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International Summary

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International Summary

"CAPIS Global Markets 3/21/2019"

posted by Matthew Kiselica on 03/21/2019 at 7:05 am

by Matthew Kiselica

03/21/2019 at 7:05 am

Asian Markets

Most of the region notches modest gains following yesterday’s FOMC decision and statements.  You may have heard about it.  Japan was closed for the Vernal Equinox.

Sectors were mixed.  IT led with a gain of 1%.  That was largely due to semi stocks following Micron’s results.  More on this in the U.S. section.  Materials are the day’s next best performer.  Telcos end the day off more than 1% and see below.

It was a busy rate decision day.  Taiwan, Indonesia and the Philippines each saw their respective central banks stand firm with their benchmark rates.

Important Headlines

  • China Mobile -4.8% initially responded well to it FY18 results.  The company’s FY NI of CNY 117.8b is a touch better than consensus and the prior year.  However, it is not providing 5G capex guidance.  This provided some doubt on the products roll out.
  • Geely Auto’s +2.3% FY Revenues of CNY 106.6b and NI of CNY 12.55b are both inline with consensus.  It has provided some relief to recent concerns for the sector.  While noting 2019 will slow, it sees “huge growth potential” for the Chinese markets.
  • New China Life’s +7.7% FY18 NI is a touch below expectations.  However, the value of new business was ahead of projections.
  • Plenty of companies reported after the local close including CNOOC, CK Asset, CK Hutchison, Petrochina and Tencent. 

European Markets

Europe has been down small since the open but is currently off initial lows. The markets aawait the Bank of England’s rate decision due to 8 AM Eastern.  There are no changes expected to either rates or its asset purchase targets.

Regarding central banks, the SNB left its benchmark rate unchanged at -0.75%, as expected.  It still sees the “Swissy” as highly valued.  In fact in reaction to its statements, a CNBC commentator noted this has read pretty much the same for the past decade or so.

Sectors are split.  Travel/leisure and banks are giving ground by more than 1%.  Financials and insurance are following closely behind.  Semis continue the global trend of solid advances and basic resources are higher by c. 0.8%.

While the U.K. attempts to get an extension to Brexit until June 30th, there are questions regarding legal viability.  PM May addressed the nation noting her citizen’s are “tired” on the matter.  Quite a few MPs are critical of her speech.  She is now off to Brussels for further talks with the EU.  European Council Pres. Tusk says an extension is possible but only if the current agreement is approved.  The debates drone on.

Snippets from the Region

  • Next’s -1.4% results and outlook are inline with prior guidance provided at the beginning of  January.  The share is seeing some profit taking due to a 30.0% YTD gain along with data suggesting the year is off to a slow start.
  • While operating margin for its construction unit improved in Q4, Skanska -2.8% says it is unlikely to reach its margin target for FY19 and FY20.
  • Reuters indicates the EU has anti-trust concerns regarding the Vodafone’s -1.5% acquisition of Liberty Global’s asset in Germany and Eastern Europe.

On Our Side of the Pond

  • Micron’s revenues are below expectations.  However, the company is providing two positive for the semiconductor sector.   First, it will cut production due to lower demand.  Secondly, it believes were are at the bottom of the chip cycle and sees a recovery later this year.
  • Levi Strauss commences trading today following its IPO pricing above the range.  CNBC reported issue was 10 times oversubscribed.
  • The FBI is reportedly joining an investigation regarding Boeings’ 737 Max plane.
  • Curaleaf’s CEO says CVS will commence sales of its CBD products.
  • The Fed was not the only central bank active yesterday.  Brazil is leaving its benchmark rate at 6.5%, as expected.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK Exports 20 Days YoY Mar -4.90% -11.70%
SK Imports 20 Days YoY Mar -3.40% -17.30%
AU RBA FX Transactions Market Feb A$432m A$337m
AU RBA FX Transactions Government Feb -A$517m -A$546m
AU RBA FX Transactions Other Feb -A$1103m -A$5637m
AU Employment Change Feb 15.0k 4.6k 39.1k 38.3k
AU Unemployment Rate Feb 5.00% 4.90% 5.00%
AU Full Time Employment Change Feb -7.3k 65.4k 65.6k
AU Part Time Employment Change Feb 11.9k -26.3k -27.3k
AU Participation Rate Feb 65.70% 65.60% 65.70%
HK CPI Composite YoY Feb 2.10% 2.10% 2.40%
EC ECB Publishes Economic Bulletin
SP Trade Balance Jan -4483m -3247m
UK Public Finances (PSNCR) Feb 0.6b -25.4b
UK Central Government NCR Feb -1.7b -25.8b
UK Public Sector Net Borrowing Feb -0.8b -0.7b -15.8b -14.1b
UK PSNB ex Banking Groups Feb 0.7b 0.2b -14.9b -13.3b
UK Retail Sales Ex Auto Fuel MoM Feb -0.40% 0.20% 1.20% 1.10%
UK Retail Sales Ex Auto Fuel YoY Feb 3.50% 3.80% 4.10% 4.00%
UK Retail Sales Inc Auto Fuel MoM Feb -0.40% 0.40% 1.00% 0.90%
UK Retail Sales Inc Auto Fuel YoY Feb 3.30% 4.00% 4.20% 4.10%
UK Bank of England Bank Rate 21-Mar 0.75% 0.75%
UK BOE Corporate Bond Target Mar 10b 10b
UK BOE Asset Purchase Target Mar 435b 435b
CA Wholesale Trade Sales MoM Jan 0.60% 0.30%
US Philadelphia Fed Business Outlook Mar 4.8 -4.1
US Initial Jobless Claims 16-Mar 225k 229k
US Continuing Claims 9-Mar 1770k 1776k
US Bloomberg Consumer Comfort 17-Mar 60.8
US Bloomberg Economic Expectations Mar 54.5
US Leading Index Feb 0.10% -0.10% 0.00%
EC Consumer Confidence Mar A -7.1 -7.4

About the Author

Matthew Kiselica headshot
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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