Despite Japan being closed for holiday, the Yen has started off on the back foot, with the USDJPY rising 20 pips following a weekend Nikkei report that Prime Minister Shinzo Abe has decided to dissolve the lower house with a general election to follow next month, hoping to capitalize on an uptick in public support before the opposition has a chance to regroup and mount a formidable challenge. According to the Nikkei, the plan is rooted in the assumption that an early dissolution would work to the advantage of Abe's Liberal Democratic Party and junior coalition partner Komeito. The Democratic Party, the main opposition group, is mired in turmoil, with multiple members reportedly looking to defect. Abe's other goal would be to head off the advance of Tomin First no Kai (Tokyoites First) onto the national political scene. The face of the group is Tokyo's popular governor, Yuriko Koike. Abe is expected to make the final call after assessing the North Korea situation. The logic is that the rogue state's recent missile launches and nuclear test might actually work in the LDP's favor - the conventional wisdom being that the public will prefer an experienced, relatively hawkish leader like Abe. The prime minister met with LDP Secretary-General Toshihiro Nikai at the prime minister's office on Friday, upon returning from a visit to India. Abe's decision is likely reinforced by his recent sharp rebound in the polls: having seen his approval rating plunge to record lows as recently as two months ago following a series of cabinet corruption scandals, on Friday, a poll conducted by Japan's Jiji founds that the approval rating for Abe’s Cabinet rose 5.2% points to 41.8%, exceeeding disapproval for first time in 3 months. The poll cited the government responses to the North Korean missile launches and nuclear test as a reason behind rise in approval, although it is not exactly clear just what those "responses" have been, besides empty jawboning and threats. According to the 2,000 individuals survedy, Abe's disapproval fell 7.4 ppts to 36.7% Sensing a change in the political winds, senior Komeito officials gathered for an emergency meeting on Saturday. The party shares the view that a dissolution is possible before the end of the year, and intends to begin preparing for an election. Also on Saturday, Komeito officials discussed the matter with senior officials of Soka Gakkai, a lay Buddhist organization that serves as the party's base. Soka Gakkai is to hold a campaign strategy meeting on Sunday. For now, the market response has been muted, with the USDJPY spiking above 111 at the open, although that may be more a function of the S&P finally hitting a new record high just north of 2,500.
В частности, газета Nikkei сообщила, что сообщения по экстренной системе оповещения J-Alert не удалось передать должным образом по меньшей мере в пяти муниципалитетах
Китай, готовится ввести фьючерсный контракт на поставку нефти, номинированный в китайских юанях, конвертируемых в золото. Потенциально это может привести к возникновению азиатской эталонной цены на нефть, которая позволит экспортерам обходить эталоны, выраженные в долларах, ведя торговлю в юанях. Обеспечение фьючерсов в юанях золотом была бы весьма привлекательной для экспортеров нефти, которые предпочли бы избежать расчетов в американских долларах. Согласно сообщению Nikkei Asian Review, крупнейший в мире экспортер нефти, Китай, готовится ввести фьючерсный контракт на поставку нефти, номинированный в китайских юанях, конвертируемых в золото. Потенциально это может привести к возникновению азиатской эталонной цены на нефть, которая позволит экспортерам обходить эталоны, выраженные в долларах, ведя торговлю в юанях
Authored by Pater Tenebrarum via Acting-Man.com, Anecdotal Flags are Waved “If a shoeshine boy can predict where this market is going to go, then it’s no place for a man with a lot of money to lose.” - Joseph Kennedy It is actually a true story as far as we know – Joseph Kennedy, by all accounts an extremely shrewd businessman and investor (despite the fact that he had graduated in economics*), really did get his shoes shined on Wall Street one fine morning, and the shoe-shine boy, one Pat Bologna, asked him if he wanted a few stock tips. Kennedy was amused and intrigued and encouraged him to go ahead. Bologna wrote a few ticker symbols on a piece of paper, and when Kennedy later that day compared the list to the ticker tape, he realized that all the stocks on Bologna’s list had made strong gains. This happened a few months before the crash of 1929. Joseph Kennedy in 1914, at age 25 – at the time reportedly “the youngest ever bank president in the US” Kennedy sold all his stock market investments over the next several months and put the money in what he considered the safest banks. He had already made a fortune in the bull market, and reportedly augmented it later by going short in the bear market. We are pretty sure his meeting with the market-savvy shoe-shine boy wasn’t the only reason for which he decided to sell. He did mention the anecdote later in life though and the experience served to solidify a conclusion he had already arrived at: It was very late in the game and the market was likely to crack badly fairly soon. We felt reminded of this story when a good friend (who invests for a living) visited us this summer. He inter alia told us about an acquaintance of his, whom he described as an autopilot investor who only very rarely looks at the market and has a record of getting the wrong ideas at the wrong time. His latest idea was noteworthy: he thought it would be a good idea to “sell volatility” (by writing puts, if memory serves). This was in July, just before the VIX reached a new all time low. In 2008, the VIX hit a high of 90 points, which was in fact the technical target we were eying at the time. In both 2010 and 2011 it jumped to approximately 47 points. In 2014 it made a high at 32 points, and in 2015 it streaked to 52 points. On these occasions put writing was not very popular with the people mentioned above. But they loved the idea with the VIX between 9 and 11.50. Go figure – click to enlarge. One shouldn’t jump to conclusions from this just yet – if it wasn’t well-known before, it should be by now: the VIX can remain subdued for a very long time. It only tells us that there is very little concern in the market – there is little demand for option hedges and traders are more inclined to sell volatility than to buy it. And similar to how high bullish sentiment during a bull market is not a contrary indicator most of the time, the lack of concern can be well founded for extended time periods. We have good reason though to suspect though that this particular game is quite long in the tooth as well. We are going to discuss developments in sentiment data in detail in a separate post. Still, here are a few observations in this context. Sentiment has become even more lopsided lately, with the general public joining the party. It may not “feel” like the mania of the late 1990s to early 2000, but in terms of actually measurable data, the overall bullish consensus seems to be even greater than it was back then. For instance, mutual fund inflows rose to record highs earlier this year. Along similar lines, here is a recent chart that aggregates the relative cash reserves of several groups of market participants (including individual investors, mutual fund managers, fund timers, pension fund managers, institutional portfolio managers, retail mom-and-pop type investors). It shows that there is simply no fear of a downturn: Cash is still trash – to a record extent. Investors evidently don’t believe the market could possibly go down. Not surprisingly, a few years ago, when the S&P 500 index was nearly 1900 points lower than it is today, they had the exact opposite opinion. As always, keep in mind that this is not a timing indicator. What this indicator shows us is how big the danger is once the market’s trend reverses. As a rule such extremes in complacency precede crashes and major bear markets, but they cannot tell us when precisely the denouement will begin – click to enlarge. With respect to market sentiment we would like to share a remark by renowned Citi credit market analyst Matt King, which strikes us as an example of investors basing their decisions on a wrong premise. It also illustrates why investors should either invest their money on their own, or be very careful which administrators of other people’s money they trust to look after their savings. It also shows that the incentives driving the decisions of fund managers have become hopelessly distorted. “Indeed, many investors we speak to seem almost to have given up on valuation as a metric. Rather like real estate in London or New York or Hong Kong, they are resigned to it: it may look expensive on paper, but the price is what it is, and they buy anyway. Several told us they would rather lose lots of money in company with the rest of the market than underperform slightly in a continuing rally and then suffer a fall in assets under management as investors move elsewhere.” This attitude may have implications for the market’s near term prospects. US Money Supply Growth Continues to Falter Rapidly Most of the broad true money supply data for August have been reported, and it seems the slowdown in the year-on-year growth rate of the money supply is accelerating. The annual growth rate of TMS-2 lost a chunky 1.3% in August alone, falling from 5% y/y to 3.7% y/y. Just as we suspected, it is following the steep decline in the growth rate of the narrow money supply measure AMS which we discussed a few weeks ago with a lag. The year-on-year growth rates of TMS-2 (broad true US money supply, black line) and commercial and industrial loans in the US (red line). Money supply growth is nearly at a 10 year low – click to enlarge. As we always point out, this is the most important fundamental datum one needs to be aware of. Everything else is secondary, because money supply growth leads both asset prices and economic activity. The current height of asset prices and the current strength of economic data tell us nothing about tomorrow (or only very little, at any rate). When these trends turn, they will do so quite suddenly, with very little warning. Some warning signs will of course be noticeable prior to a major trend change. In the stock market we can observe internals, sentiment, certain ratios (e.g. the performance of non-cyclical vs. cyclical sectors) and technical divergences. Note that two so-called “Hindenburg omens” have recently occurred in close succession – the Hindenburg omen mainly gives us an indication of the degree of intra-market correlation, as a major feature of the signal is the fact that it is triggered when the number of new 52-week highs and lows is almost similar despite the indexes trading close to new highs.. Here is the definition of a “confirmed” Hindenburg omen (via Bob Hoye): The 50-day moving average of the NYSE must be rising. The number of new 52-week lows must be at least 2.2% of all issues that traded and changed in value. The new 52-week highs must also be at least 2.2% of all issues that traded and changed in value. The McClellan Oscillator ($NYMO) must be negative on the day. A confirmed signal occurs when a second signal is given within 36 days. There was a confirmed signal in May/June. Another signal has occurred in the NYSE index ($NYA) in mid August on the heels of a close shave in early August (on a less strict definition, the early August signal would have counted as an “omen” as well). The number of Hindenburg signals across major indexes has soared this year – click to enlarge. The most recent rally has resulted in an improvement of market internals – but their divergence with prices remains firmly in place. Here are some internals of the S&P 500 Index as an example – the SPX is the strongest index in terms of internals, as big cap stocks have significantly outperformed small and medium cap stocks this year (note that the NYSE cumulative a/d line still looks fine, but it is a lone exception): Fewer and fewer stocks support rallies to new highs – click to enlarge. Our point is that the ice is getting quite thin. The Fed is reportedly set to announce the beginning of “quantitative tightening” at the upcoming FOMC meeting, which is bound to pressure money supply growth even more. It should be obvious that this cannot be bullish, even if the process will be a very gradual one. And yet, even with free liquidity weakening, sentiment at extremes and internals dubious, the market is consolidating close to all time highs in mid September – which is statistically the weakest month of the year. It seems therefore possible that the investors Matt King referred to (see above) will once again pile into stocks with whatever cash reserves they have left, so as to “make their year”. This is what happened in Japan in 1989, when the Nikkei streaked to a final high at the end of the year despite an inverted yield curve, sharply rising interest rates and deteriorating liquidity. Nine months later it traded below the low of the 1987 crash. What the chart below doesn’t show: after a five month bounce off the 1990 crash low, the index was absolutely crushed over the next twelve months. By mid 1993 it had lost 65% from the peak. In March 2009 it was a full 83% below its peak of 30 years earlier – n.b., in nominal terms, while the BoJ was on QE5 or QE6 (depending on how one counts its QE programs). The Nikkei’s late 80s – early 90s blow-off and crash – note the “final lurch to the peak” – click to enlarge. Back in the late 1980s, when the Nikkei index seemed invincible, Japanese mutual fund managers – similar to the ones Matt King heard from recently – “had given up on valuation as a metric”. They went down with the ship big time, and eventually lost more than 90% of their AUM. And Japanese investors learned that “buy and hold stocks for the long term” is a potentially quite dangerous mantra. Oh well, at least they still have time before they beat the record long bear market of 1721 – 1789. Conclusion It is clear that since our last “heads-up” when it became obvious that growth in the domestic USD money supply was slowing rather dramatically, the situation has deteriorated further – hence asset prices are on even thinner ice than before. Other warnings signs continue to proliferate as well. We wish we could tell you in which month the exhaustion point will be reached and the denouement will commence, but we can’t. There are too many moving parts; in the euro area, money supply growth (narrow money M1) is at a still hefty 9% y/y (down from a near 15% y/y peak) and while that can do nothing directly for assets priced in dollars, it underpins sentiment by keeping European high yield bonds well supported. Could a final blow-off move be in the offing? It is possible, but a crash over the coming eight weeks is at least just as likely. Since the interim peak in money supply growth in November 2016 there has been a massive decrease in the growth of money and credit. Perhaps the coming announcement of the partial reversal of QE will serve as a “trigger” (since no-one seems to be taking it very seriously). We don’t know of course, but we suspect the exhaustion point is now very close. Footnotes: *of course, when he graduated in 1912, economic science wasn’t yet fully pressed into the service of the State, so it was comparatively free of arrant nonsense.
Authored by John Rubino via DollarCollapse.com, For what seems like decades, other countries have been tiptoeing away from their dependence on the US dollar. China, Russia, and India have cut deals in which they agree to accept each others’ currencies for bi-lateral trade while Europe, obviously, designed the euro to be a reserve asset and international medium of exchange. These were challenges to the dollar’s dominance, but they weren’t mortal threats. What’s happening lately, however, is a lot more serious. It even has an ominous-sounding name: de-dollarization. Here’s an excerpt from a much longer article by “strategic risk consultant” F. William Engdahl: Gold, Oil and De-Dollarization? Russia and China’s Extensive Gold Reserves, China Yuan Oil Market (Global Research) – China, increasingly backed by Russia—the two great Eurasian nations—are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it. So long as Washington dirty tricks and Wall Street machinations were able to create a crisis such as they did in the Eurozone in 2010 through Greece, world trading surplus countries like China, Japan and then Russia, had no practical alternative but to buy more US Government debt—Treasury securities—with the bulk of their surplus trade dollars. Washington and Wall Street could print endless volumes of dollars backed by nothing more valuable than F-16s and Abrams tanks. China, Russia and other dollar bond holders in truth financed the US wars that were aimed at them, by buying US debt. Then they had few viable alternative options. Viable Alternative Emerges Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989—Russia and China—are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today. For several years both the Russian Federation and the Peoples’ Republic of China have been buying huge volumes of gold, largely to add to their central bank currency reserves which otherwise are typically in dollars or euro currencies. Until recently it was not clear quite why. For several years it’s been known in gold markets that the largest buyers of physical gold were the central banks of China and of Russia. What was not so clear was how deep a strategy they had beyond simply creating trust in the currencies amid increasing economic sanctions and bellicose words of trade war out of Washington. Now it’s clear why. China and Russia, joined most likely by their major trading partner countries in the BRICS (Brazil, Russia, India, China, South Africa), as well as by their Eurasian partner countries of the Shanghai Cooperation Organization (SCO) are about to complete the working architecture of a new monetary alternative to a dollar world. Currently, in addition to founding members China and Russia, the SCO full members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and most recently India and Pakistan. This is a population of well over 3 billion people, some 42% of the entire world population, coming together in a coherent, planned, peaceful economic and political cooperation. Gold-Backed Silk Road It’s clear that the economic diplomacy of China, as of Russia and her Eurasian Economic Union group of countries, is very much about realization of advanced high-speed rail, ports, energy infrastructure weaving together a vast new market that, within less than a decade at present pace, will overshadow any economic potentials in the debt-bloated economically stagnant OECD countries of the EU and North America. What until now was vitally needed, but not clear, was a strategy to get the nations of Eurasia free from the dollar and from their vulnerability to further US Treasury sanctions and financial warfare based on their dollar dependence. This is now about to happen. At the September 5 annual BRICS Summit in Xiamen, China, Russian President Putin made a simple and very clear statement of the Russian view of the present economic world. He stated, “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.” To my knowledge he has never been so explicit about currencies. Put this in context of the latest financial architecture unveiled by Beijing, and it becomes clear the world is about to enjoy new degrees of economic freedom. China Yuan Oil Futures According to a report in the Japan Nikkei Asian Review, China is about to launch a crude oil futures contract denominated in Chinese yuan that will be convertible into gold. This, when coupled with other moves over the past two years by China to become a viable alternative to London and New York to Shanghai, becomes really interesting. China is the world’s largest importer of oil, the vast majority of it still paid in US dollars. If the new Yuan oil futures contract gains wide acceptance, it could become the most important Asia-based crude oil benchmark, given that China is the world’s biggest oil importer. That would challenge the two Wall Street-dominated oil benchmark contracts in North Sea Brent and West Texas Intermediate oil futures that until now has given Wall Street huge hidden advantages. That would be one more huge manipulation lever eliminated by China and its oil partners, including very specially Russia. Introduction of an oil futures contract traded in Shanghai in Yuan, which recently gained membership in the select IMF SDR group of currencies, oil futures especially when convertible into gold, could change the geopolitical balance of power dramatically away from the Atlantic world to Eurasia. In April 2016 China made a major move to become the new center for gold exchange and the world center of gold trade, physical gold. China today is the world’s largest gold producer, far ahead of fellow BRICS member South Africa, with Russia number two. Now to add the new oil futures contract traded in China in Yuan with the gold backing will lead to a dramatic shift by key OPEC members, even in the Middle East, to prefer gold-backed Yuan for their oil over inflated US dollars that carry a geopolitical risk as Qatar experienced following the Trump visit to Riyadh some months ago. Notably, Russian state oil giant, Rosneft just announced that Chinese state oil company, CEFC China Energy Company Ltd. Just bought a 14% share of Rosneft from Qatar. It’s all beginning to fit together into a very coherent strategy. Meanwhile, in Latin America: De-Dollarization Spikes – Venezuela Stops Accepting Dollars For Oil Payments (Zero Hedge) – Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight? Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports. As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters, "Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal. Maduro hinted further that the South American country would look to using the yuan instead, among other currencies. “If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said. The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner. This first step towards one or more gold-backed Eurasian currencies certainly looks like a viable and — for a lot of big players out there — welcome addition to the global money stock. Venezuela, meanwhile illustrates the growing perception of US weakness. It used to be that a small country refusing to take dollars could expect regime change in short order. Now, maybe not so much. Combine the above with the emergence of bitcoin and its kin as the preferred monetary asset of techies and libertarians, and the monetary world suddenly looks downright multi-polar.
