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12.10.2019 11 new posts under Morning Note (9), International Summary (1), Press Releases (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Markets 7/2/2019"

posted by Matthew Kiselica on 07/02/2019 at 6:59 am

by Matthew Kiselica

07/02/2019 at 6:59 am

Asian Markets

Most of the markets treaded water although Hong Kong was the standout playing catch up following yesterday’s holiday.  Investors there focused more upon the Pres. Trump and Pres Xi meeting as opposed to yesterday storming of the local parliament by protesters.

Most sectors advanced.  Telcos, consumer discretionary and healthcare were better close to 1%.  Financials gave way small while IT and energy lagged.

Down Under, the RBA reduced its benchmark rate 25 bps to 1%, as expected.  The follow up statements were less dovish than expected and the “Aussie” climbed.

Other Important Headlines

  • Chinese Premier Li announced ownership limits on brokers will be ended “by 2020.”  The previous indication had been 2021.
  • Byd +3.3% and peers rose following Pres. Xi’s pledge to support the EV vehicle sector.
  • The Hong Kong listing of Ab Inbev’s +1.3% Asian ops ( as well as hops) has a price range of HK$40 to HK$47 per share.  That values Budweiser Brewing APAC at $54b to $64b.   The shares are expected to commence trading on the 19th.
  • JP Morgan sees Japanese equities as the only asset class with the chance to have better performance during H2 vs. H1.
  • After the close, Hong Kong retail sales fell during May but are well ahead of projected declines.

European Markets

The region has spent most of the session up small.  It has bounced off the flat line twice.  The second dip was caused by comments the ECB was patient regarding any rate cut this month.  This caused the € to catch some bids.  Conversely, the £ is lower following dreadful construction PMI results which are a decade low.

Sectors are split.  Utilities and food/bevies have spent the session up about 1% for most of the session.  Construction, media and chemicals are lower by less than 0.5% and off lows.  While still lower, basic resources and autos have also improved from lower levels.

The debt markets are seeing some interesting action.  In a bid to appease the EU, the Italian government has lowered its FY’19 budget deficit to 2.04% from 2.4%.   Italian yields are falling with the 10 yr. lower by c. 7 bps.  The 2 yr. Italian yield fell below 0% for the first time since May of 2018 before paring the decline.

In the commodity markets, crude is giving ground following yesterday’s gains  The Saudi oil minister says the OPEC+ deal will be finalized today for an extension of the cuts for 9 months.  The Iranian minister has already left prompting some concerns regarding a deal.  On a related note, reports allege Saudi Aramco is preparing for its IPO again.

Corporate Snippets

  • The U.S. is proposing additional tariffs on $4b of European goods in the continued Airbus -1.0%/ Boeing spat.
  • Deutsche Bank -0.5% is seeking lower capital buffers from regulators as it attempts to reorganize the bank.
  • WPP -2.3% confirms the company is conducting exclusive talks to sell a majority stake in its Kantar unit to Bain Capital.

On Our Side of the Pond

  • Fairly quiet with the 4th approaching.
  • Keep in mind, the Canadian markets will need to play catch up today.
  • No U.S. macro but the Markit Canadian Manuf. PMI will be released north of the border.

Markets & Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK CPI MoM Jun -0.10% -0.20% 0.20%
SK CPI YoY Jun 0.80% 0.70% 0.70%
SK CPI Core YoY Jun 0.90% 0.90% 0.80%
AU ANZ Roy Morgan Weekly Consumer Confidence Index 30-Jun 118.9 114.3
JN Monetary Base YoY Jun 4.00% 3.60%
JN Monetary Base End of period Jun ¥523.2t ¥511.8t
AU RBA Cash Rate Target 2-Jul 1.00% 1.00% 1.25%
IT Budget Balance Jun -0.8b -0.9b
GE Retail Sales MoM May 0.50% -0.60% -2.00% -1.00%
GE Retail Sales NSA YoY May 2.70% 4.00% 4.00% 4.60%
UK Nationwide House PX MoM Jun 0.20% 0.10% -0.20%
UK Nationwide House Px NSA YoY Jun 0.50% 0.50% 0.60%
FR Budget Balance YTD May -83.9b -67.2b
SP Unemployment Change Jun -90.0k -63.8k -84.1k
UK Markit/CIPS UK Construction PMI Jun 49.2 43.1 48.6
HK Retail Sales Value YoY May -4.30% -1.30% -4.50%
HK Retail Sales Volume YoY May -5.40% -1.70% -5.00%
EC PPI MoM May 0.10% -0.10% -0.30%
EC PPI YoY May 1.70% 1.60% 2.60%
CA MLI Leading Indicator MoM May 0.40%
CA Markit Canada Manufacturing PMI Jun 49.1
CA Bloomberg Nanos Confidence 28-Jun 57.8

 

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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