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International Summary

"CAPIS Glbbal Recap – 5/8/2019"

posted by Clayton Duff on 05/08/2019 at 6:52 am

by Clayton Duff

05/08/2019 at 6:52 am

Asian Headlines

Asian markets fared better than the US overnight albeit still ending lower on the session. The Nikkei underperformed on weakness in Consumer Staples, Energy, and Material names with losses broad across all sectors. Losses were broad in other locales as well as investors keep an eye on trade talks between the US and China.  On that, the Nikkei said a sticking point in the deal discussions centers around China’s state subsidies.  Talks of course are scheduled to resume in DC this Thursday and Friday.

Trade data out of China saw exports in USD terms fall 2.7% in April vs and expected 3% increase.  Imports though rose 4% vs a 2.1% decrease leaving their trade surplus at $13.84B, well light the $34.56B expected reading. Vs the United States their surplus for to $21B from $20.5B prior.  The New Zealand Dollar weakened overnight after their central bank cut its cash rate by .25% to 1.5%.  Expectations were adjusted for another cut.

Down Under, BHP -.3% will face a £5B lawsuit in British courts related to the 2015 Samarco dam burst.  The suit alleges the company knew of escalating safety concerns and with 235k Brazilians represented in the case. Related to the space, discussions continue to swirl about iron ore hitting $100 a ton with Vale experiencing new disruptions at one of their mines.  The move allowed BHP to work off of lows with Fortescue -1.5% and Rio Tinto -.1% still lower.

Keep an eye on Honda’s ADR’s today after it  reported an unexpected 4Q loss.  Currency effects and production changes in Europe were cited with the firm seen lowering its FY view.  The company plans to cut different variations of global models by a 1/3 by 2025.

Toyota also looks to trade lower with FY op income under earlier estimates. 4Q NI was well light but the company announced a share repurchase of up to 1.73% of outstanding shares to the tune of ¥300B.

European Headlines

Early in the session US futures were steadily working higher with Europe seemingly wanting to rebound.  However that only lasted an hour with indices there just off of lows.  The losses though are slight compared to yesterday with earnings taking the stage with trade concerns.   Several sectors though are bucking the trend with Industrials, Media, Energy, and Food names up a bit.  To the downside, Insurers, Utilities, and Autos weigh.

In a rare sight today, Siemens +4.4% is green today post reporting 2Q orders up 6% with their industrial business beating estimates. The company confirmed FY industrial profit views.  The firm is said to be preparing to pare 10k positions.

Imperial Brands -4.9% met estimates and retained FY views but is lower with concerns that those FY estimates may be unattainable.  This stems from weaker US vape sales couple with slowing tobacco revenues.

On several broker downgrades BMW is off 2.5%.  UBS lowered their PT and EPS estimates citing a potential EU fine and higher wage expenses.  While lowering current year estimates Warburg retained estimate views for the next two years.

Wirecard is up nearly 3% post upping their FY19 ebitda view. Transactions occurrences are on the upswing with customers seemingly not too concerned with accounting irregularities being investigated in Germany.

Event Survey Actual Prior Revised
SK 26) BoP Current Account Balance Mar $4819.6m $3601.9m
SK 27) BoP Goods Balance Mar $8467.3m $5479.4m
UK 28) BRC Sales Like-For-Like YoY Apr 2.50% 3.70% -1.10%
JN 29) Monetary Base YoY Apr 3.20% 3.10% 3.80%
JN 30) Monetary Base End of period Apr ¥514.6t ¥506.3t
JN 31) Nikkei Japan PMI Composite Apr 50.8 50.4
JN 32) Nikkei Japan PMI Services Apr 51.8 52
CH 33) Trade Balance Apr $34.56b $13.84b $32.64b $32.42b
CH 34) Exports YoY Apr 3.00% -2.70% 14.20% 13.80%
CH 35) Imports YoY Apr -2.10% 4.00% -7.60% -7.90%
CH 36) Trade Balance CNY Apr 216.75b 93.57b 221.23b 219.69b
CH 37) Exports YoY CNY Apr 8.00% 3.10% 21.30% 20.80%
CH 38) Imports YoY CNY Apr 3.00% 10.30% -1.80% -2.10%
EC 39) EU Commission Economic Forecasts
SZ 40) Unemployment Rate Apr 2.40% 2.40% 2.50%
SZ 41) Unemployment Rate SA Apr 2.40% 2.40% 2.40%
GE 42) Industrial Production SA MoM Mar -0.50% 0.50% 0.70% 0.40%
GE 43) Industrial Production WDA YoY Mar -2.60% -0.90% -0.40% 0.20%
NO 44) Industrial Production MoM Mar -1.40% -1.80%
NO 45) Industrial Production WDA YoY Mar -6.50% -5.70%
NO 46) Ind Prod Manufacturing MoM Mar 0.30% -0.80% -0.30%
NO 47) Ind Prod Manufacturing WDA YoY Mar 1.40% 3.10%
NO 48) Average Monthly Earnings YoY 1Q 3.20% 2.80%
FI 49) Trade Balance Mar P -95m -87m -105m
UK 50) Halifax House Prices MoM Apr 0.10% 1.10% -1.60%
UK 51) Halifax House Price 3Mths/Year Apr 4.50% 5.00% 2.60%
SW 52) Budget Balance Apr -2.6b 12.0b
BE 53) Budget Balance YTD Apr -4.954b -11.246b
IR 54) New Vehicle Licences Apr 17339 18144
PO 55) Unemployment Rate 1Q 6.80% 6.70%

About the Author

Clayton Duff headshot
ClaytonDuffDir,Director of International Trading

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. Clayton was promoted to manager of international trading in 2019. He earned his bachelor’s degree f...

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