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07.18.2019 14 new posts under Morning Note (9), International Summary (4), Compliance Docs. (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 6 13 2019"

posted by Clayton Duff on 06/13/2019 at 6:41 am

by Clayton Duff

06/13/2019 at 6:41 am

Headlines in Asia

After an uninspiring day in the US Asia followed up with a like result.  The bias on the day was to the downside, albeit on slight losses with mainland China up small.  Protests continued in Hong Kong with their market lower in the morning before closing flat by day’s end.  Legislators there delayed for the second time a meeting on the extradition bill.  The government HQ there is said to be shut today and tomorrow.  Cash demands there were again higher with money market rates up.  Oil prices have been in focus today with what is being called an attack in the Sea of Oman on 2 tankers.  Headlines hit post the close in Japan and Australia with Energy names both leading to the downside there.   Brent is up over $2.00 with WTI better by over $1.4.

  • Chinese FDI rose 8.5% in May, ahead of the prior 6.3% gain seen.  State newspaper China Daily said moderate inflation and a current dovish environment will allow for the government to adjust credit to counter any risks that may arise if trade talks with the US continue to go south.
  • LG Chem +3.6% inked a deal with China’s Geely Auto -.9% to produce batteries for their EV’s.
  • Mitsubishi UFJ -1.3% could see a loss per the Nikkei in the 1Q.  This is predicated on a likely ¥300B impairment charge concerning an Indonesian JV into Bank Danamon.
  • Post the close headlines noted Japan Display will likely miss Friday’s deadline for a bailout.  The company fell 12% today with ADR’s no doubt expected to suffer today in the US.

Tomorrow in China we will see Industrial Production number along with Retail Sales, Fixed Asset growth, Property Investment, and some jobs data.

Headlines in Europe

After a lower open European indices have worked higher with smallish gains currently on tap.  Roughly 2/3rds of Stoxx 600 sectors are to the upside, led by Basic Resources and Construction.  On the economic front German inflation met expectations with tepid growth in May.  Switzerland’s SNB left their Sight Deposit Rate unchanged.  They see inflationary pressure as moderate adding the franc was highly valued.

  • Ahead of a vote for a new Tory leader the Labour party was defeated in Parliament in a push to block a no-deal Brexit.
  • The SNB maintained their GDP target at 1.5% while increasing consumer inflation targets for this year and next.  Earlier the 3 month Libor target range was held steady with the central bank noting they will replace the target range citing the future of Libor was not guaranteed.
  • HVAC supplier Ferguson is up 7% with Trian Fund Mgmt acquiring a 6% stake.
  • German telco provider 1&1 Drillisch is better by ~8% after securing 5G spectrum even as providers had to pay up.  The country raised €6.55B, well more than the €5B expected which should force carriers to share more across the networks to cut down on infrastructure costs.
  • Defense contractor Thales +2.5% upped their earning forecast with cost savings said to be above previous estimates.
  • OPEC Monthly Report lowers FY19 global oil demand growth to 1.14M from 1.21M bpd citing trade concerns. Retained FY19 non-Opec supply growth at 2.14M bpd.  Sees consumption growth accelerating the balance of the year.

North America

  • Ahead in the States, import Prices ex-petroleum expected to fall .2% vs a -.6% prior drop.  Export prices expected to fall .2% vs a prior rise of .2%.
  • Initial Jobless Claims expected at 215k in June, slightly less than the 218k prior.  Continuing claims expected at 1.660M vs the 1.682M prior reading.

About the Author

Clayton Duff headshot
ClaytonDuffFVP,Senior International Trader

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. He earned his bachelor’s degree from the University of Texas Arlington. Clayton maintains Series 3,...

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