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Daily Briefing – Wednesday, November 8, 2017

Europe

Europe’s Brexit negotiators are expected to release today their vision of divorce terms, which include leaving the UK in the single market for 2 years after it leaves the bloc. European equities yesterday showed losses nearly across the board, as earnings reports missed expectations. Retail sales beat expectations, rising from September’s negative territory to 0.7% MoM. Housing price growth in the UK eased from 0.8% in September to 0.3%, but the yearly figure indicates the highest advance since February. ECB President Draghi yesterday said that negative interest rates were not hurting bank profits, but these have so far failed to strengthen financial stability.

 

US

The DOW yesterday managed to eke out a 0.04% profit while S&P and Nasdaq both closed in the red as Trump’s corporate tax cuts continue to hit turbulence. Retail store closures have hit a record high, with bankruptcies at 300 so far this year and housing prices exploding. Consumer credit last night was up to $21bn and job openings in September rose to 6.09m – although hiring is at a 6-month low. Credit card debt is above the trillion dollar mark – led by student and auto loans.

 

Asia

Commodity prices could be under pressure as China’s growth slows, as indicated overnight by the nation’s trade balance data, which – at a $254bn surplus – missed expectations. Export growth slowed from 8.1% in September to 6.9% in October, and imports grew at 17.2%. The Australian Dollar added 0.3% on the report. Most Asian indexes have pulled back, the Nikkei down 0.11% on profit taking and an increase in the Yen.

 

Commodities

As Saudi Arabia freezes the accounts of its arrested royals and associates (1200 accounts in all worth about $800bn), oil is once again below the $57 mark after a less than expected drawdown of 1.56mB – according to the API. After losing about half of its gains from one day earlier, gold is once again struggling to gain traction as the USD quavers between green and red and Chinese production drops by nearly 10% in the year’s first half.

 

Shares

Snap again missed expectations by a large margin in yesterday’s quarterly earnings report – revenues at $207m instead of 235, and an EPS of 14c. Shares lost 21% on the announcement. Apple issued $7bn in bonds on Monday, as demand for the iPhonex grows.

 

Today’s Events

1:15 PM GMT Canada: Housing Starts
3:30 PM GMT EIA Crude Oil Inventories
8 PM GMT New Zealand: Interest Rates & Monetary Policy
11:50 PM GMT Japan: Foreign Investments, Trade Balance & BoJ statement

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