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10.15.2019 14 new posts under Morning Note (10), CAPIS Headlines (3), International Summary (1)

International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 9/19/2019"

posted by Clayton Duff on 09/19/2019 at 6:55 am

by Clayton Duff

09/19/2019 at 6:55 am

Asian Headlines

Central banks are the focus today, this after the US Fed cut rates yesterday. The BoJ left their rates unchanged while maintaining reit and ETF purchases at prior levels. Kuroda added they are focusing more on the momentum toward achieving price stability on concern it will be lost. He noted they saw little affect from the increase in their sales tax adding after the close their economy is expanding moderately.  Further easing was noted as a possibility with a steep yield curve desired.  On the retention of level rates the Yen strengthened to under 108 vs the Dollar but has pulled back slightly.  Of interest, Japan’s Semi Equipment Association said billings fell 11.5% YoY in August.

Taiwan’s central bank left their rates unchanged as expected noting their inflation outlook remains moderate. FY19 CPI though was reduced to +.7% from +.9% while GDP for the year was upped to 2.4% from 2.1%. The PBoC enacted a 14-day reverse repo, this the first time since June. CNY200B in funds was injected between 7 and 14 day repo operations.   Down Under, big banks called for more easing after mixed employment numbers disappointed.

On the trade front Japan and South Korea are said to be holding talks tomorrow. With word a deal with the US may be in the work Japan’s Foreign Minister said no additional tariffs by the US on Japanese vehicles will be a requirement before a deal is done.  CNBC reported China’s vice MofAg will be visiting this week and will tour some US farms as the two sides work to reach a deal in DC.

On the equity front the Nikkei finished up small with Energy, Utilities, and Health Care names leading.  Despite decent gains on the mainland from IT and Discretionary names, Hong Kong fell over a percent on weakness in Industrials, Communications, and Financials.

  • Fujifilm +.4% said they see FY19 health care revenues of ¥510B with expectations revenue in the unit will rise to ¥1T by the mid-2020’s.
  • Cosmetic retailer Sa Sa International closed flat despite noting revenue is seen down 15% over the 1st 5 months. Sales in August were weak with a decline in HK visitors weighing.  Like other retailers in Hong Kong, Citi said margins are being squeezed.

European Headlines

European markets got a boost higher with SCMP quoting a Chinese official economist as he said China and the US could be close to agreeing to an interim trade war deal by next month.  As we have seen recently an easing by the US on upping tariffs and allowing business with Huawei will be coupled with an increase in Chinese purchases of US ag products.  While off of highs indices are still mostly positive with all but a few sectors up. Banks up better by nearly 2% with Insurers and Energy also leading.

The Swiss National Bank left their rates unchanged with concern still noted about the ‘highly valued’ franc. They clarified their negative interest charged on bank’s sight deposits noting it is only above a certain threshold.  They said the negative charge is to be limited to what is necessary. While inflation levels were retained for this year both next year and 2021 saw a reduction in expectations.  Exports there fell 4.4% in August with Watch Exports up 1.5%, a slowdown vs the 4.7% growth seen prior in July.   Norway’s central bank upped their deposit rate to 1.5% which was not expected.  The BoE left rates unchanged on a 9-0 vote while retaining asset purchase levels as well. They said they are able to act either way in the case of a no-deal Brexit.

The EU released their Interim Eco Outlook report with GDP’s for EU, the US, and China all reduced for this year and next. They see a no-deal Brexit pushing the UK into recession while asking for continued global easing.

  • Next is off 4% after missing 1H revenue estimates while affirming its FY view.  The stock has had a good run with profits coming off the table today.
  • Diageo -.2% retained their FY20 sales outlook with organic sales still seen between up 4-6%.  Growth still evident in China but notes collateral damage from the continuing trade spat.
  • Foundation construction company Bauer -21% is on shaky ground today after paring FY ebit.  They see FY earnings after tax only slightly positive with project postponements expected to worsen in the 2H.

Event Survey Actual Prior Revised
CH 38) Swift Global Payments CNY Aug 2.22% 1.81%
AU 39) Employment Change Aug 15.0k 34.7k 41.1k 36.4k
AU 40) Unemployment Rate Aug 5.20% 5.30% 5.20%
AU 41) Full Time Employment Change Aug -15.5k 34.5k 32.0k
AU 42) Part Time Employment Change Aug 50.2k 6.7k 4.4k
AU 43) Participation Rate Aug 66.00% 66.20% 66.10%
AU 44) RBA FX Transactions Market Aug A$608m A$837m
AU 45) RBA FX Transactions Government Aug -A$750m -A$961m
AU 46) RBA FX Transactions Other Aug A$531m -A$4377m
JN 47) BOJ Policy Balance Rate 19-Sep -0.10% -0.10% -0.10%
JN 48) BOJ 10-Yr Yield Target 19-Sep 0.00% 0.00% 0.00%
SK 49) Money Supply L SA MoM Jul 0.80% 0.40%
SK 50) Money Supply M2 SA MoM Jul 0.30% 0.70%
SW 51) Valueguard HOX Sweden Home-Price Index
NE 52) Unemployment Rate Aug 3.50% 3.40%
NE 53) Consumer Confidence Index Sep -2 0
NE 54) Consumer Spending YoY Jul 1.70% 1.70% 1.40%
JN 55) All Industry Activity Index MoM Jul 0.20% 0.20% -0.80% -0.70%
SZ 56) Exports Real MoM Aug -4.40% -1.80% -1.20%
SZ 57) Imports Real MoM Aug 1.00% -0.50% 0.00%
SZ 58) Swiss Watch Exports YoY Aug 1.50% 4.30% 4.70%
SZ 59) SNB Sight Deposit Interest Rate 19-Sep -0.75% -0.75% -0.75%
SZ 60) SNB Policy Rate 19-Sep -0.75% -0.75% -0.75%
NO 61) Deposit Rates 19-Sep 1.25% 1.50% 1.25%
EC 62) ECB Current Account SA Jul 20.5b 18.4b
IT 63) Current Account Balance Jul 8421m 5047m
GR 64) Current Account Balance Jul 1280m 874m
UK 65) Retail Sales Ex Auto Fuel YoY Aug 2.30% 2.20% 2.90% 3.10%
UK 66) Retail Sales Ex Auto Fuel MoM Aug -0.30% -0.30% 0.20% 0.40%
UK 67) Retail Sales Inc Auto Fuel MoM Aug 0.00% -0.20% 0.20% 0.40%
UK 68) Retail Sales Inc Auto Fuel YoY Aug 2.80% 2.70% 3.30% 3.40%
HK 69) Composite Interest Rate Aug 0.97% 0.94%
EC 70) OECD Publishes Interim Economic Outlook
CH 71) FX Net Settlement – Clients CNY Aug -23.0b -28.3b
UK 72) Bank of England Bank Rate 19-Sep 0.75% 0.75% 0.75%
UK 73) BOE Corporate Bond Target Sep 10b 10b 10b
UK 74) BOE Asset Purchase Target Sep 435b 435b 435b

 

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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