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Markit
Markit
51% акций компании принадлежит консорциуму из 12 банков (Barclays, Citigroup, Deutsche Bank, Goldman Sachs, JP Morgan и др). Markit специализируется на предоставлении детальной финансовой информации по рынкам ценных бумаг, деривативов, а также на прогнозировании и анализе рисков. Markit рассматрив ...
51% акций компании принадлежит консорциуму из 12 банков (Barclays, Citigroup, Deutsche Bank, Goldman Sachs, JP Morgan и др). Markit специализируется на предоставлении детальной финансовой информации по рынкам ценных бумаг, деривативов, а также на прогнозировании и анализе рисков. Markit рассматривается многими как прямой конкурент таких компаний, как Thomson Reuters и Bloomberg. В конце 2013 г. Markit запустила свой собственный месседженговую систему, которая включает в себя уже существующие внутренние системы обмена сообщениями ведущих банков, в том числе систему Thomson Reuters Eikon Messenger.
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23 августа, 22:01

Now You Can Be As Cool (& Short Credit) As Carl Icahn

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Authored by Kevin Muir via The Macro Tourist blog, I know all the cool kids like to quote Nassim Taleb and give dire warnings about the coming collapse of risk assets, but I must have too many years of playing Dungeons & Dragons because I just can’t seem to join their club. I don’t see the same black swans that everyone else does. Central Banks have gone giant-golden-crowned-flying-fox batshit crazy, and instead of looking at the possibility that this unprecedented science experiment explodes in a fiery inflationary explosion to the upside, the “in-crowd” are all convinced the collapse has to look exactly like 2008 (only worse). And yeah, there is no doubt that given the stretched valuations in risk assets, a Central Bank tightening error might have catastrophic consequences. Yet, I believe there is at least an equal chance that Central Bankers have made (or will make) a colossal overshoot error. You are probably getting bored with my posting of the chart of Central Bank balance sheets, but I am amazed at how these Central Bankers can write billions of dollars of blue tickets, and we don’t bat an eye. The Swiss National Bank owns $85 billion of US equities. F’ me. That’s just absurd. Central Banks are printing money out of thin air and buying stocks with it. Stop a moment and really take that in. Short term interest rates are negative in many parts of the developed world. Negative! How do you price equities with negative interest rates and Central Banks competing with blue tickets? But hey! What do I know? Maybe all this extreme monetary stimulus means that when the business cycle finally kicks in, the fall will be all the more violent. That’s certainly the prevalent thinking amongst the “cool kids.” And while a good portion of this crowd is busy buying VIX and shorting stocks, the more sophisticated are buying protection on corporate bonds. This trade has much less negative carry and presents a much better asymmetrical risk reward profile. Corporate bonds can, at best, only return the interest, but can lose the whole principal. So when a trader looks at the current high yield spread on the 10 year CSI Barclays index, which is trading at 361 basis points, it seems like betting against corporate bonds is a cheap wager. After all, if they are wrong, it costs less than 4% a year. But if they are correct, then this spread could easily double to 8% like 2015 and 2011, or even spike to 20% like 2008! This trade made legends of the few hedge fund gurus who were long CDX protection during the Great Financial Crisis. And since this huge win is embedded in all the hedgies’ minds, everyone now envisions themselves putting on the next Big Short. Carl Icahn even went so far to make a video, fittingly named “Danger Ahead,” outlining the disaster that is coming in high yield bonds. In the video, Carl highlights how he is buying protection on high yield bonds anticipating rising defaults and spreads blowing out. The problem for all of us without ISDAs, this trade is out of reach. Sure we could short the HYG ETF and buy government bonds in some form on the other side, but this is not a capital efficient way to put on the trade. What is needed is a listed derivative instrument that tracks the high yield spread index. And I thought we were out luck until I received a call from Corry at ICE Futures. Much to my surprise, ICE has a couple of contracts based on Markit’s CDX Investment Grade (IG) and High Yield (HY) indexes. I could barely contain my excitement. This sort of product is perfectly suited for traders that either don’t have access to OTC products, or want the benefits of trading a listed product. Corry sent me a PDF with the products’ details. I uploaded it and you can download it here. Or alternatively, you can navigate to the ICE website to the credit index section. Now I realize that these futures contracts are still in their infancy. There is not a ton of open interest, and the volume is small. Yet there are market makers continually providing decent two sided markets. And most importantly, the underlying index that the future expires into are OTC benchmarks. All of a sudden, you can be just as cool as Carl Icahn, and buy protection on the CDX HY CDSI S28 5Y swap. There is one slight problem for us Interactive Brokers users - IB has not yet listed the product. Corry says it is in the works, but if you are an IB client that wants to trade it, then a request from more clients would probably help speed the process along. Although I have no desire to join the cool kids and get long CDX protection, I know that many of you have asked for efficient way to put this trade on. Now there is a product that levels the playing field for the little guy. It is in all of our interest that this product succeed. Who knows, someday I might be cool enough to leave the geek table in the cafeteria, and I would love for there to be liquid listed CDX products to trade. In the meantime, I will agree with Carl that high yield bonds are a disaster in the making. But where I differ is that I believe all fixed income will be a problem. Carl is convinced that credit will be the epic center of pain for the next crisis. I think duration risk is by far more worrisome. I, therefore, have no desire to short high yield credit and go long government bonds (which is what the CDX swap tracks). But it’s great to know that you can climb aboard Carl’s train, and get long CDX protection. Just be careful you don’t make Carl mad - you don’t want him yelling at you -it’s not pretty.

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23 августа, 16:54

US Services Economy Soars To Highest Since April 2015 As Manufacturing Slumps

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The US Manufacturing economy continues to languish near one-year lows (in line with the collapse in 'hard data' in recent months) but US Services are soaring to their highest level since April 2015. Manufacturing was ugly across the board... Weaker increases in both output and new orders were key factors weighing on the headline manufacturing PMI in the latest survey period. Production volumes expanded at the slowest rate for 14 months in August, while new business growth weakened from July’s four-month high. Consequently, purchasing activity rose at a softer pace while firms also registered slower increases in inventory levels. Latest data signalled a further pick up in the rate of input price inflation at US goods producers. But everything is anecdotally awesome in Services-land... According to anecdotal evidence, strong economic conditions and an improvement in client demand had driven the latest upturn in activity. The latter was highlighted by a sharp and accelerated rise in new business received by services companies, with the rate of new order growth reaching a 25-month high in August. Greater intakes of new work and rising activity levels led firms to hire more staff in August. Judging by the collapse in 'real' economic data, we suspect manufacturing survey respondents are on to something...   Commenting on the flash PMI data, Rob Dobson, Director at IHS Markit said: “The US economic growth story remained a tale of two sectors in August. The overall rate of expansion accelerated to a 27-month record, driven higher by strong and improved growth of business activity in the vast services economy. In contrast, the performance of manufacturing remained sluggish in comparison, with production volumes rising to the weakest extent in over a year.   “Nonetheless, the acceleration signaled for the economy as a whole suggests that GDP growth is still gaining momentum during the third quarter. With new order inflows also strengthening and job creation equalling its best pace in the year-to-date, economic growth should remain on course to outperform relative to the second quarter.   “The principal weak spot in the economy placing downside risk on that outcome remains exports. Foreign goods orders fell – albeit only marginally – for the second month in a row, often blamed on the strength of the dollar. The domestic demand picture should hopefully remain relatively bright to offset such risks, however.” Is GDP hope driving surveys?

23 августа, 13:33

Stocks Slide After Trump Threatens Government Shutdown Over Wall Funding, Killing NAFTA

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Yesterday, when stocks surged at the market open following Politico's report that Trump is unexpectedly "making strides" on tax reform, we warned that "it can all be wiped away as soon as tonight, when Trump will deliver a speech to his "base", in which he may promptly burn any of the goodwill he created with capital markets following his far more conventional Afghanistan speech last night." That's precisely what happened, because on Tuesday night, in another fiery campaign rally, Trump fiercely defended his response to violence in Charlottesville, made passing remarks from a teleprompter about the need for unity and inclusion before veering off-script to attack the news media, Democrats and even Republicans in the Senate whom he accused of distorting his response and blocking his agenda. But what spooked markets, and what has sent both US futures and European stocks lower, was Trump's threat to bring the U.S. government to the brink of a shutdown if needed to pressure Congress into funding the border wall that was a centerpiece of his 2016 campaign, stoking renewed fears that the debt ceiling debate will be far more contentious that the market expects. Delivering a warning to Democratic lawmakers who have objected to his plans to construct a wall along the U.S.-Mexico frontier, Trump called them “obstructionists” and said that it was time for the U.S. to crack down on illegal immigration. "If we have to close down our government, we’re building that wall,” Trump told thousands of supporters gathered in Phoenix for a campaign-style rally. “One way or the other, we’re going to get that wall.” As Trump spoke, S&P500 futures reversed gains to slip as much as 0.3% as Trump spoke. As Bloomberg notes, Trump has asked for $1.6 billion to begin construction of the wall, with Congress under pressure to pass some kind of spending bill to keep the government open after Sept. 30. But Republicans in Congress haven’t shown much appetite for fighting to spend potentially billions more on a border barrier either. The funding would add to the deficit at the same time Republicans are trying to figure out how to pay for tax cuts. Separately, the yen strengthened, while the Mexican peso weakened 0.2 percent as the president also said he might terminate the North American Free Trade Agreement at some point: "Personally, I don't think we can make a deal because we have been so badly taken advantage of. They have made such bad deals, both of the countries, but in particular Mexico, that I don't think we can make a deal. So I think we'll end up probably terminating Nafta at some point. I personally don't think we can make a deal without termination, but we'll see." “His comments on the NAFTA negotiations once again brings the general direction toward obstructing free trade, and raises concerns over its impact on global trade,” said Hideyuki Ishiguro, a senior strategist at Daiwa Securities Co. in Tokyo. Still, despite the latest Trump bluster, the hope for tax reform wasn't completely killed: during his speech Trump repeated his call for a historic tax cut, promising to pass the "first major tax reform in over 30 years." While he provided no details of any planned legislation, he urged congressional Democrats to support it. Democratic senators in states he won should be particularly wary, Trump said. Most Senate Democrats have said they’ll refuse to support any tax legislation that provides a tax cut to the highest earners. “The Democrats are going to find a way to obstruct,” Trump said. If so, he told his supporters, they’ll be preventing Americans from receiving a “massive tax cut.” Unlike healthcare, tax reform is a less divisive issue among Republicans and could represent Trump's first major legislative victory, if it were to pass, although in light of recent reports of a collapse in relations between Trump and Mitch McConnell, even that now looks improbable. * * * Putting it all together, on Wednesday morning S&P futures are down 0.24%, alongside with European shares and oil. The Yen gained versus all G-10 peers as investors sought safer assets afterTrump threatened to bring the U.S. government to the brink of a shutdown if needed to pressure Congress into funding the border wall that was a centerpiece of his 2016 campaign, and threatened to terminate Nafta at some point. “The Nafta hot air may be as much an excuse to take a step back after Wall Street’s surge yesterday, as it is a legitimate concern about the president not appreciating nuances of inter-dependence embedded in trade deals,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “The ‘she loves me, she loves me not’ thought process could lead to on-off markets” Elsewhere, treasury futures marginally firmer; the Kiwi fell sharply after New Zealand cut growth and budget forecasts; the Korean won climbed for third day. HKEX cancels trading due to Typhoon Hato; The Nikkei rose for first time in six days. In China, the PBOC drained net 40 billion yuan in open market operations although the overnight money market rate spike to two-year high turned out to be inaccurate due to a "faulty print" although iron ore slumps 5.2% after steel rebar sinks.  WTI crude drifts sideways near $47.70; The euro was the standout gainer in an otherwise listless day in markets, as strong European data boosted confidence in the region’s growth, while a speech by Mario Draghi, seen as a preview to his Jackson Hole address, did not unveil any new dovish message/policy shift, and instead underscored the recent European strength. Gold and yen benefited as comments from President Donald Trump provoked another bout of investor caution. The surprise gain in the European PMI index, however, did little to spur the Stoxx Euro 600 Index, which retreated led by WPP Plc after the world’s largest advertising company cut its revenue forecast. European Markit flash prints: EU Markit Comp Flash PMI (Aug) 55.8 vs. Exp. 55.5 (Prey. 55.7) EU Markit Services Flash PMI (Aug) 54.9 vs. Exp. 55.4 (Prey. 55.4) EU Markit Manufacturing Flash PMI (Aug) 57.4 vs. Exp. 56.3 (Prey. 56.6) German Markit Comp Flash PMI (Aug) 55.7 vs. Exp. 54.7 (Prey. 54.7) German Markit Manufacturing Flash PMI (Aug) 59.4 vs. Exp. 57.7 (Prey. 58.1) German Markit Services Flash PMI (Aug) 53.4 vs. Exp. 53.3 (Prey. 53.1) French Markit Services Flash PMI (Aug) 55.5 vs. Exp. 55.8 (Prey. 56.0) French Markit Manufacturing Flash PMI (Aug) 55.8 vs. Exp. 54.5 (Prey. 54.9) Despite the strong survey data, European stocks traded lower across the board, with the Stoxx Europe 600 Index down 0.2% in early trading. The U.K.’s FTSE 100 Index gained less than 0.05%, while Germany’s DAX Index fell 0.1 percent. Meanwhile, geopolitical events continue to escalate in the background: Trump also said that North Korean leader Kim Jong Un is beginning to respect the U.S., the latest comments that suggest his administration is moving closer to seeking talks over Pyongyang’s nuclear arsenal. But the U.S. tightened its financial restrictions on North Korea, slapping sanctions on Chinese and Russian entities it accused of assisting Pyongyang’s development of nuclear weapons and ballistic missiles. In rates, Italian BTPs sell off heavily for a second day, continution of carry trade unwinds and auction setups; USTs lower with bunds following PMI data and German supply Economic data include MBA mortgage applications, PMIs and new home sales. RBC, Lowe’s, HP and Eaton Vance are among companies reporting earnings. Bulletin Headline Summary from RanSquawk President Trump says he will probably terminate NAFTA at some point and happy to shut government to build the wall EUR supported by positive PMI data. Draghi's speech refrains from mentioning current monetary policy Looking ahead, highlights include US PMIs, DoEs, and Fed's Kaplan Market Snapshot S&P 500 futures down 0.2% to 2,447.2 STOXX Europe 600 down 0.3% to 374.84 German 10Y yield rose 1.2 bps to 0.412% Euro up 0.2% to $1.1783 Italian 10Y yield rose 6.7 bps to 1.809% Spanish 10Y yield rose 2.6 bps to 1.598% MSCI Asia up 0.07% to 159.74 MSCI Asia ex Japan down 0.07% to 527.31 Nikkei up 0.3% to 19,434.64 Topix up 0.3% to 1,600.05 Hang Seng Index up 0.9% to 27,401.67 Shanghai Composite down 0.08% to 3,287.71 Sensex up 0.5% to 31,432.36 Australia S&P/ASX 200 down 0.2% to 5,737.16 Kospi up 0.05% to 2,366.40 Brent futures down 0.5% to $51.63/bbl Gold spot up 0.08% to $1,286.14 U.S. Dollar Index down 0.1% to 93.41 Top Overnight News Trump Threatens Government Shutdown Over Border Wall Funding German economic growth is set to exceed 2% this year for the first time since 2011, a report from IHS Markit shows Mario Draghi said that while central bank policy over the last decade has strengthened the global economy, it is important to be open minded in preparing for new challenges German Chancellor Angela Merkel rejected the caricature of her party as obsessed with debt, while her main election challenger attacked her as too accommodating toward Trump Paris or Frankfurt? BofA Executives Debate Trading Hub Location Pay MiFID Research Costs Yourselves, Wealth Managers Tell Funds New Mountain Is Said to Hire Financial Advisers for Sale of IRI WPP Shares Slump as Ad Giant Cuts Forecast on Waning Spending Clarion Call for Metal Bulls as Citigroup Hails China Reform Steinhoff Plans IPO of Africa Retail Assets by End of September Mueller Uses Classic Prosecution Playbook Despite Trump Warnings Asian equity markets traded mixed as the region somewhat failed to sustain the impetus from Wall St, where the Nasdaq led the surge after rebounding from a 3-day losing streak. ASX 200 (-0.23%) and Nikkei 225 (+0.26%) were both initially higher with outperformance in the Japanese bourse due to early JPY weakness. However, majority of gains were later pared amid comments from President Trump regarding shutting down the government to build the wall, while ASX 200 slipped into the red as losses in Healthscope and IAG post-earnings dampened healthcare and financials. Shanghai Comp. (-0.08%) traded choppy despite a firmer liquidity injection by the PBoC of CNY 180bln via reverse repos, as this still amounted to a daily net drain once maturing repos were taken into account, while Hang Seng remained closed due to Typhoon Hato. Top Asian News Shanghai Stocks Edge Lower While Typhoon Hato Shutters Hong Kong Saudi Wealth Fund Is Said to Hire Head of $111 Billion Portfolio Citigroup Sees ‘Significant’ Inflows Into China Bond Market Bank of Thailand Gets Baht Help From First Trade Gap Since 2015 Unicom to Pump as Much as $11.3 Billion Into Hong Kong Unit Jokowi’s Dream GDP Target Seen Out of Reach by Finance Ministry China’s VIPKid Raises $200 Million From Tencent, Sequoia China BOT Unlikely to Introduce New Measures to Curb Baht Gains: Citi Mongolia, Anyone? Junkiest Sovereign Debt Pays Less Than 6% Japan Shares Gains Capped by Trump’s Nafta, Wall-Funding Remarks On a broad basis EU Bourses are trade with little in the way of firm direction, (Eurostoxx50 flat) following President Trump's stormy speech in which he stated he would shut down Government in order to build a wall in-between USA and Mexico, while also commenting he could get rid of NAFTA. In stock specific news WPP shares are on course for its worst trading session in 19 years, falling 10% after the company cut its year outlook. Bund yield ticking higher this morning following the aforementioned better than expected German PMI readings, while slight outperformance has been seen in the short run end of the curve. Peripheral debt continues to underperform its German counterpart with Italian spreads wider by 3.9 bps. This morning has also seen the absorption of UK and GE supply which was relatively well received. Top European News Draghi Says Central Banks Must Be Open-Minded to Meet Challenges Surviving Oil Crash, Norway’s PM Builds Hope for Second Term Euro-Area Factories Feed Best Growth Spell for Economy in Years London Home Prices to Remain Stalled for Years, Economists Say German Economy Set to Break Through 2% Growth Hurdle in 2017 French Manufacturing Propels Economic Growth as Services Slow Pound Drops to Near Two-Month Low as U.K. Softens Brexit Stance Euro Reverses Drop on PMIs as Draghi Doesn’t Express FX Concern Macron Gets Down to Business in EU Tour to Curb Cheap Labor Merkel Rebuts Image of Debt-Obsessed Germany in Campaign Pitch In currenciues, there were no fireworks from Draghi at the Lindau meeting as the President does not address future policy or economic outlook in his speech. EUR edging higher this morning amid firm PMI readings from the Eurozone's two largest economies, Germany and France. GBP slightly lower today, although much of the focus is on the GBP TWI, which is now at a fresh 2017 low at 74.90. Subsequently, suggesting that the outlook for import prices could be back on the rise. Today will set to soften its stance today on new legal laws, requesting to only end 'direct jurisdiction' of the ECJ after Brexit. NZD is the worst performer, slipping by 0.8% after the NZ governments pre-election fiscal update, in which they cut their GDP forecast, while cross related buying seen through AUD/NZD had also kept NZD pressured as the cross breached 1.09. MXN notably softer this morning following comments from President Trump who stated that the US would probably scrap NAFTA at some point (Mexico are to hold 2nd round of talks in September). Additionally, Trump also promised a government shutdown in order to build Mexico border wall, subsequently pushing USD/MXN higher by 0.5%. In commodities, WTI & Brent crude futures are marginally lower this mornings, despite the headline drawdown in the API Crude report, however there had been a sizeable build in Gasoline and Distillate inventories. Gold prices tracking higher by around 0.1% given the slight softness observed in equity markets. Looking at the day ahead, the Markit PMIs on manufacturing, services and composite are out for Eurozone, Germany and France, with stronger mfg numbers offset by weaker service data. In the US, there is the MBA mortgage applications and new home sales data (0% mom expected) for July. Onto other events, Draghi will speak at Lindau (Germany), potentially providing an update on the QE. The Fed’s Kaplan will also speak. US Event Calendar 7am: MBA Mortgage Applications, prior 0.1% 9:45am: Markit US Manufacturing PMI, est. 53.5, prior 53.3; Services PMI, est. 55, prior 54.7; Composite PMI, prior 54.6 10am: New Home Sales, est. 610,000, prior 610,000; Sales MoM, est. 0.0%, prior 0.8% DB's Jim Reid concludes the overnight wrap: Welcome to Jackson Hole Eve. As we said earlier this week, expectations have been dialled down a bit through August as to how hawkish central banks can afford to be at this juncture. Yes the Fed may hike in December and yes the ECB may announce a further taper for 2018 in October but recent events (softer inflation, softer market sentiment and the strong Euro for the ECB) may mean that now might not be the time they choose to guide markets towards such an outcome. On balance I think the risks are more skewed towards higher yields post the symposium as an increasing amount of investors have relaxed over the likely central bank message. We'll see. Before we get to the main event, today sees the important flash PMI numbers and Mr Draghi will be the keynote speaker at the Lindau symposium in Germany at 9:25am CET. He is  expected to speak about the "interaction between research and monetary policy decision making". All before checking in to his transatlantic flight to the US. Ahead of Mr Draghi's double bill, the flash PMIs today in the Euro area and for Germany and France will make interesting reading. Growth has been very robust on these measures but there has been some signs over the last couple of months that we've peaked out for now. For example, focusing on the composite index, current expectations are running a bit lower than their recent peak, with Germany at 54.7 (vs. 57.3 recent peak), the Eurozone (55.5 vs 56.8) and in France (55.4 vs 57.6). The strong Euro of late might cement that trend and it was interesting that yesterday's German ZEW survey, whilst strong in terms of current economic conditions (best reading since Jan 2008), saw expectations falling to 10, which is the lowest level since October. This morning in Asia, Japan’s preliminary Nikkei manufacturing PMI for August was released at 52.8 (vs. 52.1 previous). After initially following the risk on from yesterday, bourses in the region are slipping after Mr Trump has been discussing ending NAFTA and also shutting down the government if he can't get funding for his Mexican border wall. Another dimension to think about as we get closer to the budget ceiling stand off over the next couple of months. So markets are off their highs for the session but have still broadly followed the positive lead from US, with the Nikkei (+0.33%), Kospi (flat), but the ASX 200 dipped 0.25% while the Hang Seng was closed for the morning due to a typhoon. US equity markets had a stronger day as it was a good day in terms of political newsflow with regards to Mr Trump gaining momentum on his tax reform agenda. The Politico reporting that Trump's top aides and congressional lawmakers have found common ground on some of the ways to pay for personal and corporate tax cuts. Some of the funding options touted include: capping mortgage interest deduction for home owners, scrapping state and local tax deductions, eliminate businesses' ability to deduct interest while allowing the phase-in of full expensing for small businesses. The corporate tax rate is expected to fall to 22%-25%, but unlikely to be less than 20%. On the back of this, US equities strengthened, albeit on light volume. The S&P was up +0.99%, the Dow up +0.90% and the Nasdaq increased +1.36%. Within the S&P, only the real estate sector was in the red. Notable gains elsewhere included: IT (+1.45%), materials (+1.20%) and health care (+1.17%). European markets also increased, with the Stoxx 600 up 0.83% and all sectors increased. Elsewhere, the Dax (+1.35%), FTSE 100 and CAC (both up c0.9%) were higher, but Italy’s FTSE MIB dipped 0.11%. The VIX fell 14% to 11.5. Over in the bond markets, yields modestly increased in the US and Europe. The UST 10Y yields were up 3bps (2Y: +2bps; 10Y: +3bps), while bunds were flattish (2Y: -0.4bp; 10Y: unch) and Gilts (2Y: -1bp; 10Y: +1.5bps) and French OATs (2Y: -0.5bp; 10Y: +0.5bp) up slightly at the longer end of the curve. The Italian BTPs had more action, with the curve sharply steeper (2Y: +2bps; 10Y: +7bps). A potential catalyst may have been reports that former PM Berlusconi who leads the centre-right Forza Italia party, has indicated his support for the introduction of a parallel currency in Italy. The idea itself is not new, but does highlight concerns about broader anti-euro sentiment in Italy, as the country heads into elections next year. Turning to currencies, the US dollar index strengthened 0.5% overnight. Conversely, the Euro/USD and Sterling/USD fell 0.5% and 0.6% respectively, while the Euro/Sterling was little changed. In commodities, WTI Oil has pared gains this morning (-0.4%), after API reported US crude stockpiles fell last week, but increasing gasoline supplies offset this development. Elsewhere, the joint OPEC and non-OPEC committee will meet again in late September to review production curbs. Iron ore dipped 0.4% after a c9% rise over the prior three days. Precious metals were slightly down (Gold -0.5%, Silver -0.1%), while other metals have also softened this morning with copper (-0.1%), aluminium (-0.6%) and zinc (-1.2%). Away from the markets, San Francisco Fed President Williams said there’s no sign of recession near term and that in regards to the Fed’s plan to unwind its balance sheet, he said “we’re trying to make it boring”. Elsewhere, DB’s Winkler and Harvey have written on the looming US debt ceiling debate. They argue that even if a technical default is highly unlikely, the issue is likely to become an increasing focus for markets and so they examine potential  tail risks for the US dollar. On the fiscal side, the main risk concerns are any fiscal conditionality attached to a debt ceiling increase. The experiences of 2011 and 2013 show that debt ceiling debates have the potential to become important fiscal turning points. On the monetary policy side, it would likely be too early for the Fed to take into account developments in Washington at their 20 September meeting. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the Richmond Fed manufacturing index was steady mom but higher than expected at 14 (vs. 10), suggesting a manufacturing ISM reading in the 55-60 range. The FHFA house price index for June was slightly lower at 0.1% (vs. 0.5% expected), lowering the through-year growth to 6.5% yoy. In Germany, the ZEW expectations index was lower than expected at 10 (vs. 15.0), partly impacted by concerns that the rising Euro will weigh on the economy as well as the widening diesel car scandal. Over in the UK, the CBI’s  Industrial Trends survey again painted a positive picture, with the output expectations and orders indices both edging higher and thus remaining at historically elevated levels. Elsewhere, the July borrowing data was lower than expected, with public sector net borrowing at -0.8bn (vs. 0.3bn expected) and private sector net borrowing for July at -0.2bn (vs. 1.0bn expected). Looking at the day ahead, the Markit PMIs on manufacturing, services and composite will be out for the US (53.4 expected for manufacturing and 54.9 for services), Eurozone, Germany and France. The Eurozone’s advance consumer confidence for August will also be out. Over in the US, there is the MBA mortgage applications and new home sales data (0% mom expected) for July. Onto other events, Draghi will speak at Lindau (Germany), potentially providing an update on the QE. Over in the US, the Fed’s Kaplan will also speak.

