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

International Summary

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International Summary

"CAPIS Global Markets 8/14/2019"

posted by Matthew Kiselica on 08/14/2019 at 7:03 am

by Matthew Kiselica

08/14/2019 at 7:03 am

Markets Overview

The bounce following yesterday positive tariff news is proving to be short lived.  The major story of the day is yields.  The Asian markets lost steam on a number of Chinese macroeconomic data points that were all below consensus.  These raised slowdown concerns.  Data out of Germany and Europe have underscored those worries.  (All data provided in Markets and Macro section.)   The U.K. yield curve is inverted for the first time since 2007 with the U.S. 10 yr. yield is below the 2 yr. yield also for the first time since then.

The EU debts markets are seeing yields lower by c. 3 basis points.  However, U.S yields are seeing some dramatic moves.  The 2 yr. is lower by c. 7.5 basis points, , 10 yr. c. 11 bps & 30 yr. c. 13 bps.

While Asian equities were higher across the board, Europe is now firmly in the red due to the items highlighted above.  All the major sectors are lower.  Autos, banks, basic resources, technology,  chemicals, energy off at least 2%.  Many others are giving ground more than 1%.  Defensives are outperforming.

The commodity markets are also showing the risk-off sentiment.  Earlier gold was down small and trading below $1,500.  However, as the yield story became a theme it moved into the green, regaining that level.   Crude and copper are lower by more than 1%.

Corporate Headlines

  • Hon Hai -0.4% initially traded well following the results released after yesterday’s close.  By and large, they were regarded as reassuring despite the Huawei issues.  However, they slowly trickled lower over the course of the session due to the Chinese data.
  • After the close, Tencent reported results.  Adj Net of CNY 23.5B & Op CNY 27.5B are both ahead of consensus.  Revenues  of CNY 88.2B is a miss with CNY 93.4B  expected.  The company is not proposing a dividend.
  • Balfour Beatty’s +6.8% H1 PTP is better by 14% y/y.  The company is making substantial increases to its net cash guidance and increasing its dividend by 31.0%!
  • RWE +1.3% also reports strong H1 results thanks to improved trading performance.  The company is raising its outlook which it had just increased at the end of July.  It now sees FY adj. EBITDA between €1.4 0 €1.6b vs. the prior guidance of €1.2b to €1.4b.   NI forecasts are also being increased.
  • Admiral +2.9% is also bucking the overall trend this morning.  Results are reassuring with both adj. PTP and overall PTP improving by 4% y/y.

On Our Side of the Pond

  • Tillray’s loss is worse than anticipated despite revenues ahead of projections.  Interest and operating expenses are higher than projected.
  • Presidio accepts a bid from BC Partners at $16/share.  That is a 21% premium to yesterday’s close.
  • Facebook reportedly paid “hundreds” of consultants to review user audio.
  • Cisco and Canopy Growth reporting after the close.

Markets & Macro

Markets

Event Survey Actual Prior Revised
SK Export Price Index MoM Jul -0.20% -2.10% -2.20%
SK Export Price Index YoY Jul -5.30% -2.50% -2.70%
SK Import Price Index YoY Jul -1.30% -0.40% -0.60%
SK Import Price Index MoM Jul 0.60% -3.50% -3.70%
SK Unemployment rate SA Jul 4.00% 4.00% 4.00%
JN Core Machine Orders MoM Jun -1.00% 13.90% -7.80%
JN Core Machine Orders YoY Jun -1.10% 12.50% -3.70%
AU Westpac Consumer Conf Index Aug 100 96.5
AU Westpac Consumer Conf SA MoM Aug 3.60% -4.10%
AU Wage Price Index QoQ 2Q 0.50% 0.60% 0.50%
AU Wage Price Index YoY 2Q 2.30% 2.30% 2.30%
CH Fixed Assets Ex Rural YTD YoY Jul 5.80% 5.70% 5.80%
CH Industrial Production YoY Jul 6.00% 4.80% 6.30%
CH Industrial Production YTD YoY Jul 6.00% 5.80% 6.00%
CH Retail Sales YoY Jul 8.60% 7.60% 9.80%
CH Retail Sales YTD YoY Jul 8.40% 8.30% 8.40%
CH Surveyed Jobless Rate Jul 5.30% 5.10%
CH Property Investment YTD YoY Jul 10.60% 10.90%
FR ILO Unemployment Rate 2Q 8.60% 8.50% 8.70%
FR Mainland Unemp. Change 000s 2Q -66k -19k -28k
FR ILO Mainland Unemployment Rate 2Q 8.30% 8.20% 8.40%
GE GDP SA QoQ 2Q P -0.10% -0.10% 0.40%
GE GDP NSA YoY 2Q P -0.30% 0.00% 0.60% 0.80%
GE GDP WDA YoY 2Q P 0.10% 0.40% 0.70% 0.90%
IN Wholesale Prices YoY Jul 1.80% 1.08% 2.02%
FR CPI EU Harmonized MoM Jul F -0.20% -0.20% -0.20%
FR CPI EU Harmonized YoY Jul F 1.30% 1.30% 1.30%
FR CPI MoM Jul F -0.20% -0.20% -0.20%
FR CPI YoY Jul F 1.10% 1.10% 1.10%
FR CPI Ex-Tobacco Index Jul 103.91 103.91 104.12
UK CPIH YoY Jul 1.80% 2.00% 1.90%
UK CPI MoM Jul -0.10% 0.00% 0.00%
UK CPI YoY Jul 1.90% 2.10% 2.00%
UK CPI Core YoY Jul 1.80% 1.90% 1.80%
UK Retail Price Index Jul 289.6 289.5 289.6 289.6
UK RPI MoM Jul 0.00% 0.00% 0.10%
UK RPI YoY Jul 2.80% 2.80% 2.90% 2.90%
UK RPI Ex Mort Int.Payments (YoY) Jul 2.70% 2.70% 2.80%
UK PPI Input NSA MoM Jul 0.60% 0.90% -1.40% -0.80%
UK PPI Input NSA YoY Jul 0.30% 1.30% -0.30% 0.30%
UK PPI Output NSA MoM Jul 0.10% 0.30% -0.10%
UK PPI Output NSA YoY Jul 1.70% 1.80% 1.60%
UK PPI Output Core NSA MoM Jul 0.10% 0.40% 0.10%
UK PPI Output Core NSA YoY Jul 1.70% 2.00% 1.70%
UK House Price Index YoY Jun 1.00% 0.90% 1.20% 0.90%
IT General Government Debt Jun 2386.2b 2364.7b
EC Industrial Production SA MoM Jun -1.50% -1.60% 0.90% 0.80%
EC Industrial Production WDA YoY Jun -1.50% -2.60% -0.50% -0.80%
EC Employment QoQ 2Q P 0.20% 0.30% 0.40%
EC Employment YoY 2Q P 1.10% 1.30%
EC GDP SA QoQ 2Q P 0.20% 0.20% 0.20%
EC GDP SA YoY 2Q P 1.10% 1.10% 1.10%
US MBA Mortgage Applications 9-Aug 21.70% 5.30%
US Import Price Index MoM Jul -0.10% -0.90%
US Import Price Index ex Petroleum MoM Jul -0.10% -0.40%
US Import Price Index YoY Jul -2.00% -2.00%
US Export Price Index MoM Jul -0.10% -0.70%
US Export Price Index YoY Jul -1.60%

 

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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