Перед открытием рынка фьючерс S&P находится на уровне 2,490.00 (-0.17%), фьючерс NASDAQ снизился на 0.15% до уровня 5,961.50. Внешний фон негативный. Основные фондовые индексы Азии завершили сессию преимущественно в минусе. Основные фондовые индексы Европы на текущий момент демонстрируют негативную динамику. Nikkei 19,909.50 +102.06 +0.52% Hang Seng 27,807.59 +30.39 +0.11% Shanghai 3,353.67 -17.76 -0.53% S&P/ASX 5,695.02 -43.65 -0.76% FTSE 7,201.26 -94.13 -1.29% CAC 5,210.64 -14.56 -0.28% DAX 12,530.32 -10.13 -0.08% Октябрьский нефтяные фьючерсы Nymex WTI в данный момент котируются по $49.97 за баррель (+0.16%) Золото торгуется по $1,327.80 за унцию (-0.11%) Фьючерсы на основные фондовые индексы США на премаркете демонстрируют незначительное снижение на фоне сообщений о новой провокации со стороны Северной Кореи и публикации блока неожиданно слабой американской статистики. Ситуации на Корейском полуострове вновь обострилась, что было спровоцировано очередным запуском Пхеньяном баллистической ракеты. Выпущенная сегодня ракета пролетела над северным японским островом Хоккайдо и приземлилась в Тихом океане. По оценочным данным, ракета пролетела около 3700 км, что является достаточным для поражения острова Гуам, где расположена американская военная база. Напомним, не так давно Совет Безопасности ООН принял новую резолюцию, усиливающую экономические санкции против Пхеньяна в ответ на проведенное 3 сентября термоядерное испытание. Отчет по розничным продажам показал их сокращение августе во второй раз за три месяца. Согласно отчету, продажи в розничных сетях по всей стране упали на 0.2%, что стало самым большим спадом в течение шести месяцев. Экономисты прогнозировали рост на 0.1%. В то же время продажи за июль и июнь также были намного слабее, чем первоначально сообщалось. Августовское сокращение розничных продаж отражает меньшее количество покупок автомобилей и нежелание американцев тратить на различные потребительские товары, такие как одежда и электроника. В августе продажи в автосалонах снизились на 1.6%. За исключением автомобилей, розничные продажи в США выросли на 0.2%, но увеличение было связано в основном с более высокими ценами на бензин, что отрицательно для потребителей. Продажи на бензоколонках выросли на 2.5%, что является самым большим увеличением с декабря. За год розничные продажи выросли на 3.2%. Отчет ФРС показал, что объем промышленного производства в американской экономике снизился на 0.9% в августе после роста на 0.2% в июле. Экономисты прогнозировали рост на 0.2%. Загрузка мощностей в промышленном секторе сократилась до 76.1% в августе с 76.7% в предыдущем отчетном месяце. По сравнению с августом предыдущего года, промпроизводство показало рост на 1.5% в прошлом месяце против 2.2% в июле. Негативное влияние на показатель оказал ураган Харви. Важных сообщений корпоративного характера, способных оказать влияние на динамику широкого рынка, на премаркете отмечено не было. После начала торгов влияние на их ход могут оказать предварительные данные по индексу потребительских настроений от Reuters/Michigan (14:00 GMT), а также статистика по товарно-материальным запасам (14:00 GMT).Источник: FxTeam
S&P futures are slightly lower (ES -0.1%) as traders paid little attention to the latest missile test by North Korea on Friday, with shares and other risk assets barely moving, gold lower and focus rapidly returning to when and where interest rates will go up. Most global market are mostly unfazed, and the Korean Kospi actually closed up 0.4%, by the latest geopolitical escalation after a North Korean ballistic missile flew far enough to put the U.S. territory of Guam in range. European stocks edged fractionally lower while Asian shares advanced. As reported on Thursday evening, the main overnight event was North Kore's launch of a missile which passed through Japan’s airspace and over Hokkaido, before landing in the Pacific Ocean. This initially prompted Japan to issue an emergency warning for its residents to seek shelter, while there were also reports that South Korea conducted its own missile firing test as a show of readiness. US military stated North Korean missile did not pose a threat to Guam and that the launch was an intermediate range ballistic missile. South Korean President Moon said will not sit idle on North Korea provocation and that South Korea has power to pulverize should North Korea provoke. On Friday morning, Russia also denounced the ‘provocative’ N. Korea missile test, according to the Kremlin. Meanwhile, North Korea stated that it will take stronger actions for its self-defence if the US continues to walk on current course. Still, markets are showing clear signs of habituation to missile launches and other provocative actions from North Korea, which has fired more than a dozen missiles this year and tested a nuclear device. Global equities climbed to a record high this week as earnings and confidence in economic growth overshadowed tensions on the Korean Peninsula. The MSCI All Country World Index is poised for its third week of gains in four. Meanwhile, recent economic data has been supporting of bullish positions, with yesterday's CPI prints suggesting inflation may again be on the rebound. While China data this week softened, the signals from DM financial markets remain optimistic. As such, investors will look to U.S. retail numbers today for more clues about the policy path. “You have risk appetite returning in the markets more generally at the moment, so you have all these forces pushing down the yen,” said Vasileios Gkionakis, global head of FX strategy at UniCredit. In Asia, Japan's Topix index rose 0.4% at the close in Tokyo to complete its best week since April. South Korea’s Kospi index ended 0.4 % higher after dropping as much as 0.5% in early trading following news of the North Korea launch, while Australia’s S&P/ASX 200 Index fell 0.8 percent. Hong Kong’s Hang Seng Index swung between gains and losses, and the Shanghai Composite Index was also lower. The Stoxx Europe 600 Index edged lower as North Korea’s latest missile launch raised geopolitical tensions, although to a few lower extent than just three weeks ago and modest moves in risk-off assets showed investors are becoming inured to the provocation. In fact, USDJPY has jumped overnight above 111 and gold was down to 1,324 as few even bothered to wait for the dip to emerge before buying it. The Japanese yen declined 0.9 percent to 111.29 per dollar, the weakest in almost seven weeks. The Japanese currency has seen its biggest fall this week in 10 months while the dollar is headed for its biggest rise since April, thanks to a revival in U.S. inflation data and bets the Federal Reserve could raise rates again this year. At the same time, sterling surged to a post-Brexit high, taking another leg higher on Friday after BOE policy maker Gertjan Vlieghe turned hawkish and said he may support raising interest rates in the near future. Following his comments, sterling soared above 1.36 for the first time since June 2016, and was in touching distance to post Brexit highs, breaking through the September 2016 high of 1.3442. “If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in the Bank Rate might be as early as in the coming months,” BoE member Gertjan Vlieghe said on Friday. Vlieghe said the appropriate time for hike might be "as early as the coming months", further stating that risks remain that Brexit will have bigger impact on economy but for now wage pressures are gently building. He also stated that conditions for hike are fall in slack, rising pay pressures and household spending and robust global growth. “The standout undervalued currency in G-10 is sterling,” Citigroup Inc. Strategists led by Jeremy Hale said in a report. “The possibility of a hike in the near term is now non-negligible and this, combined with the fact that the pound’s real effective exchange rate is close to its all-time low, could support the currency from here.” On the other hand, as Unicredit’s Gkionakis said, “If they don’t do it (hike rates) this time, their credibility will be lost completely for the next few years.” Markets expect the BoE to move in November, he added. Meanwhile, not even a report this morning of an explosion on a London underground train at Parsons Green station, which is being dealt with as a terrorist related incident, The dollar stayed on the backfoot, slipping a second day amid the North Korea tensions; sterling surged past $1.35 as Bank of England policy maker Gertjan Vlieghe turned hawkish, stoking speculation of a rate increase within months. Treasuries edged lower and the yen reversed earlier gains as the geopolitical concerns faded, while the euro gained modestly as the ECB’s Sabine Lautenschlaeger said now is the time to take the decision on scaling back quantitative easing. Overnight, the People’s Bank of China offered most cash in open-market operations since July 24 to meet funding demand. Onshore markets: the PBOC pumped in a net 200b yuan via reverse-repurchase agreements, after adding 100b yuan Thursday. The PBOC said that "injections help offset impact of corporate tax and reserve-requirement payments on liquidity." With help of PBOC’s liquidity offering, money rates have declined and will continue to do so until the upcoming party Congress, China Merchants Securities analysts led by Xu