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23 августа, 09:53

Mixed Data from Europe Invites USD Bulls

On Tuesday, Germany’s monthly economic sentiment index came in below market expectations. The ZEW Survey for Economic Sentiment cited a “strong decrease in expectations” as the index fell to 10 in August, down from 17.5 in July – causing a selloff in EUR. News was rosier in the UK with the country posting its first July surplus in 15 years and defying expectations of another deficit. The Office for National Statistics reported a modest surplus in July. Whilst the data is positive, the markets reacted with a selloff in GBP likely indicating such positive news is an aberration. In the US, markets reacted positively amid growing speculation that Trumps administration is gaining momentum in its efforts to reform the US tax code. It is on this issue that Trump hopes to finally secure a major legislative achievement and rebuild relations with his party. However, markets reacted negatively to comments made by Trump, late on Tuesday, that he would force a government shutdown if he does not receive funding to build his “infamous” wall. The markets are focusing on the Jackson Hole conference later this week with scheduled speeches from Fed Chair Yellen and ECB President Draghi. The markets are looking for clues on the FOMC’s monetary policy and any new policy messages from Global Central Bankers. EURUSD lost 0.5% on Tuesday, trading down to 1.17446. Currently, EURUSD is trading around 1.1760. USDJPY gained 0.45% to trade as high as 109.54 on Tuesday and continued higher overnight, to reach a high of 109.821 in early Wednesday trading. Currently, USDJPY is trading around 109.40. GBPUSD lost more than 0.5% on Tuesday. Currently, GBPUSD is trading around 1.2820. Gold recovered from lows of $1,281.96 on Tuesday to currently trade around $1,287. WTI was little changed overnight and currently trades around $47.70pb. At 08:00 BST, A keynote speech will be made by ECB President Mario Draghi at the opening ceremony of the 6th Lindau Meeting on Economic Sciences in Lindau, Germany. Markets will be interested to hear any clues to ECB Economic Policy updates. At 09:00 BST, Markit Economics will release Eurozone Manufacturing, Services and Composite PMI for August. Sentiment is expected to remain above 50 but forecasts are calling for a slight reduction from the previous release. At 14:45, Markit Economics will release US Manufacturing, Services and Composite PMI for August. Similar to Eurozone PMI, markets are expecting releases in line with the previous release, with Services seeing a slightly better release of 54.9 compared to the previous 54.7. At 15:30 BST, the US Energy Information Administration will release Crude Oil Stocks change for the week of August 18th. Another drawdown is expected of -3.375M, less than the previous -8.945M.

Выбор редакции
23 августа, 09:53

Mixed Data from Europe Invites USD Bulls

On Tuesday, Germany’s monthly economic sentiment index came in below market expectations. The ZEW Survey for Economic Sentiment cited a “strong decrease in expectations” as the index fell to 10 in August, down from 17.5 in July – causing a selloff in EUR. News was rosier in the UK with the country posting its first July surplus in 15 years and defying expectations of another deficit. The Office for National Statistics reported a modest surplus in July. Whilst the data is positive, the markets reacted with a selloff in GBP likely indicating such positive news is an aberration. In the US, markets reacted positively amid growing speculation that Trumps administration is gaining momentum in its efforts to reform the US tax code. It is on this issue that Trump hopes to finally secure a major legislative achievement and rebuild relations with his party. However, markets reacted negatively to comments made by Trump, late on Tuesday, that he would force a government shutdown if he does not receive funding to build his “infamous” wall. The markets are focusing on the Jackson Hole conference later this week with scheduled speeches from Fed Chair Yellen and ECB President Draghi. The markets are looking for clues on the FOMC’s monetary policy and any new policy messages from Global Central Bankers. EURUSD lost 0.5% on Tuesday, trading down to 1.17446. Currently, EURUSD is trading around 1.1760. USDJPY gained 0.45% to trade as high as 109.54 on Tuesday and continued higher overnight, to reach a high of 109.821 in early Wednesday trading. Currently, USDJPY is trading around 109.40. GBPUSD lost more than 0.5% on Tuesday. Currently, GBPUSD is trading around 1.2820. Gold recovered from lows of $1,281.96 on Tuesday to currently trade around $1,287. WTI was little changed overnight and currently trades around $47.70pb. At 08:00 BST, A keynote speech will be made by ECB President Mario Draghi at the opening ceremony of the 6th Lindau Meeting on Economic Sciences in Lindau, Germany. Markets will be interested to hear any clues to ECB Economic Policy updates. At 09:00 BST, Markit Economics will release Eurozone Manufacturing, Services and Composite PMI for August. Sentiment is expected to remain above 50 but forecasts are calling for a slight reduction from the previous release. At 14:45, Markit Economics will release US Manufacturing, Services and Composite PMI for August. Similar to Eurozone PMI, markets are expecting releases in line with the previous release, with Services seeing a slightly better release of 54.9 compared to the previous 54.7. At 15:30 BST, the US Energy Information Administration will release Crude Oil Stocks change for the week of August 18th. Another drawdown is expected of -3.375M, less than the previous -8.945M.

11 августа, 13:43

Global Market Rout Spreads: VIX Marches Higher As China Stocks, Currency Plunge

The global rout resulting from tensions over the North Korean nuclear standoff continued on Friday as world stocks tumbled for the fourth day, on course for their worst week since November following a third day of escalating verbal exchanges between Trump and Kim, as European and Asian shares tumlbed, volatility spiked, and the selloff in US futures continued albeit at a more modest pace as the escalating war of words over North Korea drove investors on Friday to safe havens such as the yen, Swiss franc and gold. In addition to North Korea, attention will be closely focused on today's US CPI print, which could result in even more currency volatility, should it surprise significantly in either direction. "What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "Of course, it's all come at a time when share markets are due for a correction, so North Korea has provided a perfect trigger." All eyes remained on the sharp short squeeze in the VIX, which exploded more than 50% above 16 on Thursday from single digits the day before - the highest print since Trump's election victory - and extended gains on Friday rising nearly 5% to 16.80, after briefly topping 17, a potential "margin calling" nightmare for countless vol sellers over the past year. Thursday also saw the highest VIX volume day on record as 937K VIX futures traded across the curve. The Global Financial Stress Indicator surged positive after trading in negative territory since April. The global rout that sent the Nasdaq lower by 2% on Thursday, spread to China which saw the Shanghai Composite tumble by 1.6% to 3,208, its biggest drop this year, led by mining and resource stocks, with nearly 20 names halted limit down, after Chinese metals prices tumbled by 5%. The Chinese volatility index jumped by the most since January 2016 to its highest level in more than seven months. While there wasn't a specific catalyst for the rout, a driver for the sharp commodity selling was the announcement by the China Steel Industry Association which said the recent surge in steel futures was not due to market demand but misunderstanding by some institutions. Adding fuel to the fire was a Reuters report that the Shanghai Futures Exchange told its members it may raise margins on steel rebar contracts if market trade volume is too large. As a result, metals also led declines on the mainland CSI 300 Index: Xiamen Tungsten slides as much as 9.3%, most intraday since September; Jiangxi Copper falls as much as 8.3%; China Molybdenum slips as much as 7.7%; the Bloomberg China Steel Producers Valuation Peers Index tumbled 5.9%, with Nanjing Iron & Steel, Maanshan Iron & Steel, Angang Steel dropping at least 6.9%. "Chinese investors locked in profits on commodity shares following strong gains which had been driven by bets that capacity cuts would boost prices", said Helen Lau, Hong Kong-based analyst with Argonaut Securities. "Stock markets are in a risk-off mode due to escalating geopolitical risks, so recent outperformers would be the first to take a hit amid a selloff."  In HK trading Aluminum Corp. of China tumbles as much as 7.4%, the biggest intraday drop since February 2016, while China Shenhua Energy dropped as much as 4.8%, among the worst performers on Hang Seng Index. Also hurting Chinese sentiment was the plunge in Tencent, with the Chinese tech giant dropping as much as 5% in Hong Kong, its biggest intraday decline in more than a month, following news of a Chinese probe into Tencent, Sina and Baidu for cyber-security law violations.  Stocks of related tech companies were all lower with Sina down 3%, Weibo down 4.5%, and Baidu down 2.5%. Earlier in the session, the onshore Chinese yuan dropped as much as 0.43% vs USD to 6.7080, its biggest drop since Jan. 19, after the PBOC set the fixing at a weaker level than expected. As Bloomberg reported overnight, the PBOC strengthened fixing by 0.19% to 6.66420, compared with forecasts of 6.6477 from Commerzbank, 6.6552 from Mizuho Bank, 6.6559 from Scotiabank and 6.6549 from Nomura. At the same time, the offshore yuan dropped as much as 0.28% to 6.6853, most since June 26, although putting the drop in context, just one day earlier, the CNY rose to its strongest level since August 2016 on Thursday, prompting Bloomberg to call the Yuan the new "safe haven" currency. Elsewhere in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 percent, its biggest one-day loss since mid-December, to leave it down 2.5 percent for the week. Australia’s S&P/ASX 200 Index fell 1.2 percent at the close in Sydney. The Hang Seng Index in Hong Kong tumbled 2 percent and China’s Shanghai Composite Index was down 1.6 percent. The Japanese yen rose 0.2 percent to 108.96 per dollar, the strongest in more than 15 weeks. Japanese markets are closed for the Mountain Day public holiday. South Korea's KOSPI fell 1.8 percent to an 11-1/2-week low, but its losses for the week are a relatively modest 3.2 percent; volatility on the Kospi 200 surged as much as 27 percent. "Pretty remarkable, perhaps even extraordinary, considering," said fund manager BlueBay strategist Tim Ash. The Korean won also continued to skid, down 0.45 percent to 1,147.2, falling below its 200-day moving average for the first time in a month. European markets continued sliding into risk-off mode although at a slower pace; even so Europe's where regional indices were set for the worst week of losses this year as sentiment on ongoing fears about escalation between the US and North Korea. Euro zone volatility jumped to the highest since April, when France's election was rattling the region.  Weakness has been seen across the board (Eurostoxx 600 -1.0%), however mining names have notably underperforming amid Chinese metal prices slumping by some 5% overnight. The iTraxx Crossover extended its recent widening, leading sentiment as hedges are placed into the weekend. European equity markets opened lower led by mining sector, as base metals sell off heavily in Asia after a report saying the Shanghai exchange may raise margins on steel rebar contracts, which was later confirmed. DAX futures dip to approach 200-DMA, financials under pressure after HSBC warns low-vol environment could hit 2H revenues. CHF and JPY marginally outperform in G-10, EMFX weaker against USD across the board. Core fixed income extends rally and bund curve flattens further, yet UST/bund spread widens 3bps as USTs lag amid focus on U.S. CPI data which may add to the recent dollar pains should inflation come in weaker than expected. U.S. treasury yields fell to their lowest in more than six weeks ahead of inflation data expected to show a pickup in price growth, which could boost the chances of a further rate hike this year, while the Fed’s Kaplan and Kashkari are due to speak. The dollar declined against the Japanese yen for a fourth day as North Korea tensions remained elevated. The yield on 10-year Treasuries fell one basis point to 2.19 percent, the lowest in more than six weeks. Germany’s 10-year yield decreased three basis points to 0.38 percent, the lowest in more than six weeks. Oil was modestly higher even though the IEA cuts its OPEC demand estimates for this year and next year by by 400bpd after revising down its demand estimates going back to 2015, rejecting OPEC's own assessment of rising demand growth for the near future. Aside from North Korea, inflation data is where the market is most sensitive to a surprise at the moment, even if yesterday's weak US PPI doesn't suggest an imminent rise. For the US CPI today, consensus expected core CPI inflation to rise +0.2%, and should finally snap its streak of four consecutive monthly misses which could be important. As recent Fed statements have emphasized, policymakers will be monitoring near-term inflation trends closely. Hence, an in line print would provide tentative evidence that the recent downshift in core inflation may be behind us. New York Fed President William Dudley cautioned that it will “take some time” for inflation to reach the central bank’s 2 percent target, the latest official warning that price pressures remain muted. The Federal Reserve Bank Dallas President Fred Kaplan speaks this afternoon. Also today, Moody’s may publish a review of South Africa’s credit rating, two months after reducing its foreign- and local-currency assessments to one level above junk.  JC Penney, Magna International and Telus are due to release results. July consumer price data is also due later. Bulletin Headline Summary From RanSquawk Geopolitical tensions continue to act as a driving force for markets amid the latest exchange between the US and NK This has seen downside in EU equities (Eurostoxx 50 -1.0%) and a FTQ in other assets Looking ahead, highlights include US CPI, Fed's Kashkari and Kaplan Market Snapshot S&P 500 futures down 0.1% to 2,434.25 STOXX Europe 600 down 1.0% to 372.26 DAX down 0.3% to 11,980 MSCI ASIA down 0.8% to 158.49 MSCI ASIA ex JAPAN down 1.5% to 515.81 Nikkei down 0.05% to 19,729.74 Topix down 0.04% to 1,617.25 Hang Seng Index down 2% to 26,883.51 Shanghai Composite down 1.6% to 3,208.54 Sensex down 1.1% to 31,193.00 Australia S&P/ASX 200 down 1.2% to 5,693.14 Kospi down 1.7% to 2,319.71 German 10Y yield fell 3.5 bps to 0.38% Euro down 0.1% to 1.1759 per US$ Brent Futures down 0.9% to $51.45/bbl US 10Y yields unchanged at  2.19% Italian 10Y yield rose 2.1 bps to 1.743% Spanish 10Y yield fell 0.6 bps to 1.452% Brent Futures down 0.4% to $51.70/bbl Gold spot up 0.1% to $1,287.31 U.S. Dollar Index up 0.04% to 93.44 Top Overnight News China Urges Restraint as Futures Slide; FOMC Voters to Speak After CPI Data; Snap Slammed Amid Facebook Pressure The escalating war of words between Trump and North Korean leader Kim Jong-Un sent Asian markets tumbling as the region braced for more provocations from his regime next week President Donald Trump stepped up his campaign of pressure on North Korea, warning the regime not to follow through with a missile test near Guam and promising massive response to any strike against the U.S. or its allies Treasury yields may climb from a six-week low if Friday’s U.S. consumer- price data merely meet expectations, as the market is on high- alert for evidence that inflation is heating up and supporting the Fed’s case for higher interest rates For all the talk that Chair Janet Yellen’s plan to shrink the Fed’s balance sheet will hurt Treasuries, U.S. mortgage bonds face a bigger test The International Energy Agency cut estimates for the amount of crude needed from OPEC this year and in 2018, after lowering its historical assessments of consumption in emerging nations including China and India All that stands between German Chancellor Angela Merkel and a fourth term is six weeks of campaigning Morgan Stanley added its voice to a growing chorus of skepticism surrounding debt valuations, with Pacific Investment Management Co. writing in a report released Wednesday that investors should pare relatively expensive assets like corporate bonds in favor of safer investments like Treasuries Credit Suisse Group AG is barring its traders from buying or selling certain Venezuelan securities and business as the political and economic crisis in the South American country intensifies Gold advanced to the highest in two months as the spike in tensions between the U.S. and North Korea fanned demand, with hedge fund billionaire Ray Dalio flagging rising risks, including “two confrontational, nationalistic, and militaristic leaders playing chicken with each other” President Donald Trump laid out a path for Senate Majority Leader Mitch McConnell to get back in his good graces: replace Obamacare, overhaul the U.S. tax code and find a way to pay for big infrastructure improvements RBA’s Lowe says next interest rate move likely up, but could be some time away; RBA prepared to intervene in A$ in ’extreme’ situations Snap, Blue Apron Fall Flat as the Incumbents Smash the Upstarts IEA Cuts Estimates for Crude Needed From OPEC This Year and Next Chinese Regulator Starts Probe Into Tencent, Weibo and Baidu Stolen 1MDB Funds Are Focus of U.S. Criminal Investigation Health Insurers Face Long Odds to Win Reprieve of Obamacare Tax U.S. Stocks Gain, Hong Kong Loses Weight in MSCI Indexes: SocGen FBI Says ISIS Used EBay to Send Cash to U.S.: WSJ Anbang Ownership Secrets Subject of U.S. Workers’ Complaint Hollywood Heads For Its Worst Summer Box Office in a Decade Asia stock markets were heavily pressured amid continued geopolitical tensions after further fighting talk between US and North Korea, which also saw US indices close negative for a 3rd consecutive day. The fresh goading came from both sides as US President Trump suggested his fire and fury comments maybe was not tough enough and warned North Korea to get its act together or it will be in trouble like few nations have ever been. This evoked a response from North Korea which vowed to mercilessly wipe out the provocateurs and stated the US will suffer a shameful defeat. As such, ASX 200 (-1.2%), KOSPI (-1.7%) Hang Seng (-2.0%) and Shanghai Comp (-1.7%) all traded with firm losses, while Nikkei 225 was shut due to public holiday. PBoC injected CNY 70bln in 7-day reverse repos and CNY 60bln in 14-day reverse repos, for a net weekly drain of CNY 30bln vs. CNY 40bln drain last week. Top Asian News War of Words Between Trump and Kim Has Asia Bracing for Conflict South Korean Banks Follow Won Lower Amid Rising Trump Rhetoric China Data Dump and Alternative Gauges Both Signal Steady Output Maker of India’s Aircraft Carrier Surges 22% on Trading Debut Biggest India Lender Slumps as Bad-Loan Surprise Hits Profit KKR Completes 26 Investments in China as of Aug. 1 Freeport Urged to Reinstate Workers to End Indonesian Strike India July Local Passenger Vehicle Sales Gain 15% Y/y to 298,997 BlackRock’s James Lenton Joins Fidelity as Trader in Hong Kong European indices are set for the worst week of losses this year as sentiment is weighed by the war of words between the US and North Korea. Weakness has been seen across the board (Eurostoxx 50 -1.0%), however mining names have notably underperforming amid Chinese metal prices slumping by some 5% overnight. EGBs supported by flight to quality with Bunds printing fresh session highs, while there had been reports of 5k lots tripping stops at 164.50. Peripherals underperform this morning, led by BTPs, subsequently the GER-ITA spread has widened to 162bps Top European News Morgan Stanley Makes ‘Multi-Year Call’ For Strong Euro on Reform Europe Miners Slump as Metals Fall on China Steel Body’s Warning Tullow Oil, Genel Energy Drop; GMP Cuts Both Stocks to Reduce Old Mutual First-Half Profit Climbs as Insurer’s Split Looms Merkel’s Bloc Holds All the Coalition Options in Latest Poll Buy BNP Paribas, Credit Suisse; Sell Barclays, Goldman Says Nordea Chairman Hints HQ Review Isn’t Limited to the Nordics In currencies, safe-haven support for the currency has continued as USD/JPY made a brief break below 109.00 overnight. Although, with the war of words showing no signs of stopping, JPY could make a push back to the April low at 108.11. So far, the pair have traded in a narrow range with investor focus for the USD shifting to the US inflation figures due out later in the session. AUD softened in Asian trade as commodities prices slipped. Crude prices fell over 0.5%, despite Saudi Arabia and Iraq's announcement to ensure that all major producers comply to the OPEC production cut, while Saudi also left the door open to deeper cuts. Additionally, Chinese iron ore prices fell some 5%, further weighed on the currency, subsequently pushing AUD to the mid 0.78. In commodities, China state run newspaper editorial comments state China will remain neutral if North Korea launches an attack on US, but if US strikes first and tries to overthrow North Korean government, China will stop them. Saudi Arabia Energy Minister Al-Falih stated the possibility for continuation of output cuts is on the table and if the size of cuts need to be adjusted, this will be examined and subject to approval by 24 countries. North Korea vows to mercilessly wipe out the provocateurs, says US will suffer a shameful defeat, according to North Korean state media. IEA raises 2017 global oil demand forecast to 1.5mln bpd vs. 1.4mln bpd, global oil supply rose by 520k, while OPEC compliance fell to 75%. Looking at the day ahead, the main focus will be its inflation stats for July, with expectations at 0.2% mom (for core) and 1.7% yoy. Onto other events, the Fed’s Kaplan and Fed’s Kashkari will also speak today. US Event calendar 8:30am: US CPI MoM, est. 0.2%, prior 0.0%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.1% US CPI YoY, est. 1.8%, prior 1.6%; CPI Ex Food and Energy YoY, est. 1.7%, prior 1.7% Real Avg Weekly Earnings YoY, prior 1.09%; Real Avg Hourly Earning YoY, prior 0.8% DB's Jim Reid concludes the overnight wrap I'm hoping I'll be on this planet for as close to 36,525 days as I can get and I'm also hoping tomorrow will be the only day of that stint that I'm stupid enough to be picking up a brand new car with no miles on it. So in some ways it's exciting and in some way it’s very annoying as I vowed never to waste money on a new car. The twins have forced the issue and I'll be figuratively setting light to wads of bank notes as I roll out the forecourt. I'm driving 80 miles to Poole to collect it and I'm setting off very early as I have to get back to make sure everything is ready at home for the new arrival. The excitement is building, I'm very nervous and hopes and dreams come in abundance with such a fresh start. Yes Liverpool kick off their season at lunchtime tomorrow and I need to make sure I'm back in time to watch it. Wish me luck. The markets and more importantly the world is wishing for a bit of luck at the moment and a peaceful solution to the North Korean spat. The nuclear fallout from this week's high stakes geopolitical jaw boning couldn't completely unsettle markets on Wednesday but Thursday was a different story. We finally broke the 15 day run of sub 0.3% closes in either direction with the S&P 500 -1.45% after a day where the news we covered yesterday morning concerning North Korea's threat to attack Guam by mid-August increasingly spooked global investors as the day progressed. Mr Trump then raised the temperature another notch late in the US session last night, saying his ‘fire and fury” comment earlier in the week “wasn’t tough enough” and that “things will happen to them (NK) like they never thought possible..” and has “declined” to rule out a pre-emptive strike on NK, noting “we’ll see what happens”, all of which helped the US close at the lows for the session and shatter the recent low vol environment. Given the previous record low vol run was 10 days in 1966, if I do live to be 100 I'm statistically unlikely to witness anything like what we saw in the 15 days before yesterday. The S&P 500 had its worse day since mid-May this year when it fell 1.8%. Over at the Vix, the fear gauge broadly traded up most of the day and surged 44% higher to close at 16.04, which is actually the first day the index closed above 16 in CY2017. Across the pond, the Vstoxx was up 26% to 18.9, the highest level since April when Europe had heightened political risks in the run up to the French elections. Investors pushed safe haven assets higher again, with gold up 0.7% to a 9 week high, the Swiss franc up 0.1% (was +1.1% the day before) and JPY/USD +0.8% higher. Over in European government bonds, changes in core yields were more tempered following the ~5bp fall the day before. Bunds fell 1bp (2Y: unch; 10Y: -1bps), with Gilts down 3bps (2Y: +0.3bp; 10Y: -3bps) at the long end of the curve, while French OATs were broadly flat (2Y: unch; 10Y: -0.5bp). Peripheral bond yields were up slightly across the curve, with Italian BTPs (2Y: +1bp; 10Y: +2bps) and Portuguese yields (2Y: -0.5bp; 10Y: +2bps) not sure whether they  were a flight to quality instrument or a high beta asset. Across the pond, the UST10Y fell 5bps yesterday (2Y -1bp) but is fairly flat this morning. In Asia, markets have continued to fall. The Kospi recovered a little to be 1.6% down as we type, the Won/USD dipping another 0.2%. The Hang Seng fell for the 3rd consecutive day (-1.9%), with Chinese bourses down 1.1% to 1.6%. We also got a glimpse of what China might be thinking, with the Global times (English paper under the People's Daily) writing that China should make clear that: i) it will stay neutral if the US retaliates after NK launches missile that threaten American soil, but ii) if countries try to overthrow the NK regime, China will prevent them from doing so. Moving on, if we can pull out attention away from the nuclear threat, inflation data is probably where the market is most sensitive to a surprise at the moment, even if yesterday's weak US PPI doesn't suggest an imminent rise. For the US CPI today, our economists expect core CPI inflation (+0.2% vs. +0.1%) should finally snap its streak of four consecutive monthly misses which could be important. They also remind us that as recent Fed statements have emphasized, policymakers will be monitoring near-term inflation trends closely. Hence, an in line print would provide tentative evidence that the recent downshift in core inflation may be behind us. Following on the theme of inflation, DB’s Luzzetti examined the impact of recent US dollar depreciation on the inflation outlook. Based on their own inflation models and analysis cited by Fed officials, they think that recent dollar weakness – assuming that it does not reverse – could lift year-over-year core PCE inflation by about 0.2pps by mid-2018 and 0.1pps by mid-2019. More details here. Turning to Europe, the flip-side of recent currency moves is discussed by DB’s Mark Wall who has written on how euro appreciation will be balanced against growth momentum in determining the ECB’s exit from QE. He argue that all else unchanged the euro’s appreciation since June could reduce the ECB staff core inflation forecast for 2019 from 1.7% yoy to 1.5% yoy. More details here Returning to the equity market sell-off in a little more depth, US bourses all weakened yesterday, with the S&P (-1.5%), the Dow (-0.9%) and the Nasdaq (-2.1%) sharply lower. Within the S&P, only the utilities sector was up (+0.3%) versus larger losses elsewhere (IT -2.2%; Financials -1.8%). European markets also fell across the board, the Stoxx 600 was down 1% to the lowest level since March with all sectors in the red. Across the region the FTSE 100 (-1.4%),  the DAX (-1.2%), Italian FTSE MIB (-0.8%) and CAC (-0.6%) were all lower. Currencies were mixed but little changed, the USD dollar index dipped 0.2% post the lower than expected PPI data. The Euro continued to edge ahead against the USD and Sterling, up 0.1% and 0.3% respectively, while the Sterling/USD was down 0.2%. In commodities, WTI oil fell 2%, despite OPEC raising its demand forecast for oil and two of the largest OPEC producers (Saudi Arabia & Iraq) agreeing to strengthen their commitments to production cuts. Notably, Iraq's recent compliance to production targets is not exactly great (29% in July). Elsewhere, precious metals were modestly up (Gold +0.7%; Silver +1%) and aluminium continues to gain (Copper -0.3%; Aluminium +0.9%). Agricultural commodities were broadly lower, with corn, wheat and cotton all down ~4%, while soybeans, coffee and sugar were down ~3%. This follows a USDA report which suggest US farmers will produce more corn and soybeans than analyst forecasts. Away from the markets, Trump has made his disappointment with Senate majority leader McConnell well known, tweeting “can you believe that McConnell, who has screamed repeal & replace (Obamacare) for 7 years, couldn’t get it done…” and “…Mitch, get back to work…”. However, Trump was more conciliatory on special counsel Mueller, saying he “hasn’t given it any thought about firing Mueller” and that “I’m not dismissing anybody”. Elsewhere, NY Fed president Dudley cautioned that it will "take some time" for inflation to reach the Fed's 2% target, which is consistent with comments made by his colleagues earlier in the week. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the July PPI report was softer than expected. The core measure (ex-food & energy aggregate) was -0.1% mom (vs. 0.2% expected) and 1.8% yoy (vs. 2.1% expected). The PPI for healthcare services, which is closely correlated with that within the PCE deflator, rose a steady 1.4% yoy. Elsewhere, claims data were mixed, with initial jobless claims up 3k to 244k (vs. 240k expected) and continuing claims at 1,951k (vs. 1,960k expected). In Europe,France’s June industrial production (IP) was modestly lower than expectations at -1.1% mom (vs. -0.6% expected, 1.9% previous) and 2.6% yoy (vs. 3.1% expected), while manufacturing production was slightly better at -0.9% mom (vs. -1% expected) and 3.3% yoy (vs. 3.2% expected), which is just a bit weaker than Markit PMI readings had foreshadowed. Over in UK, IP for June was higher than expectations at 0.5% mom (vs. 0.1% expected) and 0.3% yoy (vs. -0.1% expected), while June manufacturing production was flat and in line, at 0% mom and 0.6% yoy. The UK’s trade deficit also unexpectedly widened in June as exports fell but imports rose. Looking at the day ahead, the final CPI figures for Germany (1.5% yoy expected), France (0.8% yoy expected) and Italy (1.2% yoy expected) will be released. Over in the US, the main focus will be its inflation stats for July, with expectations at 0.2% mom (for core) and 1.7% yoy. Onto other events, the Fed’s Kaplan and Fed’s Kashkari will also speak today.

