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International Summary

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International Summary

"CAPIS Global Markets 6 5 2019"

posted by CAPIS on 06/05/2019 at 7:07 am

by CAPIS

06/05/2019 at 7:07 am

Asian Markets

Most markets advanced with Japan leading the way.  The ¥ gave back some of its recent gains providing relief to exporters.  Australia moved higher with RBA Gov. Lowe making dovish comments following yesterday’s rate cut.  The Chinese May Caixin Services PMI is below expectations hitting a 4 month low.  S. Korea also had disappointing macro data.  Its currency a/c turned negative for the first time since 2012.  This was in part due to large offshore dividend payments.  Full figures in our macro section.  India (along with many Muslim nations) was closed for the start of Ramadan.

Japanese names provided a lift to most sectors.  Consumer discretionary, IT, industrials and telcos each gained c. 1%.  Energy, healthcare and utilities lagged finishing around the flat line.

Important Headlines

  • Toyota Motors +2.5% sees the potential cost increases due to the proposed Mexican tariffs of up to $1b.
  • While Byd -0.4% fell today, China is taking steps to bar entry to the electric vehicle space.  Additionally, it will foster key, efficient providers in the space.
  • China Vanke’s +2.8% May contract sales rose 35.0% to CNY 58b.

European Markets

The region has been to the upside since the open.  Most of the markets have managed to maintain headway despite negative news regarding Italy.  The EU is initiating the process to take disciplinary action due to the nation’s debt.  Italian equities have fallen with banks taking the brunt of the selling.  The Italian 10 yr. yield is higher c. 10 bps. and the € has pulled back from earlier gains to the flat line.

Most markets are to the upside.  Industrial, tech, travel/leisure, personal goods and tech are better by c. 1% or more.  Banks are off c. 0.5% with insurance and autos down small.

Corporate Snippets

  •  Late yesterday, word hit Renault-flat is holding off on a Fiat Chrysler -1.1% merger decision until tomorrow.  However, a major hurdle appears to have been cleared.  Apparently, both Italy and France have warmed up to the potential deal.
  • Norsk Hydro +3.7% has provided a positive surprise to the markets.  The company’s Q1 underlying profit beat an expected loss.  Revenues and EBIT are also ahead of consensus.  The icing on the cake is the company provided clarity regarding the final impact of cyber attack during the quarter.
  • U.K. subprime lender Non-Standard Finance -6.4% is electing to let its hostile bid for Provident Financial +15.11% lapse.

On Our Side of the Pond

  • Salesforce is seeing strong gains pre-market following results.  The company’s growth shows no signs of ebbing.  The company’s Q1 revenues range starts at what the Street was expected.
  • Mind you eye in Ford.  China is fining its Chinese jv CNY 162.8m for monopoly violations.
  • Bombardier is conducting talks regarding the potential sale of its regional jet unit to Mitsubishi Heavy.  This news hit the tape well after the Japanese close.
  • The Fed Beige Book will be released later today.

Markets & Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK Foreign Reserves May $401.97b $404.03b
AU AiG Perf of Services Index May 52.5 46.5
AU CBA Australia PMI Services May F 51.5 52.3
AU CBA Australia PMI Composite May F 51.5 52.2
SK BoP Current Account Balance Apr -$664.8m $4819.6m
SK BoP Goods Balance Apr $5668.0m $8467.3m
JN Nikkei Japan PMI Composite May 50.7 50.8
HK Nikkei Hong Kong PMI May 46.9 48.4
JN Nikkei Japan PMI Services May 51.7 51.8
AU GDP SA QoQ 1Q 0.50% 0.40% 0.20%
AU GDP YoY 1Q 1.80% 1.80% 2.30%
CH Caixin China PMI Composite May 51.5 52.7
CH Caixin China PMI Services May 54 52.7 54.5
IN Nikkei India PMI Services May 50.2 51
IN Nikkei India PMI Composite May 51.7 51.7
SP Industrial Output NSA YoY Apr -2.00% -0.10% -0.20%
SP Industrial Output SA YoY Apr -0.20% 1.70% -3.10% -3.00%
SP Industrial Production MoM Apr 0.50% 1.80% -1.20%
SP Markit Spain Services PMI May 52.5 52.8 53.1
SP Markit Spain Composite PMI May 52.1 52.1 52.9
IT Markit/ADACI Italy Services PMI May 49.8 50 50.4
IT Markit/ADACI Italy Composite PMI May 49.3 49.9 49.5
FR Markit France Services PMI May F 51.7 51.5 51.7
FR Markit France Composite PMI May F 51.3 51.2 51.3
GE Markit Germany Services PMI May F 55 55.4 55
GE Markit/BME Germany Composite PMI May F 52.4 52.6 52.4
EC Markit Eurozone Services PMI May F 52.5 52.9 52.5
EC Markit Eurozone Composite PMI May F 51.6 51.8 51.6
IT Istat Releases the Monthly Economic Note
UK New Car Registrations YoY May -4.60% -4.10%
UK Markit/CIPS UK Services PMI May 50.5 51 50.4
UK Markit/CIPS UK Composite PMI May 51 50.9 50.9
UK Official Reserves Changes May $2309m $1517m
EC PPI MoM Apr 0.20% -0.30% -0.10%
EC PPI YoY Apr 3.10% 2.60% 2.90%
EC Retail Sales MoM Apr -0.50% -0.40% 0.00%
EC Retail Sales YoY Apr 1.50% 1.50% 1.90% 2.00%
US MBA Mortgage Applications 31-May 1.50% -3.30%
US ADP Employment Change May 185k 275k
CA Labor Productivity QoQ 1Q 0.40% -0.40%
US Markit US Services PMI May F 50.9 50.9
US Markit US Composite PMI May F 50.9
US ISM Non-Manufacturing Index May 55.4 55.5
US U.S. Federal Reserve Releases Beige Book

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