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09.20.2019 14 new International Summary posts under Morning Note (10) and International Summary (4)

International Summary

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International Summary

"CAPIS Global Markets 5/22/2019"

posted by Matthew Kiselica on 05/22/2019 at 6:58 am

by Matthew Kiselica

05/22/2019 at 6:58 am

Asian Markets

The markets were subdued despite the solid performance during the U.S. trading session.   The Nikkei closed flat with the ¥ a bit stronger following mixed April trade data.   Exports again fell 2.4%, worse than expected while imports ticked up leaving a larger trade deficit than expected. Real Estate names were up 60bps while Financials pulled back somewhat.

China’s Ambassador to the U.S. said his nation is ready to resume talks to address trade imbalances and offer to purchase more products and services from the US.  One former State Department official said a deal could take place by the end of next month but the recent break in talks will probably lead to a more drawn-out time line.   Adding to the tariff/Huawei mix, the U.S. may add five Chinese video surveillance firms to its list of firms unable to purchase US components.  Chinese espionage and treatment of a minority groups is cited for the possible action.  Despite that, the IT sector led with gains shy of 1% in Shanghai.  However, the nation’s major indices all settled lower.

Other Important Headlines

  • The Nikkei reports Tencent -0.6% is seeing slower growth in Chinese video ad sales.
  • An executive of Hangzhou Nikvision Digital -5.5% stated the company has not had any indications of the aforementioned U.S. blacklisting story.  He added the company has other venues to make sales and sees limited impact if the U.S. does take action.
  • Due to the Sino-U.S. trade battle, Guangzhou Auto-flat is delaying its U.S. launch.
  • South Korea announced a plan to end smoking with moves to include packaging restrictions.
  • Also, in S. Korea, officials at the BoK stated the KRW is weakening too rapidly.  Authorities are meeting to discuss options to support the currency.
  • Australian Q1 construction work done slumped 1.9% q/q when consensus was expecting it to hold steady.

 

European Markets

As a whole, Europe had been up small for most of the session.  However, U.K. PM May noted the division in Parliament regarding the her current plan with the EU.  Additionally, opposition is strong to a 2nd referendum.  Reports swirl she is facing mounting pressure among her party to step down.

Currently, most sectors are lower.  Banks are off by more than 1% followed by travel/leisure, insurance, retail and autos.  Technology, financials, personal goods and media are up small.

Not all of the day’s trade headlines are negative.  Turkey announced they will cut tariffs on a host of U.S. goods.

On a less happy note, Tensions in the Middle East (and elsewhere) continue to percolate.  The U.S. claims Syria may be renewing the use of chemical weapons.  The last time the U.S. led strikes in the nation, the war of words with Russia ratcheted up.   North Korea continues to call for the release of the cargo ship seized by the U.S.  Iran is no happier with US as Saudi Arabia states they will do everything they can to prevent war in the region.

Corporate Snippets

  • Marks and Sparks -6.6% sees its FY 19/20 earnings back ended for the 2H.  It also announced the terms of its rights issue.  The capital is being used to fund its purchase of Ocado Group -1.6%.
  • Sources allege BMW -1.1% CEO Krueger’s future is being evaluated by several members of the supervisory board.
  • Generali -0.4% is discussing the purchase of MetLife’s Central European assets.
  • Sasol -11.8% is increasing its cost projections for its Lake Charles operations.
  • Oriflame +32.0% is on fire.  The founding family is bidding SEK227 a share to take the company private.
  • Safecharge +22.0% has received an all cash bid from Nuvei Corp. at $5.55 per share.

On Our Side of the Pond

  • Q2 EPS at Toll Brothers are ahead of the range.  However, sees Q3 deliveries and FY revenues that imply consensus will need to come down.  It notes a slowing California housing market.
  • Lowe’s EPS missed and the company cut its outlook.
  • Brazil’s Natura Cosmeticos is conducting talks to purchase Avon Products.
  • Pres. Trump, Sen. Shumer, et. al. are meeting this morning to discuss an infrastructure bill.
  • Fed Minutes due later.

Markets and Macro

Markets Snapshot

Event Survey Actual Prior Revised
JN Trade Balance Apr ¥232.7b ¥60.4b ¥528.5b ¥527.8b
JN Trade Balance Adjusted Apr -¥37.5b -¥110.9b -¥177.8b -¥154.3b
JN Exports YoY Apr -1.60% -2.40% -2.40%
JN Imports YoY Apr 4.50% 6.40% 1.10% 1.20%
JN Core Machine Orders MoM Mar 0.00% 3.80% 1.80%
JN Core Machine Orders YoY Mar -3.40% -0.70% -5.50%
AU Bloomberg May Australia Economic Survey (Table)
AU Westpac Leading Index MoM Apr -0.09% 0.19% 0.28%
AU Skilled Vacancies MoM Apr -1.60% -1.50% -1.80%
AU Construction Work Done 1Q 0.00% -1.90% -3.10% -2.10%
SK South Korea Household Credit 1Q KR1540.0t KR1534.6t KR1536.7t
JN Supermarket Sales YoY Apr -1.00% 0.50%
IT Istat Releases Economic Forecast for 2019
UK CPIH YoY Apr 2.10% 2.00% 1.80%
UK CPI MoM Apr 0.70% 0.60% 0.20%
UK CPI YoY Apr 2.20% 2.10% 1.90%
UK CPI Core YoY Apr 1.90% 1.80% 1.80%
UK Retail Price Index Apr 287.6 288.2 285.1
UK RPI MoM Apr 0.90% 1.10% 0.00%
UK RPI YoY Apr 2.80% 3.00% 2.40%
UK RPI Ex Mort Int.Payments (YoY) Apr 2.80% 3.00% 2.40%
UK PPI Input NSA MoM Apr 1.30% 1.10% -0.20% -0.80%
UK PPI Input NSA YoY Apr 4.50% 3.80% 3.70% 3.20%
UK PPI Output NSA MoM Apr 0.30% 0.30% 0.30% 0.10%
UK PPI Output NSA YoY Apr 2.30% 2.10% 2.40% 2.20%
UK PPI Output Core NSA MoM Apr 0.20% 0.20% 0.00% -0.10%
UK PPI Output Core NSA YoY Apr 2.20% 2.20% 2.20%
UK House Price Index YoY Mar 1.00% 1.40% 0.60% 1.00%
UK Public Finances (PSNCR) Apr -7.1b 8.9b 8.8b
UK Central Government NCR Apr -9.8b 22.5b 22.1b
UK Public Sector Net Borrowing Apr 5.1b 5.0b 0.8b -1.0b
UK PSNB ex Banking Groups Apr 5.9b 5.8b 1.7b -0.1b
US MBA Mortgage Applications 17-May -0.60%
CA Retail Sales MoM Mar 1.20% 0.80%
CA Retail Sales Ex Auto MoM Mar 0.90% 0.60%
US FOMC Meeting Minutes 1-May

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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