10 августа, 13:48

World Markets Slide Spooked By Latest N.Korea Statement; Dollar, Gold, Oil Jump

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European and Asian market and S&P futures have resumed their slide, as geopolitical tensions between North Korea and the U.S. spiked again overnight after Pyongyang responded to the latest set of warnings by Trump, revealing a plan to fire 4 ballistic missiles at Guam by mid-August. Gold gains for a third day while Brent rose above $53. Following de-escalation attempts by Rex Tillerson, and a NYT report that Trump's "fire and fury" statement had been improvised, markets saw a tentative recovery in risk appetite in overnight U.S. and early Asian trading, but a risk off mood returned again as Asian stocks fell back and London, Frankfurt and Paris dropped 0.5-1.2 percent in Europe, spooked by North Korea’s latest response to Trump, which dismissed as a "load of nonsense" warnings by President Trump that it would face "fire and fury" if it threatened the United States and in which a general outlined a detailed plan on state TV to fire four Hwasong-12 ICBM at Guam by mid-August, sending virtually every Asian market lower. "Sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him" North Korea said of its diplomacy with Trump. Asia took the brunt of tonight's selloff, with Japan’s Topix index ended less than 0.1 percent lower, while South Korea’s Kospi index slid 0.4 percent, adding to a 1.1 percent drop on Wednesday. The Hang Seng Index in Hong Kong fell 1.1 percent. Australia’s S&P/ASX 200 Index lost 0.1 percent. The MSCI Asia Pacific Index fell 0.5 percent.  The won dropped to a four-week low and was trading 0.6 percent down, while the Japanese yen rose 0.2 percent to 109.80 per dollar, the strongest in eight weeks. "We saw a tentative recovery in risk appetite yesterday from the sell off inspired by North Korea but I think, justifiably that move is fading a little bit today," said Saxo Bank's head of FX strategy John Hardy. With the escalating war of words rumbling on, Europe's German bund yield held near six-week lows. U.S. and British equivalents were also trading a touch above Wednesday's six-week lows. "We would currently be careful with a whiff of risk aversion in the air and, by extension, also stay away from shorts in the rates market," RBC's global macro strategist Peter Schaffrik said. As a result of the ongoing diplomatic fiasco, the Stoxx Europe 600 Index headed for a second day of declines, following declines in markets from Hong Kong to Tokyo to Sydney, which also pressured S&P index futures fell. The greenback was firmer against most of its G-10 peers. Japan’s yen edged higher, extending yesterday’s increase as havens including gold continued to find support. Oil held gains above $49 a barrel as U.S. production eased and crude inventories extended declines. “The North Korea situation is still unstable and investors are controlling risk and taking profit after recent gains,” said Sam Chi Yung, a Hong Kong-based senior strategist at South  China Financial Holdings Ltd. Geopolitical tensions also pushed euro-area volatility sharply higher, with the VStoxx Index surging 27% since Tuesday’s close as European stocks added to their losses. The Stoxx 600 falls 0.6%, set for biggest back-to-back declines in three weeks, as the DAX hits lowest since April 21, down 2% so far this week. All European industry groups declined, with miners and energy shares faring the worst.  Utilities outperform selloff, sector is recommended by HSBC as a defensive refuge should European equities undergo a correction In currencies, as noted above, South Korea’s won led losses in emerging Asian currencies as tensions over the peninsula heightened. “USD/Asia should be somewhat supported today given the rise in geopolitical risk as North Korea and Trump keep up their back and forth,” said Julian Wee, a senior market strategist at National Australia Bank Ltd. in Singapore. “The weakness in equity markets suggests that the incendiary rhetoric has spooked the markets.” Traders added to positions in haven currencies such as the yen and Swiss franc, and pushed up the dollar index by unwinding some of the recent bets on the euro; the yen rose for a third day, outperforming all other Group-of-10 currencies.  Unrelated to Korea, the NZD was the notable underperformer overnight after the RBNZ monetary policy decision. The rate decision itself was met with choppy price action. However, the downside largely stemmed from comments by RBNZ Assistant Governor McDermott who stated that "NZD needs to adjust lower", which saw NZD break through 0.7300, and was trading at 0.726 last. In China, the onshore yuan rises for 10th straight day vs trade-weighted basket to highest in nearly five months as People’s Bank of China strengthens fixing by most since June. As Bloomberg reports, as global investors turn increasingly risk averse amid tense relations between North Korea and the U.S., China’s currency is becoming an unlikely winner. The yuan is the best performer among 31 major peers since Friday, rising 1.1 percent to 6.6605 against the greenback. That compares with a 1.5 percent tumble by the South Korean won or a 0.5 percent drop by the Australian dollar. While China is North Korea’s key ally, the nation’s central bank has been supporting the yuan with a series of strong fixings, and bearish bets against the currency have receded after it rose above 6.7 per dollar. In addition to geopolitics, some of the biggest names in the asset management industry have already been warning that it’s time to take risk off the table. As reported yesterday, Pimco told investors to pare exposure to U.S. equities and junk bonds, but keep exposure to real assets, including commodities and gold. Separately, T. Rowe Price said it cut its stock allocation to the lowest level since 2000. Morgan Stanley strategists said investors should consider betting against U.S. junk-bonds as recent price weakness may be the beginning of a correction. In commodities, safe haven gold rose 0.1 percent to $1,278.04 an ounce, the strongest in two months. West Texas Intermediate crude climbed 0.4 percent to $49.75 a barrel, the highest in more than a week, while Brent traded 0.8%, to $53.20 Today we get July PPI data (for core, 0.2% mom and 2.1% yoy expected), the monthly budget statement (-$54bn) and initial jobless claims and continuing claims figures. Fed’s Dudley will also speak today. Notable companies reporting include Nvidia, Snap, Macy’s and Newscorp. Bulletin headline summary from RanSquawk Lingering geo-political concerns continue to weigh on Asian equities. NZD underperforms as the RBNZ kept a somewhat dovish-to-neutral tone. Looking ahead, highlights include US PPI and comments from Fed's Dudley. Market Snapshot S&P 500 futures down 0.3% to 2,465.50 STOXX Europe 600 down 0.4% to 378.41 MSCI Asia down 0.5% to 159.73 MSCI Asia ex Japan down 0.7% to 525.33 Nikkei down 0.05% to 19,729.74 Topix down 0.04% to 1,617.25 Hang Seng Index down 1.1% to 27,444.00 Shanghai Composite down 0.4% to 3,261.75 Sensex down 0.5% to 31,644.07 Australia S&P/ASX 200 down 0.08% to 5,760.93 Kospi down 0.4% to 2,359.47 German 10Y yield rose 0.5 bps to 0.433% Euro down 0.3% to 1.1729 per US$ Italian 10Y yield rose 0.8 bps to 1.722% Spanish 10Y yield fell 0.6 bps to 1.424% Brent Futures up 0.6% to $53.03/bbl Gold spot up 0.1% to $1,278.98 U.S. Dollar Index up 0.2% to 93.70 Top Overnight News South Korea and Japan warned North Korea that it would face a strong response if it carried through with a threat to launch a missile toward the U.S. territory of Guam North Korea says ‘sound dialogue not possible’ with Trump; considering plan for striking at Guam through simultaneous fire of four missiles U.S. inflation is finally picking up -- or at least that’s the expectation of economists who have been wrong-footed by sub-par readings four months in a row Glencore Plc built a war chest in the first half of the year, continuing to cut debt as the world’s largest commodities trading house prepares to ramp up acquisitions West Virginia Governor Jim Justice said Donald Trump is “really interested” in his plan to prop up Appalachian mining by giving federal money to power plants that burn the region’s coal U.K. June Industrial Production m/m: 0.5% vs 0.1% est; ONS notes North Sea oil fields did not shut down for summer maintenance as normal, supporting production Norway July CPI y/y: 1.5% vs 1.4% est; core CPI 1.2% vs 1.1% est. RBNZ’s Wheeler: Would like to see a lower exchange rate, intervention in FX market is always open to us; Assistant Governor McDermott says RBNZ changed NZD language in a step toward intervention China Securities Journal: Govt. will soon release a package of measures to reduce leverage of state-owned enterprises; especially investments by central SOEs in financial sector Trump Seen Bypassing Acting FTC Chief in Favor of Outsider Disappointing U.K. Manufacturing, Trade Cap Sluggish Quarter Facebook Introduces Watch as New Platform for Shows NY Orders Con Edison to Take Action on Subway Power Reliability Perrigo Full Year Adjusted EPS Forecast Tops Estimates Monsanto Judge Angered by Lawyer’s Release of Roundup Documents Pepper Group Accepts KKR’s A$3.60-a-Share Cash Offer Facebook’s ‘Dazzling’ Stock May Belie Long-Term Risks: Grant’s MUFG Realizes Money Alone Can’t Build a Truly Global Bank Glencore Slashes Debt as It Positions for M&A in Commodities Asian indices tried to pick themselves up from the recent geopolitical-triggered losses, but failed and the upside gradually fizzled out throughout the session which saw the region's bourses negative across the board. ASX 200 (-0.2%) and Nikkei 225 (-0.1%) failed to sustain the early gains as financials dragged Australia lower, while Japanese stocks reversed ahead of tomorrow's Mountain Day holiday. Markets in China lagged with the Shanghai Comp (-0.4%) dampened by a lukewarm liquidity operation and with China considering measures for deleveraging in state-owned enterprises, while Hang Seng (-1.1%) underperformed as investors used the escalation of global tensions as an opportunity to book profits in the index which had already surged by around 25% YTD. Finally, 10yr JGBs traded flat as the risk sentiment in Japan lacked conviction and with the BoJ's Rinban announcement somewhat tepid. On Thursday, the PBoC injected CNY 50bln in 7-day reverse repos and CNY 40bln in 14-day reverse repos. The PBoC set CNY mid-point 6.6770 at (Prey. 6.7075 Top Asian News Toshiba Reports Loss With Auditor’s Qualified Endorsement China Mobile Shares Surge as Carrier Adds Special Dividend SEC Delays Decision on Chinese Buyout of Chicago Exchange It’s Hard to Price an ‘Extinction Event’ Like a North Korea War South Korea, Japan Warn Kim Against Firing Missile at Guam Philippines Keeps Benchmark Rate at 3%, in Line With Forecasts Natco Tumbles to 6- Month Low on Expected Delay in Sclerosis Drug Malaysia Warns Traders Against Ringgit Derivatives in Singapore Billionaire Wang Plans Overhaul of Property Assets, Wanda Unit Another morning of declines in Europe with geo-political tensions at the forefront of investors' minds. Slight underperformance in the FTSE 100 amid a slew of Ex-Divs from a number of large cap names taking off roughly 40ppts. On a stock specific basis, much of the price action has been dictated by earnings with Adecco, Lanxess and Henkel among the worst performers following soft financial reports. Very quiet on this front with yields ticking up slightly across the German curve, peripheral spreads wider, albeit mildly so. Top European News Prudential Interim Dividend Per Share 14.5p Thyssenkrupp Debt Soars on Negative Third-Quarter Cash Flow Zurich Insurance CEO Greco Sees ‘Positive’ Signs for Dividend Dong Sees Early Shareholder Returns as Offshore Costs Tumble Adecco Slides as Sales Miss Estimates Amid Downturn in Hiring Mail.ru’s Russian Food Deliveries Surge as Sales Beat Estimates U.K. Homebuilders Slip as Residential Price Growth Slows Further Russian Gas Link Offshoot Taps Investors as Sanctions Swirl Shopping Cart Shows ECB Buying Italy Over France as Bonds Mature In currencies, the NZD was the notable underperformer overnight post the RBNZ monetary policy decision. The rate decision itself was met with choppy price action. However, the downside largely stemmed from comments by RBNZ Assistant Governor McDermott who stated that "NZD needs to adjust lower", which saw NZD break through 0.7300. USD at better levels against its counterparts today, tensions remain at elevated levels between the US and North Korea, although focus is slightly edging towards key US data with US CPI figures to be released tomorrow. But, before that we get the PPI numbers out at midday. GBP saw a brief uptick to pare some of its losses this morning following firm than expected industrial output figures, however much of the other data had been erring to the softer side with the trade balance showing a wider deficit than analysts had expected. In commodities, oil prices up this morning with Brent breaking through USD 53 for the first time since May, however failed to consolidate above and has since retraced some of its gains. Precious metals also hovering at elevated levels. Gold rose 0.1 percent to $1,278.04 an ounce, the strongest in two months. US Event Calendar 8:30am: Initial Jobless Claims, est. 240,000, prior 240,000; Continuing Claims, est. 1.96m, prior 1.97m 8:30am: PPI Final Demand MoM, est. 0.1%, prior 0.1%; Ex Food and Energy MoM, est. 0.2%, prior 0.1%; Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2% 8:30am: PPI Final Demand YoY, est. 2.2%, prior 2.0%; Ex Food and Energy YoY, est. 2.1%, prior 1.9%; Ex Food, Energy, Trade YoY, prior 2.0% 9:45am: Bloomberg Consumer Comfort, prior 49.6 2pm: Monthly Budget Statement, est. $52.0b deficit, prior $90.2b deficit Looking at the day ahead, there is the July PPI data (for core, 0.2% mom and 2.1% yoy expected), the monthly budget statement (-$54bn) as well as the initial jobless claims and continuing claims figures. Fed’s Dudley will also speak today. Notable companies reporting include Macy’s and Newscorp. DB's Jim Reid concludes the overnight wrap Over the last few days we've been wondering what it would take to knock the S&P 500 out of its 90 year record low trading range of no moves of bigger than 0.3% in either direction. After yesterday we can possibly rule out the threat of nuclear war as a catalyst as despite a sudden end to the peaceful markets of late, and a fairly notable global risk aversion, the S&P 500 managed to close only -0.04% lower and extend the daily record to 15 days without a closing move of bigger than 0.3%. Before we sound the all clear though as we'll see below, Asia is having a difficult session after markets initially opened up stronger. They have been seemingly tracking North Korea’s response to Mr Trump. According to the FT they have outlined a detailed plan on state TV to fire four Hwasong-12 ICBM at Guam by mid-August. As we type, the Nikkei is slightly lower (-0.2%), and the Kospi (-1%), Hang Seng (-1.6%) and Chinese bourses between -1% and -1.2% lower. The Hang Seng is on course for its worst day of 2017. The Korean Won has dipped a further 0.2% this morning and S&P futures -0.25% lower. This follows a day of relatively large intra-day moves across various market. The VIX surged ~15% higher to an intra-day peak of 12.63, before range trading and then finally sharply falling to close only 1.5% higher for the day (+0.15pts to 11.11). Over at UST 10Y, yields initially fell ~2bp before increasing back to be broadly flat for the day. The calming influence on the markets was likely due to US Secretary of State Tillerson signalling military confrontation was not imminent, saying that “Americans should sleep well tonight, have no concerns about this particular rhetoric of the last few days” while on a plane post a tour of Southeast Asia. Trump was also a bit more tempered later on and said via twitter, that the “…US nuclear arsenal is now far stronger than ever…but hopefully we will never have to use this power”. Nonetheless, the preference for safe haven assets was still apparent yesterday, with gold (+1.3%) and Swiss franc both modestly up (+1.1%). Over in European government bonds, core yields fell ~5bps at the longer end of the curve with bunds (2Y: -3bps; 10Y: -5bps), Gilts (2Y: -1bp; 10Y: -5bps) and French OATs (2Y: -1bp; 10Y: -4bps) rallying hard. Peripheral bond yields were a bit more mixed, with Portugal’s yield modestly down (2Y: -3bps; 10Y: -2bps), but the Italian BTPs actually up slightly (2Y: unch; 10Y: +1bp). Back to the non nuclear war part of the day, overnight two more Fed speakers echoed prior comments made by their colleagues earlier in the week. St. Louis Fed President Bullard cautioned that failure to get inflation to the Fed’s 2% target could undermine its credibility, “the misses add up over time”. Elsewhere, the Chicago Fed Chief Evans noted it would be “reasonable” to announce the start of balance sheet unwind next month. As far as conventional monetary policy is concerned, he noted the possibility that "We might be pretty close to neutral", and that despite the economy doing very well "...inflation might have some trouble getting up to 2%". Turning to market performance overnight, US bourses closed slightly lower despite the intraday actions, with the S&P (-0.1%), the Dow (-0.2%) and the Nasdaq (-0.3%) all lower but recovering into the close as discussed above. Within the S&P, modest gains in the Health care and materials sector were broadly offset by losses in utilities (-0.5%), consumer and telco names. After the bell, Twenty- First century Fox was up ~+1.5% post a result beat. In Europe, markets also weakened, with the Stoxx 600 down -0.7%. Within the index, only the utilities sector was up (+0.1%), while financials saw heavier losses (-1.5%). Across the region, indices all fell, with the DAX (-1.1%), FTSE 100 (-0.6%), CAC (-1.4%) and Italian FTSE MIB (-0.9%). Currency markets ended the day broadly unchanged, the US dollar index dipped 0.1% yesterday, but is slightly up this morning. Elsewhere, the Euro and Sterling both edged 0.1% higher against the USD, while Euro/Sterling softened for the second consecutive day. In commodities, WTI oil was up 0.8% following EIA’s report of a drop in crude inventories, although intraday gains were slightly pared back due to reports of a build-up in US gasoline stockpiles. Precious metals were higher yesterday (Gold: +1.3%; Silver +3%) but have softened a little this morning. Industrial metals were higher with Copper up 0.7% and Aluminium up  3.9%, marking a cumulative gain of ~9% over three days, likely reflecting reports of China increasing efforts to curtail illegal or polluting capacity. Away from the markets, the Washington Post has reported the FBI has searched a home belonging to Paul Manafort, who was Trump’s former campaign chairman. The search took place on 26th of July, but could be another sign that the federal probe into Russian involvement in the 2016 election is expanding. To recap, Manafort was Trump’s election campaign chairman from March to August 2016, but was forced to resign post increased scrutiny of his past work consulting for the Kremlin backed former Ukrainian president. Elsewhere, a $23bn 10-year US note sale drew a yield of 2.25%, with a bid-to-cover ratio of 2.23, the second-weakest in the last eight years, which contrasts the strong demand for the three-year note yesterday where it’s bid-to-cover ratio was the highest since Dec. 15. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the preliminary 2Q nonfarm productivity stat was a little firmer than expectations at 0.9% (vs. 0.7% expected), leaving throughyear growth at the unrevised 1.2% yoy rate seen in 1Q. However, the growth in unit labour costs were weaker than expected at 0.6% (vs. 1.1%), although this quarter follows a large upward revision in the prior reading. Elsewhere, the final wholesale inventories for June was marginally higher at 0.7% mom (vs. flash estimate of 0.6%) and the MBA’s new purchase mortgage applications index rose 0.8% last week, with the four-week average rising 7.5% yoy. In Italy, industrial production for June was higher than expectations at 1.1% mom (vs. 0.2%), taking annual growth to 5.3% yoy (vs. 3.5% expected) – a bit closer to what the Markit manufacturing PMI has been suggesting. Looking at the day ahead, UK and France’s industrial production and manufacturing production data will be out in the morning, with expectations for UK’s IP at 0.1% mom (-0.1% yoy) and manufacturing production at flat mom (0.6% yoy). Further, June trade balance stats for UK (-£2500 expected) and Italy are also due. Over in the US, there is the July PPI data (for core, 0.2% mom and 2.1% yoy expected), the monthly budget statement (-$54bn) as well as the initial jobless claims and continuing claims figures. Onto other events, the Fed’s Dudley will speak today. Notable companies reporting include Macy’s and Newscorp in the US and ABN Amro closer to home.

