09.30.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 3/13/2019"

posted by CAPIS on 03/13/2019 at 6:48 am


03/13/2019 at 6:48 am

Asian Markets

A mix across the region as investors digest the implications of the latest Brexit vote.  More on this in the European section.  Reports the U.S. is telling China it must keep tariffs “on the table” in trade talks didn’t help.  Most core markets traded lower while peripherals advanced.  Worth noting, many exchanges saw light volume.  Korean data indicates the lowest turnover since Christmas Eve.  There is a fair amount of Chinese data due tonight which may have prompted cautious trading.

The majority of major sectors traded to the downside.  IT was more than 1.5% with industrials and consumer discretionary off c. 1%.  Real estate managed to advance about 0.5%.

The “Aussie” moved lower as macro economic data continues to show weakness.  The Westpac March Consumer Confidence Index slipped from the prior reading.  The -4.8% m/m decline is the largest since 2015.  S. Korea’s unemployment rate for February is below expectations.  Japan’s February PPI is a touch higher than expected while January Core Machinery Orders fall more than consensus.

Important Headlines

  • Ping An +1.6% responded well to the earnings we highlighted yesterday.  The company will also implement a share buyback up to CNY 10b.
  • ZTE’s  -7.6% parent (Zhongxingxin Telecom) is reducing its stake in the company.  Zhongxingxin will exchange the holding for a broad A share ETF holding.
  • Chinese defense sector names gained with Pres. Xi pressing for military project goals to be met.
  • Corporate Travel Management -1.0% confirms it is holding talks with Capita Plc %.  CTM has interest in Capita’s events units.
  • The HKMA once again defended its currency band.
  • The BoJ maintained it current bond purchase targets ahead of its two day meeting which commences tomorrow.

European Markets

Similar to yesterday, Brexit dominates the headlines.  PM May has suffered yet another defeat.  This time the result is 391 against vs. 242 in support of her latest draft.  Today, Parliament will vote yes or no to a “no-deal” Brexit.

The equity markets have traded in a very narrow range and are currently up small, as a group.  That is largely due to underperformance in the U.K. and Germany.  The day has also seen plenty of earnings which is driving sector performance.

Most sectors are to the upside. Financials, energy, basic resources, travel/leisure, autos and banks are higher by 0.5% or more.  Retail is lower by 0.5% followed by utilities.

The currency markets see the £ advancing and above the 1.31 level.  The debt markets have the U.K. 10 yr. gilt yield higher by .

Earnings Snippets

  • Sales at Adidas -3.0% rose 5% during Q4 which is below consensus of 6-8%.  Also, the company warns sales growth for FY19 will be up to 3%.  That is considerable reduction from FY18’s total growth of 8%.
  • Despite a dividend increase, Inditex -4.3% is lower due to slowing sales growth.  Sales in local currency rose 7% during FY18 which lags its historical rate.  EBIT is also below projections.  Additionally,  the company is projecting LFLs of 4-6% for FY19.
  • Balfour Beatty’s +0.9% revenues are inline but both OP and EPS beat the top end of the range.  The order book is strong and the company is increasing its year end dividend by a hefty 33.0.

On Our Side of the Pond

  • Despite the raft of national bans on the Boeing 737-8 Max, the FAA sees “no basis” to ground the aircraft.
  • U.S. PPI and Durable Goods due.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK Unemployment rate SA Feb 4.20% 3.70% 4.40%
AU Westpac Consumer Conf Index Mar 98.8 103.8
AU Westpac Consumer Conf SA MoM Mar -4.80% 4.30%
JN PPI YoY Feb 0.70% 0.80% 0.60%
JN PPI MoM Feb 0.10% 0.20% -0.60%
JN Core Machine Orders MoM Jan -1.50% -5.40% -0.10%
JN Core Machine Orders YoY Jan -2.10% -2.90% 0.90%
SK Money Supply L SA MoM Jan 0.70% 0.50% 0.60%
SK Money Supply M2 SA MoM Jan 1.10% 0.30%
SK Bank Lending To Household Total Feb KR831.2t KR828.7t
SK Bloomberg March South Korea Economic Survey (Table)
JN Tertiary Industry Index MoM Jan -0.30% 0.40% -0.30% -0.50%
SP CPI Core MoM Feb 0.10% -1.50%
SP CPI Core YoY Feb 0.80% 0.70% 0.80%
SP CPI MoM Feb F 0.20% 0.20% 0.20%
SP CPI YoY Feb F 1.10% 1.10% 1.10%
SP CPI EU Harmonised MoM Feb F 0.20% 0.20% 0.20%
SP CPI EU Harmonised YoY Feb F 1.10% 1.10% 1.10%
IT Unemployment Rate Quarterly 4Q 10.50% 10.60% 10.20% 10.30%
EC Industrial Production SA MoM Jan 1.00% 1.40% -0.90%
EC Industrial Production WDA YoY Jan -2.10% -1.10% -4.20%
US MBA Mortgage Applications 8-Mar -2.50%
CA Teranet/National Bank HPI MoM Feb -0.10%
CA Teranet/National Bank HP Index Feb 223.96
CA Teranet/National Bank HPI YoY Feb 2.20%
US PPI Final Demand MoM Feb 0.20% -0.10%
US PPI Ex Food and Energy MoM Feb 0.20% 0.30%
US PPI Ex Food, Energy, Trade MoM Feb 0.20% 0.20%
US PPI Final Demand YoY Feb 1.90% 2.00%
US PPI Ex Food and Energy YoY Feb 2.60% 2.60%
US PPI Ex Food, Energy, Trade YoY Feb 2.50%
US Durable Goods Orders Jan P -0.40% 1.20%
US Durables Ex Transportation Jan P 0.10% 0.10%
US Cap Goods Orders Nondef Ex Air Jan P 0.20% -1.00%
US Cap Goods Ship Nondef Ex Air Jan P -0.20% 0.00%
US Construction Spending MoM Jan 0.50% -0.60%

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