Hanfei write in note Treasury yields rose before U.S. data on manufacturing and retail sales. The yield on 10-year Treasuries climbed one basis point to 2.20 percent, the highest in more than three weeks. Germany’s 10-year yield increased two basis points to 0.44 percent, hitting the highest in a month with its sixth consecutive advance. Britain’s 10-year yield gained six basis points to 1.294 percent, reaching the highest in two months on its sixth consecutive advance. Elsewhere, the bitcoin crash which started last Friday following reports that China would stop local exchanges from trading of cryptocurrencies by the end of September, has acclerated, and the cryptocurrency is now down 40% from its all time highs just shy of $5,000 hit on September 1, and was trading a little over $3,000 this morning. Today's Economic data include retail sales, U. of Michigan consumer sentiment index. Bulletin Headline Summary GBP trades in Brexit night’s range, following comments from Vlieghe North Korea launched a missile that flew through Japanese airspace, prompting Japan to issue an emergency warning Looking ahead, highlight include US retail sales, industrial output and U of Michigan Market Snapshot S&P 500 futures down 0.1% to 2,491.00 STOXX Europe 600 down 0.1% to 381.32 MSCI Asia up 0.2% to 162.62 MSCI Asia es Japan up 0.09% to 538.66 Nikkei up 0.5% to 19,909.50 Topix up 0.4% to 1,638.94 Hang Seng Index up 0.1% to 27,807.59 Shanghai Composite down 0.5% to 3,353.62 Sensex down 0.06% to 32,222.34 Australia S&P/ASX 200 down 0.8% to 5,695.02 Kospi up 0.4% to 2,386.07 German 10Y yield fell 0.5 bps to 0.408% Euro up 0.03% to $1.1922 Italian 10Y yield rose 1.9 bps to 1.767% Spanish 10Y yield fell 1.1 bps to 1.591% Brent Futures little changed at $55.46/bbl Gold spot down 0.2% to $1,327.57 U.S. Dollar Index down 0.3% to 91.85 Top Overnight News North Korea Puts Guam in Range With Missile Launch Over Japan Trump Push for U.S. Jobs May Spur Boom in ‘Corporate Welfare’ Icahn Is Said to Seek $1.5 Billion as Fel-Pro Sale Considered Oracle First Quarter Adjusted EPS Beats Estimates Alphabet Is Said to Consider Lyft Investment of About $1 Billion Nestle Is Said to Pay $425 Million to Buy Blue Bottle Coffee Police Investigate London Subway Incident as Explosion Reported BlackRock Hires Ex-Goldman Derivatives Trader Cho for Equities MoneyGram Deal Panel Is Said to Weigh Data Theft in Review: NYP Morgan Stanley CEO: Low Chance of U.S. Rules Overhaul: Echos Array Biopharma 20.9m-Share Offering Prices at $10.75 Apiece Facebook Plans to Open AI Center in Montreal: WSJ Japan Considering Tax Increase for E-Cigarettes, Asahi Says Credit Suisse Reaches Settlement of MassMutual Litigation Reps. Gowdy, Smith Ask Equifax CEO for Briefing, Documents Dole Food Is Said to Be Exploring a Sale, DJ Says China Credit Expansion Remains Robust as PBOC Maintains Support Google and Facebook Fret Over Anti-Prostitution Bill’s Fallout Trump Deal With Democrats Brings New Wall Pledge: Build It Later Asia equity markets traded mixed after North Korea launched a missile that flew through Japanese airspace and over the Hokkaido prefecture before landing in the Pacific Ocean, which prompted Japan to issue an emergency warning for its residents and South Korea also conducted its own missile firing test as a show of readiness. This triggered a risk-averse tone across asset classes with ASX 200 (-0.7%) and KOSPI (-0.2%) pressured from the open, while Nikkei 225 (+0.5%) pared early losses as USD/JPY rebounded from its lows. Shanghai Comp. (-0.3%) and Hang Seng (+0.4%) both initially conformed to the downbeat sentiment caused by the renewed geopolitical concerns, although downside in mainland China was stemmed and Hong Kong recovered amid a firm liquidity effort by the PBoC. 10yr JGBs were higher and eyed the 151.00 level amid the mostly risk-averse tone in the region and with the BoJ present in the market for JPY 880bln in JGBs of maturities across the curve. PBoC injected CNY 120bln via 7-day reverse repos, CNY 60bln via 14-day reverse repos and CNY 20bln via 28-day reverse repos. (Newswires) PBoC set CNY mid-point at 6.5423 (Prev. 6.5465). Top Asian News South Korean Markets Show Resilience After North Fires Missile N.Korea Says Missile Launch Normal Part of Nuclear Deterrent:NHK China Says Unhelpful to Unjustly Blame Others on N. Korea Issue Hedge Fund Farallon’s Singapore CEO to Resign After 17 Years China’s JD.com, Thailand’s Central Group to Venture in Fintech Formula One Extends Singapore Race Contract for Four More Years Tata Feud With Mistry Deepens With Plan to Change Holding Firm GM’s Record China Deliveries Mask Muted Electric Car Sales European equities trade marginal lower amid geopolitical tensions, where North Korea fired another missile into Japanese airspace. Market reaction was minimal in Asia, led into European trade where equity markets trade with slight losses. FTSE under-performs as a result of the buoyant Sterling, as hawkish BoE comments were supported by Governor Carney and noticeable dove Vlieghe, with the former stating, the probability of a hike has definitely increased, may need to adjust Bank Rate in the coming months. European bonds trade in a tight range, with yields now slightly higher vs. yesterday across the board. Gilts have been in focus following the volatility that has been seen in UK asset classes post BoE. The UK 10y continues to trade near lows, pushed by comments from BoE’s Vlieghe, now trading through July’s lows. Top European News BOE’s Vlieghe Says Rate Increase May Be Needed in Coming Months Axa Said to Weigh Merger for European Asset Management Unit Bavarian Plunges as Committee Recommends Ending Phase 3 Study EU Eyes Monetary Fund for Region as Political Wills Align HSH Nordbank Is Good Opportunity for the Right Buyer: Flowers Dutch State Sells Stake of About $1.8 Billion in ABN Amro Iceland Government Faces Breakup as Coalition Partner Quits In currencies, the geopolitical concerns saw USD/JPY briefly spike below 110.00, as unfazed bids were stacked around 109.50, bouncing the pair 100 pips. The JPY safe-haven flow has become a concern of late, as threats against Japan could lead to flows outside of the JPY, and some traders looking for other safe haven assets. This could be indicated by the lack of aggression in the bounce in USD/CHF, with the cross remaining other the 2017 downward resistance trendline. The other notable currency move was in the pound: following Vlieghe’s comments, Cable is now in touching distance of those post Brexit highs, breaking through the September 2016 high of 1.3442, next key resistance could be at 1.3535. In commodities, WTI trades just short of USD 50.00, as some bids have been evident as we approached the European lunch hour. Gold fell 0.4 percent to $1,323.88 an ounce. Copper increased 0.2 percent to $6,512.00 per metric ton. Looking at the day ahead, we get numerous data releases including: IP for August (0.1% mom expected), the empire manufacturing survey, August retail sales, business inventories as well as the University of Michigan’s consumer sentiment index. Onto other events, EU finance ministers will hold Ecofin and Eurogroup meetings, the agenda includes: deepening of economic and monetary ties, developing capital-markets union, and tax and customs matters. US Event Calendar 8:30am: Empire Manufacturing, est. 18, prior 25.2 8:30am: Retail Sales Advance MoM, est. 0.1%, prior 0.6%; Retail Sales Ex Auto MoM, est. 0.5%, prior 0.5% 8:30am: Retail Sales Ex Auto and Gas, est. 0.3%, prior 0.5%; Retail Sales Control Group, est. 0.2%, prior 0.6% 9:15am: Industrial Production MoM, est. 0.1%, prior 0.2%; Capacity Utilization, est. 76.7%, prior 76.7%; 10am: Business Inventories, est. 0.2%, prior 0.5% 10am: U. of Mich. Sentiment, est. 95, prior 96.8; Current Conditions, est. 108, prior 110.9; Expectations, est. 83, prior 87.7 1 Yr Inflation, prior 2.6%; 10am: U. of Mich. 5-10 Yr Inflation, prior 2.5% DB's Jim Reid concludes the overnight wrap Happy Friday. It wasn't so long ago that the weekend ahead would offer the enticing prospect of a couple of rounds of golf, maybe a game of cricket, a night out with the boys, watching Liverpool on the telly and then a box set and a steak on Sunday evening. Oh how things have changed. This weekend I'll be on strict duty for the regular 90 minute feeding sessions every 3 hours and around this we have two birthday parties to attend for 2 years olds. To be fair one of them is my own daughter's tomorrow (unbelievably she'll be two) but the other on Sunday possibly involves me driving my wife and Maisie there and then waiting in the car with the twins as given the big party it might not be advisable for them to be exposed to a big crowd before they've had their injections. Oh what fun. That's not where it ends as many of Maisie's friends are turning two and my weekend diary is full for the next month attending these. My advice to the younger readers of this note is make sure you fill your weekend with every fun thing imaginable. Days like these won't last! There's been enough going on in markets over the last 18 hours to keep my mind off the stresses of the weekend ahead. In fact there was a fairly fascinating middle few hours of the day yesterday with the BoE surprising on the hawkish side, US inflation higher than expected, North Korea trying