04 августа, 13:50

Futures Flat As Payrolls Loom, Dollar Slide Continues

It took stocks only a few minute to "price in" the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed's thinking or the market. Stocks, gold and most metals headed for a fourth week of gains on Friday, as fresh political woes for U.S. President Donald Trump and the prospect of a trade war with China kept the dollar depressed ahead of payrolls. The Bloomberg Dollar spot index inched lower for a third day, hovering near the weakest in 15 months, while cable rose to $1.3154, the euro hit a fresh two-and-a-half year high against the dollar and oil retreated.    Global stocks were just barely in the green this morning with the MSCI All-Country World Index rising less than 0.05%. In key overnight macro moves, the Aussie dollar gained against the greenback despite RBA warnings about currency’s strength, while the USD/JPY fell as much as 0.2% to 109.85, the weakest since June 15, before paring decline to 110.03. In Asia, Japan’s Topix index slid 0.2% and Australia’s S&P/ASX 200 Index lost 0.3%. South Korea’s Kospi was up 0.5 percent after sliding 1.7 percent on Thursday. Japan's Nikkei ended the week little changed, dropping 0.4 percent on Friday as a stronger yen weighed. Wall Street was expected to start marginally higher, having seen the Dow index break through 22,000 points this week. Hong Kong’s Hang Seng Index was little changed, while the Shanghai Composite Index swung between gains and losses.   European markets got off to an underwhelming start, with Britain's FTSE 100, Germany's DAX and France's CAC 40 all lower. The FTSE was on course for its best week in two months, boosted by the latest tumble in the pound. The Stoxx 600 traded sideways as Swiss Re AG’s profit drop weighed on insurers. The rising Euro, which ING now expects to rise as high as 1.20 in the next 4 weeks, has capped Stoxx gains in recent months, on concerns it will pressure exporter earnings. The U.K.’s FTSE 100 Index gained less than 0.05 percent to the highest in more than a week.   Germany’s DAX Index jumped 0.1 percent. The dollar index, which has just recorded its worst run of monthly losses since early 2011, was 0.1 percent lower at 92.766 on the day and about 0.6 percent during a week in which it fell to a 15-month low of 92.548. "We think things are overdone in terms of negative sentiment around the dollar," said PineBridge Investments fund manager Hani Redha, quoted by Reuters. "Overall we think global growth is going to be quite solid but we think the leadership is going to change back towards the U.S.," he added, saying Trump was also likely to get at least some fiscal stimulus measures through in the coming months. As SocGen's Kit Juckes writes this morning, the US Treasury market is heading towards today's non-farm payroll data with 10s at 2.23%, in the bottom half of their 2.12-2.42 range. The RBA sees lower inflation thanks to the AUD's rise to date and a threat to growth from further appreciation, Japanese wages fell and even smoothed show the same lack of wage growth as we see everywhere, despite a tightening labour market. Just taking those three bits of information I get a now-familiar snapshot of the world. Anchored US rates and yields will make sure that capital goes on flowing out of dollars and into anything that's perceived as more interesting. Other central banks will grumble (at the very least) about the weaker dollar trend and in Japan, the need to reboot inflation expectations remains as clear as ever, the difficulty of doing so likewise, and the danger that anchored US yields drag USD/JPY down and is pretty clear too. Previewing today's payrolls report, the SocGen strategist writes that with consensus forecasts of +180k in NFP an 2.4% in average hourly earnings, "the BOJ, RBA and the ECB for that matter, will be hoping for an upside surprise. An NFP surprise would provide some relief, a huge upside surprise in wage growth would really help them a lot. That doesn't make it likely, sadly." WTI fell below $49, extending its weekly loss with the Baker Hughes rig count due later.  "It was very natural on the technical side that we should see consolidation around the 200 day moving average," Torbjorn Kjus, chief oil economist at DNB Bank, told Bloomberg. Brent is trading below 200-day MA Friday after moving above that level last week and settling above the marker for past 2 sessions; WTI also below Friday In rates, Europe's 10-year benchmark government bond yield and U.S. equivalents were pinned near one-month lows of 0.45 and 2.23% respectively amid the U.S. political uncertainty. U.S. yields have been falling for most of 2017 as the President's travails have cooled expectations for growth and inflation. 10-year gilt yield +1bps to 1.16% after Bank of England kept rates on hold Thursday. In commodities, West Texas Intermediate crude dipped 0.8 percent to $48.66 a barrel, the lowest in a week. Gold was steady at $1,269 an ounce and set to score and modestly weekly rise, which will be its fourth in a row. Copper advanced 0.2 percent to $2.88 a pound. Market Snapshot S&P 500 futures up 0.05% to 2,473 STOXX Europe 600 down 0.05% to 378.75 MSCI Asia up 0.01% to 160.92 MSCI Asia ex Japan up 0.2% to 529.07 Nikkei down 0.4% to 19,952.33 Topix down 0.2% to 1,631.45 Hang Seng Index up 0.1% to 27,562.68 Shanghai Composite down 0.3% to 3,262.08 Sensex down 0.04% to 32,225.85 Australia S&P/ASX 200 down 0.3% to 5,720.58 Kospi up 0.4% to 2,395.45 EUR/USD: +0.1% to 1.1880 USD/JPY: steady at 110.09 GBP/USD: +0.1% at 1.3154 German 10Y yield rose 0.3 bps to 0.456% US 10-year yield +1bp to 2.23% Italian 10Y yield fell 2.6 bps to 1.697% Spanish 10Y yield rose 1.6 bps to 1.468% Brent Futures down 0.8% to $51.62/bbl Gold spot up 0.06% to $1,269.40 U.S. Dollar Index down 0.1% to 92.75 Top Overnight News Payrolls May Show Stable Economy; Grand Jury Issues Russia Subpoenas; HNA Says It’s Not Raising Funds in N.Y. Toyota and Mazda to sell stakes to each other, worth about 50b yen each Special counsel Robert Mueller is using a federal grand jury in Washington to help collect information as he probes Russia’s meddling in the 2016 election and possible collusion by Trump campaign associates Pearson Plc made good on a pledge to cut costs, slashing 3,000 jobs and cutting its interim dividend to preserve cash as it works on a turnaround of its struggling education business Allianz SE and Canada Pension Plan Investment Board have agreed to buy a 20 percent stake in Spain’s Gas Natural SDG SA’s gas distribution business for 1.5 billion euros ($1.8 billion) The world’s biggest pension fund posted its fourth-straight quarterly gain, as global stocks rose and a decline in the yen against both the dollar and the euro helped boost the value of its overseas investments Teva Pharmaceutical Industries Ltd.’s warning to investors that it may breach debt covenants if cash flow weakens triggered its biggest bond selloff on record “Passive investing is in danger of devouring capitalism,” billionaire Paul Singer wrote in his firm’s second-quarter letter dated July 27 BOE Is Said to Find Error Behind Spike in U.K. Mortgage Arrears Rosneft Aids Venezuela’s State Oil Producer With Prepayment Icahn-Backed Change in Biofuel Rule Is Said to Near EPA Rebuff McDonald’s Japan July Sales Helped by Desserts, Hawaiian Burgers Teva Debt Sells Off After Warning May Breach Covenants Asian equity markets traded mixed, with the region indecisive ahead of key risk NFP data and after a lacklustre close in US where energy underperformed and the Russian probe seemed to have stepped up a notch. This saw early losses in ASX 200 (-0.2%) and Nikkei 225 (-0.3%), with financials the underperformer in Australia after big 4 bank CBA was accused of breaches to anti-money laundering and counter¬terrorism regulations. Shanghai Comp (+0.2%) and Hang Seng (+0.1%) were slightly positive after the PBoC upped its daily liquidity operations, although upside was capped as this still amounted to a net weekly liquidity drain. RBA Statement on Monetary Policy states recent AUD rise had modest effect on GDP and inflation forecast. Says: Holding policy steady consistent with growth and inflation target. Recent increase in AUD has modest dampening effect on economy. Further strength in AUD would reduce economic growth and inflation. RBA maintains inflation forecast for 2017 and 2018 at between 1.5%-2.5% for both, 2019 forecast kept at 2.0%-3.0%. Lowers GDP forecast for 2017 to 2.0%-3.0% from 2.5%-3.5%, 2018 forecast maintained at 2.75%-3.75%, while 2019 forecast was increased to 3.0%-4.0%. Top Asian News China Hedge Fund Says Most ‘Violent’ Deleveraging Phase Over China Millionaires in Jeans Spur Wealth Manager Push Abroad Abe’s New Cabinet Shows Continuity in Japanese Economic Policy Summit Announces $1 Billion LNG-to-Power Project in Bangladesh Indonesia Sees Room to Ease If Inflation, Forex Rate Manageable JT to Buy Karyadibya Mahardhika for $1b Enterprise Value China Bulls’ Resolve Tested as Stocks Struggle to Pass Key Level Indonesia Says Google Agrees to Monitor Negative YouTube Content Hong Kong Stock Rally Buoyed by Bullish Profit Projections The majority of EU bourses have come off worst levels, and now trade in marginal green territory. The biggest movers throughout the European morning have been UK Home Building names, with an overnight article from "PropertyWeek" circulating, which states that the Government is reviewing its 'Help to Buy' Scheme. Taylor Wimpey (TW LN) and Perisimmon (PSN LN) shares were both down over 5% for the session, as the former generated 45% of its sales from the Scheme. Later reports from a UK government spokesperson stated that it is incorrect to infer that the government are set to cancel the help to buy scheme, did see many of the loses retraced. NFP Friday trade has been evident in fixed income. markets today, with the 1 Oy bund holding its slim range. Underperformance has been seen in peripherals, with delays relaying slight profit taking in BTPs and Bonos. Corporate issuance once again came into fruition today, with Verizon printing AUD 2.2bn "kangaroo" bond, with BAT mandating banks for a multi-currency and multi-tranch bond deal. Top European News BOE Says Companies Need Clarity as Brexit Crimps Investment German Factory Orders Jump in Sign of Robust Economic Growth Allianz Buys LV= Unit in Deal Valued at as Much as $1.3 Billion RBS’s Investment Bank Drives Second-Quarter Profit Beat Constellium Is Said to Weigh Options After Takeover Interest Swiss Re Drops as Earnings Succumb to Market-Pricing Pressure U.K. Housebuilders Fall After Reports of ’Help to Buy’ Review BOE Is Said to Find Error Behind Spike in U.K. Mortgage Arrears Rosneft Aids Venezuela’s State Oil Producer With Prepayment In currencies, GBP has seen the majority of volatility this morning as EUR/GBP and GBP/USD both briefly broke out of the post EU trading range. Elsewhere, overnight volatility was seen in AUD, following the release of the RBA's statement of Monetary Policy, with no fears of an overvalued currency, AUD/USD begun to gain some bullish pressure, we have continued to see buying following the bounce of August's low, with bulls now looking to retest 0.80. USD & CAD will both await their jobs reports due at 13.30BST. However, it is worth noting the greenback did once again see concerning news as political tensions continue with US Special Counsel Mueller empanelling a Washington Grand Jury in Russia probe. In commodities, Asian oil demand has been seen to shift back to the Middle East and Russia in Q4 following the recent rise in Brent. Elsewhere, OPEC has delivered a record high adherence to its oil cut in 2017, struggles do remain with Iraq and the UAE yet to show how they can meet their targets. Trade yesterday saw the USD 50.00/bbl level hold once again and the rejection has leaked into trade today, with WTI now trading around USD 48.80. Precious metals all trade in marginal positive territory, likely abiding to the risk tone following the recent acceleration in the US Russian probe. Looking at the day ahead, Friday is relatively quiet day for data in both Asia and Europe with only German factory orders data for June due and Italy’s retail sales for June. The US will be in greater focus as the July nonfarm payrolls number is due (180k expected) along with other labor market data. Alongside that, we will also get the trade balance reading for June. Onto other events, the Baker Hughes US rig count will also be out. Notable US companies reporting include: Cigna, Berkshire Hathaway and CBOE. Notable European companies reporting include: Allianz, Swiss Re and Erste Group. US Event Calendar 8:30am: Change in Nonfarm Payrolls, est. 180,000, prior 222,000; Change in Private Payrolls, est. 180,000, prior 187,000 Change in Manufact. Payrolls, est. 5,000, prior 1,000 Unemployment Rate, est. 4.3%, prior 4.4% Average Hourly Earnings MoM, est. 0.3%, prior 0.2%; Average Hourly Earnings YoY, est. 2.4%, prior 2.5% Labor Force Participation Rate, prior 62.8% Underemployment Rate, prior 8.6% 8:30am: Trade Balance, est. $44.5b deficit, prior $46.5b deficit DB's Jim Reid concludes the overnight wrap Hello Payrolls Friday. On a day we pore over how many people have been employed and how much they've been paid in the US, I'm still trying to come to terms with the €222 million buy out clause activated for the transfer of Brazilian Neymar from Barcelona to PSG. This is broadly equivalent to the annual GDP of the equatorial Marshall Islands (population over 53k) which is around the 190th biggest nation in the world. If you include his wages over a 5 year contract you can nearly double this and you get close to the annual GDP of Tonga - home to over 100k people. The Marshall Islands aren't a hot bed of economic activity although I did note that their income tax rates are 8% and 12% and corporation tax is at 3%. Anyone coming with me to set up a company? Although make sure you can afford your current buy-out first though. Back to US jobs and consensus expectations are for a 180k gain (222k previous) today. Our US economists project a more optimistic figure of 200k for headline and private payrolls, which they expect to be sufficient to lower the unemployment rate a tenth to 4.3%. However, they note that the July ADP survey and the employment subcomponents of the manufacturing and non-manufacturing ISMs add some downside risks to their forecast as their payrolls model (which uses the first reported values of ADP and the ISM composite employment reading) projects private payroll gains of around 165k. Counterbalancing this risk however is the fact that private payrolls have recently fallen short of the levels implied by ADP and the ISMs, and payrolls (including revisions) have accelerated in the past following similar misses. On other detail aspects of the report, they expect that hours worked should remain steady at 34.5 along with a 0.3% gain in average hourly earnings (AHEs), which would lower the YoY growth rate of the series to 2.4% (with a risk of rounding up and remaining at 2.5%). However, as long as there is no material surprise in either direction, they do not expect this month's AHEs to meaningfully impact policymakers' intermediate-term inflation expectations. Finally, the team notes that even if July payrolls fall below their forecast, Amazon's hiring spree this month could result in an upside surprise in next month’s (August) data, which will likely factor  more prominently into the Fed's decision process going into the September 20 meeting. So another report where the market will look for any life in inflation and a reason for bonds to sell-off. This report comes on the back of a sizeable bond rally yesterday which seemed to be kickstarted by a  relatively downbeat outlook from Mr Carney on a day the BoE cut their growth and wages forecast. Before we review this it's worth highlighting that the Wall Street Journal reported 30 minutes before the US close that Special Counsel Robert Mueller was said to have impaneled a grand jury in the ongoing Russia probe. It led to a small spike lower in risk (see below) into the close and it's another cloud for the Trump presidency to contend with. Back to the BoE. As widely expected, the Bank left rates steady at 0.25% with the number of dissent votes declining from three to two, due to Kristin Forbes’ departure. The Bank reiterated future policy may need to be tightened slightly more than the current market yield curve implies (the first hike is priced in 2H18), but DB’s Mark Wall notes that Governor Carney made no attempt during the press conference to re-price dovish market expectations for this year. In Carney’s opinion, the UK was still experiencing exceptional circumstances ‘and would do so for some time’, with Brexit-related risks to the forefront. The bank has also cut its economic growth projections to 1.7% in 2017 (vs. 1.9% previous) and 1.6% in 2018 (vs. 1.7% previous). Looking ahead, with two new members on the MPC as of the September meeting, our team think it will be difficult for the hawks to gain a majority on the MPC without the support of the Governor. So our team continues to expect the BoE to NOT tighten monetary policy until Brexit related uncertainty has been sufficiently reduced. Post the BOE release, Gilt yields dropped ~5bps in 10 mins of trading and continued to fall to close 9bps lower for the day. The more dovish rates outlook and cautious comments from Carney had a similar impact across most government bond markets with Gilts (2Y: -6bp; 10Y: -9bps), USTs (2Y: -2bps; 10Y: -5bps) and German bunds (2Y: +1bp; 10Y: -3bps) yields mostly notably lower. Elsewhere changes were a bit more modest with Italian BTPs (2Y: unch; 10Y: -2bps) and OATs (2Y: +1; 10Y: -3bp). Turning to currencies there was a fair bit of intraday activity for Sterling after the meeting. It traded as high as 1.1202 in the morning session against the Euro, but then fell to as low as 1.1052 in the hours after the BoE announcement, before closing at 1.1069 for the day (-0.7% for the day). Sterling/USD also had similar intraday trends, before closing down -0.6% for the day. For other currencies, the USD dollar index dipped 0.2%, partly due to the softer ISM non-manufacturing data and the Euro/USD edged 0.1% higher. In commodities, WTI oil fell 1.3% as investors weighed up reports of rising US production against a decline in crude stockpiles. Elsewhere, precious metals were slightly up (Gold +0.1%, Silver +0.2%), copper was flat, but aluminium fell 0.8%. Onto equities, the S&P also had its share of intraday action. The index was trading in a tight range for most of the day, but then fell ~0.3% post the Mueller news and closed -0.2% down for the day. The VIX also responded, rising ~+5.5% around that time to 10.5 but closed a bit lower at 10.44. Elsewhere, the Dow edged up ~+0.1%, breaking another fresh all-time high for the 7th consecutive day. Within the S&P, modest gains in the industrials and utilities sectors were more than offset by losses in energy (-1.3%) and materials (-0.7%). European markets broadly strengthened, the Stoxx 600 edged up 0.1%, the FTSE 100 up 0.9% (helped by the fx move) and the CAC (+0.5%), but the DAX fell 0.2%, impacted by Siemens (-3%). Away from the markets, as noted earlier, the WSJ has reported that Special Counsel Mueller has impaneled a grand jury as part of his probe into Russia’s interference in the US election and possible ties with President Trump’s campaign. A grand jury suggests that the probe has gone beyond investigating what might have happened, to potentially charging people with crimes. Mueller’s office has declined to comment. However, a special counsel to the president (Ty Cobb) added later that he wasn’t aware that Mueller was using a grand jury, but also acknowledged that “…grand jury matters are typically secret…". Elsewhere, US senators have introduced two bipartisan bills aimed at protecting Mueller on concerns that Mr Trump may look to dismiss him. We shall no doubt see more news flow on this in the coming weeks. This morning in Asia, markets are mixed but little changed. The Nikkei is -0.4%, the Kospi recovering slightly (+0.2%) after yesterday’s -1.7% fall, with the Hang Seng flat and China slightly higher on balance. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, data was in line to slightly soft. The ISM nonmanufacturing composite for July was below expectations at 53.9 (vs. 56.9 expected; 57.4 previous), which is the lowest level since a similar downward spike in August last year. Digging into the details, new orders index fell 5.4pt to 55.1 and the employment index fell 2.2pt to 53.6. However, even after factoring in the employment indices from the twin ISM reports together, DB’s economist believes the employment indicators are still consistent with decent payrolls growth (~200k per month). Elsewhere, factory orders for June was in line at 3%, initial jobless claims for July was slightly lower than expectations at 240k (vs. 243k) and continuing claims was at 1,968k (vs. 1,958k expected). The final durable goods order stat for June was reported higher at 6.4% (vs. 0% expected). Onto Europe and the June Eurozone retail sales were higher than expectations at 0.5% mom (vs. 0% expected) and 3.1% yoy (vs. 2.5% expected), while UK’s Markit services and composite PMI were also a tad higher than expectations at 53.8 (vs. 53.6) and 54.1 (vs. 53.8) respectively. Elsewhere, the final July services and composite PMI for the Eurozone (-0.1pt vs flash composite), France (-0.1pt) and Germany (-0.4pt) were also released and was slightly lower than the flash PMIs. Looking at the day ahead, Friday is relatively quiet day for data in both Asia and Europe with only German factory orders data for June due (0.5% mom, 4.4% yoy expected) and Italy’s retail sales for June (0.1% mom expected). The US will be in greater focus as the July nonfarm payrolls number is due (180k expected, DB 200k) along with other labour market data. Alongside that, we will also get the trade balance reading for June. Onto other events, the Baker Hughes US rig count will also be out. Notable US companies reporting include: Cigna, Berkshire Hathaway and CBOE. Notable European companies reporting include: Allianz, Swiss Re and Erste Group.

