09.23.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

International Summary

News Trading Desk

International Summary

"CAPIS TGIF Global Markets 1/04/2018"

posted by CAPIS on 01/04/2019 at 1:14 pm


01/04/2019 at 1:14 pm

Asian Markets

Most of the markets advanced with China leading the way.  The U.S. trade delegation will head to China and conduct further negotiations with the Chinese Commerce Ministry next Monday and Tuesday.  There were further reasons for market optimism.  The Caixin Chinese Dec. Services PMI beat expectations and reached a 6 month high.   Also, Chinese Premier Li stated the nation will “step up countercyclical adjustments of macro policy.”  Japan reopened from a 4 day break and played “catch down.”

The majority of sectors advanced with real estate, financials, telcos and utilities better by more than 1%.  IT was lower by more than 1% weighed down by Japanese Apple suppliers.  As a group, they fell by c. 5%.

Well after the local close, the PBoC cut its reserve ratio by 1% point.  It will be implemented in two steps: a 0.5% point reduction on Jan. 15th and another 0.5% on Jan. 25th.  This will result in the rate reducing to 13.5%.

Other Headlines of Importance

  • Ping An Bank’s +5.0% NI rose 7% last quarter.  The bank saw NPL improvement and will adhere to stricter rules to identify non-performing loans.
  • In addition to the Ping An Bank results, Chinese financials rose with a local analyst indicating state funds are buying the sector.

European Markets

The region’s markets had a solid start to the day thanks to the trade hopes.  They made further gains after the Chinese reserve ratio cut.  The icing on the cake was the strong U.S. macro data.  The major indices ended the day near their respective highs.  Given today’s gains, most are are now up for the year.  Breadth was very bullish with only 19 of the Euro Stoxx 600 names to the downside.

All sectors advanced.   Basic resources more than 5%.  Autos and industrials by 4%.  Even defensives, which underperformed, gained more than 1%.

As a general comment, most of the region’s Services and Composite PMI results lagged consensus.  However, Italy was the exception.  All the Chinese and trade news have the cyclical commodities advancing on solid gains.

Snippets from the Region

  • BMW +3.9% CEO Kreuger confirmed the company’s FY ’18 margin target remains “at least 7%.”  He added FY ’19 forecasts will be provided in March.
  • Bayer +6.7% had a U.S. Federal judge limit evidence plaintiffs may present in RoundUp cancer cases.
  • Press reports allege Mediaset -2.0% may buyout Mediaset Espana +1.5%.
  • Volvo +4.4% is taking a SEK 7b provision related to a defective emissions-control part.  However, Citigroup had estimated the charge would be as much as SEK 10b.

On Our Side of the Pond

  • The 116th U.S. Congress opened with the Democrat led House passed spending bills that would reopen most of the currently closed government operations.  However, it has no funding for Pres. Trump’s border wall.  Therefore, the President is expected to veto the measures.
  • U.S payroll data showed strong beats in all three categories: non-farm, manufacturing, and private.

