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04.23.2019 15 new posts under Morning Note (8), General (3), International Summary (3), and 1 more category

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 1/16/2019"

posted by Matthew Kiselica on 01/16/2019 at 6:48 am

by Matthew Kiselica

01/16/2019 at 6:48 am

Markets Focus on Brexit

If you missed it, U.K. PM May’s Brexit deal was resoundingly rejected by Parliament.  It was not a surprise the measure was voted down.  However, the margin of defeat (432 nays vs. 202 ayes) was wider than expected.  To put this in perspective,  this is the largest margin of defeat in Parliament in the history of the U.K.  Following the result, Labour Party leader Corbyn called for a non confidence vote which will be held today at 2PM Eastern.  The has managed to hold steady for most of the morning.   U.K. yields are higher with 10 yr. c. +7 basis points.

Asian Markets

This caused the Asian markets to trade in mixed fashion.  Part of the issue is no one is sure what the next step in the Brexit process will be.  In fact, there are many who believe this will lead to a delay from the March 29th “deadline.”  The PBoC injected a record CNY 560b into the financial system today which help support the Chinese markets.  This was to meet the demand for upcoming tax payments and the Chinese New Year which commences in the first week of February.

In keeping with how the major indices had no clear direction, sectors were evenly split.  IT and material names were the laggards but gave ground by less than 0.5%.  In a flight to safety, healthcare gained about 0.5%.

European Markets

The European markets have been to the upside as a whole.   In addition to the Brexit delay mentioned above, there have been other factors that have created support.  Despite some of the recent weak macroeconomic data, ECB Pres. Draghi indicates the region will avoid a recession.  Also, Italian FM Tria sees the nation’s banks proceeding with non-performing loan reductions according to plan.

Those last two tidbits have prompted the banking and insurance sectors to advance by c. 1%.  However, U.K. names are mostly lower.  The majority of the remaining sectors are also better to one degree or another.  Consumer staples and energy are off a tad than 0.5%.

Sector and Corporate Snippets

  • Lenovo -3.3% surprised investors by increasing the size of a convertible bond issue to $675m from $550m.
  • An undisclosed institutional investor has raised $278m by placing 231m Xiaomi -2.6% shares at HK$9.45.
  • Underscoring the comments made by Italian FM Tria, Unicredit +2.6% has managed to reduce its non-performing exposure to 4.3% with a coverage ratio of 62.0%.
  • In the logistics space, DSV +4.6% is bidding to acquire Panalpina Welttransport +31.0% at a 24.0% premium to yesterday’s close.
  • Pearson -7.3% is at the bottom of the media space an Euro Stoxx 600.  Its FY revenue update revealed a 5% decline in educational courseware.
  • Under the radar?   Greece also holds a confidence vote today.

On Our Side of the Pond

Markets and Macro

MArkets Snapshot

Event Survey Actual Prior Revised
AU Westpac Consumer Conf Index Jan 99.6 104.4
AU Westpac Consumer Conf SA MoM Jan -4.70% 0.10%
JN Core Machine Orders MoM Nov 3.00% 0.00% 7.60%
JN Core Machine Orders YoY Nov 0.20% 0.80% 4.50%
JN PPI YoY Dec 1.80% 1.50% 2.30%
JN PPI MoM Dec -0.30% -0.60% -0.30%
CH New Home Prices MoM Dec 0.77% 0.98%
JN Tertiary Industry Index MoM Nov -0.60% -0.30% 1.90% 2.20%
GE CPI MoM Dec F 0.10% 0.10% 0.10%
GE CPI YoY Dec F 1.70% 1.70% 1.70%
GE CPI EU Harmonized MoM Dec F 0.30% 0.30% 0.30%
GE CPI EU Harmonized YoY Dec F 1.70% 1.70% 1.70%
EC EU27 New Car Registrations Dec -8.40% -8.00%
IT Industrial Sales WDA YoY Nov 0.60% 2.00%
IT Industrial Sales MoM Nov 0.10% -0.50%
IT Industrial Orders NSA YoY Nov -2.00% 2.00% 1.80%
IT Industrial Orders MoM Nov -0.20% -0.30% -0.50%
UK CPIH YoY Dec 2.10% 2.00% 2.20%
UK CPI MoM Dec 0.20% 0.20% 0.20%
UK CPI YoY Dec 2.10% 2.10% 2.30%
UK CPI Core YoY Dec 1.80% 1.90% 1.80%
UK Retail Price Index Dec 286 285.6 284.6
UK RPI MoM Dec 0.50% 0.40% 0.00%
UK RPI YoY Dec 2.90% 2.70% 3.20%
UK RPI Ex Mort Int.Payments (YoY) Dec 2.80% 2.70% 3.10%
UK PPI Input NSA MoM Dec -1.40% -1.00% -2.30% -2.60%
UK PPI Input NSA YoY Dec 3.70% 3.70% 5.60% 5.30%
UK PPI Output NSA MoM Dec 0.00% -0.30% 0.20% 0.10%
UK PPI Output NSA YoY Dec 2.90% 2.50% 3.10% 3.00%
UK PPI Output Core NSA MoM Dec 0.10% 0.20% 0.10%
UK PPI Output Core NSA YoY Dec 2.40% 2.50% 2.40%
UK House Price Index YoY Nov 3.00% 2.80% 2.70% 2.70%
IT CPI FOI Index Ex Tobacco Dec 102.1 102.1 102.2
IT CPI EU Harmonized YoY Dec F 1.20% 1.20% 1.20%
US MBA Mortgage Applications 11-Jan 13.50% 23.50%
US Retail sales data postponed by govt shutdown
US Import Price Index MoM Dec -1.30% -1.60%
US Import Price Index ex Petroleum MoM Dec 0.00% -0.30%
US Import Price Index YoY Dec -0.80% 0.70%
US Export Price Index MoM Dec -0.70% -0.90%
US Export Price Index YoY Dec 1.80%
US Business inventories data postponed by govt shutdown
US NAHB Housing Market Index Jan 56 56
US U.S. Federal Reserve Releases Beige Book
US TIC Flows data postponed by govt shutdown

About the Author

MatthewKiselicaFVP,Manager of International Trading

Matthew Kiselica joined CAPIS in 2010 and has over twenty-five years of industry experience. Prior to CAPIS, he was vice president of Cazenove’s global sales trading desk in New York. Matthew is a board member for the National Psoriasis Foundation. He earned his bachelor’s degrees in fina...

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