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Daily Briefing – Wednesday, September 13, 2017

Europe

After spiking on yesterday’s deluge of excellent UK data – house prices, producer and consumer inflation all up beyond expectations, the GBP yesterday plunged to lose half of its gains on the announcement that Brexit talks were being postponed on the UK’s backtracking on EU divorce payments. The British negotiating team has announced that there is no legal basis for the EU’s demand for a £90 billion payment to cover UK obligations – especially considering that the UK buys more from the EU than the opposite. Meanwhile, in Italy, opposition parties are calling for the introduction of a parallel currency to the Euro to boost economic growth and jobs. German inflation this morning came in steady at 1.8% and European stocks yesterday gained an average ½% on banking shares. The FTSE lost 0.17%.

 

US

The USD was dealt another blow yesterday when the JOLTS jobs openings figure showed an all-time high of 6.17mil. The index is a favorite of FED Chair Yellen and could increase motivation for an additional interest rate hike this year – an option that has floated ever distant alongside continuingly bad US data and geopolitical stress on several fronts.

 

Asia

The day after China agreed to vote in sanctions against North Korea, US Treasury Secretary Steven Mnuchin told CNBC that the government would remove Chinese banks from the SWIFT electronic financial transaction system. Japanese wholesales prices rose 2.9% in August – their fastest pace in 9 years. Stock markets were slightly cold overnight, with the Nikkei adding 0.44% on a weakening Yen and Chinese benchmarks up slightly less. The Hang Seng lost 1/3%. In Australia, consumer confidence jumped this month to 2.5% after providing a negative 1.2% in August.

 

Commodities

West Texas crude yesterday gained 70c following the API’s huge 6.1mB gain report and is currently trending in the 48.20 region. And Bitcoin has tumbled below $4000 for the first time 3 weeks after JPMorgan CEO Jamie Dimon called the cryptocurrency a scam. Dimon nevertheless stated that he himself was not ready to short Bitoinc just yet. Meanwhile, in Russia, Russian Foreign Minister Anton Siluanov said that his government has no intention of fighting the coin but is actually working on regulation.

 

Today’s Events

8:30 AM GMT UK: Employment and Earnings
9 AM GMT EU: Industrial Production and Employment Change
12:30 PM GMT US: PPIs followed at 6 by the Monthly Budget Statement.
1 AM GMT (+1) Australia: Employment, Participation and Consumer Inflation Expectations
2 AM GMT (+1) China: Retail Sales, Industrial Production and Urban Investment

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