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Daily Briefing – Wednesday, September 6, 2017


US markets closed with a bang yesterday, the S&P losing 20 points as the bad news keeps pouring in. Factory orders in July fell to -3.3% – a 7-month low – and NAFTA talks ended in disappointment as the US team’s lack of preparedness called into question the president’s bombast. To top off the cake, the Fed’s Lael Brainard yesterday indicated weak data and insufficient inflation as a possible excuse for refraining from additional interest rate hikes this year. Other Fed speakers yesterday were also dovish, some even hinting tht the previous hikes have hurt the economy. All this plus a better-than-expected 4.5% GDP growth in Q2 is helping the Canadian Dollar to trade at 2-year highs against its US counterpart; although analysts do not expect the nation’s central bank to raise interest rates again this afternoon so soon after last month’s.



After a day of disappointing PMIs across the Eurozone, this morning’s factory orders from Germany show a 0.7% reduction in July month-on-month. Foreign demand flat-lined and domestic orders crashed 1.6%. The number is still 0.5% above last year’s figure. In the UK, the services PMI has hit a 1-year low and the FTSE closed down as the GBP hit a 3-week high – echoing pan-zonal fears over geopolitical tensions. However, the British economy continues to lag behind the mainland European one as Brexit talks grind gears and inflation begins to rise.



Global stocks continued to suffer selloffs, and the Nikkei is no stranger: abetted by the fearful sprint towards the Yen as tensions continue flaring around North Korea, the Nikkei nevertheless managed to close with a relatively benign 0.13% loss. Overnight figures from Australia show a strong 2nd quarterly growth – 1.8% YoY – reflecting increasing business confidence and hopefully preserving the nation’s triple-A credit rating. And in China, Alibaba has announced it would open its first bricks-&-mortar store – a 5-story shopping center in April 2018 that will offer the conglomerate’s Hema supermarket as an anchor.



WTI was well above the 48.60 mark this morning as Texas refineries come back on line much sooner than expected, but additional hurricanes threaten gulf production. And as US bitcoin exchanges boast over 10 million users, UK co-living pioneer The Collective has announced that it will begin accepting the crypto-currency as down-payments for housing.


Today’s Events

12:30 PM GMT US: Trade Balance followed by Markit PMIs at 1:45
8:30 PM GMT API Weekly Crude Oil Inventories
11:50 PM GMT Japan: Foreign reserves & investments
1:30 AM GMT (+1) Australia: Trade Balance

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