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04 августа, 04:48

July Payrolls Preview: Smooth Sailing But Watch Out For Cars

At 8:30am on Friday, the BLS is expected to announce that in July the US created 180K jobs, down from 222K in June though still in line with the 6-month average of 180K, with the biggest downside risk a slowdown in durable manufacturing payrolls as auto production slumped. Sellside expectations: UBS: 175K Barclays: 175K HSBC: 175K SocGen: 180K TD Securities: 190K Goldman Sachs: 190K Oxford Economics: 195K Fathom Consulting: 210K RBC: 220K The unemployment rate is expected to decline to cycle lows of 4.3% from 4.4%, although the main focus will be on average hourly earnings which are forecast to slow to 2.4% Y/Y from 2.5% last month, up 0.3% sequentially, for an indication whether wage growth is finally picking up (which judging by yesterday's Amazon job fair which showed tens of thousands of people lining up desperate for minium wage jobs, is not happening). As RanSquawk notes, overall job growth has remained solid, despite a number of Fed officials forecasting a bigger slowdown as the US is very close to full employment. Most Fed officials have stated that the Fed is pretty much there in regards to their employment mandate, but Kashkari and Brainard have both been more cautious with Brainard saying that she is not confident that the Phillips curve can be counted on to return inflation to target and that there remains a question about whether an unemployment rate of 4.4% still meant there was slack left in the labour market. As mentioned above, average hourly earnings will be one of the key data points to watch as wage growth has been subdued and shown no signs of surging above 3% recently, a level consistently seen pre-crisis. However, even if earnings come in softer than expected, it’s not expected to alter the course of the Fed anytime soon: the US central bank has signalled that an announcement on the beginning of balance sheet reduction will likely come in September, with one more rate hike pencilled in for December. With at least one more payrolls report before that meeting, plus more data on inflation, this report could be one that doesn’t alter the outlook a great deal. In other words, any traders waiting for tomorrow to start their vacations, can do so one day early. Sectoral employment and wages: Labor Supply: The participation rate has been inching up. Slow wage growth also hints at less labor market tightness than the low unemployment rate would seem to suggest. The past year's slower outflows from the labor force are consistent with that increasing supply. Through the end of last year, re-employment rates for the longterm unemployed were rising fairly rapidly—a renewed source of supply—but that improvement appears to have stalled. Possible Reporting Quirks: The July pay period ended on the 15th and the month also had two fewer workdays relative to June, both of which should boost seasonally-adjusted wage growth at the margin. On the negative side, Goldman notes the possibility of mean-reversion in the construction and information industries following above-trend wage growth in recent months. While wage growth has disappointed this year across multiple measures, it is likely that much of this weakness has been concentrated at the high-end, whereas wage growth in the bottom-half of the income distribution appears relatively high due to minimum wage increases and appears to be accelerating. To the extent that wage growth is more persistent in the lower and middle tiers of the income distribution, this would suggest scope for resilience in aggregate wage growth going forward. Recent Labor Market Indicators: Jobless claims continue to remain near a 44-year low with the four-week average at just 241,750. The headline figure has remained below 300K – a traditional indicator of an improving labour market – for over 2 years, the longest streak since the early 1970s. The most recent employment components of the dual ISM reports have shown employment growth continuing in July, albeit at a slower pace than June. The manufacturing survey showed employment dropping to 55.2 from 57.2 with the non-manufacturing survey dropping to 53.6 from 55.8. Nevertheless, both were still over the 50.0 threshold, indicating expansion.The July ADP employment report was slightly weaker than expected but still strong at 178K. The figure bodes well from Friday’s official release but the correlation between the two reports is not one to usually write home about, RBC notes that it does a better job of predicting the official figure in July, “especially since the methodology shift back in 2012”. Factors for a stronger report: Service sector surveys. Service-sector employment surveys were mixed in July but remained at generally high levels. While the ISM non-manufacturing employment component fell 2.2pt to 53.6, our overall non-manufacturing employment tracker edged up 0.1pt to 54.8, a two-year high. This reflected gains in the Markit, New York Fed, and Richmond Fed employment subindices that were partially offset by a drop in the Dallas Fed and ISM Non-Manufacturing measures. Encouragingly, the Conference Board labor market differential – the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get –strengthened 2.5pt to 16.1, a 16-year high. Evolving July seasonality. July nonfarm payrolls have risen by over 200k in each of the last three years (in both the first and final vintages), and growth has exceeded the 6-month average in both of the last two years. While one cannot rule out coincidence, there is a possibility that payrolls seasonality is evolving towards increased net hiring in July. On a non-seasonally adjusted basis, nonfarm employment typically declines by one million jobs or more in July, reflecting the departure of public and private education employees at the end of the school-year. Continued sharp seasonal declines in these categories each July have masked what appears to be a pickup in net hiring in private payrolls ex-education services (see left panel of Exhibit 1). So far, the nonfarm payrolls seasonal adjustment factors have appeared to lag this evolution, suggesting scope for solid seasonally adjusted job growth in tomorrow’s report. Factors for a weaker report: In its modestly negative preview, UBS - which expects a payroll number of 165K - notes that in June local government and healthcare payrolls rose unusually quickly, and retail jobs swung from falling to rising. The Swiss bank doubts those gains were repeated, and allows for some slowing in durable manufacturing payrolls as auto production declined. It also expects that with softer factory employment, average hourly earnings probably rose only 0.1%m/m, slowing 0.2pt to 2.3%. Furthermore, UBS notes that among the indicators of labor supply: —participation, labor market flows, and slow wage growth—hint that the jobs market is not as tight as the unemployment rate suggests. In turn, the pace of payrolls, faster or slower, is more likely an indication of changes in labor demand than supply. initial claims for unemployment insurance benefits edged modestly higher, averaging 244k during the four weeks between the June and July payroll survey periods, up from 243k during the June payroll month and the cycle low of 241k in the May period. Additionally, continuing claims rose by 20k from survey week to survey week, similar to the 21k increase in the weeks leading up to the June payroll period. Job availability. The Conference Board’s Help Wanted Online (HWOL) report showed a 3.3% pullback in July online job postings – its largest drop in five months. We place limited weight on this indicator at the moment, in light of research by Fed economists that suggests the HWOL ad count has been depressed by higher prices for online job ads. However, we note the possibility that the drop reflects a legitimate pull-back in labor demand. Sharp slowdown in the auto sector: The manufacturing softness probably extended into July, and auto production cuts are an ongoing risk. Production cutbacks in auto manufacturing in July probably resulted in temporary layoffs as well as some drag on average hourly earnings. Neutral factors: Manufacturing sector surveys. While headline manufacturing sector surveys softened on net in July, the employment components generally held up well. The ISM manufacturing employment component pulled back 2pt from elevated levels (-2.0pt to 55.2), and other survey data were mixed, with sequential increases in Markit, Richmond Fed, and Dallas Fed employment subindices, but declines in the Chicago PMI, Philly Fed, and Empire Fed employment measures. Our overall manufacturing employment tracker edged down 0.3pt to 55.7, the lowest since February but still well above the 2016 average of 49.4. Manufacturing payroll employment edged up 1k in July and has increased 9k on average over the last six months. ADP. The payroll processing firm ADP reported a 178k increase in private payroll employment in July. While this was 12k below consensus expectations, the pace of June growth was revised up by 33k, providing mixed signals for tomorrow’s employment report. While large surprises in the ADP report have tended to predict the subsequent nonfarm payroll surprise, a 12k miss is probably not large enough to qualify. Moreover, this relationship may have deteriorated since ADP’s methodological revamp last October as shown in Exhibit 2, which plots each ADP surprise (vs. consensus based on first-reported ADP) against the subsequent nonfarm payrolls surprise. Market Reaction As is often the case with the employment report, a knee-jerk reaction is often observed following the headline figure. If a miss is seen then initial USD weakness could be observed with treasuries picking up and vice-versa on a stronger-than-expected headline. However, as the market digests the report, you often see a retracement depending on the other components of the report What the Banks Are Saying BARCLAYS (EXP. 175K): We expect nonfarm payrolls to rise 175k, with a 170k increase in private payrolls. July will be the first “clean” reading on labor markets since April, as the timing of the May survey week and the return of college-aged workers to the labor force, in our view, distorted May and June payrolls. The average gain in payrolls in 2017 has been 179k, and our forecast assumes this trend rate of hiring continued in July. Elsewhere in the report, we expect the unemployment rate to decline one-tenth, to 4.3%, and average hourly earnings to rise 0.3% m/m and 2.4% y/y. Finally, we expect no change in average weekly hours at 34.5. CAPITAL ECONOMICS (EXP. 222K): We estimate that overall non-farm payrolls followed the 222,000 gain in June with another healthy 200,000 increase in July. The downward trend in initial jobless claims shows little signs of abating, while the recent strength of temporary help employment is also a positive sign. In addition, the employment index of the Markit Composite PMI rose to a seven-month high in July. Another strong month of employment growth should have been enough to push the unemployment rate back down to 4.3% in July, and the surveys suggest it will fall even lower. Meanwhile, although we have pencilled in a stronger 0.3% m/m gain in average hourly earnings, base effects probably dragged the annual growth rate back down to 2.4%. But if the unemployment rate does continue to fall, wage growth should come under some renewed upward pressure before long. FATHOM CONSULTING (EXP. 210K): We expect next Friday’s employment report to show that 210,000 net new nonfarm payrolls were added in July. This is slightly higher than the consensus estimate of a gain of 180,000. We forecast a 0.3% increase in average hourly earnings in July, but given the 0.4% gain in average hourly earnings in July last year, this would be consistent with the annual rate of earnings growth slipping from 2.5% to 2.4%. Such meagre earnings growth is linked to low productivity growth: with employees’ output per hour growing very slowly, workers are finding it hard to negotiate higher wages, despite the low unemployment rate. GOLDMAN SACHS (EXP. 190K): We have argued that the US economy will soon move past full employment, and that the funds rate needs to rise in order to prevent an overheating that would be difficult to reverse without a recession. But the recent weakness in the inflation and wage data poses a challenge to our view. After all, full employment is typically defined as the level of resource utilization that generates wage and price pressures consistent with the Fed’s target. So the shortfall could mean that current estimates of a near-zero output and employment gap will prove wrong. Nevertheless, our conviction that we are at full employment is relatively high. First, other labor market indicators—including job openings, quits, reported skill shortages, and household assessments of job availability—are if anything indicative of an even stronger labor market than the official unemployment rate. Several of these indicators also cast doubt on the notion that labor force participation remains cyclically depressed, as does the fact that the participation rate is now slightly higher than the projection from a remarkably prescient 2006 Fed staff study. Second, we do not view the recent price and wage data as a “red flag” indicating additional slack. Core price inflation is only loosely related to labor market slack as the “price Phillips curve” is quite flat. The “wage Phillips curve” is steeper, making it in principle more suitable for backing out slack. But the recent slowdown has come mostly in areas where wage growth is statistically somewhat less sensitive to labor market slack. Moreover, surveys of wage growth have continued to accelerate and now imply a 3% pace, close to the maximum rate that we think is sustainable in the longer term. Based on this, we expect wage growth to rebound before long. In the near term, Fed officials will not need to take a strong view on these issues. Balance sheet runoff in September/October seems very likely barring a major market shock, while a September rate hike is very unlikely. So the next big date is the December meeting, when the committee needs to decide whether to resume the hikes. At least based on our analysis of the labor market, the answer is likely to be yes. HSBC (EXP. 175K): The average monthly increase in nonfarm payrolls in the first half of 2017 was 180,000. Retail employment growth has slowed this year, but many other key industries continue to create jobs at a steady pace. We forecast nonfarm payrolls increased by 175,000 in July. Wage growth has picked up only modestly in recent years, even as the unemployment rate has continued to fall. We forecast a 0.3% m-o-m rise in average hourly earnings in July. The year-on-year rate could slip to 2.4%, down from 2.5% in June. We forecast the unemployment rate fell to 4.3% in July from 4.4% in June. OXFORD ECONOMICS (EXP. 195K): We have July Payroll rising 195,000 on the heels of a 222,000 gain in June. Our July forecast is just above average monthly payroll growth in the 6-months ending June (+180,000). We have the July unemployment rate dipping back down to 4.3% after rising to 4.4% in June. We also see average hourly earnings in July rising 0.3% after rising by 0.2% in June. RBC (EXP. 220K): Following a relatively weak start to the year (which, again, was inconsistent with nearly every other labor market metric), we expect payroll growth to remain on the firm side near-term. Accordingly, we look for headline and private NFP prints of 220K and 205K for July, respectively. This pace of payroll growth would be more than enough to elicit a sharp decline in the unemployment rate (assuming we got commensurate gains in the Household survey), but we are cognizant that with sentiment on the labor backdrop at 16-year highs (look at the Conference Board’s labor differential sitting at +16.1%), we could see some firming in the labor force beyond normal population growth (i.e., from folks coming back in from the sidelines). So we are penciling in just a modest downturn in unemployment, to 4.3% from 4.4% prior. TD SECURITIES (EXP. 190K): We expect a solid 190k print, taking into account risk for a sharp pullback in government jobs as labor market indicators on balance point to a 200k+ gain. A lower unemployment rate (4.3% vs 4.4%) and solid 0.3% gain on avg hourly earnings should garner a hawkish market reaction, though due to base effects in the latter, the y/y pace on wage growth should be little changed to lower. UBS (EXP. 175K): We continue to forecast headline payrolls up 175k in Friday's employment report (consensus 180k) and private payrolls up 165k (consensus 180k). We project slightly softer average hourly earnings growth (+0.1%m/m vs consensus 0.3%), and the unemployment rate falling 0.1pt to 4.3% (consensus 4.3%). ADP reported private payrolls up 178k in July, little different from the consensus forecast for private payrolls in Friday's employment report (180k) or our own forecast (165k). Services payrolls continued to rise on trend, but payrolls for goods-producing industries decelerated sharply, with some slowing in construction and natural resources and a decline in factory payrolls. In our forecast for BLS payrolls, we have incorporated a drag from the auto sector, where summer shutdowns appear more extensive than usual. At the margin, the ADP report supports that drag. ADP manufacturing payrolls fell 4k in July versus +17k per month on average in H1. That said, it's hard to take too much from the ADP report. On average, ADP's initial estimate of private payrolls has overstated the BLS estimate by 50k per month this year, but in June it instead understated by 29k. The large errors, and the low probability of guessing when they switch from positive to negative, make ADP fairly unreliable as an indicator for the BLS measure.

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03 августа, 19:51

India's Economy Crashes After "Mind-Bogglingly Inane" Tax System Strikes Back

With just a hint of schadenfreude, we note that, following our discussion of "how to destroy an economy", India's Composite PMI collapsed to 46.0 in July - its lowest on record (well below the kneejerk lows after demonetization in November) as the "mind-bogglingly inane" new tax system and demonetization efforts continue to crush the poor and feed the wealthy. As Goldman Sachs notes India's Nikkei Markit services PMI contracted in July after reaching a 8-month high in June, following a decline of manufacturing PMI on Tuesday. The fall was led by a significant decline in new business, suggesting a worsened business sentiment after the GST implementation on July 1. Main points: India's Nikkei Markit services PMI contracted to 45.9 (the lowest reading since September 2013). Combined with the manufacturing PMI reported on Tuesday, the July composite PMI fell to 46.0, the lowest reading since March 2009. Among subcomponents, the new business index fell the most to 45.2 (from 53.3 in June), reflecting disruptions caused by the GST. As the press release from Markit Economics mentioned, “Most of the contraction was attributed to the implementation of the goods & services tax and the confusion it caused". The employment index for services fell to 48.9 (from 51.8 in June). That said, the index for business expectations rose to a 11-month high to 62.3, suggesting optimism from services providers about the future once they have more clarity about the new tax system. The output price index rose to 54.6 (from 51.0 in June), while the input price index moderated to 51.7. Overall, PMI data for July suggest a significant drag on new business activity post the GST implementation. That said, optimism expressed by both manufacturers and services providers about the future is encouraging and suggest a potential improvement in activity once businesses adjust to the new tax system. From 8-month highs to record lows... why does any one put any faith in the useless 'soft' surveys?   But expect more of this insanity to come, as one Indian businessman told us... Given that the incumbent government has been winning elections despite steps like demonetization and the opposition is in complete disarray (Modi is a great orator), they have been emboldened to introduce measures that would be viewed as draconian by normal standards.   In this context, I have to mention Modi has been able to mesmerize voters to an extent that he can make even pain appear as something that is pleasurable and he has been able to conquer state after state and has an invincible aura about him now.   Such acts always bring Goebbels to my mind.

