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11.20.2019 9 new Morning Note posts under Morning Note (8) and General (1)

International Summary

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International Summary

"CAPIS Global Recap – 9/9/2019"

posted by Clayton Duff on 09/09/2019 at 6:40 am

by Clayton Duff

09/09/2019 at 6:40 am

Asian Headlines

Not a bad start to the week with mostly higher closes seen in the region.  Mainland China led with strong returns in IT and Communication names.  This was predicated on word Shanghai is demanding a quicker rollout of 5G.  Financials and Healthcare led in Japan while Communication names eased.  many companies curtailed business today ahead of Typhoon Faxai.  Both Hong Kong and Australia underperformed with each market closing flat on the session. In Hong Kong, with protests continuing, Health Care names saw weakness while Energy, Discretionary, and IT names closed up.  Chipmakers buoyed the Kospi.

Over the weekend trade data was released in China with imports and exports both contracting.  The USD-quoted Trade Surplus finished at $34.84B, well light of the $44.30B expected.  Exports to the US fell 16% with the country upping imports from Australia by 32% YoY.   The other notable focus point today was the PBoC reserve requirement rate reduction for all their banks.  This RRR will go into effect next week with the level reduced by 50 bps to 13%.   TTN reported several headlines of interest including last week’s phone discussion between the country and the US involved China’s plan to purchase a “modest” amount of US ag products in exchange for the US pushing back the Oct 1st tariffs and easing export restriction on Huawei.  Stay tuned for further tweets to get the skinny on that outcome.  Also, a story titled “A Forensic Examination of China’s National Account” has been submitted to the Brookings Papers on Economic Activity which outlines that China has padded their GDP by an average of 2% from 2008 through 2016.

  • Nissan -.2% will soon get another CEO after last week the current CEO, Hiroto Saikawa, admitted he was overpaid by ten of millions of Yen.
  • Hon Hai fell .4% with a firm called China Labor Watch reporting Foxconn and Apple allowed for harsh working conditions in its plants that produce iPhones.  Apple admitted that Foxconn broke labor laws by employing more temporary workers than allowed.  Up to 10% of temp workers, called dispatch workers, is allowed but Foxconn had plants employing up to 50% of their employees with dispatch workers.
  • The PBoC is said to be considering cutting the medium term lending facility rate later this month with the bank today not rolling over the entire maturing amount of CNY176.5B.

European Headlines

Little change in markets today in Europe with indices up small on the session thus far.  Autos and Banks lead with gains of over a percent with Energy and Insurers posting sold returns as well.  The balance of sectors are up/down on more tepid moves with Food names the weakest.

The ECB meets this week with the Deposit Facility Rate expected to be cut even more.  Today though UK economic releases are in focus with the Pound strengthening on said releases. As noted below July results for Industrial and Manufacturing Production, Construction output, and trade surpassed expectations, if even by a little. The £ strength is weighing on the FTSE.

On the Brexit front Amber Rudd left Tory cabinet this week will no longer head up the Work and Pensions department.  Rudd is frustrated over Boris’ purge of rebel Tories and how he is handling Brexit adding Johnson does not want a deal with the EU.  He continues to push to prevent a Brexit extension but the courts may alter that.

  • AstraZeneca is off 2% despite positive results from its small-cell lung cancer drug Imfinzi.
  • Air France -9% disappointed markets with their August passenger traffic growth of 2.1%.  EasyJet -2.2% said they are interested in the assets of bankrupt Aigle Azur.
  • London-listed Intu Properties +11% is up on word Orion Capital could acquire the shopping-center owner. Also in the space Spain’s Lar Espana RE +9% gains with Vukile said to be looking at a €700M bid.

 

