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08.21.2019 18 new Morning Note posts under Morning Note (10) and International Summary (8)

International Summary

News Trading Desk

International Summary

"TGIF Global Markets 7/5/2019"

posted by Matthew Kiselica on 07/05/2019 at 6:41 am

by Matthew Kiselica

07/05/2019 at 6:41 am

Asian Markets

After mixed performance yesterday, most of the core markets managed modest gains.  However, activity was muted with volumes dramatically lower due to yesterday’s U.S. holiday and the payroll data due this morning.  India is a standout to the downside.  Investors are disappointed by two key factors in the government’s fiscal plan.  There was less stimulus spending than anticipated and taxes will be increased for a higher bracket.

Sectors were mixed.  Consumer staples fared well rising more than 1%.  Healthcare advanced more than 0.5%.  Energy ended the day lower by c. 0.5% followed by materials.

Other Important Headlines

  • Samsung Elec. -0.75% is the key corporate story.  The company’s preliminary  Q2 OP of KRW 6.5t is ahead of consensus: KRW 6.08t.  However, that includes a one-off customer related gain of KRW 900b.  It is speculated to have come from Apple.  Taking that out of the OP puts it below estimates.
  • Iron ore futures in Shanghai tumbled when a Chinese mill association asked authorities to investigate the recent price surge.
  •  Reports allege China is asking trusts to limit financing within the property sector.  The Shanghai Property Index fell more than 1% but pared a loss of 1.9%.
  • After the close, China announced its new tech board will commence trading on the 22nd.

European Markets

Europe has been lower since the open following German factory orders for May which are well below expectations, declining more than thought.  The markets are currently near their lows.

Most sectors are lower.  Industrials and basic resources have been off at least 1.5% more of the morning.  Construction is down c. 1%.  Defensives and retail are proving sum support.

The debt markets are fairly quiet and most yields are seeing small gains.  However, yesterday the yield on the German 10 yr. bund fell below the ECB’s deposit rate!

Corporate Snippets

  • Osram Licht’s +1.8% board is recommending the bid made by Bain Capital and the Carlyle Group.  It values Osram at €3.4b.  It works out to €35 per share vs. the stock trading below €29 on Tuesday prior to M&A speculation hitting the tape.
  • Reports allege IAG -1.0% is mulling a bid for Norwegian Air +7.1%.  However, IAG has denied the story.
  • About three hours into the trading day, BWM -0.5% CEO Kreuger disclosed he will not seek reappointment to the post.  His current term expires at the end of April 2020.  He wishes to ‘pursue new professional endeavors.’
  • U.K. building supplier Sig Plc -4.0% notes U.K. construction activity is seeing “marked deterioration” as the year progresses.  This follows the Market UK Construction PMI from earlier in the week which was well below expectations: 43.1 vs. 49.2 expected.
  • Logistic company John Menzies -11.0% is also making dire prognostications.  The company notes weak cargo volumes and reduced flight schedules.  Analysts foresee estimate cuts of 6%-10%.

On  Our Side of the Pond

Have a good weekend!

Markets & Macro

Markets

Event Survey Actual Prior Revised
IN India’s Economic Survey
GE Markit Germany Construction PMI Jun 50 51.4
UK New Car Registrations YoY Jun -4.90% -4.60%
EC Retail Sales MoM May 0.30% -0.30% -0.40% -0.10%
EC Retail Sales YoY May 1.60% 1.30% 1.50% 1.80%
AU AiG Perf of Construction Index Jun 43 40.4
JN Household Spending YoY May 1.50% 4.00% 1.30%
JN Official Reserve Assets Jun $1322.3b $1308.0b
JN Leading Index CI May P 95.4 95.2 95.9
JN Coincident Index May P 103.1 103.2 102.1
IN India FY20 Budget Presentation
GE Factory Orders MoM May -0.20% -2.20% 0.30% 0.40%
GE Factory Orders WDA YoY May -6.20% -8.60% -5.30%
AU Foreign Reserves Jun A$77.5b A$79.9b A$79.1b
FR Trade Balance May -4854m -3278m -4981m -4866m
FR Current Account Balance May 0.3b -0.8b -1.2b
SP Industrial Output NSA YoY May 1.80% -2.00%
SP Industrial Output SA YoY May 0.60% 1.40% 1.70% 1.80%
SP Industrial Production MoM May -0.50% 0.30% 1.80%
UK Halifax House Prices MoM Jun -0.40% -0.30% 0.50% 0.40%
UK Halifax House Price 3Mths/Year Jun 5.70% 5.70% 5.20%
UK Unit Labor Costs YoY 1Q 2.10% 3.10%
HK Foreign Reserves Jun $445.6b $437.8b
IT Istat Releases the Monthly Economic Note
CA Net Change in Employment Jun 9.9k 27.7k
US Change in Nonfarm Payrolls Jun 160k 75k
US Two-Month Payroll Net Revision Jun
CA Unemployment Rate Jun 5.50% 5.40%
US Change in Private Payrolls Jun 150k 90k
CA Hourly Wage Rate Permanent Employees YoY Jun 2.70% 2.60%
US Change in Manufact. Payrolls Jun 3k 3k
CA Participation Rate Jun 65.7 65.7
CA Full Time Employment Change Jun 27.7
US Unemployment Rate Jun 3.60% 3.60%
CA Part Time Employment Change Jun 0
US Average Hourly Earnings MoM Jun 0.30% 0.20%
US Average Hourly Earnings YoY Jun 3.20% 3.10%
US Average Weekly Hours All Employees Jun 34.4 34.4
US Labor Force Participation Rate Jun 62.80% 62.80%
US Underemployment Rate Jun 7.10%
CA Ivey Purchasing Managers Index SA Jun 55.9

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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