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International Summary

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International Summary

"CAPIS Global Markets 6 10 2019"

posted by CAPIS on 06/10/2019 at 6:30 am

by CAPIS

06/10/2019 at 6:30 am

Asian Markets

A solid start to the week for the region’s markets following Friday’s U.S.-Mexican trade news.  As a refresher,  Pres. Trump suspended his threatened increase to Mexican tariffs.  He says a deal has been reached regarding border security along with agricultural products.  Friday’s headlines the Chinese government would seek to increase consumption of autos, home appliances and electronics was another factor.   The icing on the cake is the PBoC signaling it has scope for further easing, if needed.  Australia was closed.

All major sectors advanced.  Consumer discretionary, real estate, consumer staples, telcos, healthcare and industrials improved by 1% or more.  Safe havens such as gold and the ¥ gave back some of the recent gains.

Other Important Headlines

  • China’s May trade surplus was also almost twice what was anticipated.  While imports in USD are below expectations, exports were a surprise increase.  (All figures in Markets & Macro section.)  There is some thought exporters were trying to get items shipped prior to the U.S. tariff increases.
  • Japan’s Q1 GDP is bang inline with estimates.
  • Reports over the weekend indicate both the French & Japanese governments are at odds regarding the future of the Renault/Nissan +0.8% alliance.  This is on top of discord between the two company’s executives.  Renault indicates it will abstain from voting on Nissan’s governance proposals.  Given Renault’s significant holding, it means the measures will not pass.  More on Renault later.
  • Following results released following Thursday’s close and a 3 day weekend, Chow Tai Fook +13.0% surged.
  • Organizers claim 1M people attended protests in Hong Kong regarding new extradition rules to the Mainland.  Authorities claim the number was only c. 25% of that figure.

European Headlines

Europe has been trading to the upside since the open.  However, gains have been pared following U.K. GDP, industrial production, manufacturing production and construction output were all below consensus.  A number of markets are closed including Germany, Switzerland, Norway, Denmark and Austria.  Yes Clayton, I am sure they are putting another shrimp on the Bar-b.

Most sectors are advancing.  Basic resources are better c. 1% with banks up more than 0.5% while autos and energy are seeing improvement around that level.  Utilities are off more than 0.5% with other defensives lagging all session.

Corporate Snippets

  • Renault +2.4% and Fiat Chrysler +2.0% are said to be reviving merger talks.
  • Mediaset +6.3% and Mediset Espana -6.0% will form a Dutch holding company combining the Italian and Spanish units.  The new shares will be listed in both Milan and Madrid.
  • Ferguson’s -6.0% Q3 organic revenues growth of 2.7% is below consensus of +3.6%.  The company noted a “material slowdown” in the U.S. residential market along with slowing trends in Canada.
  • Thomas Cook +14.3% is holding talks with Fosun Intl +4.0% to sell its tour operator business.

On Our Side of the Pond

  • The aerospace/defense sector is seeing a major M&A deal.  United Technologies is agreeing to purchase Raytheon.  Both names are trading up pre-market. United Tech will proceed with the spin-0ff of the Otis Elevator and Carrier A/C units.
  • Salesforce will acquire Tableau Software.
  • The directors of operations and marketing at Uber are “stepping down.”
  • Mexico is down playing Pres. Trump’s claim of an agricultural deal.
  • Late on Friday, Chile cuts its benchmark rate by 50 bps to 2.5%.

Markets & MacroMarkets

Event Survey Actual Prior Revised
JN BoP Current Account Balance Apr P ¥1514.5b ¥1707.4b ¥2847.9b
JN BoP Current Account Adjusted Apr P ¥1440.2b ¥1600.1b ¥1271.0b
JN Trade Balance BoP Basis Apr P ¥5.0b -¥98.2b ¥700.1b
JN GDP SA QoQ 1Q F 0.60% 0.60% 0.50%
JN GDP Annualized SA QoQ 1Q F 2.20% 2.20% 2.10%
JN GDP Nominal SA QoQ 1Q F 0.80% 0.80% 0.80%
JN GDP Deflator YoY 1Q F 0.20% 0.10% 0.20%
JN GDP Private Consumption QoQ 1Q F -0.10% -0.10% -0.10%
JN GDP Business Spending QoQ 1Q F 0.50% 0.30% -0.30%
JN Bank Lending Incl Trusts YoY May 2.60% 2.40%
JN Bank Lending Ex-Trusts YoY May 2.80% 2.50%
CH Foreign Reserves May $3090.00b $3101.00b $3094.95b
CH Exports YoY May -3.90% 1.10% -2.70%
CH Imports YoY May -3.50% -8.50% 4.00%
CH Trade Balance May $22.30b $41.65b $13.84b $13.77b
CH Exports YoY CNY May 4.70% 7.70% 3.10%
CH Imports YoY CNY May 5.80% -2.50% 10.30%
CH Trade Balance CNY May 136.00b 279.12b 93.57b 93.12b
JN Bankruptcies YoY May -9.38% -0.76%
JN Eco Watchers Survey Current SA May 45.4 44.1 45.3
JN Eco Watchers Survey Outlook SA May 48 45.6 48.4
IT Industrial Production MoM Apr 0.00% -0.70% -0.90% -1.00%
IT Industrial Production WDA YoY Apr -0.50% -1.50% -1.40% -1.60%
IT Industrial Production NSA YoY Apr 0.10% -3.10% -3.20%
UK Monthly GDP 3M/3M Change Apr 0.40% 0.30% 0.50%
UK GDP (MoM) Apr -0.10% -0.40% -0.10%
UK Industrial Production MoM Apr -1.00% -2.70% 0.70%
UK Industrial Production YoY Apr 0.90% -1.00% 1.30%
UK Manufacturing Production MoM Apr -1.40% -3.90% 0.90%
UK Manufacturing Production YoY Apr 2.00% -0.80% 2.60%
UK Construction Output SA MoM Apr 0.50% -0.40% -1.90%
UK Construction Output SA YoY Apr 3.30% 2.40% 3.20%
UK Visible Trade Balance GBP/Mn Apr -£13000m -£12113m -£13650m -£15430m
UK Trade Balance Non EU GBP/Mn Apr -£4476m -£4595m -£4361m -£6217m
UK Trade Balance Apr -£4700m -£2740m -£5408m -£6151m
UK Index of Services MoM Apr 0.10% 0.00% -0.10%
UK Index of Services 3M/3M Apr 0.20% 0.20% 0.30%
CA Housing Starts May 210.0k 235.5k
CA Building Permits MoM Apr 1.80% 2.10%
CA Bloomberg Nanos Confidence 7-Jun 55.5
US JOLTS Job Openings Apr 7496 7488

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