to grab back the spotlight and halting the rise in yields, Mr Trump publicly haggling with Democrats on a DACA deal, which is apparently “fairly close”, and as the European day ended, Mr Carney admitting he was one of those leaning towards a hike as prices were going up due to a weaker currency. Adding to this, this morning North Korea has fired off another missile that flew over Japan and landed into the Pacific Ocean. This follows their threats yesterday to use a nuclear weapon against Japan and turn the US into “ashes and darkness” for agreeing on new UN sanctions this week. The range of the test is important as the 3700km travelled is further than the distance to US controlled Guam (3400km). So it looks highly provocative. Asian markets are surprisingly taking the news in their stride with the Nikkei (+0.46%) and Hang Seng (+0.3%) higher but with the Kospi (-0.14%) and Shanghai Comp (-0.32%) slightly lower. Elsewhere UST 10yrs have only dipped 0.5bp. So we'll see if Europe gets more stressed by the news. The UN Security Council reconvenes at 3pm NYT today so we'll see if there is an additional response here. The North Korean headlines yesterday slightly overshadowed the US CPI numbers as they came out. After five consecutive downside misses, core Inflation surprised on the upside. According to DB's Matt Luzzetti, much of the volatility in the past two months has been due to large swings in the lodging away subcomponent, which rose sharply in August after plunging in July. Smoothing through this volatility, there are still signs that the core inflation trend is firming: the average monthly inflation rate over the past two months is 0.18%, which annualizes to 2.2%. DB still think YoY inflation for the next few months will be around current levels but that it will move higher in 2018 due to the lagged impact of recent stronger growth, recent $ weakness and tightening labour markets. In response, the UST 10y yields initially rose c2bp intraday but recovered to close broadly unchanged at 2.186%, in part given the rising tensions with North Korea. Elsewhere, the probability of a rate hike in December has increased 4ppt overnight to 43% and is up c18ppt from recent lows (per Bloomberg calculator). On the BoE, the risks were always to the hawkish side yesterday and this is what we saw. Indeed DB have now changed their official rate call and now expect a 25bp policy rate hike on 2 November. There was no denying the signal in the MPC statement and minutes. A “majority” of committee members would support a rate hike in the near term if the economy performs in line with expectations. “All members” agree that rates are likely to rise more than the market is pricing. As Mark Wall and Oliver Harvey note there now needs to be a surprise event to push the majority away from a near-term hike. Brexit has that potential if negotiations turn disorderly. They remain skeptical about this being the start of a tightening cycle though and see consensus expectations for UK GDP growth as too optimistic. The market responded with Sterling rallying 1.42% vs. USD, 10y Gilts rising 8.5bp to 1.227% and the probability of a rate hike in November also jumping 17ppt to 50% (as per Bloomberg's calculator). Notably, changes in other sovereign bond yields were more tempered. Core European bond yields were up around 1bp, with Bunds (2Y: +0.2bp; 10Y: +1bp) and French OATs (2Y: +1bp; 10Y: +1bp) slightly higher in yield while Peripherals rose by around 2bp, with Italian BTPs (2Y: unch; 10Y: +2bp) and Spain (2Y: +1bp; 10Y: +2bp) the highlights. Onto other markets, US equities were mixed but little changed, with the S&P and Nasdaq down 0.11% and 0.48% respectively, but the Dow bucked the trend to be up 0.20%. Within the S&P, gains were led by utilities (+0.87%) and the real estate sector as they partly recovered from prior day losses, while the discretionary consumer and Telco names underperformed. European markets were also little changed, with the Stoxx up 0.12%, with gains from energy names being largely offset by a decline in mining stocks. Elsewhere, the DAX dipped 0.10%, the CAC rose 0.15% and the FTSE 100 fell 1.14% as the BOE got more hawkish and Sterling rallied. Turning to currencies, most of the action was in Sterling as noted earlier. The US dollar index fell -0.43%, while the Euro/USD gained 0.29% but fell 1.13% against Sterling. In commodities, WTI oil increased 1.20%, building on the momentum from higher demand forecasts from IEA and OPEC yesterday as well as OPEC members voicing a preference to the extension to production cuts. Elsewhere, precious metals were slightly higher (Gold +0.56%; Silver +0.13%), but base metals weakened following the earlier softer than expected Chinese macro data (Copper -1.27%; Aluminium -0.67%, LME Nickel -1.41%). Away from the markets, PM Theresa May’s big speech has been confirmed to take place on 22 September in Florence, which could provide direction or alternatively chaos to the Brexit talks. Shortly after that, the official talks with the EU will begin again on the 25th September. Across the Pond, President Trump said he is close to a deal with Congressional democrats to permanently avoid deportation of 0.8m of immigrants brought illegally to the US as children. He noted that “we’re working on a plan for DACA (deferred action for childhood arrivals). People want to see that happen”. Notably, he is now flagging the DACA issue and his desire for a Mexican border wall to be handled separately, provided that the democrats promise not to “obstruct” it (funding for the wall) in the future. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, as discussed earlier, core inflation was slightly above market at 0.2485% mom (vs. 0.2% expected), enabling the annual rate to rise to 1.7% yoy (vs. 1.6% expected). Elsewhere, both initial jobless claims and continuing claims were lower than expectations, with jobless claims at 284k (vs. 300k expected) and continuing claims at 1,944k (vs. 1,965k expected). In the UK, The August RICS survey revealed that on balance, surveyors continued to report a decline in both buyer enquiry and new selling instructions. Elsewhere, the final readings on inflation for France and Italy were unchanged at 0.9% yoy and 1.4% yoy respectively. Turning to the lower than expected Chinese macro data we touched on yesterday, our China research team highlights that they maintain their baseline GDP growth forecast at 6.6% yoy in Q3 and 6.5% yoy in Q4 (Q2 was 6.9% yoy). They see no reason to panic, noting that the land market continued to boom in August which will help government revenue in H2. And if the government is concerned by slower growth, they could suspend the supply constrain on upstream sectors and increase infrastructure spending. Looking at the day ahead, the Eurozone’s trade balance stats for July are due. Then the US will release numerous data including: IP for August (0.1% mom expected), the empire manufacturing survey, August retail sales, business inventories as well as the University of Michigan’s consumer sentiment index. Onto other events, EU finance ministers will hold Ecofin and Eurogroup meetings, the agenda includes: deepening of economic and monetary ties, developing capital-markets union, and tax and customs matters.
В пятницу, 15 сентября, азиатские фондовые индексы продемонстрировали преимущественно положительную динамику по итогам торговой сессии, проигнорировав новость о том, что Северная Корея произвела очередной запуск ракеты, которая пролетела над территорией Японии. Из макроэкономической статистики в Японии был опубликован индекс делового доверия Reuters Tankan, составивший в сентябре 25 пунктов по сравнению с 27 пунктами в июле. В отчете отмечается, что уверенность японских производителей снизилась в сентябре впервые за четыре месяца. В Новой Зеландии вышли данные по индексу деловой активности в производственном секторе. Так, в августе показатель достиг 57,9 пункта по сравнению с 55,4 пунктами в июле. Сводный индекс региона MSCI Asia Pacific закрылся на положительной территории, прибавив на 0,2%. Японский Nikkei 225 вырос на 0,51%, китайский Shanghai Composite сниз
Торги на крупнейшей в Азии Токийской фондовой бирже завершились в пятницу ростом основных индексов, несмотря на новый ракетный запуск КНДР. Ключевой индекс Nikkei, отражающий колебания курсов акций 225 ведущих компаний страны, вырос по итогам торгов на 0,52%, до 19 909,5 пункта. Более широкий индекс TOPIX, отражающий курсы акций всех компаний в...
(индекс/цена закрытия/изменение, пункты/изменение, %) Nikkei -58.38 19807.44 -0.29% TOPIX -5.20 1632.13 -0.32% Hang Seng -116.88 27777.20 -0.42% CSI 300 -12.65 3829.96 -0.33% Euro Stoxx 50 +3.34 3526.48 +0.09% FTSE 100 -84.31 7295.39 -1.14% DAX -13.12 12540.45 -0.10% CAC 40 +7.61 5225.20 +0.15% DJIA +45.30 22203.48 +0.20% S&P 500 -2.75 2495.62 -0.11% NASDAQ -31.10 6429.09 -0.48% S&P/TSX +45.91 15172.72 +0.30% Информационно-аналитический отдел TeleTrade Источник: FxTeam
Gold and Yen spiked this morning (right before CPI) on the back of Nikkei headlines about preparation being observed for another North Korean missile launch (following overnight news that US officials had confirmed). Now Reuters reports that defense officials have confirmed to Fox News that North Korea is prepping for a new missile launch and gold and yen are bid once again.
