Daily Briefing – Wednesday, May 17, 2017
The US Dollar is down for the 5th day in arrow, having now erased all post-election gains and indexes also fell towards the end of the session. The primary source of tension is yesterday’s release by former FBI head Comey of information alleging that the president had attempted to obstruct his investigations against Michael Flynn, since Industrial Production yesterday showed a 0.96% increase – its largest since February 2014. On the other hand, Housing starts also disappointed with a 2.6% drop, rather than rebound from March’s 6.6% drop.
Asian markets lost between 1/3 and 2/3 of a percent upon closing this morning on US news and in spite of a massive $24.7 bn injection by the People’s Bank of China into financial markets – the largest single-day injection in nearly half a year. Observers believe the bank is attempting to revive investor confidence after its campaign to battle speculation. In Japan Industrial production fell in March 1.9% while machinery orders increased by 1.4%. And consumer confidence in Australia also fell 1.1% to 98.
European equities are all down again today on a surge in the Euro against the US Dollar. They closed down yesterday on health care and – in German – on auto shares. Continental data yesterday showed a 0.5% growth in GDP for Q1 and a better-than-expected widening of the trade surplus to 23 bn Euros. Another source of optimism is German regional elections strengthening Merkel’s September prospects, the ZEW economic sentiment reading yesterday rising to 20.6, though not as well as expected. The FTSE closed above 7500 – a record – in spite of 3-year record inflation (2.7%) that failed to strengthen the pound and a healthy 3.5% increase in retail prices.
Gold spiked overnight as information about President Trump’s alleged attempt to obstruct justice surfaced. It is currently struggling to break through the 1243 handle to target 1256. And oil is back down towards the $48 region after yesterday’s API report showed a surprising 882Kb gain.
Vodofone shares rose 4% on yesterday’s upbeat quarterly earnings report. Cisco reports today. Alibaba and Walmart tomorrow. And Yahoo yesterday announced a $3bn share buyback ahead of the Verizon merger.
|8:30 AM GMT||UK: Average Earnings & Unemployment rate|
|9 AM GMT||EU: CPIs|
|2:30 PM GMT||EIA Crued Oil Inventories|
|11:50 PM GMT||Japan: GDP & Foreign Investments|
|1 AM GMT (+1)||Australia: Consumer Inflation, followed at 1:30 by Unemployment|