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03 августа, 17:06

US Services Economy Crashes To 11-Month Lows (Or Surges To 6-Month Highs) - You Decide

Following mixed US manufacturing survey data earlier in the week (and disapopinting French/German PMIs), US Services were even more mixed with PMI printing at 6-month highs (new business expanding at its fastest in two years), and ISM collapsing to 11-month lows. Despite the ongoing collapse in 'hard' economic data (against even weaker expectations), surveys of US Services employers by PMI are ebulient, but it seems the people that ISM are talking to are dysphoric... ISM Respondents do not seem to be as exuberant as PMI respodents. "A typical and expected midsummer slowdown in hiring activity by employers is causing a normal slowdown in business for this time of year. We expect a sharp ramp-up of business activity over the next three months." (Management of Companies & Support Services)   "Business volume slowed some in June." (Health Care & Social Assistance)   "Business in third quarter is looking up, but it may be delayed from slower than expected second quarter. The next couple of months will determine the outcome." (Professional, Scientific & Technical Services) There is one thing to pay attention to however: Input costs paid by service providers continued to rise in July, thereby extending the trend seen every month since data collection began in October 2009. Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The PMI surveys have now shown growth accelerating for four consecutive months, meaning the economy started the third quarter with the strongest momentum since January.   "This is also a broad-based improvement, with the upturn in service sector activity coming on the heels of news of faster manufacturing growth.   “With inflows of new business into the vast service sector rising at the fastest rate for two years, the survey data support the view that the economy is on course for solid growth in the third quarter.   “Hiring meanwhile remains encouragingly buoyant, with the July PMI surveys indicating a payroll rise in the region of 200,000. Firms retained a strong hiring appetite in response to widespread optimism of future growth and the need to deal with rising backlogs of existing orders, underscoring the current positive mood in the business sector.” As Williamson concludes, at current levels, the surveys are indicative of GDP rising at an annualised rate of approximately 2%, but if growth accelerates further in line with the upturn in new business, the third quarter could be even stronger.   But the ISM data crushes that hope. with 7 of the compondents tumbling...   And while new business is flourishing in Markit's world, ISM sees new orders collapsing...   And the 53.9 print below the lowest economist estimate (of 54.9)...missing expectations by 6 standard deviations...

02 августа, 13:44

Dow To Rise Above 22,000 On Apple Earnings; Europe Pressured By Surging Euro

Nasdaq 100 futures jumped 0.8% after Apple surged to record highs following a strong beat and optimistic projections ahead of the launch of the company's new batch of iPhones. Eminis are little changed, up 0.1% to 2,475, trailing Asian markets, while European stocks and crude oil fall. Apple surged 6% after-hours to a new record highm taking its market capitalization above $830 billion. That should help carry the Dow through the 22,000 mark when the market opens. Among Asia's Apple suppliers, LG Innnotek jumped 10 percent and SK Hynix, the world's second-biggest memory chip maker, rose 3.8 percent. Murata Manufacturing firmed 4.9 percent and Taiyo Yuden 4.4 percent, helping the Nikkei up 0.47 percent. "It is all about Apple," said Naeem Aslam chief market analyst at Think Markets. "The firm comfortably topped its forecast and produced stellar numbers for its revenue and profit." Oil came under pressure again as higher than expected US inventories and reports of rising OPEC output helped drive prices below back below $48/bbl (WTI  crude). In FX markets, the USD dollar gave up some gains late in the session with DXY edging down by 0.1% and the euro rising to $1.1827. Treasury yields are 0.5-2bps higher across the curve with the 10y at 2.273%. The MSCI tech index for Asia climbed 0.9 percent to ground not trod since early 2000, bringing its gains for the year to a heady 40 percent. Asian markets rose, supported by tech shares after Apple's surprising beat guidance boost as well as stronger Chinese manufacturing PMIs (the Caixin/Markit survey of private Chinese manufacturing rose to 51.1 in July, its highest level in four months). Japan's Nikkei gained after the strong Apple sales outlook helped boost tech shares; Korea's Kospi and the Hang Seng were also firmer while the ASX 200 slipped on commodities pullback. The NZ kiwi dropped sharply after New Zealand’s employment unexpectedly fell. Australian government bonds trimmed early gains after monthly building approvals surged; WTI crude futures drift lower toward $48.50; Dalian iron ore January futures 1.6% weaker In Europe, the Stoxx Europe 600 Index declined 0.2%, the U.K.’s FTSE 100 Index decreased 0.3 % while Germany’s DAX Index dropped 0.1%. Mining and oil shares weighed on Europe’s benchmark equity index as crude fell for a second day and most industrial metals traded lower. Meanwhile, following its best month since March 2016 the Euro's gains continued, reached a new two-and-a-half-year high against the ailing dollar, and leading to a stop-loss triggered spike around 4:30am ET, which sent the EURUSD as high as 1.1870, pressuring the Eurostoxx 600 lower, as traders ktrimmed long-dollar positions ahead of U.S. payrolls data on Friday. Rio Tinto Plc led the decline among basic resources shares after first-half profit missed estimates. Banks dropped after Standard Chartered Plc said it can’t resume dividends amid an uncertain recovery, while Societe Generale SA slumped as litigation costs increased. Oil extended a retreat from its brief rise above $50 a barrel as U.S. crude stockpiles expanded, while copper dropped a second day. "The ECB is going to be the central bank to watch for the rest of the year," said JP Morgan Asset Management global market strategist Alex Dryden. "We think they are going to take 9-12 months to get out of the market but that is a big question ... it could even be six months," he added. With the dollar index near a two-year low, the options market shows that traders are gearing up for more euro strength with demand growing for calls, according to Bloomberg. The currency’s strength has pushed European earnings revisions into negative territory, according to Credit Suisse Group AG. The pound retains bullish trading ahead of the Bank of England policy decision on Thursday, rising as high as 1.3240. European government bonds slipped before Germany’s sale of 10-year bunds, which priced at an average yield of 0.49%, down from 0.59% previously (Bid to cover 1.52, retention of 19.5%). The key overnight FX move included a tumble in the New Zealand dollar, which fell more than half a percent after second-quarter employment unexpectedly declined. Most emerging Asian currencies fell initially as the dollar recovered after capping a fifth straight month of declines in July. The MSCI EM Asia Index of shares is up for a third day, with bonds in the region mostly higher. However, as the night progressed, dollar gains fizzled and the Bloomberg Dollar Index was down less than 0.1% after bing up 0.1% earlier, following Tuesday’s 0.2% advance, which came after a sharp 2.6% slide in July. China’s money-market squeeze returned, with sovereign bonds beginning to feel the heat as the central bank keeps liquidity on a tight leash, without adding any net new reverse repo liquidity for another day, and concerns grow about a wall of fund maturities this month. 10-year bond yield little changed at 3.64%, hovering near the highest level in 8 weeks as PBOC refrains from boosting liquidity for third day. Onshore, offshore yuan both drop; Shanghai Composite Index down 0.2%. In a statement on its microblog, SAFE said it didn’t target specific companies as in a media report that it checked their collaterals for loans overseas. Expect data on MBA mortgage applications later, along with earnings reports from Tesla, MetLife and Time Warner among others. Market Snapshot Dow futures +53 Dow cash closed +72.80 to 21,963.92 S&P 500 futures +3.5, up 0.1% to 2,474.75 S&P 500 cash closed +0.24% to 2,476.35 10Y UST yield +2bps to 2.273% STOXX Europe 600 down 0.2% to 379.33 MSCI Asia Pacific down 0.02% to 161.30 MSAPJ up 0.05% to 531.62 Nikkei up 0.5% to 20,080.04 Topix up 0.4% to 1,634.38 Hang Seng Index up 0.2% to 27,607.38 Shanghai Composite down 0.2% to 3,285.06 Sensex down 0.08% to 32,549.91 Australia S&P/ASX 200 down 0.5% to 5,744.20 Kospi up 0.2% to 2,427.63 German 10Y yield rose 0.4 bps to 0.495% Euro up 0.5% to 1.1866 per US$ Italian 10Y yield fell 7.4 bps to 1.727% Spanish 10Y yield rose 3.9 bps to 1.477% Brent Futures down 0.5% to $51.53/bbl old spot down 0.1% to $1,267.36 U.S. Dollar Index down 0.3% to 92.80 Top Overnight News from BBG Apple Results Push Global Tech Higher; White House Considers China Trade Action; Oil Slips on Surprise Jump in Stockpiles Apple Inc. gave a revenue forecast that highlighted resilient demand for the iPhone ahead of the launch of its new models and the growing significance of the company’s supporting businesses Deutsche Bank AG envisions shifting almost half its U.K. positions to the European continent over coming years as the lender’s Brexit plans take shape Auto sales fell the most since August 2010, a year after the federal government’s “Cash for Clunkers” program to stimulate demand came to an end Central banks around the globe are stocking up on Treasuries again, giving bond traders one more reason to wager on a steeper U.S. yield curve in the months ahead Clients said to have pulled 15% of their assets from Paul Tudor Jones main fund in 2Q Trump’s Russia Ties Get No Scrutiny as House Panel Eyes Clinton Trump’s CEO Brain Trust Comes Up Short on Big Ideas for Policies Democrats Say They Had ‘Bizarre’ Meeting With Trump’s Ex-Im Pick Wal-Mart Puts New Scrutiny on Suppliers With Chemicals Project Apple FY4Q Rev. View Midpoint Tops Est; Gross Margin View Trails Fleetcor Raised $3.975b of Pro-Rata Loans Alongside $350m TLB Global Smartphone Sales Rise 5.5% as Xiaomi Re-Joins Top Five Teck Says BC Hydro Exercised Right on Interest in Waneta Dam Methode to Buy All Pacific Insight Shares for About C$144m Cash  CVS Sees Removing 17 Products From Standard Control Formulary Match Group Names Mandy Ginsberg to Succeed Greg Blatt as CEO Amazon Cloud Users Told Not to Bypass China Internet Rules: WSJ Asian stocks traded mostly higher taking the impetus from Wall Street's gains where the DJIA homed in on the 22,000 level and NASDAQ futures surged after-market following Apple's (+5% after-market) strong Q3 earnings. This supported the Apple supply chain and resulted to outperformance of the TAIEX (+0.7%), while Nikkei 225 (+0.6%) was underpinned by a weaker currency. Conversely, losses in the commodities complex and financials weighed on ASX200 (-0.4%), while Shanghai Comp (+0.1%) was indecisive and traded choppy due to a lack of drivers and a reduced liquidity operation by the PBoC. Finally, 10Y JGBs were relatively flat amid the positive risk tone in Japan with only mild gains seen following a respectable Rinban announcement in which the BoJ are in the market for over JPY ltln JGBs ranging from ly to 10Y maturities. The Kiwi tumbled after ugly jobs data: New Zealand Employment Change (Q2) Q/Q -0.2% vs. Exp. 0.7% (Prey. 1.2%) New Zealand Employment Change (Q2) Y/Y 3.1% vs. Exp. 4.1% (Prey. 5.7%) New Zealand Unemployment Rate (Q2) 4.8% vs. Exp. 4.8% (Prey. 4.9%) Top Asian News GIC Is Said to Invest $100 Million in Japan Activist Fund Misaki China Billionaire Triples Wealth and Shorts See a Fat Target Hongqiao to Shut and Replace More Than 2 Mln Tons Alu Capacity Sleepy Japan Stocks Set for Rude Awakening, Strategists Say Noble Group May Challenge Yancoal Equity Raising for Rio Deal BNP Paribas Is Said to Expand Japan Operations With 30 Hires European bourses traded with modest losses with energy and material names underperforming, the latter weighed by Rio Tinto post their soft earnings report. Apple suppliers performing well this morning with the likes of Dialog Semiconductors trading with modest gains after Apple profits rose ahead of analyst estimates. Standard Chartered and SocGen lower this morning following soft financial results. EGB yields ticking higher this morning, while firmer Eurozone PPI figures have also led to the upside. Notable outperformance observed in the German 5Y with the yield falling 0.2bps. Top European News Deutsche Bank Brexit Base Case Said to See 4,000 Jobs Move Standard Chartered First Half Adjusted Operating Income $7.2 Bln U.K. July Construction PMI 51.9 vs 54.8 in June; Est. 54 Glencore Asks Australia to Focus on Economy Before Climate Deal Brexit Angst Is So 2016 as These Indicators Show: Markets Live UniCredit, Mediobanca, Generali to Cut Crossholdings: Repubblica Thyssenkrupp Said to Consider Break-Up as Plan B to Tata In currencies, NZD underperformed last night post the release of soft jobs figures which took NZD back towards 0.74. Consequently, the jobs data alongside the relatively tepid Fonterra GDT auction reinforces the RBNZ's current neutral stance on interest rates, in the wake of the data, AUD/NZD broke back above 1.07. CAD noticeably weaker this morning, largely on the back of softer crude prices following last night's surprise API build. The recent bearish trend looks to have broken down with USDCAD now hovering around last week's high of 1.2577 and looking to make a move above 1.26. JPY weaker across the board, USD/JPY eying 111.00 to the upside after offers just above 110.50 failed to cap strength. EURJPY holding 131.00 for now as gains have been led by rise in EUR/USD which tripped through 118.00. GBP relatively choppy this morning following a sizeable miss on the Construction PMI reading (51.9 vs. Exp. 54.5), GBPUSD ticking off some 20 pips before trading back to pre-announced levels In commodities, WTI crude futures were drilled below USD 49/bbl following a surprise build in API inventories and a survey which suggested OPEC supply rose in July. Elsewhere, gold (-0.3%) retreated from near 8-week highs amid profit taking and with the safe-haven also dampened by the increased risk appetite, while copper prices were also lower alongside the broad-based weakness across the commodities complex. WTI and Brent crude futures tracking lower following last night's API report. Iron ore futures also saw a slight pullback from its recent advances, declining over 1% in Asian trade. Taking a look now at the day ahead, we will get the ADP employment number for July due (190k expected; 158k previous). At present the three month trailing average of ADP private employment gains (179k) is tracking close to that of BLS private payrolls (180k). So our US economist believes it would take a material miss relative to expectations for us to change our payroll forecast. Major US companies due to report earnings include: American International Group (AIG), Metlife, Mondelez International and Time Warner. US Event Calendar 7am: MBA Mortgage Applications, prior 0.4% 8:15am: ADP Employment Change, est. 190,000, prior 158,000 11am: Fed’s Mester Speaks to Community Banking Conference 3:30pm: Fed’s Williams Speaks in Las Vegas on Monetary Policy DB's Jim Reid concludes the overnight wrap Many in the market continue to talk about it being a carry trade until at least Jackson Hole in 3 and a half weeks’ time. The chatter on the US debt ceiling that we've discussed before also continues in the background with some saying the Trump administration will struggle to build a consensus around the smooth raising of it as we approach it around October time. The thing that worries investors most from an immediate event risk point of view is an escalation of tensions between the US and North Korea. Could we wake up one morning to find the US has used force in some way in the peninsula? Clearly its impossible to predict but that doesn't prevent some from using it to handicap their view. We also have the Fed and the ECB likely to stop reinvestment and announce a fresh taper in September and October respectively. So plenty to think about after the holidays are over but for now most investors are riding carry trades. In the days leading up Jackson Hole it'll be interesting to see if that changes but markets probably have two weeks before it comes into view enough to focus on. Ahead of the likely August lull, government bond yields fell across all regions and maturities yesterday, with the German Bunds down to the lowest level since early July (2Y: -2bp; 10Y: -5bps). For other sovereigns, the Italian BTPs (2Y: -3bps; 10Y: -8bps) fell the most, followed by the OATs (2Y: -6bps; 10Y: -6bps) and Gilts (2Y: -1bps; 10Y: -2bps). The bund yield started higher in the morning, but fell ~5bp in the afternoon to 0.49%. The change was similar to intraday falls in the UST 10Y, partly driven by the mixed US macro data and lower auto sales by US car markers (sales at GM -15% yoy). To be fair, as we type, UST 10Y yields have bounced back from the lows and is now ~1.5bp higher this morning. In commodities, WTI oil fell 2 %, marking the first decline after 6 consecutive days of gain. The softness was partly associated with an industry report (American Petroleum Institute) showing rising US inventories and a Reuters survey indicating higher OPEC production in July, led by a further recovery in supply from Libya. Iron ore softened 0.2%, after a 7% rise the day before on positive Chinese steel PMI data. Elsewhere, precious metals were slightly lower (Gold -0.1%; Silver -0.2%) and industrial metals also softened (Copper -0.4%; Aluminium -0.1%). Onto equities, US bourses continue to edge ahead, following supportive results. The S&P and the Nasdaq were both up 0.2%. The Dow was up 0.3% to another record close – the fifth record high and closer to the 22,000 mark. Within the S&P, modest gains in the financials (+0.8%) and IT sector (+0.5%) were partly offset by losses in health care and industrials. After the bell, Apple was up ~4% on a solid quarterly result and upgraded revenue forecast. European markets also strengthened, aided by the lower Euro and sound results from BP and Rolls-Royce. The Stoxx 600 was up 0.6%, with most sectors increasing on the day. Utilities and the energy sector was up 1%, while health care was the only sector down (-0.2%). The DAX was up 1.1%, with similar increases across the region: FTSE 100 (+0.7%), CAC (+0.7%) and Italian FTSE MIB (+0.6%). Turning to currency, the US dollar index gained 0.2% on the back of mixed but slightly supportive data. The Euro/USD and Sterling/USD both softened marginally, falling 0.3% and 0.1% respectively. Turning to Tuesday's data, the key focus was on the Markit PMI and ISM data out of Europe and the US respectively. Before we take a detailed look at these numbers, we quickly recap some of the other economic data releases out yesterday. Away from the PMIs in Europe we saw the advance Q2 GDP estimate for the Eurozone that came in line with expectations at +2.1% YoY (+0.6% mom), up from +1.9% YoY in Q1. After factoring this in and the clear lift in momentum seen in other indicators, our European team now expects full year growth in 2017 to be 2.2% up (vs. 1.9% previous) and 2018 growth to be 2.0% (vs. 1.6% previous). Meanwhile over in the US personal income growth was flat in June (vs. +0.4% expected) while personal spending also slowed in line with expectations at +0.1% mom (+0.2% previous). Real personal spending was however flat on the month against expectations of an increase of +0.1%. Turning to the manufacturing PMI data now. In Europe we saw manufacturing PMIs for Germany (58.1 vs. 58.3 flash), France (54.9 vs. 55.4 flash) and the Eurozone (56.6 vs. 56.8 flash) all revised slightly lower. Elsewhere we also got the first look at the Spanish PMI (54.0 vs. 54.5 expected) that disappointed while Italy (55.1 vs. 55.0 expected) and the UK (55.1 vs. 54.5 expected) beat expectations. The UK number had fallen for the last three months and the rise was on the back of the strongest rise in export orders since April 2010. Has the devaluation finally had an impact? Across the pond the ISM reading dipped to 56.3 (vs. 56.4 expected; 57.8 previous), but was largely in line with expectations. The production index fell to 60.6 (vs. 62.4 previous) while new orders slipped to 60.4 (vs. 63.5 previous). New export orders also fell to 57.5 (vs. 59.5 expected). One interesting dynamic to take note of is the prices paid index that climbed significantly more than expected to 62.0 (vs. 55.8 expected; 55.0 previous). Of the 18 manufacturing industries surveyed, 14 reported an increase in the prices paid for raw materials in July. While part of the climb could be attributed to the fact that the index was quite low in June (lowest level since November 2016), the US dollar weakness in July likely played an important role in driving up raw material costs for US manufacturers. Away from the markets, the WSJ reported that US senate democratic leader Schumer wrote to President Trump and urged him to put all Chinese M&A activity in the US on hold until China takes more aggressive actions to address the evolving North Korean situation. This morning, Asian markets have followed the lead from US, with the Nikkei (+0.4%), the Kospi (+0.2%) and Hang Seng (+0.3%) all higher but with Chinese bourses broadly flat. Taking a look now at the day ahead, today’s calendar appears to be fairly quiet. In Europe the Eurozone PPI for June (-0.1% mom expected; -0.4% previous) is the only data of note, while the US has the ADP employment number for July due (190k expected; 158k previous). At present the three month trailing average of ADP private employment gains (179k) is tracking close to that of BLS private payrolls (180k). So our US economist believes it would take a material miss relative to expectations for us to change our payroll forecast. Major US companies due to report earnings include: American International Group (AIG), Metlife, Mondelez International and Time Warner.

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01 августа, 17:08

Manufacturing Surveys Signal Economy "Still Stuck In Low Gear" Amid Collapse In 'Hard' Data

After hitting a 9-month low in June, Markit's US Manufacturing PMI bounced to 53.3 in July with new orders, output, and employment rebounding. In a China-esque moment, ISM disappointed, modestly dropping to 56.3 with prices paid surging and new orders tumbling. All of this uncertainty is happening as 'hard' data in the American economy is collapsing. After six straight months lower, PMI bounced in July (very slightly beating the 53.2 expectation) but ISM dipped and missed expectations.   ISM breakdown shows most sub-indices declined but a surge in prices paid!! New Orders are slumping Despite the drop in new orders and the overall index, every ISM respondent was bullish... Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The second half of the year got off to a good start for US manufacturers, with the health of the sector improving at the fastest rate for four months. Output, new orders, employment and buying activity all grew at increased rates. The only real blot on the copybook was a decline in exports for the first time since last September.   “However, IHS Markit expects GDP growth to accelerate to a near 3% annualised rate in the third quarter, fueled by gains in consumer spending and business investment, which should benefit manufacturing.” However, before we get all carried away with this modest rebound, Williamson notes... ...although rising, the survey indices remain consistent with only very modest increases in comparable official data such as manufacturing output, durable goods orders and payroll numbers.   Clearly the manufacturing sector remains stuck in a low gear, though is at least gaining momentum and will hopefully shift up a gear as we move through the second half of the year if demand continues to improve.