Перед открытием рынка фьючерс S&P находится на уровне 2,488.00 (-0.27%), фьючерс NASDAQ снизился на 0.49% до уровня 5,979.50. Внешний фон негативный. Основные фондовые индексы Азии завершили в минусе. Основные фондовые индексы Европы на текущий момент демонстрируют преимущественно негативную динамику. Nikkei 19,807.44 -58.38 -0.29% Hang Seng 27,777.20 -116.88 -0.42% Shanghai 3,371.43 -12.72 -0.38% S&P/ASX 5,738.68 -5.58 -0.10% FTSE 7,319.00 -60.70 -0.82% CAC 5,227.85 +10.26 +0.20% DAX 12,512.79 -40.78 -0.32% Октябрьский нефтяные фьючерсы Nymex WTI в данный момент котируются по $49.78 за баррель (+0.97%) Золото торгуется по $1,321.70 за унцию (-0.47%) Фьючерсы на основные фондовые индексы США на премаркете снижаются после обновления рекордных максимумов индексами накануне. В центре внимания инвесторов находятся данные по потребительской инфляции в США. Как показал правительственный отчет, индекс потребительских цен (ИПЦ), вырос в прошлом месяце на 0.4%, что стало самым большим увеличением с января. Экономисты прогнозировали увеличение ИПЦ на 0.3%. Более высокая арендная плата и увеличившаяся стоимость бензина в августе ударили по карманам потребителей, тогда как рост стоимости медицинского обслуживания существенно замедлился. Рост потребительских цен в августе поднял ежегодный рост инфляции до 1.9% с 1.7%, всего лишь незначительно ниже 2%-ной цели ФРС. Еще одна тщательно отслеживаемая мера, которая исключает изменчивые категории продуктов питания и энергии, оказалась меньше основного показателя инфляции. Так называемый базовый индекс в августе вырос на 0.2%, при этом четвертый месяц подряд индекс за 12 месяцев оставался на уровне 1.7%. Кроме того, инвесторы оценивают последние данные по первичным обращениям за пособием по безработице в США. Как показал отчет Министерства труда, число американцев, подавших заявки на пособие по безработице, неожиданно упало на прошлой неделе. Первичные обращениям за пособием по безработице снизились на 14 000 до 284 000 за неделю, закончившуюся 9 сентября. Аналитики ожидали увеличение показателя до 300 000 с 298 000 неделей ранее. В минтруда отметили, что на данные повлияли ураганы Харви и Ирма, которые затруднили получение четкой картины о состоянии рынка труда. Среди сообщений корпоративного характера стоит отметить новость о том, что компания Tesla (TSLA) планирует представить своей электрогрузовик в 26 октября. Об этом генеральный директор компании Илон Маск сообщил в Twitter. Таким образом, презентация состоится немного позже, чем Маск предполагал ранее в этом году. В апреле он сказал, что компания Tesla, которая в прошлом не раз срывала самостоятельно назначенные дедлайны, продемонстрирует свой электрогрузовик в сентябре. Акции TSLA на премаркете снизились на 0.3%.Источник: FxTeam
Gold spiked and USDJPY tumbled as headlines from Japan's Nikkei newspaper confirmed US military officials' observations last night that North Korea is said to show signs of missile launch preparation. According to the Nikkei, citing an unidentified Japanese government official, the missile is being prepared for launch has engine for liquid fuel, suggesting missile is an ICBM. It adds that the missile is said to be fueled already, ready for launch. As Japan's Asahi further notes, the North Korean missile prep may be for a Hwason 14 ICBM and adds that missile prep is said to have started on Wednesday. The immediate reaction was a risk-off spike in the Yen and dollar. This Nikkei report comes after North Korea's threats overnight that it will "sink" Japan and reduce America to "ashes." And comes on the heels of the release of satellite imagery showing notable instability around the site of North Korea's nuclear bomb testing facility, NBC reports that three US military officials have observed North korea moving mobile missile launchers and preapreing hard sites in the last 48 hours. JUST IN: North Korea observed moving mobile missile launchers & preparing hard sites in last 48 hours, per 3 U.S. senior military officials — NBC Politics (@NBCPolitics) September 13, 2017 This comes just hours after 38North.org exposes details new commercial satellite imagery confirms earlier 38 North analysis identifying numerous landslides throughout the Punggye-ri Nuclear Test Site on the slopes of Mt. Mantap (and beyond) resulting from North Korea’s sixth nuclear test. These disturbances are more numerous and widespread than seen after any of the North’s previous five tests, and include additional slippage in pre-existing landslide scars and a possible subsidence crater. However, it is unclear from the imagery whether this subsidence is due to what has been reported as “a cave-in that was externally observable,” associated with the 4.6 magnitude event that occurred eight minutes after the test. There also appears to be increased water drainage in the North Portal Area, likely stimulated by the large underground nuclear test. Such underground water flow stimulation (brought about by expansion of existing cracks and fissures) could also be expected to promote the transport of radionuclides to the surface, and is not inconsistent with a more recent reportthat some radionuclides (traces of Xenon-133) were detected in the environment following the test (by South Korea). An apparent rectangular subsidence “crater” appears in the stratified volcanics at the basalt escarpment lip on the western corner of Mt. Mantap. This “crater” is likely what has been reported as a possible “collapse chimney crater,” but could also just be induced slippage prompted by the massive tremor. We may know more once synthetic aperture radar (SAR) imagery becomes available to potentially plot the epicenter of all of the surface disturbances. Imagery from September 8 also shows a large tractor/trailer cargo truck in the South Portal Area for the first time, and mining carts and other equipment are present outside the West Portal. Such activity, coming shortly after the largest underground nuclear test conducted at Punggye-ri to date (via the North Portal), suggests that onsite work could now be changing focus to further prepare those other portals for future underground nuclear testing. For the first time in over a year, activity was noted within the South Portal Area. A large tractor/trailer cargo truck was located in the area between the primary and secondary tunnel portals. The purpose of the vehicle is as yet unknown. It remains to be seen, however, whether or not the North Portal will ever be used for another nuclear test. There are still two unused additional tunnel complexes (served by the South and West Portals) that are also deemed potentially capable of conducting nuclear tests, albeit for tests having lower yields than that of the sixth test. Read more here... As North38 concludes, we also see no reason to alter our previous assessment that regardless of whether this most recent test was an operational warhead for an ICBM or simply a device, the yield of the test clearly shows North Korean progress in increasing the yields of their nuclear weapons. The significance of this is that it has the potential to dramatically increase the threat posed by its Strategic Force (responsible for ballistic missiles) as individual nuclear warheads potentially now have 10-times (or more) greater destructive power. This would allow fewer missiles to be employed to ensure destruction of a given target, and increase the target areas threatened by North Korean ICBMs by allowing a larger number of targets to be engaged with the current missile inventory. If the claim that the device just tested has a variable yield is true (from tens to hundreds of kilotons), then this may also imply the North Koreans intend to adopt an expanded policy of using nuclear weapons, including tactical use, in addition to deterring threats to existence of the state. By doing so, they would join countries such as the United States, Russia, China, Pakistan, etc. that have policies regarding the use of tactical nuclear weapons, clearly further destabilizing the Korean peninsula situation.
Less than a day after US officials observed North Korea moving mobile missile launchers and engaging in preparations for what appears to be another missile test, a North Korean state committee has stepped up its belligerent rhetoric, threatening to use nuclear weapons to “sink” Japan and reduce the US to “ashes and darkness” after the UN Security Council passed new sanctions against the isolated country earlier this week, Reuters reported. The North also accused the US of “cooking up” the latest restrictive measures against it and demanded that the US be beaten “to death as a stick is fit for a rabid dog. These latest threats follow reports from last night that US satellites had spotted the North’s military moving mobile missile launchers and preparing hard sites for what’s expected to be the country’s fourteenth missile test of 2017. The revelations followed reports of new commercial satellite imagery confirming an earlier analysis identifying numerous landslides throughout the Punggye-ri Nuclear Test Site on the slopes of Mt. Mantap (and beyond) resulting from North Korea’s sixth nuclear test. The data suggest that the hydrogen bomb test was up to three times more powerful than previously believed. According to Reuters, North Korea’s Asia-Pacific Peace Committee, which handles the North’s external ties and propaganda, called for the breakup of the security council, which it accused of being “a tool of evil” made up of “money-bribed” countries that move at the order of the US. Then it turned its attention to Japan… “The four islands of the archipelago should be sunken into the sea by the nuclear bomb of Juche. Japan is no longer needed to exist near us,” the committee said in a statement carried by the North’s official KCNA news agency." (Juche, as a reminder, is the North’s unique ideology, developed by country founder Kim Il Sung, the grandfather of Kim Jong Un, which combines elements of Marxism with an emphasis on nationalism and self-reliance). The committee continued to bash Japan, threatening to deliver “a telling blow” to its regional neighbor and longtime geopolitical foe, according to Bloomberg… “A telling blow should be dealt to them who have not yet come to senses after the launch of our ICBM over the Japanese archipelago,” a spokesman for the Korea Asia-Pacific Peace Committee said in Thursday’s KCNA statement. The committee is an affiliate of the ruling Workers’ Party. Japanese Chief Cabinet Secretary Yoshihide Suga called the North's comments “extremely provocative.” “If North Korea stays the course that it is on, it will increasingly become isolated from the world,” Suga told reporters on Thursday in Tokyo. “Through implementing the new United Nations Security Council resolution and related agreements, the international community as a whole needs to maximize pressure on North Korea so that it will change its policy.” Before turning its attention back to “US imperialists,” threatening to “annihilate”them as if they were “rabid dogs,” according to the Daily Mail. “In a statement released by news agency KCNA, a spokesman for the regime said: 'The army and people of the DPRK are unanimously demanding that the Yankees, chief culprit in cooking up the "sanctions resolution,” be beaten to death as a stick is fit for a rabid dog. 'There's limit to patience. Now is the time to annihilate the U.S. imperialist aggressors. Let's reduce the U.S. mainland into ashes and darkness.” The spokesman also called for the country to “vent our spite” by mobilizing all of the “means of retaliation” that the country has at its disposal. 'Let's vent our spite with mobilization of all retaliation means which have been prepared till now. These are voices of the Korean army and people. The North's missile tests have led analysts to believe that that its Hwasong-14 ICBM is capable of striking most of the US mainland. And it has already been fired over Japan. According to the Daily Mail, the North claims that the nuclear warhead it tested at its Punggye-ri nuclear test site on Sept. 3 is small enough to fit atop the Hwasong-14 rocket. US and Japanese intelligence confirmed that the North had likely developed a nuclear warhead small enough to fit inside the missile. Increased activity around potential underground test sites in the country’s west and south suggest that the North is preparing to carry out still more nuclear tests. North Korea in late August launched a ballistic missile over northern Japan in what it described as “muscle-flexing” to protest annual military drills between the US and South Korea, which the regime believes are merely dress rehearsals for an invasion. Leader Kim Jong Un called it a “meaningful prelude” to containing Guam, a US territory that the North threatened to strike with a nuclear weapon earlier this summer. The threat to Japan comes a day after members of Japan’s ruling Liberal Democratic Party were considering visiting Pyongyang for talks with North Korean leaders. “In the LDP there are some people seeking dialogue,” independent lawmaker Antonio Inoki told reporters in Tokyo following a trip to the North Korean capital. “There’s a change in atmosphere at the moment” about the need for talks rather than pressure, he said." Tokyo had criticized the visit, noting that all trips to North Korea by Japanese citizens are discouraged. While Chinese and Russian leaders have continued to urge the two sides to sit for diplomatic talks, Japanese Prime Minister Shinzo Abe instead stressed the need for more economic pressure while belittling the possibility of a dialogue. He told the Nikkei this week that Japan was in agreement with the US and South Korea that dialogue would only be possible when North Korea committed to complete and verifiable denuclearization, something which North Korea would never agree to.
