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International Summary

News Trading Desk

International Summary

"CAPIS Global Recap – 2/3/2020"

posted by Clayton Duff on 02/03/2020 at 6:54 am

by Clayton Duff

02/03/2020 at 6:54 am

Asian Headlines

China’s markets reopened today after being shut since January 23rd with unsurprising weakness.  The Shanghai closed down 7.72% with the Shenzhen off 8.41%.  Losses were broad with IT, Communication, Real Estate, Industrials, and Discretionary names off 9% or more.  Health Care outperformed as you might imagine, down less than 3%.  Note that over the same time period Hong Kong was off 7% with the US S&P down ~3.5%.   The rest of Asian did not escape losses with the Nikkei easing lower on Consumer goods and IT.  Down Under, Energy and Materials weighed with some strength seen in South Korea.

To support the economy China released a plethora of measures including a massive injection of CNY1.2T by the PBOC via reverse repos.  Additionally, rates for both 7 and 14 day reverse repos were lowered by 10bps.  Their securities regulator curtailed some futures restrictions with intra-government support for financing costs related to support of coronavirus-affected enterprises.  Also, securities lending has said to be suspended beginning today as well.  Unfortunately the death toll continues higher for the Wuhan coronavirus, approaching 400 with one death noted in the Philippines.   Back to the economy, Industrial Profits in China fell 6.3% in December with Caixin PMI readings at 51.1 vs the 51.0 expected.  With some factories still shut the NDRC said resumption of production will be on an ‘orderly basis’ with the ultimate impact uncertain at this point.   Post the close the headlines noted the country will reassess their 2020 growth estimates in light of the coronavirus.

Hong Kong closed up small led by gains in Health Care, IT, Communications, and Discretionary names.  Press there noted some companies will be allowed to report earnings late due to the cornonavirus.  Evergrande RE +.4% said they will halt all on-site property sales in the mainland for 3 weeks with only online sales to occur until then.

In Japan, vehicle sales remained weak in January, off 11.1% which was worse than the 9.5% pullback prior.  Down Under, Manufacturing PMI continued to contract in January with a 49.6 reading though better than the prior 49.1 result. Tomorrow, the RBA is expected to leave rates unchanged with only a ~20% chance currently of a rate cut expected.  South Korean Manufacturing PMI eased a hair to 49.8 from 50.1 prior.  Conversely, Taiwanese PMI rallied to 51.8 from 50.8 previously.

European Headlines

European markets have held steady today with a small skew to the upside.  The balance of sectors up vs down is even with Tech names eking out small gains while Basic Resource and Energy names lag.  PMI readings are in focus with most countries seeing better results.  For the region, the Eurozone ticked a hair better, to 47.9 vs the expected and prior 47.8 readings.  The UK moved to 50.0 with Germany and France also a bit better.  Spain lagged but still bettered its past reading.

In individual names electronic payment firm Ingenico Group is up 12% with Worldline to acquire the firm in a €7.8B deal via cash and stock.

After missing its new net money target for the last year Julius Baer -5% instead plans to increase pretax profit by 10% this year.  On that the firm is paring costs including releasing 5% of its salesforce.

Despite confirming its FY estimates Siemens Healthineers -4.5% missed on ebit.  Margins were crimped with number lower down the page affected by taxes as well.

Norwegian sports retailer XXL +6% trades better with peer Gresvig filing bankruptcy. Gresvig has 95 self-owned stores with 100 franchised shops not included in the filing.

Event Survey Actual Prior Revised
AU 1) AiG Perf of Mfg Index Jan 45.4 48.3
AU 2) CBA Australia PMI Mfg Jan F 49.6 49.1
AU 3) CoreLogic House Px MoM Jan 0.90% 1.20%
AU 4) Melbourne Institute Inflation MoM Jan 0.30% 0.30%
AU 5) Melbourne Institute Inflation YoY Jan 1.80% 1.40%
AU 6) Building Approvals MoM Dec -5.00% -0.20% 11.80% 10.90%
AU 7) Building Approvals YoY Dec -1.40% 2.70% -3.80% -2.80%
AU 8) ANZ Job Advertisements MoM Jan 3.80% -6.70% -5.70%
SK 9) Markit South Korea PMI Mfg Jan 49.8 50.1
JN 10) Jibun Bank Japan PMI Mfg Jan F 48.8 49.3
IR 11) AIB Ireland PMI Mfg Jan 51.4 49.5
CH 12) Industrial Profits YoY Dec -6.30% 5.40%
CH 13) Caixin China PMI Mfg Jan 51 51.1 51.5
IN 14) Markit India PMI Mfg Jan 55.3 52.7
JN 15) Vehicle Sales YoY Jan -11.10% -9.50%
AU 16) Commodity Index AUD Jan 117.7 116.4 116.5
AU 17) Commodity Index SDR YoY Jan -3.60% -2.10% -1.90%
SW 18) Swedbank/Silf PMI Manufacturing Jan 47.6 51.5 47.1 47.7
NO 19) DNB/NIMA PMI Manufacturing Jan 54.4 50.9 55.5 55
NE 20) NEVI Netherlands Manufacturing PMI Jan 49.9 48.3
SP 21) Markit Spain Manufacturing PMI Jan 48.7 48.5 47.4
HK 22) GDP Annual YoY 2019 -1.40% -1.20% 3.00% 2.90%
SZ 23) PMI Manufacturing Jan 50.3 47.8 50.2 48.8
HK 24) GDP YoY 4Q A -3.90% -2.90% -2.90% -2.80%
HK 25) GDP SA QoQ 4Q A -1.50% -0.40% -3.20% -3.00%
IT 26) Markit Italy Manufacturing PMI Jan 47.3 48.9 46.2
FR 27) Markit France Manufacturing PMI Jan F 51 51.1 51
GE 28) Markit/BME Germany Manufacturing PMI Jan F 45.2 45.3 45.2
EC 29) Markit Eurozone Manufacturing PMI Jan F 47.8 47.9 47.8
SZ 30) Domestic Sight Deposits CHF 31-Jan 503.7b 508.9b
SZ 31) Total Sight Deposits CHF 31-Jan 588.7b 587.2b
GR 32) Markit Greece Manufacturing PMI Jan 54.4 53.9
UK 33) Markit UK PMI Manufacturing SA Jan F 49.8 50 49.8
DE 34) Danish PMI Survey Jan 53.2 50.7 51.1

 

 

 

 

 

 

Note that trading in Mexico is shut today.

About the Author

Clayton Duff headshot
ClaytonDuffFVP,Manager of International Trading

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. Clayton was promoted to manager of international trading in 2019. He earned his bachelor’s degree f...

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