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"CAPIS Global Recap – 10/12/2017"

posted by Clayton Duff on 10/12/2017 at 5:59 am

by Clayton Duff

10/12/2017 at 5:59 am

Asian Headlines

Mostly green on the screen following the U.S. gains and Fed minutes.  Most sectors gained with telcos ahead by more than 0.5% followed by real estate and healthcare.  Materials and energy were both lower by c. 0.25%.  Despite the overall market advance, MUFG -1.0%, SMFG -0.5% Mizuho -0.2% and Standard Chartered -0.6% gave way following the IMF noting potential profitability issues going forward.

The latest Japanese polls show PM Abe’s coalition will remain in control of parliament.  The elections are set for October 22nd.  September PPI was bang inline with expectations.  Both ABC-Mart -3.3% and FamilyMart Uny -3.3% trimmed some of their FY forecasts.  Reports T-Mobile and Sprint are moving closer to finalizing a deal boosted Softbank +3.6%Toshiba +3.3% gained following yesterday’s removal from the TSE’s downgrade watch list.  After the close, Fast Retailing saw its FY OP outlook a touch ahead of consensus.

Greater China was mixed with the mainland giving ground small.  The tech sector was in focus following yesterday’s WSJ report indicating Chinese regulators are considering taking 1% stakes in a number of companies including Tencent -0.4%, Wiebo and AlibabaSeptember auto sales rose 3.3% y/y.  The market awaits Great Wall Motor (suspended) to clarify the BMW -0.4% jv story.  Today, reports indicated the Bavarian car maker will outsource some Mini production to the Chinese company.  Wharf Holdings +2.5% setup a special purchase agreement with LVGEM Real Estate Inv. Co. to sell a unit that is developing property in the Kwun Tong area.  CSPC Pharma (suspended) conducted a placement of 157m new shares.

S. Korea advanced for the 3rd consecutive day since returning from holiday.  Brokers saw buying interest from both locals and foreigners with the construction sector also in favor.

Australia managed to overcome the basic resources weakness with all other sectors advancing.  August home loan approvals gained twice the consensus estimate.

European Headlines

The Spanish drama continues as PM Rajoy establishes a deadline for Catalan to clarify its independence position.  Catalan Pres. Puigdemont has until Monday morning to state explicitly if he has declared independence.  If yes, he then has 3 more days to rescind the declaration.  Stay tuned……

The £ has come under pressure after EU Brexit negotiator Barnier declared talks regarding the financial settlement “are in deadlock.”

The markets have had minimal moves moving towards highs after better than expected EU industrial production but then back towards lows on the above Brexit headlines.   Real estate has gained more than 0.5% thanks to higher than expected U.K. RICS housing prices.   Most sectors green but starting to seep also on the Brexit story.  Energy has lagged throughout following an IEA sector outlook.  It believes the decline in crude inventories will end as U.S. shale production and other supplies will offset the OPEC/Russia bloc output cuts.

Sanofi -0.6% noted Q3 sales will being negatively impacted 4-4.5% by currency headwinds.

Vivendi +1.4% has officially launched a public buyout of Havas +3.2% at €9.25/sh.

At its AGM, Sky +1.5% reported a 5% increase in revenues topping forecasts.  James Murdoch has won support of shareholders to be reelected as chairman.

Dong Energy -4.3% has been one of the day’s worst performers.  A Goldman unit is selling its stake that amounts to 2.75% of outstanding capital.

Financials are in focus on our side of the pond with JPM already on the tape and Citi due as well.

Market Levels and Macro Data

Event Survey Actual Prior Revised
SK Foreign Reserves Sep $384.67b $384.84b
UK RICS House Price Balance Sep 4% 6% 6%
JN PPI YoY Sep 3.00% 3.00% 2.90%
JN PPI MoM Sep 0.20% 0.20% 0.00%
JN Bank Lending Incl Trusts YoY Sep 3.00% 3.20%
JN Bank Lending Ex-Trusts YoY Sep 3.00% 3.20%
AU Consumer Inflation Expectation Oct 4.30% 3.80%
AU Home Loans MoM Aug 0.50% 1.00% 2.90% 2.80%
AU Investment Lending Aug 4.30% -3.90% -3.70%
AU Owner-Occupier Loan Value MoM Aug 0.90% 0.90% 1.30%
AU Credit Card Purchases Aug A$26.9b A$25.6b
AU Credit Card Balances Aug A$51.3b A$51.3b
JN Tokyo Avg Office Vacancies Sep 3.17 3.35
JN Tertiary Industry Index MoM Aug 0.10% -0.20% 0.10%
FR CPI EU Harmonized MoM Sep F -0.10% -0.20% -0.10%
FR CPI EU Harmonized YoY Sep F 1.10% 1.10% 1.10%
FR CPI MoM Sep F -0.10% -0.20% -0.10%
FR CPI YoY Sep F 1.00% 1.00% 1.00%
FR CPI Ex-Tobacco Index Sep 101.32 101.3 101.47
UK Bank of England Credit Conditions & Bank Liabilities Surveys
EC Industrial Production SA MoM Aug 0.60% 1.40% 0.10% 0.30%
EC Industrial Production WDA YoY Aug 2.60% 3.80% 3.20% 3.60%
IN CPI YoY Sep 3.53% 3.36%
IN Industrial Production YoY Aug 2.60% 1.20%
CA New Housing Price Index MoM Aug 0.20% 0.40%
CA New Housing Price Index YoY Aug 3.80%
CA Teranet/National Bank HPI MoM Sep 0.60%

About the Author

ClaytonDuffFVP,Senior International Trader

Mr. Duff joined CAPIS in 2008. Before coming to CAPIS, he spent four years as a trader for First Southwest. He earned his bachelor degree from the University of Texas Arlington. Mr. Duff maintains Series 3, 4, 7, 24, 55, and 63 licenses.

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