Global stocks backed off from all time highs, and S&P futures are unchanged ahead of the much anticipated US CPI report, which is expected to break a streak of five consecutive misses, while eyeing disappointing overnight Chinese economic data which missed across the board. European stocks and Asian markets were also modestly in the red, with the relentless global rally to new daily record highs taking a breather amid some concerns China's economy is rolling over, which weighed on commodities including base metals, which in turned dragged down mining stocks. Most major currencies drifted before today's other major report: the BOE rates decision, where the central bank is expected to keep rates unchanged. As reported last night, Chinese retail sales, industrial production and fixed-asset investment all slowed and missed last month after a lackluster July as efforts to rein in credit expansion slammed the economy. Offsetting China's weakness was the latest Australian employment report, according to which the country added 54,200 jobs in August from July, more than twice the 20,000 estimated. The jobless rate was steady at 5.6%. The Aussie dollar rallied past 80 cents to the U.S. currency on stronger-than-expected employment numbers, before paring gains on the disappointing Chinese economic data. The sharp but brief dollar rally appears to have lost steam, with Trump denying a DACA deal was made with Democrats putting the recent euphoria over Trump's Tax Reform in question, but the currency held most of its recent gains. Not even another threat by North Korea to nuke Japan had much of an impact on the value of the greenback. Treasuries and bunds were little changed ahead of Thursday’s U.S. CPI report. The euro advanced against the Swiss currency after the SNB signaled the franc remains “highly valued” while cutting its economic outlook; the pound stuck to a tight range as investors waited to see how the Bank of England will try to balance policy amid faltering wages and faster inflation. Shares fell in Asia, knocking MSCI’s All-Country World index which tracks shares in 46 countries, off a record high hit on Wednesday, when Asian shares hit their highest since 2007 and Wall Street closed at all-time peaks. Asian markets are mostly lower, led by China and Hong Kong. Asia’s benchmark stock index, which has outperformed the U.S., traded just shy of its highest level since December 2007 ahead of the US CPI data report. The MSCI Asia Pacific Index fell 0.1% to 162.57, dragged by materials and telecom stocks. China’s Shanghai Composite Index closed lower after industrial output and retail reports suggested an unexpectedly slower pace of growth in the world’s second-biggest economy, while Japan stocks erased early gains. On the flip side, the Philippine benchmark rose to a record high as property and consumer-related shares gained after a report that the Senate will rein in the government’s plan to increase taxes on low-cost homes and sugary drinks. The momentum of Asia stocks wasn’t as strong as U.S. counterparts in this week’s rebound, said Margaret Yang, a market analyst at CMC Markets Singapore Pte Ltd, citing a greater year-to-date gain in the region. Investors are awaiting the U.S. inflation report that may determine whether the Federal Reserve delivers an interest-rate increase before year-end. European shares opened lower. The STOXX 600 index dipped 0.1 percent with down 0.3 percent, following the mildly negative tone seen during Asia-Pacific trade as markets eye upcoming key risk events including the BoE rate decision and US inflation report. In terms of a sector breakdown, material names are the notable laggards amid downbeat industrial production and retail sales figures from China overnight, while energy names have been supported from the recent gains in WTI and Brent. Elsewhere, UK retail names have been dealt a helping hand after Next (+10%) upgraded their guidance, which has also provided support to some of their domestic competitors including Marks & Spencer (+4.5%). From a fixed income perspective, paper has traded in a particularly tight range throughout the session after yesterday’s digestion of supply with just Ireland stepping up to the plate today. Note, tomorrow sees notable redemptions which some have suggested could guide price action later in the session (EUR 15.5bln IT principals, EUR 13bln GE, EUR 6bln FI, EUR 8bln AT, EUR 6bln EFSF, EUR 2bln coupons). Following Friday's PBOC margin announcement, the Yuan has been a one way train in reverse, and the onshore yuan has now dropped for a fifth day, heading for longest run of declines since early July, as China’s central bank weakens its daily fixing after overnight rise in the dollar. CNY falls 0.18% to 6.5568 per dollar as late afternoon in Shanghai, taking five-day retreat to 1.1%. Investors were seen buying the dollar to close short USD/CNY positions before end of session, triggering stop-losses that pushed CNY weaker, according to Bloomberg. Banks also cut short USD/CNY positions to avoid another overnight USD surge like Wednesday’s. Korean won weakest in Asia following the latest threat from North Korea. Treasury yields are little changed. Australia’s 10-year yield up 6 bps. Dalian iron ore futures drop. The main event for European currency traders is likely to be the Bank of England policy meeting. While no change in rates is expected, investors will be watching whether there is any shift in the number of rate-setters voting for a rise after a jump in inflation last month. Weak wage growth and questions over what Brexit will mean for the economy suggest most policymakers will see the recent surge in inflation to well above the BoE’s target as temporary. Sterling held steady around $1.32 having risen as high as $1.3329 on Wednesday. The pound was also flat at 89.95 pence per euro. The Swiss franc edged lower against the dollar and the euro after Switzerland's central bank said its currency was highly valued and that the situation on the foreign exchange market was still fragile. In rates, U.S. 10Y yields edged down 0.3 basis points to 2.192 percent. Bunds hit a 3-1/2-week high just shy of 0.42% after some harsh words from Jeff Gundlach. A weaker euro, which is down 1.7 percent from 2-1/2-year highs hit against the dollar last week, could encourage the European Central Bank to bring forward plans to withdraw monetary stimulus that has crushed euro zone bond yields. “The weaker euro has amplified the headwinds facing the bond market,” said Rainer Guntermann, a strategist at Commerzbank. “With the euro off its highs, it is easier for the ECB to taper next year.” Oil extended gains, trading at a five-week high amid demand optimism. Copper fell to near the lowest level in a month. Brent traded above $55/bbl, highest since mid-April, after IEA on Wednesday said worldwide demand is strong. WTI near $49.50. “In general it’s a bullish picture,” says Eugen Weinberg, head of commodities research at Commerzbank. “Yet again, the International Energy Agency confirmed the view that demand recently was extremely high” Economic data includes initial jobless claims and August inflation. Oracle and Empire are reporting earnings Bulletin Headline Summary from RanSquawk GBP has been offered as we approach the BoE despite outside bets of further dissent on the MPC The greenback has remained subdued to the benefit of its major counterparts while AUD/USD gained ground on strong jobs Looking ahead, highlights include BoE, US CPI and ECB’s Weidmann Market Snapshot S&P 500 futures little changed at 2,493.30 STOXX Europe 600 down 0.1% to 380.79 MSCI Asia down 0.05% to 162.56 MSCI Asia ex Japan down 0.02% to 538.63 Nikkei down 0.3% to 19,807.44 Topix down 0.3% to 1,632.13 Hang Seng Index down 0.4% to 27,777.20 Shanghai Composite down 0.4% to 3,371.43 Sensex up 0.1% to 32,228.68 Australia S&P/ASX 200 down 0.1% to 5,738.68 Kospi up 0.7% to 2,377.66 German 10Y yield fell 0.2 bps to 0.399% Euro up 0.1% to $1.19 Italian 10Y yield rose 1.5 bps to 1.748% Spanish 10Y yield rose 1.1 bps to 1.591% Gold spot little changed at $1,324.05 U.S. Dollar Index down 0.2% to 92.34 Top Overnight News Saudis Are Said to Prep for Possible Aramco IPO Delay to 2019 North Korea Threatens to Use Nuclear Weapon to ‘Sink’ Japan Apple Is Said to Discuss $3 Billion Stake in Bain Chip Bid China’s Economy Cools Again as Industry, Retail, Investment Slow Trump Blocks China-Backed Lattice Bid as Beijing Urges Fairness U.K. Subjects Murdoch’s Fox to Wider Probe Over Sky Takeover Bid Democrats Say They Have Tentative ‘Dreamers’ Deal With Trump Munich Re Says It May Miss Profit Target on Irma, Harvey Carney’s Rate Dilemma No Easier as Inflation Rears Up Again Hermes Warning Raises Concern Strong Euro to Erode Luxury Sales Australia employment surges in August, led by full-time roles Saudis are said to prep for possible Aramco IPO delay to ’19 U.K. Aug. RICS house price index at 6, vs 1 in July AT&T opens iPhone price war with buy-one-get-one-free offer Asia equity markets were lacklustre with a non-committal tone seen for most of the day after the cautious gains in the US and as the region also digested key data releases. ASX 200 (-0.1%) and Nikkei 225 (-0.2%) were subdued with weakness across miners and discouraging Chinese data weighing on Australia, while a softer JPY struggled to keep the Japanese index afloat. Hang Seng (-0.5%) and Shanghai Comp. (-0.2%) also lacked demand as an increased liquidity effort by the PBoC was clouded by a miss on Chinese Industrial Production and Retail Sales data. 10yr JGBs were lower despite the subdued risk-tone seen across markets, with prices weighed following a weaker 20yr JGB auction where the b/c, amount and accepted prices were all lower than the prior month. PBoC injected CNY 60bln in 7-day reverse repos, CNY 30bln in 14-day reverse repos and CNY 10bln in 28-day reverse repos. PBoC set CNY mid-point at 6.5465 (Prev. 6.5382) Chinese Industrial Production (Aug) Y/Y 6.00% vs. Exp. 6.60% (Prev. 6.40%). Chinese Retail Sales (Aug) Y/Y 10.10% vs. Exp. 10.50% (Prev. 10.40%) Top Asia News ZhongAn Online Is Said to Set Terms for Up to $1.5 Billion IPO India’s August Wholesale Inflation Rises Most in Four Months Bullet Train Pact Sends Shares of India Power-Gear Maker Soaring Morgan