On the Markets’ Agenda for Next Week

  • The Sino-U.S. trade talks will be front and center.
  • The U.S. budget impasse will also remain a focal point.
  • Macro data includes: a rate decision in Israel, Swiss and Chinese foreign reserves, German and U.S. factory orders.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK Foreign Reserves Dec $403.69b $402.99b
AU CBA Australia PMI Services Dec F 52.7 52.2
AU CBA Australia PMI Composite Dec F 52.9 52.4
UK BRC Shop Price Index YoY Dec 0.30% 0.10%
HK Nikkei Hong Kong PMI Dec 48 47.1
JN Nikkei Japan PMI Mfg Dec F 52.6 52.4
CH Caixin China PMI Composite Dec 52.2 51.9
CH Caixin China PMI Services Dec 53 53.9 53.8
IN Nikkei India PMI Services Dec 53.2 53.7
IN Nikkei India PMI Composite Dec 53.6 54.5
US Wards Total Vehicle Sales Dec 17.24m 17.50m 17.40m
UK Nationwide House PX MoM Dec 0.10% -0.70% 0.30% 0.40%
UK Nationwide House Px NSA YoY Dec 1.50% 0.50% 1.90%
FR CPI EU Harmonized MoM Dec P 0.10% 0.10% -0.20%
FR CPI EU Harmonized YoY Dec P 2.00% 1.90% 2.20%
FR CPI MoM Dec P 0.10% 0.00% -0.20%
FR CPI YoY Dec P 1.80% 1.60% 1.90%
SP Markit Spain Services PMI Dec 53.7 54 54
SP Markit Spain Composite PMI Dec 53.7 53.4 53.9
IT Markit/ADACI Italy Services PMI Dec 50.1 50.5 50.3
IT Markit/ADACI Italy Composite PMI Dec 49.3 50 49.3
FR Markit France Services PMI Dec F 49.7 49 49.6
FR Markit France Composite PMI Dec F 49.4 48.7 49.3
GE Unemployment Change (000’s) Dec -13k -14k -16k
GE Unemployment Claims Rate SA Dec 5.00% 5.00% 5.00%
GE Markit Germany Services PMI Dec F 52.5 51.8 52.5
GE Markit/BME Germany Composite PMI Dec F 52.2 51.6 52.2
EC Markit Eurozone Services PMI Dec F 51.4 51.2 51.4
EC Markit Eurozone Composite PMI Dec F 51.3 51.1 51.3
CH Reserve Requirement (Major Ban 15-Jan 14.00% 14.50%
CH Reserve Requirement (Major Ban 25-Jan 13.50% 14.00%
UK Net Consumer Credit Nov 1.0b 0.9b 0.9b 0.8b
UK Net Lending Sec. on Dwellings Nov 4.0b 3.5b 4.1b
UK Mortgage Approvals Nov 66.0k 63.7k 67.1k 66.7k
UK Money Supply M4 MoM Nov 0.00% 0.70%
UK M4 Money Supply YoY Nov 0.80% 1.00%
UK M4 Ex IOFCs 3M Annualised Nov 1.70% 2.30% 2.20%
UK Markit/CIPS UK Services PMI Dec 50.7 51.2 50.4
UK Markit/CIPS UK Composite PMI Dec 50.8 51.4 50.7 50.8
UK Official Reserves Changes Dec $1387m $534m
EC PPI MoM Nov -0.20% -0.30% 0.80%
EC PPI YoY Nov 4.20% 4.00% 4.90%
EC CPI Core YoY Dec A 1.00% 1.00% 1.00%
EC CPI Estimate YoY Dec 1.70% 1.60% 2.00%
IT CPI EU Harmonized MoM Dec P 0.10% -0.10% -0.20% -0.30%
IT CPI NIC incl. tobacco MoM Dec P -0.10% -0.10% -0.20%
IT CPI NIC incl. tobacco YoY Dec P 1.50% 1.10% 1.70% 1.60%
IT CPI EU Harmonized YoY Dec P 1.40% 1.20% 1.60%
US Revisions: Seasonally Adjusted Household Survey data
CA Net Change in Employment Dec 10.0k 9.3k 94.1k
US Change in Nonfarm Payrolls Dec 184k 312k 155k 176k
US Two-Month Payroll Net Revision Dec 58k
CA Unemployment Rate Dec 5.70% 5.60% 5.60%
CA Hourly Wage Rate Permanent Employees YoY Dec 1.60% 1.50% 1.50%
US Change in Private Payrolls Dec 185k 301k 161k 173k
CA Participation Rate Dec 65.4 65.4 65.4
US Change in Manufact. Payrolls Dec 20k 32k 27k
US Unemployment Rate Dec 3.70% 3.90% 3.70%
CA Full Time Employment Change Dec -18.9 89.9
CA Part Time Employment Change Dec 28.3 4.1
US Average Hourly Earnings MoM Dec 0.30% 0.40% 0.20%
US Average Hourly Earnings YoY Dec 3.00% 3.20% 3.10%
CA Industrial Product Price MoM Nov 0.00% -0.80% 0.20%
CA Raw Materials Price Index MoM Nov -11.70% -2.40% -2.30%
US Average Weekly Hours All Employees Dec 34.5 34.5 34.4
US Labor Force Participation Rate Dec 63.10% 62.90%
US Underemployment Rate Dec 7.60% 7.60%
US Markit US Composite PMI Dec F 54.4 53.6
US Markit US Services PMI Dec F 53.4 54.4 53.4

About the Author

[Author info unavailable]

Subscribe to Stay Informed

Stay informed by subscribing to information that matters to you. We'll email you when we post new content you want to see.


This communication is for informational purposes only and is solely intended for use by institutional investors. Use of this communication by others, including retail investors, is prohibited. No statement herein is to be construed as a recommendation to purchase or sell a security, or to provide investment advice. Certain products, including options and futures, may involve substantial risk and are not suitable for all investors. While the information and opinions presented in this material have been obtained or derived from sources believed by Capital Institutional Services, Inc. (CAPIS) to be reliable, CAPIS makes no representations concerning its accuracy or completeness, and accepts no liability for loss arising from the use of this material.