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11.12.2019 11 new Morning Note posts under Morning Note (9), General (1), International Summary (1)

International Summary

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International Summary

"CAPIS Global Markets 9/03/2019"

posted by Matthew Kiselica on 09/03/2019 at 6:54 am

by Matthew Kiselica

09/03/2019 at 6:54 am

Markets Overview

Risk-off sentiment is seeping into the markets again.  Several factors are prompting investors to take a pause in recent buying.   For starters, headlines on Sino-U.S. trade talks indicate the two sides can’t even agree on a schedule for the next round of talks.  The Hong Kong and Macau Authority held a press conference about the continuing protests in Hong Kong.  Comments continued to deride the “radicals” and condemn foreign government provocation.  Additionally, there critical statements regarding the handling of the unrest by HK Chief Executive Lam’s administration.  Israel and Hezbollah continue to exchange fire along the border with Lebanon.

However, the day’s most eye catching headlines pertain to Brexit.  This evening in London, Parliament will vote upon a measure blocking a No Deal Brexit.  In turn, PM Johnson threatens to call snap elections for Oct. 14 if passed.  He has emphatically stated, he will not ask for an extension to the U.K. departure date from the E.U. on Oct. 31st.   The £ has spent a fare portion of the morning trading below 1.20 for the first time in more than two years, building upon losses from yesterday.

The risk off mode is prompting yields to fall in the debt markets and inversion is being kicked around again.   Commodity markets are seeing crude & copper off more than 1%

Asian equities saw a mix across the region.  China ends the day to the upside following yesterday’s surge due to the Caixin Manufacturing PMI that unexpectedly moved back into expansion territory.  India lags on disappointing GDP and a weakening INR.  Investors worry about foreign investor outflows.  Most sectors in the region end the day lower.  Energy is off by more than 0.5% followed by real estate and financials.  IT and industrials manage to gain while materials, utilities and consumer discretionary are steady.

Europe trading lower since the open but has pared declines.  Turkey outperforms due to inflation data that at least shows the a slower rate.  Most sectors are red.  Energy if lower more than 0.5% with media down by

On the macro front, the RBA lest rates unchanged Down Under at 1.0%.  S. Korean GDP and CPI were a touch light of expectations.  Other political news is Giuseppe Conte is expected to form a government in Rome tomorrow.

Corporate Headlines

  • Xiaomi +4.2% intends to buyback up to $1.5b of its own shares.
  • Plumbing supplier Ferguson +3.1% will restructure by splitting out its U.K. operations.  This is a measure to appease activist investor Nelson Peltz.
  • CNH Industrials -1.8% is preparing to spin-off its truck, powertrain and bus units.
  • RBC is lowering price targets on both Swatch -3.0% and Richemont -2.0% citing the ongoing impact of the
  • The FT reports Marks & Spencer -1.6% is at risk of being removed from the FTSE100.

On Our Side of the Pond

  • Fairly quiet this morning following the Labour (not a typo) Day holiday.
  • The ISM data will be watched closely.

Markets & Macro

Markets Snapshot

Event Survey Actual Prior Revised
SK GDP SA QoQ 2Q F 1.10% 1.00% 1.10%
SK GDP YoY 2Q F 2.10% 2.00% 2.10%
SK CPI MoM Aug 0.40% 0.20% -0.30%
SK CPI YoY Aug 0.20% 0.00% 0.60%
SK CPI Core YoY Aug 0.90% 0.90% 1.00%
UK BRC Sales Like-For-Like YoY Aug 0.50% -0.50% 0.10%
AU ANZ Roy Morgan Weekly Consumer Confidence Index 1-Sep 114.4 114.1
JN Monetary Base YoY Aug 2.80% 3.70%
JN Monetary Base End of period Aug ¥515.9t ¥518.1t
AU BoP Current Account Balance 2Q A$1.5b A$5.9b -A$2.9b -A$1.1b
AU Net Exports of GDP 2Q 0.3 0.6 0.2
AU Retail Sales MoM Jul 0.20% -0.10% 0.40%
AU RBA Cash Rate Target 3-Sep 1.00% 1.00% 1.00%
IT Budget Balance Aug -2.2b 3.2b 3.3b
SP Unemployment Change Aug 54.4k -4.3k
UK Markit/CIPS UK Construction PMI Aug 46.5 45 45.3
EC PPI MoM Jul 0.20% 0.20% -0.60%
EC PPI YoY Jul 0.20% 0.20% 0.70%
CA MLI Leading Indicator MoM Jul 0.30%
CA Markit Canada Manufacturing PMI Aug 50.2
US Markit US Manufacturing PMI Aug F 50 49.9
CA Bloomberg Nanos Confidence 30-Aug 57
US ISM Manufacturing Aug 51.2 51.2
US ISM Employment Aug 51.7
US ISM Prices Paid Aug 46.8 45.1
US ISM New Orders Aug 50.5 50.8
US Construction Spending MoM Jul 0.30% -1.30%

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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