01 августа, 13:47

Dow Set To Open Above 22,000 As Global Stocks Levitate Higher

Welcome to August: you may be surprised to learn that S&P 500 futures are once again levitating, higher by 0.3%, and tracking European and Asian markets. Asian equities traded higher across the board after China's Caixin Manufacturing PMI beat expectations and printed its highest since March, refuting the decline in the official PMI data reported a day earlier, while firmer commodity prices boost both sentiment and commodity stocks across Asia and Europe. Notably, with DJIA futures higher by over 100 points this morning, the Dow Jones is set to open above 22,000, a new all time high. World stocks are on their longest streak of monthly gains in more than a decade, with the MSCI All-Country index rising again on Tuesday, up 0.3%, amid further signs that the global economy remains solid, while the beaten-down dollar edged up slightly from 14-month lows. The dollar again failed to stage a rebound after Monday’s drop, as investors were transfixed by the chaotic developments in Washington, pushing the greenback lower overnight and sending it down for the fifth consecutive month. "I think the short dollar trade is still the broad consensus trade in the financial markets,," said Esther Maria Reichelt, an FX analyst at Commerzbank in Frankfurt. "But we are approaching important levels against other currencies, such as 1.20 on the euro, which may prompt some concerns from other central banks." Softening U.S. inflation and incessant political turmoil has hit prospects of another Federal Reserve rate hike in coming months and sent the dollar down 10 percent from its January peaks. The dollar's decline, low inflation and stable global growth has stoked appetite for stocks, with the MSCI extending its run after the index logged its longest streak of monthly gains since 2003-04 in July. "Data and market behaviour are consistent with our global reflation theme," strategists at Morgan Stanley, led by Hans Redeker, said in a note, pointing to strong Chinese factory data, corporate earnings and surging South Korean exports. "The combination of USD weakness with decent, but not too strong, US economic growth works in favour of risk appetite, pushing financial conditions globally, and especially in the US, higher." In Europe, the Stoxx Europe 600 gained 0.6%, hitting session’s high after data showing euro-area July manufacturing kept in line with the flash reading (PMI 56.6 vs flash reading 56.8). European manufacturing sentiment pointed to "broad-based economic growth" as national surveys signaled economic expansion across the region, with Austria, the Netherlands and Germany being the best performers. French manufacturing accelerated to one of the fastest rates in six years. The Stoxx Europe 600 Index was poised to end its losing streak, heading for the first gain in four days after companies including BP reported, beating estimates, and was the biggest contributor to the advance. Crude itself also rose, as traders awaited the latest government inventory data. Recent commodity strength continued to feed into Asian equities, which were also bolstered by earnings in Japan, South Korean export numbers and Chinese manufacturing data. The U.K.’s FTSE 100 Index advanced 0.8 percent, the largest gain in a week. Germany’s DAX Index advanced 0.4 percent, the biggest gain in a week. In Asia, the MSCI Asia-Pacific Index rose to the highest since 2007 as equity indexes from Tokyo to Sydney advanced. Japan’s Topix index added 0.6 percent. Banks rallied after Sumitomo Mitsui Financial Group Inc. reported a 31 percent increase in net income for the June quarter.  Australia’s S&P/ASX 200 Index closed 0.9 percent higher, while South Korea’s Kospi index ended up 0.8 percent. The Hang Seng Index in Hong Kong rose 0.8 percent, while the Shanghai Composite Index climbed 0.6 percent. As expected, the surge in the overnight Hong Kong dollar interbank proved fleeting, as the rate tumbled 43 bps to 0.28286%  after climbing to a more than eight-year high of 0.71407% on Monday, according to Bloomberg citing the latest fixing published on the Treasury Markets Association website. The one-week HKD Hibor dropped 2 bps to 0.28836%, after rising to 0.30643% on Monday, highest since July. For European equity markets, continued improvement in euro-area economy has fueled rally in euro and raised concerns over potential impact on corporate earnings, with the 1.20 area in the EURUSD often cited as a hard stop beyond which profitability will be materially impacted. European government bonds also edged higher as PMI data highlight ECB’s conundrum of robust growth without price pressure. Meanwhile, as reported earlier, the Reserve Bank of Australia held the benchmark at 1.5% while warning that a rising currency is expected to subdue inflation and weigh on the outlook for growth and employment. The Aussie fluctuated, but has since sunk to session lows, below 0.80. In commodities, oil prices made further gains as falling U.S. inventories eased some concerns about oversupply. Futures on Brent crude LCOc1 and U.S. crude oil CLc1 rose 0.2 percent and held comfortably above $50 a barrel for the first time since May. In rates, Britain’s 10-year yield declined one basis point to 1.223 percent. Germany’s 10-year yield fell two basis points to 0.52 percent, the lowest in more than a week. ISM manufacturing and construction spending are among key data points later on Tuesday, while Apple, Pfizer, Emerson Electric are due to report earnings, together with a number of other companies. Crude oil trades above $50/bbl. Bulletin Headline Summary from RanSquawk European equities trade higher in a move predominantly led by the energy sector with indices also supported by domestic earnings FX markets continue to be guided by USD-softness as political upheaval in Washington grips summer trading conditions Looking ahead, highlights include US PCE, ISM Mfg. and APIs Market Snapshot S&P 500 futures up 0.3% to 2,474.75 STOXX Europe 600 up 0.6% to 379.92 MSCI Asia Pacific up 0.6% to 161.32 MSCI Asia Pacific ex-Japan up 0.4% to 531.46 Nikkei up 0.3% to 19,985.79 Topix up 0.6% to 1,628.50 Hang Seng Index up 0.8% to 27,540.23 Shanghai Composite up 0.6% to 3,292.64 Sensex up 0.09% to 32,542.84 Australia S&P/ASX 200 up 0.9% to 5,772.37 Kospi up 0.8% to 2,422.96 German 10Y yield fell 0.8 bps to 0.535% Euro down 0.2% to 1.1818 per US$ Brent Futures up 0.3% to $52.85/bbl Italian 10Y yield fell 2.8 bps to 1.801% Spanish 10Y yield fell 1.1 bps to 1.489% Gold spot down 0.02% to $1,269.17 U.S. Dollar Index up 0.05% to 92.91 Top Overnight News Venezuela’s most high-profile opposition figures were seized from their homes by security forces, according to people close to them, in what appeared to be a crackdown on officials challenging the government of President Nicolas Maduro The euro- area economy expanded apace in the second quarter, a sign the bloc’s upswing is becoming increasingly robust and self- sustaining. While a Purchasing Managers’ Index pointed to broad- based growth, price pressures showed further signs of easing in July U.K. manufacturing growth accelerated for the first time in three months in July, bolstered by the strongest jump in export orders in seven years Trump personally dictated son’s statement on Russia meeting: Wash. Post U.S. detected unusual levels of North Korean submarine activity: CNN Pence Says U.S. Backs Georgia in NATO Against Russian Objections No Bubble in Stocks But Look Out When Bonds Pop, Greenspan Says Banks May Be Hit With $50 Billion Capital Needs After Brexit Japan PM Abe to reshuffle cabinet on August 3: Suga China July Caixin manufacturing PMI 51.1 vs 50.4 estimate It’s time for China to increase yuan flexibility: Sec. Journal BP Says It’s Breaking Even After Debt Soared to a Record Ferrari Said to Plot ‘Utility Vehicle’ in Plan to Double Profit Tesla Batteries May Back Up Wind Farm Off Massachusetts Coast Scripps Affirmed by Moody’s on Acquisition by Discovery Lexicon to Opt-In for Co-Promotion of Sotagliflozin With Sanofi Brighthouse Financial to Replace AutoNation in S&P 500 New Anthem Data Breach Affected More Than 18,000 Enrollees: CNBC Asian equities traded higher across the board as Chinese data took focus once again after Caixin Manufacturing PMI beat expectations and printed its highest since March. ASX 200 (+0.9%) was led higher by commodity-related stocks after iron ore extended on yesterday's over 7% gains and WTI settled above USD 50/bbl for the first time since May. Nikkei 225 (+0.3%) was kept afloat after the prior session's JPY weakness, while Shanghai Comp (+0.6%) and Hang Seng (+0.8%) conformed to the positive tone after the aforementioned Chinese PMI data coupled with the PBoC's CNY 170b1n injection into the interbank market. Finally, lOy JGBs were flat with a lack of demand seen amid broad positive risk sentiment and following the uninspiring 10yr JGB auction in which the results were mixed and relatively similar to the prior month.Chinese Caixin Manufacturing PMI (Jul) 51.1 vs. Exp. 50.4 (Prey. 50.4). Top Asian News India Manufacturing PMI Hits 8-Year Low on Sales Tax Disruption Caixin China July Manufacturing PMI 51.1; Est. 50.4 Iron Ore Investors Zero In on 2018 as China Futures Roll Over Singapore’s Chevron House Owner Seeks More Than S$700M in Sale MUFG Profit Jumps 53% on Trading Income, Gains From Share Sales Macau Casinos’ July Gains Cap Year of Recovery as VIPs Flock Honda Sees New Accord, Weaker Yen Easing U.S. Pressure European bourses are firmer this morning led by the energy sector. BP shares higher by over 2% after reporting earnings were ahead of analyst estimates. Crude prices higher with WTI crude futures making a firm break above USD 50.00/bbl. German curve was initially bull flattening this morning, providing modest concession for the Schatz ahead of today's EUR 4bln Jun'19 tap with little reaction seen in German paper after a relatively well-digested Schatz auction. Gilts ebbed lower slightly following better than expected UK Mfg. PMI data with paper also unreactive to this morning's Gilt auction which saw a healthy uptake by the market. Top European News German Labor Market Strengthens as Robust Economy Fuels Hiring Female CEOs Hold Key to Returns for $42 Billion Stock Manager France July Manufacturing PMI 54.9 vs Flash Reading 55.4 BOE Rate Excitement Fizzles as Increase Appears Further Away U.K. Manufacturing Grows as Export Orders Climb to Near Record Euro-Area Economy Steams Ahead as ECB Awaits Inflation to Follow In currencies, the Greenback continued to suffer yesterday amid the political uncertainty in the USA. President Trump removed Scaramucci from his White House Communications Director post just ten days after the appointment. This news was followed by reports stating that US Senate Finance Committee Chairman Hatch said that senators are too divided to keep working on healthcare overhaul legislation now. The difficulties in the States have led to all its major currencies pairs gaining against the US dollar, as the DXY now trades through 93.00, looking close and close toward the 92.00 support level. USD/JPY saw a bounce on the physiological 110.00 level, however remains to look bearish, with a test of June's low at 108.80 possible. GBP: Brexit fears have once again resurfaced; with UK Chancellor Hammond yesterday stating futurerelationship with European Union remains under discussion, Brexit will not be postponed or delayed. GBP/USD has gained however, amid the aforementioned falling dollar, continuing to print 2017 highs, now through 1.32. With a weakening greenback, GBP/USD bulls could see this opportunity to attack 1.35. AUD: The highlight of the Asian session was the RBA interest rate decision, where as expected, the RBA kept their cash rate on hold at 1.50%. Despite a spike lower on the decision, we did see a bounce in AUD/N ZD,largely likely to the minimal concern of the higher AUD. The statement stated that a higher AUD is weighing on price pressures and would slow economy. However, the tone of the RBA was slightly more optimistic than many anticipated, stating that growth is expected to pick up, alongside the previously mentioned lack of fears toward the AUD. In commodities, WTI crude futures breached the psychological USD 50/bbl level. Europe's largest refinery (Pernis) reported further issues with a leak during maintenance work yesterday. Potential supply disruptions in Nigeria, as Niger Delta leaders threaten to dump peace talks. Gold fell 0.1 percent to $1,267.59 an ounce, the largest fall in a week. Iron ore advanced 3.4 percent to 574 yuan per metric ton, the highest in more than four months. Looking at the day ahead, we will see the June personal income (+0.4% mom expected) and spending data (+0.1% mom expected), followed by the ISM manufacturing PMI for July (56.5 expected; 57.8 previous).  Onto other events, the trade ministers from the BRICS countries will meet in Shanghai. Notable US companies reporting include: Apple, Pfizer, CME, Assurant and Illumina. US Event Calendar 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.1%, prior 0.1% Real Personal Spending, est. 0.1%, prior 0.1% PCE Deflator MoM, est. 0.0%, prior -0.1%; PCE Deflator YoY, est. 1.3%, prior 1.4% PCE Core MoM, est. 0.1%, prior 0.1%; PCE Core YoY, est. 1.4%, prior 1.4% 9:45am: Markit US Manufacturing PMI, est. 53.2, prior 53.2 10am: ISM Manufacturing, est. 56.5, prior 57.8; ISM Prices Paid, est. 55.8, prior 55; ISM New Orders, prior 63.5; ISM Employment, prior 57.2 10am: Construction Spending MoM, est. 0.4%, prior 0.0% Wards Total Vehicle Sales, est. 16.8m, prior 16.4m Wards Domestic Vehicle Sales, est. 13.1m, prior 12.8m DB's Jim Reid concludes the overnight wrap As is the norm, the first day of the month also brings the global PMIs and ISM manufacturing data. Europe's flash numbers 9 days ago were a touch on the weaker side after many months of beats so it'll be interesting to see the final numbers for the core and the first glance at the peripherals. This morning, China’s Caixin manufacturing PMI for July was slightly above expectation at 51.1 (vs. 50.4 expected, 50.4 previous). Asian markets are stronger as we type. The Nikkei is up 0.2%, the Kospi +1.0%, the Hang Seng (+0.7%) and the three Chinese bourses up between 0.1% to 0.6%. Staying with China It's fair to say that consensus expects China’s economic growth to slow slightly in 2H, which is DB’s base case too. However, our China economists now see the risk to the H2 growth outlook shifting to the upside, in part driven by high frequency data that suggests land supply and auctions remained hot in July. With the land market this strong, the fiscal revenue in H2 will strengthen and support infrastructure spending. As July put the shutters down for the final time, global equity markets were broadly flat to slightly lower yesterday. US equities fluctuated between gains and losses but dipped down again into the close (S&P500 -0.1%), with financials (+0.6%) and telecoms (+0.4%) leading the way while materials (-0.8%) and information technology (-0.5%) dragged it lower. The Dow again bucked the trend (+0.3%) to close at a record for the 4th day in a row. Over in Europe the STOXX 600 (-0.1%) traded slightly lower on the day, while regional markets were mixed with the DAX (-0.4%) and CAC (-0.7%) lower while the FTSE MIB (+0.3%) and FTSE 100 (+0.1%) posted some gains. Overnight, our European strategists did a stock take of earnings downgrades over the past month, noting that European EPS have been revised down by -0.6%, more than any other major region. Over in government bond markets, we saw German Bunds and US treasuries largely unchanged, except for Bund yields at the very long end (20Y -1bps; 30Y: -2bps). Gilt yields were higher across nearly all maturities in a somewhat parallel shift of the curve (2Y +3bp; 10Y +2bp). 10 year peripheral yields were 3-4bps lower. Turning to FX markets, we saw the US dollar index drop further yesterday by -0.4% while the Euro and Sterling gained by +0.7% and +0.5% respectively against the Greenback. In commodity markets the energy segment saw oil prices spike back up into positive territory by the close (+0.8%) with WTI trading above $50 for the first time since May. Iron ore was up 7%, with China's July steel industry purchasing managers' index showing the highest reading in 15 months. Away from the markets, White House communications director Scaramucci has left the role after 10 days in the job. The cause of his departure is unclear, whether it was at the hands of Mr Trump or the new Chief of Staff John Kelly, who also started on the same day. Press secretary Sanders noted that Scaramucci left in “mutual agreement” with Kelly. It's certainly not been a great couple of weeks for the administration. Taking a look now at some of the data out yesterday. In Europe we got German retail sales data that unexpectedly saw momentum pick up on the month (+1.1% mom vs. +0.2% mom expected; +0.5% previous). We also got UK consumer credit data where net consumer credit supplied in June was in line with expectations at GBP 1.5bn although there were signs of credit growth slowing as mortgage approvals ticked down to 64.7k (vs. 65.0k expected; 65.2k previous) and unsecured borrowing rose at its slowest rate in over a year (10% YoY). Thereafter we got some aggregate Eurozone data in the form of the June unemployment rate that came in just below expectations (9.1% vs. 9.2% expected) and the July CPI estimate that was in line with expectations (+1.3% YoY), but the core CPI was a tad above expectations at 1.2% yoy (vs. 1.1% expected; 1.1% previous). Over in the US the data was a bit mixed as we saw the Chicago PMI reading for July dip further than expected to 58.9 (vs. 60 expected; 65.7 previous) while the Dallas Fed manufacturing activity reading for July unexpectedly increased to 16.8 (vs. 13 expected; 15 previous) and pending home sales data for June beat expectations at 1.5% mom (vs. 1.0% expected;-0.8% previous). The ECB are clearly enjoying the breather that holiday season offers as CSPP purchases last week implied a lowly average daily run rate of €157mn (slightly higher than last week) against the average of €357mn since the program started . The CSPP/PSPP ratio was 8.1%, up from 6% a week earlier but still significantly below the long-run average. It’s becoming clearer that recent large scale corporate purchases were likely a front loading exercise ahead of the summer lull. Overall CSPP has almost certainty been tapered less than PSPP but the summer months may restore the balance a little between the two as the ECB probably believe that government bonds are going to be easier to purchase in thin markets than corporates. Turning now to the day ahead. In Europe we will see July data for the UK Nationwide House Price index (-0.1% mom expected; +1.1% previous). Following that we get at the final revisions to the manufacturing PMIs for France, Germany and the Eurozone along with a first look at the data for the UK and periphery. We will also get the advance estimate for Q2 Eurozone GDP (+2.1% YoY expected; +1.9% YoY previous). Across the pond we will see the June personal income (+0.4% mom expected) and spending data (+0.1% mom expected), followed by the ISM manufacturing PMI for July (56.5 expected; 57.8 previous). Onto other events, the trade ministers from the BRICS countries will meet in Shanghai. Notable US companies reporting include: Apple, Pfizer, CME, Assurant and Illumina.