CH 1) Foreign Reserves Aug $3100.00b $3107.18b $3103.70b
CH 2) Trade Balance Aug $44.30b $34.84b $45.06b $44.58b
CH 3) Exports YoY Aug 2.20% -1.00% 3.30%
CH 4) Imports YoY Aug -6.40% -5.60% -5.60% -5.30%
CH 5) Exports YoY CNY Aug 6.30% 2.60% 10.30%
CH 6) Imports YoY CNY Aug -3.10% -2.60% 0.40%
CH 7) Trade Balance CNY Aug 299.30b 239.60b 310.26b
JN 8) BoP Current Account Balance Jul ¥2046.0b ¥1999.9b ¥1211.2b
JN 9) BoP Current Account Adjusted Jul ¥1700.6b ¥1647.1b ¥1941.9b
JN 10) Trade Balance BoP Basis Jul -¥24.0b -¥74.5b ¥759.3b
JN 11) GDP SA QoQ 2Q F 0.30% 0.30% 0.40%
JN 12) GDP Annualized SA QoQ 2Q F 1.30% 1.30% 1.80%
JN 13) GDP Nominal SA QoQ 2Q F 0.30% 0.30% 0.40%
JN 14) GDP Deflator YoY 2Q F 0.40% 0.40% 0.40%
JN 15) GDP Private Consumption QoQ 2Q F 0.60% 0.60% 0.60%
JN 16) GDP Business Spending QoQ 2Q F 0.70% 0.20% 1.50%
JN 17) Bank Lending Incl Trusts YoY Aug 2.10% 2.30%
JN 18) Bank Lending Ex-Trusts YoY Aug 2.20% 2.50% 2.40%
IR 19) Ulster Bank Ireland Construction PMI Aug 53.7 51.4
AU 20) Home Loans MoM Jul 1.50% 4.20% 0.40% 0.60%
AU 21) Investment Lending Jul 1.50% 4.70% 0.50% 0.90%
AU 22) Owner-Occupier Loan Value MoM Jul 1.00% 5.30% 2.40% 4.10%
NE 23) Manufacturing Production MoM Jul 0.50% -0.80% -1.20%
NE 24) Manufacturing Production YoY Jul -0.20% -2.20% -2.70%
NE 25) Industrial Sales YoY Jul -6.60% -10.20% -9.80%
JN 26) Bankruptcies YoY Aug -2.30% 14.24%
JN 27) Eco Watchers Survey Current SA Aug 41 42.8 41.2
JN 28) Eco Watchers Survey Outlook SA Aug 43.9 39.7 44.3
SZ 29) Unemployment Rate Aug 2.10% 2.10% 2.10%
SZ 30) Unemployment Rate SA Aug 2.30% 2.30% 2.30%
DE 31) Trade Balance ex Ships Jul 8.1b 7.4b 6.7b
DE 32) Current Account (Seasonally Adjusted) Jul 15.1b 15.2b 15.6b
GE 33) Trade Balance Jul 17.4b 21.4b 16.8b 16.6b
GE 34) Current Account Balance Jul 16.4b 22.1b 20.6b 20.9b
GE 35) Exports SA MoM Jul -0.50% 0.70% -0.10%
GE 36) Imports SA MoM Jul -0.30% -1.50% 0.50% 0.70%
NO 37) GDP (MoM) Jul 1.00% -0.20%
NO 38) GDP Mainland (MoM) Jul 0.30% 1.00% 0.20%
FR 39) Bank of France Ind. Sentiment Aug 96 99 95 96
SW 40) SEB Sweden Housing-Price Indicator
EC 41) SURVEY REPORT: Euro Area Economic Forecasts in Sep. 2019
GE 42) SURVEY REPORT: Germany Economic Forecasts in Sept. 2019
FR 43) SURVEY REPORT: France Economic Forecasts in Sept. 2019
IT 44) SURVEY REPORT: Italy Economic Forecasts in Sept. 2019
SP 45) SURVEY REPORT: Spain Economic Forecasts in Sept. 2019
PO 46) SURVEY: Portugal’s Economy to Expand 1.7% in 2019; Prior…
SZ 47) Total Sight Deposits CHF 6-Sep 591.6b 591.6b
SZ 48) Domestic Sight Deposits CHF 6-Sep 477.0b 475.5b
UK 49) Monthly GDP (3M/3M) Jul -0.10% 0.00% -0.20%
EC 50) Sentix Investor Confidence Sep -13.4 -11.1 -13.7
UK 51) Monthly GDP (MoM) Jul 0.10% 0.30% 0.00%
UK 52) Industrial Production MoM Jul -0.30% 0.10% -0.10%
UK 53) Industrial Production YoY Jul -1.10% -0.90% -0.60%
UK 54) Manufacturing Production MoM Jul -0.30% 0.30% -0.20%
UK 55) Manufacturing Production YoY Jul -1.20% -0.60% -1.40%
UK 56) Construction Output MoM Jul 0.20% 0.50% -0.70%
UK 57) Construction Output YoY Jul 0.10% 0.30% -0.20%
UK 58) Index of Services MoM Jul 0.10% 0.30% 0.00%
UK 59) Index of Services 3M/3M Jul 0.10% 0.20% 0.10%
UK 60) Visible Trade Balance GBP/Mn Jul -£9500m -£9144m -£7009m -£8920m
UK 61) Trade Balance Non EU GBP/Mn Jul -£3000m -£1932m -£186m -£1771m
UK 62) Trade Balance GBP/Mn Jul -£1500m -£219m £1779m -£132m
GR 63) Industrial Production YoY Jul -2.10% 0.30%
PO 64) Trade Balance Jul -1751m -1833m -1906m

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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