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12.10.2018 19 new posts under International Summary (9), Morning Note (9), CAPIS Headlines (1)

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International Summary

"CAPIS Global Recap – 12/4/2018"

posted by Clayton Duff on 12/04/2018 at 6:58 am

by Clayton Duff

12/04/2018 at 6:58 am

Asian Headlines

A mixed close to the day with a mostly disappointing finish. While mainland China and Hong Kong managed small gains the balance of the major markets gave back most of yesterday’s gains.  The Nikkei underperformed even more so, giving back gains made over the last 4 days on broad weakness.  Moves in energy names in the region have been to the downside even as oil prices continue to rebound.  Markets may have gotten ahead of themselves on US/China deal hopes with WH EcoAdv Larry Kudlow stating there exists a 90 day timetable for a deal which could extend to April 1st, if a deal at all materializes.

Of interest the China Daily today yesterday reported the country is considering lowering US auto tariffs.  The China Securities Daily later noted officials are in talks with expectations of tariffs returning to original levels.  On that autos Chinese automakers fell Tuesday.

Chipmakers slipped as well with one broker noting DRAM prices, and NAND, continue to move south. Samsung Electronics fell 2.5% while Hynix fell 2.1%.  In Korea GDP met estimates, holding steady at .6% QoQ growth but inflation fell in November a bit more than expected.

Sharp closed down 5.7% with the company to lay off 3k foreign staff in Japan at their plant that make iPhone components.  The production will be moved to their parent company Foxconn at a plant in China.

Down Under, the RBA left the cash rate target unchanged at 1.5% noting the low rates are supporting the economy.  While no longer targeting US trade policy they did add that slowing in global trade was of concern.

European Headlines

Losses in Europe have been kept in check with indices apart from the UK and Italy holding steady. Food names are cooking up some gains today while most sectors trade flat to down.  Autos are in focus, off nearly 2%, with Travel, Industrials, and several other sectors seeing losses of over a percent.

The Pound is higher today post a European court opinion EU members can pull article 50 without input or action from other EU members.  Essentially the move allows the UK to cancel Brexit and remain in the EU with discussions as of late focusing on whether another referendum could take place.  Of concern is that countries could invoke article 50 to extract better terms from the group knowing full well they can rescind the move if it works against them. Italy comes to mind as Finance Ministers of the Eurogroup continue to stress the country is out of compliance with their budget.

In the UK, to  the upside, the Construction PMI reading for November was 53.4 which makes for 8 months of expansion. And speaking of construction HVAC distributor Ferguson -4.2% reported 1Q that RBC said was light on margins and LfL growth.  The company  said they see trading profit for the full year inline with views.   The stock is off 25% from highs and down 7.5% on the year.

Regional air service firm SAS -7.9% beat 4Q revs noting results were inline with views. Higher fuel costs weighed in the quarter with expectations the cost will remain elevated throughout next year.

Caterer Elior -7.3% is lower after organic growth is seen slowing.  Of further concern the company is offering discounted stock in lieu of cash dividends to those who choose the option which is seen as a sign of weakness.  The firm said they will make a decision on their concessions unit in the first half of next year.

Event Survey Actual Prior Revised
AU 20) ANZ Roy Morgan Weekly Consumer Confidence Index 2-Dec 119.5 118.6
SK 21) GDP SA QoQ 3Q F 0.60% 0.60% 0.60%
SK 22) GDP YoY 3Q F 2.00% 2.00% 2.00%
SK 23) CPI MoM Nov -0.60% -0.70% -0.20%
SK 24) CPI YoY Nov 2.00% 2.00% 2.00%
SK 25) CPI Core YoY Nov 1.30% 1.10%
JN 26) Monetary Base End of period Nov ¥501.6t ¥506.9t
JN 27) Monetary Base YoY Nov 6.10% 5.90%
UK 28) BRC Sales Like-For-Like YoY Nov 0.30% -0.50% 0.10%
AU 29) BoP Current Account Balance 3Q -A$10.2b -A$10.7b -A$13.5b -A$12.1b
AU 30) Net Exports of GDP 3Q 0.3 0.4 0.1
AU 31) RBA Cash Rate Target 4-Dec 1.50% 1.50% 1.50%
FR 32) Budget Balance YTD Oct -87.0b -87.1b
SP 33) Unemployment MoM Net (‘000s) Nov -1.8 52.2
SZ 34) CPI MoM Nov -0.10% -0.30% 0.20%
SZ 35) CPI YoY Nov 1.00% 0.90% 1.10%
SZ 36) CPI EU Harmonized MoM Nov -0.10% -0.40% 0.20%
SZ 37) CPI EU Harmonized YoY Nov 1.10% 1.00% 1.10%
SZ 38) CPI Core YoY Nov 0.40% 0.20% 0.40%
SW 39) Current Account Balance 3Q 38.6b 10.0b 4.1b
NO 40) Region Survey: Output Past 3M Nov 1.38 1.35
NO 41) Region Survey: Output Next 6M Nov 1.49 1.46
UK 42) Markit/CIPS UK Construction PMI Nov 52.5 53.4 53.2
EC 43) PPI MoM Oct 0.50% 0.80% 0.50% 0.60%
EC 44) PPI YoY Oct 4.50% 4.90% 4.50% 4.60%
GR 45) GDP (QoQ) 3Q F 0.40% 1.00% 0.20% 0.40%
GR 46) GDP SA YoY 3Q F 2.20% 1.80% 1.70%
GR 47) GDP NSA YoY 3Q F 2.40% 1.80% 1.50%
IR 48) Unemployment Rate Nov 5.30% 5.30% 5.40%

 

About the Author

ClaytonDuffFVP,Senior International Trader

Clayton Duff joined the firm in 2008. He has worked in the industry since 1994 and held various trading and sales positions before CAPIS, including four years as a trader for First Southwest. He earned his bachelor’s degree from the University of Texas Arlington. Clayton maintains Series 3,...

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