31 июля, 15:38

Key Events In The Coming Week: Payrolls, Central Banks, China And More

As many traders quietly leave for summer break soaking up even more liquidity as they go, a busy US calendar unfolds in the week ahead, with ISM, PCE price data and, of course, payrolls in the spotlight. Key Events, courtesy of RanSquawk Monday:               Eurozone CPI (Jul, P), China Official PMIs (Jul) Tuesday:              RBA MonPol Decision, Eurozone GDP (Q2, Initial)                                                                                                   Wednesday:         ADP, Fed's Mester, Williams speak Thursday:            BoE MonPol Decision, Meeting Minutes & Quarterly Inflation Report                                                     Friday:                 US Labour Market Report (Jun), Canadian Labour Market Report (Jun), RBA SoMP In North America, June’s US Labor Market Report headlines the docket next week. Analysts expect the Nonfarm Payrolls headline to print at 187,000, with the unemployment rate expected to tick down to 4.3%, while hourly earnings are expected to remain subdued. The H1 average for the Nonfarm Payrolls release sits at 180,000. Following its latest statement, the Federal Reserve noted that “job gains have been solid, while household spending and business fixed investment have continued to expand.” The main worry is wage growth, which has remained muted, and is perhaps keeping a lid on the Federal Reserve’s hiking cycle at present, as inflation has been kept in check. Friday will also bring the Canadian labour market report for July. Analysts looks for 14,500 jobs to have been added, although they do expect that the unemployment rate will remain steady at 6.5%. Following a string of hot labour market reports the Bank of Canada stated that “the robust labour market” was underpinning economic growth, as it hiked its key interest rate by 25bps at its most recent decision. In front of this specific print, RBC highlight that “July numbers have traditionally been affected by large fluctuations in the education sector; however, these swings have been smaller in the last two years and we assume little impact from education hiring this month.” Looking forwards RBC suggest that “broadly speaking, employment growth is expected to moderate alongside slower – albeit still above-trend – GDP growth.” Other releases of note during the week: Tuesday US ISM manufacturing survey (Jul) Wednesday US ADP Employment Report (Jul) Thursday US ISM manufacturing survey (Jul) Friday Canadian Trade Balance (Jun) Across the G-10 spectrum, announcements from the RBA & BOE will keep FX volatile, even if both banks are expected to remain on hold. Here are the details from Bank of America and RanSquawk, laying out the US summer data bonanza week: We have a busy US calendar ahead, with ISM - both manufacturing and non-manufacturing - PCE price data and Friday's employment report all in the spotlight. Consensus expects July NFP growth around 187k, unemployment holding at 4.3% and wages up 0.3% m/m, but down to 2.4% y/y growth. June core PCE inflation is likely to print only 0.1%, leaving the y/y rate unchanged at 1.4% and the ISM manufacturing index should edge down to 57.0 in July from 57.8. See our US Economic Weekly for full details. In G10 Central Banks: RBA and BOE on hold: The RBA can afford to be patient and any case for normalization of policy will take time to build, with recent AUD strength adding to the case for caution. The RBA will be slower and more gradual than other central banks. In the UK, hawkish expectations for the Bank of England beat a retreat in the face of a smorgasbord of soft data. Expect a 6-2 vote to keep rates on hold and little disagreement with the market rate profile. The Bank of England (BoE) convenes for its quarterly ‘Super Thursday’ event this week, where it will issue its latest monetary policy decision, the minutes from the meeting, and its quarterly inflation report. While almost all of those surveyed expect the BoE to stand pat, analysts at Nomura are looking for a 25bps hike, although they do assign a 40% probably of the Bank remaining on hold. The last decision yielded a surprising 5-3 vote, although Forbes’ (a hawkish dissenter) term has now come to an end. Analysts expect dissenters McCafferty and Saunders to vote for a 25bps hike once again, with focus falling on chief economist Andy Haldane following a hawkish intra-meeting speech. As a result, analysts will focus on whether the vote split is 6-2, or 5-3, with newcomer Tenreyro expected to side with the majority this time out. With UK consumers’ pockets feeling the squeeze of higher inflation Barclays remain “confident that the bank will maintain the monetary status quo over the foreseeable future.” It is probably fair to say that the Bank’s most recent inflation report was a little optimistic, and that the UK’s economic condition has deteriorated in Q2. As a result eyes will fall on the Bank’s growth projections, while the inflation outlook could be driven by a lower trade weighted sterling and a modest recovery in oil prices. The Bank’s assessment of the labour market will also be key as it grows ever tighter, with wage growth remaining subdued. July’s PMI releases will also garner interest. The manufacturing survey is due on Tuesday, while its services counterpart is scheduled to be released on Thursday. In the wake of last month’s surveys Markit noted that “a slowing in services sector growth completed a triple-whammy of disappointing PMI survey readings. Although the three PMI surveys are running at levels that are historically consistent with GDP growing by around 0.4% in the second quarter, it’s clear that the economy heads into the third quarter losing momentum. The indications are that the economy’s resilience is being tested. There are pockets of growth, notably in financial services and business services, but the overall picture is one of business spending, investment and exports failing to provide sufficient impetus to fully offset the consumer slowdown. Given the deterioration in the forward-looking indicators, such as business optimism and order book growth, the risks are tilted towards the economy slowing in the third quarter.” The week ahead in Emerging Markets: There are monetary policy meetings in India, Czech Republic, Romania and Ukraine. We forecast India's RBI to cut 25bp. Czech Republic CNB will likely hike 20bp. Sovereign rating review in Israel and Kuwait. We also get China PMIs. We next look at the global economic calendar on a daily basis courtesy of DB's Jim Reid. Monday we have German retail sales (+0.2% mom expected; +0.5% previous) and UK consumer credit data for June due, followed by the Eurozone unemployment rate (9.2% expected) for June and CPI estimate (+1.3% YoY expected) for July. In the US we will get the Chicago PMI number (60 expected; 65.7 previous), the Dallas Fed manufacturing activity reading (13 expected; 15 previous) for July and June pending home sales (1% expected). Tuesday kicks off in Asia where we will get the Caixin China manufacturing PMI reading and the final Nikkei Japan manufacturing PMI reading for July. In Europe we will get July data for the UK Nationwide House Price index, followed by a first look at the remaining manufacturing PMIs out of Europe and the final July manufacturing PMIs for France, Germany and the Eurozone as a whole. We will also get the advance estimate for Q2 Eurozone GDP. In the US we will get personal income and spending numbers for June and the ISM manufacturing PMI for July. Wednesday is a quiet day in both the Europe and the US with no real data of note outside of ADP and the Eurozone PPI. Thursday’s calendar will round out July PMI data for the week. In Asia we will get the July composite and services PMI numbers for China (Caixin) and Japan (Nikkei). In Europe we get the July PMIs with the final services and composite PMIs for France, Germany and the Eurozone due as well as a first look at some of the same data for the rest of Europe. Thereafter all focus should shift to the BoE policy meeting. Over in the US we should also get jobless claims data followed by the ISM non-manufacturing composite for July. Thereafter we will get factory orders data as well as the final readings for durable and capital goods orders for June. Friday is relatively quiet day for data in both Asia and Europe with only German factory orders data for June due. The US should be in greater focus as the July payrolls number is due along with other labour market data. Alongside that we will also get the trade balance reading for June. Other notable events: on Tuesday, trade ministers from the BRICS countries will meet in Shanghai. Then Wednesday, the Fed’s Mester will speak at a Community banking conference and the Fed’s Williams will speak in Las Vegas on monetary policy. For Thursday, ECB will publish its economic bulletin and the Baker Hughes US rig count will out on Friday. Finally, notable US companies due to report include: Apple, Pfizer, Tesla, Berkshire Hathaway. Closer to home, we also have HSBC, Heineken, BP, ING Groep, Siemens, BMW and Swisss Re due to report. * * * Finally, here is Goldman focusing on the US with key events and consensus estimates for every event: The key economic releases this week are the personal income and spending and ISM manufacturing reports on Tuesday, and the employment report on Friday. There are a few scheduled speaking engagements by Fed officials this week. Monday, July 31 09:45 AM Chicago PMI, July (GS 58.5, consensus 60.0, last 65.7): We expect the Chicago PMI to moderate to 58.5 following a 7.3pt jump in June to a 3-year high. The index has risen sequentially over the last five months and is likely to remain at a level consistent with solid growth in the manufacturing sector. 10:00 AM Pending home sales, June (GS +0.5%, consensus +1.0%, last -0.8%): Regional contract signings data released so far were mixed in June, and we estimate pending home sales rebounded 0.5%, following an 0.8% decline in the May report. We suspect some of the May weakness reflected the lagged impact of higher mortgage rates, the impact of which may have peaked. We have found pending home sales to be a useful leading indicator of existing home sales with a one- to two-month lag. 10:30 AM Dallas Fed manufacturing index, July (consensus +13.0, last +15.0) Tuesday, August 1 8:30 AM Personal income, June (GS +0.2%, consensus +0.4%, last +0.4%); Personal spending, June (GS +0.1%, consensus +0.1%, last +0.1%); PCE price index, June (GS +0.05%, consensus flat, last -0.1%); Core PCE price index, June (GS +0.14%, consensus +0.1%, last +0.1%); PCE price index (yoy), June (GS +1.47%, consensus +1.3%, last +1.4%); Core PCE price index (yoy), June (GS +1.53%, consensus +1.4%, last +1.4%): We estimate a 0.2% increase in personal income and a 0.1% increase in personal spending (nominal, mom sa) in June. Based on details in the PPI and CPI reports as well as the firmer price-related news in Friday’s GDP report, we forecast that the core PCE price index rose 0.14% month over month in June and was up 1.53% from a year earlier. Additionally, we expect that the headline PCE price index rose 0.05% and was up 1.47% from a year earlier. 09:45 AM Markit US manufacturing PMI, July final (consensus 53.1, last 53.2) 10:00 AM ISM manufacturing, July (GS 56.8, consensus 56.4, last 57.8): We expect the ISM manufacturing index to decline 1.0pt to 56.8 in the July report. Regional manufacturing surveys were weaker on balance in July, with declines in the Empire State, Philly Fed, and Kansas City manufacturing surveys. However, the Richmond Fed and Markit PMI manufacturing surveys both moved higher. On net, our manufacturing survey tracker—which is scaled to the ISM index—fell 0.9pt to 56.8 in July. 10:00 AM Construction spending, June (GS +0.5%, consensus +0.5%, last flat): We expect construction spending to rebound 0.5% in June following a below-consensus May report, which showed declines in both private residential and private nonresidential spending. 4:00 PM Total vehicle sales, July (GS 17.1mn, consensus 16.8mn, last 16.4mn): Domestic vehicle sales, July (GS 13.4mn, consensus 13.0mn, last 12.8mn) Wednesday, August 2 08:15 AM ADP employment report, July (GS +195k, consensus +190k, last +158k): We expect a 195k increase in ADP payroll employment in July, reflecting a boost from the stronger headline payrolls growth in June utilized in the ADP model. We expect an additional modest boost from net strength in the financial and economic indicators also used in the model. The ADP report introduced methodological changes last fall and now offers more details by sector. While we believe the ADP employment report holds limited value for forecasting the BLS’s nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises. 11:00 AM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Federal Reserve President Loretta Mester will give the keynote speech at the Community Bankers Association of Ohio’s Annual Convention in Cincinnati, Ohio. 01:30 PM San Francisco Fed President Williams (FOMC non-voter) speaks: San Francisco Fed President John Williams will give a speech titled "Monetary Policy's Role in Fostering Sustainable Growth" in Las Vegas, Nevada. Audience and media Q&A is expected. Thursday, August 3 08:30 AM Initial jobless claims, week ended July 29 (GS 235k, consensus 240k, last 244k); Continuing jobless claims, week ended July 22 (consensus 1,955k, last 1,964k): We estimate initial jobless claims fell by 9k to 235k in the week ended July 29. Initial claims can be particularly volatile around this time of year due to annual summer auto plant shutdowns, and we believe the prior week’s larger than expected increase likely reflected a number of plant closures. Additionally, we expect some retracement from elevated levels of claims in California. Continuing claims – the number of persons receiving benefits through standard programs – likely declined in the week ending July 22. 09:45 AM Markit US services PMI, July final (consensus 54.2, last 54.2) 10:00 AM ISM non-manufacturing index, July (GS 57.0, consensus 56.9, last 57.4): Regional service sector surveys were mostly weaker in July, and we expect the ISM non-manufacturing index to pull back 0.4pt to 57.0 in July. The New York Fed, Richmond Fed, and Philly Fed surveys all deteriorated month-over-month in July, while the Markit PMI services survey was flat in the flash estimate. Our non-manufacturing survey tracker decreased 1.5pt to 54.2, but continues to suggest expansion in business activity. 10:00 AM Factory orders, June (GS +2.6%, consensus +2.8%, last -0.8%); Durable goods orders, June final (consensus +6.0%, last +6.5%); Durable goods orders ex-transportation, June final (last +0.2%); Core capital goods orders, June final (last -0.1%); Core capital goods shipments, June final (last +0.2%): We estimate factory orders rose 2.6% in June – following an 0.8% decrease in May – reflecting a sharp rise in commercial aircraft orders. Despite positive revisions, the June durable goods report showed a modest decline in core capital goods orders but a rise in core capital goods shipments. Friday, August 4 8:30 AM Nonfarm payroll employment, July (GS +190k, consensus +180k, last +222k); Private payroll employment, July (GS +190k, consensus +181k, last +187k); Average hourly earnings (mom), July (GS +0.3%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), July (GS +2.4%, consensus +2.4%, last +2.5%); Unemployment rate, July (GS 4.3%, consensus 4.3%, last 4.4%): We estimate nonfarm payrolls rose 190k in July, following a 222k increase in June and compared to three- and six-month moving averages of 194k and 180k, respectively. Labor market fundamentals remained solid – business employment surveys remain at strong levels, and the Conference Board’s labor market differential rose to a 16-year high – though we note some modest deterioration in jobless claims data. July payroll growth has been relatively firm in recent years – rising by more than 200k in July in each of the last three years. This trend may reflect changing seasonality in labor market flows and hiring rates in the month, and to the extent the seasonal factors have lagged such an evolution, this would suggest scope for above-trend job growth in the upcoming report as well. We expect the unemployment rate to edge down to 4.3%. The June unemployment rate barely rounded up (at 4.357%), and we believe solid overall job creation will more than offset a modest rise in continuing claims between the survey period. Finally, we expect average hourly earnings to increase 0.3% month over month and 2.4% year-over-year, reflecting somewhat favorable calendar effects. 08:30 AM Trade balance, June (GS -$44.1bn, consensus -$44.8bn, last -$46.5bn): We estimate the trade deficit narrowed by $2.4bn in June. The Advance Economic Indicators report last week showed a narrower goods trade deficit, and we forecast a similar narrowing in the broader trade balance in this week’s report. Source: BofA, DB, GS, RanSquawk

28 июля, 23:07

Обзор фондового рынка США за неделю

Основные фондовые индексы США завершили сегодняшние торги преимущественно в минусе По итогам торговой недели: DOW +1.16%, S&P +0.01%, Nasdaq -0.20% В понедельник основные фондовые рынки США завершили сессию разнонаправлено, что было обусловлено корпоративными новостями и ожиданиями итогов заседания ФРС. Индексы S&P 500 и Dow снизились на фоне потерь акций Johnson & Johnson, а Nasdaq достиг рекордной отметки перед публикацией отчета о доходах Alphabet Inc. Кроме того, данные от IHS Markit указали, что в июле наблюдалось дальнейшее ускорение роста деловой активности в частном секторе США. С учетом сезонных колебаний предварительный сводный индекс PMI вырос до 54,2 в июле, по сравнению с 53,9 в июне, и сигнализировал о самом сильном темпе расширения с января. Вместе с тем, в июне продажи жилья на вторичном рынке в США упали больше, чем ожидалось, поскольку нехватка домов подняла цены на жилье до рекордно высокого уровня. Национальная ассоциация риэлторов заявила, что продажи жилья снизились на 1,8% до сезонно скорректированного годового показателя в 5,52 млн единиц. Во вторник фондовые рынки США закрылись выше нуля, чему способствовала череда сильных квартальных доходов от компаний, в том числе от McDonald's и Caterpillar. Дополнительную поддержку рынку также оказали статданные по США. Индекс потребительского доверия от Conference Board улучшился в июле после того, как незначительно снизился в июне. Индекс сейчас составляет 121,1 (1985 = 100), по сравнению с 117,3 в июне. Индекс текущей ситуации увеличился с 143,9 до 147,8, а индекс ожиданий вырос с 99,6 до 103,3. Вместе с тем, итоги опроса ФРБ Ричмонда указали, настроения производителей пятого района улучшились в июле. Составной индекс вырос с 11 до 14 в июле - результат небольшого увеличения новых заказов и занятости. В среду основные фондовые индексы США продемонстрировали повышение, получив импульс от уверенных корпоративных доходов. Кроме того, определенное влияние на динамику торгов оказали данные по рынку жилья США и результаты двухдневного заседания ФРС. Министерство торговли сообщило, что в июне продажи новых домов в США выросли второй месяц подряд, так как покупки на Западе выросли до почти 10-летнего максимума. С учетом сезонных колебаний продажи новостроек выросли на 0,8% до скорректированного годового уровня 610 000 единиц. Темпы продаж за май были пересмотрены на понижение - до 605 000 единиц с 610 000 единиц. Что касается заседания ФРС, как и ожидалось, ЦБ оставил диапазон процентных ставок по федеральным фондам без изменений, между 1,00% и 1,25%. Данное решение было принято единогласно. В Сопроводительном заявлении FOMC сообщалось, что процесс сокращения баланса начнется "довольно скоро". В целом, ФРС никак не дала понять, что слабые инфляционные данные изменили их планы касательно еще одного повышения ставок в этом году. В четверг основные фондовые индексы США завершили сессию смешано после того, как ранее в ходе торгов обновили свои рекордные максимумы в ответ на резкий рост квартальных доходов ряда компаний, в частности Facebook и Verizon (VZ). Небольшое влияние оказали статданные по США. Как стало известно, число американцев, обратившихся за пособием по безработице, выросло в конце июля, но осталось почти на самом низком уровне за последние десятилетия, что отразило сильный рынок труда, который не показывает никаких признаков охлаждения. Первичные обращения за пособием по безработице в период с 16 июля по 22 июля увеличились на 10 000 до 244 000 с учетом сезонных колебаний. Прогнозировалось, что число обращений составит 241 000. Между тем, Министерство торговли США заявило, что заказы на товары длительного пользования взлетели в июне до трехлетнего максимума. Заказы на товары длительного пользования выросли на 6,5%. Ожидался рост на 3%. Тем не менее, за исключением самолетов и автомобилей, заказы выросли на 0,2%, а ключевой показатель инвестиций в бизнес упал впервые в 2017 году. В пятницу основные фондовые индексы Уолл-стрит преимущественно снизились на фоне падения капитализации Amazon (AMZN) после публикации квартального отчета и обвала акций табачных компаний в ответ на заявления Администрации США по контролю за продуктами и лекарствами о намерении снизить уровень табака в сигаретах до не вызывающего привыкания. Кроме того, инвесторы обратили внимание на данные по США. Окончательные результаты исследований от Thomson-Reuters и Мичиганского института показали, что в июле американские потребители чувствовали себя более пессимистично в отношении экономики. Индекс потребительских настроений упал до 93,4 пункта по сравнению с окончательным чтением за июнь 95,1 пункта и предварительным значением за июль 93,1 пункта. Прогнозировалось, что индекс составит 93,1. В отраслевом разрезе большинство секторов индекса S&P за период 24 - 28 июля включительно показали падение. Наибольшее снижение зафиксировал сектор здравоохранения (-1,4%). Максимальное повышение продемонстрировал сектор основных материалов (+1,9%) Что касается компонентов индекса DOW, за прошедшую неделю снижение показали 14 из 30 акций, входящих в состав индекса. Наибольший отрицательный результат за неделю продемонстрировали акции 3M Company (MMM, -5.84%). Лидером были акции The Boeing Company (BA, +14.61%). Информационно-аналитический отдел TeleTradeИсточник: FxTeam

27 июля, 21:42

Опрос: китайский промышленный сектор, вероятно, демонстрировал стабильный рост в июле

Активность в промышленном секторе Китая, как ожидается, продолжила расширяться в июле, а темпы роста лишь незначительно замедлились относительно июня, когда достигли 3-месячного. Если прогноз оправдается, это будет признаком того, что импульс в экономике остается сильным, несмотря на более жесткую политическую ситуацию. Аналитики и правительственные аналитические центры ожидают, что экономика замедлится во второй половине года, так как более высокие затраты по займам и меры по "охлаждению" рынка недвижимости начинают оказывать давление на экономику. Но широкий консенсус среди китайских наблюдателей заключается в том, что любое замедление, скорее всего, будет скромным и удастся избежать резкого замедления, учитывая устойчивый внутренний спрос и рост экспорта, что, вероятно, помогло обширному промышленному сектору расширится в двенадцатый месяц подряд в июле. Ранее на этой неделе, связанная с правительством Китайская академия социальных наук (CASS) предсказала, что рост ВВП в третьем квартале составит 6,8 процента благодаря устойчивому росту потребления и инвестиций. Ожидается, что официальный производственный индекс менеджеров по снабжению (PMI) Китая составит в июле 51,6 пункта, что окажется лишь незначительно ниже июньского показателя (51,7 пункта), согласно медианному прогнозу 26 экономистов, опрошенных агентством Reuters. Кроме того, экономисты ожидают, что результаты частного исследования от Caixin/Markit укажут, что производственный индекс PMI Китая не изменился в июле, и составил 50,4 пункта. Официальные данные по производственному индексу PMI будут опубликованы 31 июля, вместе с индексом для сектора услуг, а производственный индекс PMI от Caixin будет выпущен 1 августа. Информационно-аналитический отдел TeleTradeИсточник: FxTeam

27 июля, 14:00

Your Mobile Strategy Can’t Just Be About Phones

Steven Moore for HBR Ten years ago, Apple released the first iPhone. This set into motion a cycle of innovation and transformation that has touched nearly every business in the world in some way or another. The size and scope of the opportunities the mobile revolution has created for businesses is hard to overstate. Perhaps the greatest impact of all is the way mobile has created — and continues to create — new opportunities for businesses to connect with their customers. Today, mobile is quickly becoming the remote control for our lives. For businesses, it’s the hub of interactions across digital channels and physical locations, and it paves the way for more and better customer experiences in both the real and virtual worlds. According to Mary Meeker’s latest Internet Trends Report, smartphones are now in the hands of 3.4 billion people across the globe and engagement is on the rise, with users spending three hours per day on mobile — a 4% increase over last year. There’s great opportunity in the midst of this change, and brands that stay focused on the big picture stand to gain the most. To get there, companies should take the time to level-set their efforts with three strategic exercises: Reexamine your goals and strategy. As the world becomes increasingly digital and connected, the number of potential touch points companies have with their customers is expanding — fast. To thrive in this new landscape, brands must understand that “mobile” no longer means “smartphone apps.” Today, opportunities for mobile connection are everywhere: BI Intelligence predicts that 75% of all shipped cars will be connected by 2020, and IHS Markit predicts that 130 million smart home devices will be shipped worldwide in 2017. With more and more options for mobile interactions, businesses all too often get their digital strategy wrong — or don’t reassess it often enough. At the highest level, digital initiatives should revolve around a clear plan about what to build and why. Do not just copy competitors or blindly follow the hype cycle. Instead, ask yourself these questions: What are we aiming to accomplish? Have we mapped out our customers’ digital journey? Will our mobile offering solve a real problem for our customers and deliver a unique, mobile experience? Do we need specific mobile device capabilities — e.g., camera, contacts, sensor data or geolocation — to deliver or improve the experience? What cross-channel customer behaviors can mobile help impact and influence? Make sure to use the right metrics when measuring success and identifying areas for growth. Remember: the promise of mobile is to make people’s lives easier, not to occupy their attention. Research shows that mobile has reduced attention spans and increased multi-tasking. With this in mind, brands should place less emphasis on downloads and time spent in their app, and instead focus on engagement, usefulness, and customer satisfaction. In other words, shift the focus from reach and frequency to the moments that matter most to your customers and your business. Repeat usage or transactions completed may be more meaningful metrics than time spent for a productivity app like Dropbox or a travel app like Alaska Airlines. Insight Center Crossing the Digital Divide Sponsored by DXC Technology How the best companies get up to speed. Think about Airbnb. While you might not spend a lot of time every day in the Airbnb app, it’s transforming the hotel and hospitality industry as we know it because of how useful it is. Brands also need to stop thinking about mobile as a siloed part of the business. Mobile isn’t a simple extension of desktop-based engagement models; it cuts across the entire business. This means the metrics used to assess mobile strategies should expand beyond the mobile interactions themselves. Look for evidence of mobile impacting web or in-store sales — that is a metric that counts. And don’t underestimate mobile messaging. Apps and mobile-optimized websites are tried-and-true ways brands connect with users on mobile, but they are no longer the only options — nor do they help proactively serve customers in their moment of need. That’s where mobile messaging comes in. For example, consider “lock-screen” messaging delivered through mobile web, mobile apps, and wallet passes that offer deals and content based on a customer’s location. Studies have shown that consumers want notifications (which are always opt-in), and that, in fact, greater notification frequency leads to greater mobile app retention rates. According to Forrester, up to 75% of the interactions consumers have with mobile phones are micro-moments — a mobile moment that delivers information through only a glance to let the consumer either process or act on it immediately. Furthermore, Mary Meeker went on to note that “Messaging apps, with context and time, have a chance to rival the home screen as the go-to place for interaction.” This underscores the importance of including mobile messaging in your strategy and designing interactions that take advantage of micro-moments. Interactive notifications with action buttons give users an effortless way to respond, while brands can collect rich insights for future segmentation and targeting, as well as use them to trigger follow-up messaging. On average, we’ve seen notification opt-in rates and notification engagement rates improve every year for the past three years. What’s more, in the past three months alone, we’ve seen more notifications sent than we did in our first seven years of business combined. Ultimately, mobile offers brands the chance to connect the dots between a variety of entry points, customer experiences, data sources, and interfaces. This opportunity is only expanding as those interactions proliferate beyond our phone screens. To take full advantage, companies must regularly assess their mobile strategies, align measurements with business goals, and focus on serving customers needs in micro-moments. For those that succeed, the future of mobile is wide open.

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26 июля, 18:18

IHS Markit: Permian oil producers hedging 65% of their output at $50/bbl

Crude oil-weighted operators in the Permian basin have hedged 65% of their remaining 2017 oil production at $50/bbl and 50% of their remaining gas production at $3/Mcf, according to analysis from IHS Markit Ltd.

26 июля, 16:30

Zacks Industry Outlook Highlights: Dow Chemical, DuPont, Syngenta, Albemarle and Monsanto

Zacks Industry Outlook Highlights: Dow Chemical, DuPont, Syngenta, Albemarle and Monsanto