Stanley Upgrades Philippine Stocks to Overweight European equities (Eurostoxx 50 -0.3%) have largely followed on from the mildly negative tone seen during Asia-Pacific trade as markets eye upcoming key risk events including the BoE rate decision and US inflation report. In terms of a sector breakdown, material names are the notable laggards amid downbeat industrial production and retail sales figures from China overnight, while energy names have been supported from the recent gains in WTI and Brent. Elsewhere, UK retail names have been dealt a helping hand after Next (+10%) upgraded their guidance, which has also provided support to some of their domestic competitors including Marks & Spencer (+4.5%). From a fixed income perspective, paper has traded in a particularly tight range throughout the session after yesterday’s digestion of supply with just Ireland stepping up to the plate today. Note, tomorrow sees notable redemptions which some have suggested could guide price action later in the session (EUR 15.5bln IT principals, EUR 13bln GE, EUR 6bln FI, EUR 8bln AT, EUR 6bln EFSF, EUR 2bln coupons). Top European News Vivendi Hit by Watchdogs on Telecom Italia, Mediaset Stakes Syngenta Is Said to Plan $7 Billion Bond to Refinance M&A Glapinski Wins Ally in Push for Stable Polish Rates Through 2018 SNB Says Franc Drop Has Reduced ‘Significant Overvaluation’ Macquarie Sells Its Stake in Copenhagen Airports to ATP Next CEO Says Favorable Weather Helped Sales in Recent Months In currenices, as has been in the case in other markets, price action has been on the light side ahead of key risk events. A bulk of the focus in the FX space thus far has been on CHF after the SNB kept rates unchanged as expected while tweaking their rhetoric on the CHF from ‘significantly overvalued’ to ‘highly valued’, however, the SNB also stated that they will remain active in the FX markets, subsequently leading to some choppy price action in the safe-haven. Elsewhere, NZD took a tumble in early trade after the latest News1 poll for the upcoming election put the Labour party in the lead; a result which was at odds with the NewsHub poll from earlier in the week. Finally, focus for FX markets will likely centre around GBP with markets looking to see whether or not the 2.9% Y/Y inflation rate in the UK will lead to any further dissents on the MPC. In commodities, WTI crude futures continue to hold onto yesterday’s gains after the Nigerian energy minister stated that the nation would be willing to impose an output cap for six months if they were able to hit production levels of 1.8mln bpd. Elsewhere, gold has seen little in the way of price action while copper prices were sideways overnight amid a subdued risk tone which somewhat provided the metals complex mild respite from the prior day’s selling. Looking at the day ahead, in the UK, we have the BOE rate decision, the asset purchase target as well as retail sales data for August. Over in the US, the August inflation along with the initial jobless claims and continuing claims are also due. Onto other events, there is the BOE and Swiss national bank official interest rate decision. The ECB governing council member Jens Weidmann will also speak in Frankfurt US Event Calendar 8:30am: Initial Jobless Claims, est. 300,000, prior 298,000; Continuing Claims, est. 1.97m, prior 1.94m 8:30am: US CPI MoM, est. 0.3%, prior 0.1%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.1% US CPI YoY, est. 1.8%, prior 1.7%; US CPI Ex Food and Energy YoY, est. 1.6%, prior 1.7% 8:30am: Real Avg Weekly Earnings YoY, prior 1.08%; Real Avg Hourly Earning YoY, prior 0.7% 9:45am: Bloomberg Consumer Comfort, prior 52.6 DB's Jim Reid concludes the overnight wrap The two main strands of conversations I had on returning to the office yesterday was a) how tired I looked and b) whether I was buying the new iPhone X. Without even knowing what features it has Apple had me at "new i.....". Actually someone asked me if I was buying the new iPhone 8 instead and I was actually a little offended. I'm still dreading the day they get into cars. Regular readers will be aware how much I hate spending money on cars. However there would be a real risk of personal bankruptcy if and when the iCar comes out and updates itself every year. Anyway before we preview an important day headlined by US CPI and the BoE meeting, straight to Chinathis morning where the latest monthly main data dump is out. August industrial production and retail sales were softer than expected. The IP was up 6% yoy (vs. 6.6% expected) - the slowest pace this year, and retail sales grew 10.1% yoy (vs. 10.5% expected) while fixed assets expanded 7.8% (vs. 8.2% expected). Asian markets generally weakened on the numbers after a firmer start to the session without being much changed overall. The Nikkei (-0.19%), Hang Seng (-0.42%) and Shanghai Comp (-0.17%) are all lower while the Kospi (+0.25%) is slightly higher. Once the market has moved on from the Chinese data the main event today is US CPI with the market and DB at +0.3% mom for headline and +0.2% for core. Remember we have had 5 consecutive downside misses on the core. We also saw a miss on PPI yesterday (more later). Even an in line MoM core figure would result in the YoY rate slipping one tenth to 1.6% and to the lowest since Jan 2014. Our US economist Brett Ryan thinks CPI won’t bottom out until Q1 2018 but highlights that inflation tends to lag GDP growth by 5 or 6 quarters so any current weakness may reflect weak growth around the end of 2015/beginning 2016. In today's PDF we've cropped their chart showing the tight relationship (with the lag) between the two over the last couple of decades. This is fine but inflation needs to start beating soon to suggest that the normal relationship between growth and inflation is still there and we're not in a near perpetually low inflation world with today's current policy choices. As an aside we still think inflation will edge up over time due to weaker demographics meaning a lower future supply of labour relative to the past and also due to policy slowly being more directed to fiscal over monetary largely due to populism and the fact that monetary policy alone has almost been fully exhausted. This week's removal of the 1% pay cap for certain UK public sector workers is a small sign of the direction of travel. We acknowledge that this argument has no baring on the short-term inflation outlook but I think we'll look back on 2016-17 as the secular trough in inflation. As for the BoE consensus is of course for no change in policy but the devil is in the detail and the committee have a few signalling headaches given this week's higher than expected inflation numbers. DB's Oliver Harvey thinks the risks are that the MPC sounds increasingly uncomfortable about a sleepy market attitude towards interest rates. He thinks they are unlikely to be thrilled about the market reaction after the August 3rd inflation report when the broad GBP TWI fell 3% in the three weeks after (although recovered half of that since). He thinks the BoE are increasingly sceptical about benefits of a falling currency from a growth perspective, notwithstanding the impact on inflation persistence. Overall DB continue to expect the BoE to remain on hold until uncertainty about the Brexit transition diminishes. Too many aspects of the policy trade-off hinge on the outcome. There are justified concerns about the profile of future spare capacity and inflation, but protestations about these may cut little ice with the market absent a clear acceleration in wage growth or resolution of political uncertainty. Moving on, the US tax reforms appears to gaining momentum although we have heard this before. On Fox news, Director of US office of management and business Mulvaney said the target release date for a framework of the tax plans will be on September 25th, while House Speaker Ryan also confirmed party leaders would release a Republican only “template” on tax in the last week of September. Elsewhere, the President has tweeted that “the approval process for the biggest Tax Cut & Tax Reform package…will soon begin”. For now, details are still sketchy, on the one hand Trump has reaffirmed his commitment to cut the corporate tax rate to 15% and said the tax change will benefit the middle class, not the wealthy. However, both the Treasury Secretary Mnuchin and Ryan noted the corporate tax rate is open to compromise, potentially towards c20% instead. Hopefully we will get some clarity soon. Onto the market performance yesterday. US equities nudged up to another fresh record high, with the S&P up +0.08% (+11.5% YTD), the Dow (+0.18%) and the Nasdaq (+0.09%). Within the S&P, gains were led by the energy sector (+1.24%) while yield sensitive sectors such as real estate and utilities (-0.53%) fell slightly. European markets were also generally slightly higher, with gains also led by the energy sector. Across the region, the DAX (+0.23%) and CAC (+0.16%) rose slightly while the FTSE 100 dipped -0.28%. Over in sovereign bonds, core European yields were mixed but little changed across the maturity spectrum, with Bunds (2Y: +1bp; 10Y: unch) and Gilts (2Y: +1bp; 10Y: +1bp) up a little in yield, but French OATs (2Y: +1bp; 10Y: -1bp) a little more mixed. Notably, peripherals such as Spain and Portugaloutperformed with 10y yields down c3bp. Over in the US, yields were slightly higher (2Y: +1bp; 10Y: +2bp). Turning to currency markets, the US dollar index gained 0.69%, partly reflecting the increased momentum on tax reforms. Conversely, the Euro and Sterling fell 0.69% and 0.54% respectively versus the Greenback. In commodities, WTI oil rose 2.22% to a five week high, following an IEA forecast for global crude demand to be 1.7% higher in 2017 given stronger than expected consumption in Europe and US. Precious metals fell modestly (Gold -0.65%; Silver -0.74%) along with Copper (-0.66%). Elsewhere, LME Nickel dropped 5.25% overnight, but is still up c29% since June. Away from the markets, in the EC President Juncker’s State of Union speech, he touched on a few topics, which included calling for a tighter EU integration where he proposed a series of overhauls such as the creation of i) an EU finance and economy minister, ii) a single president for the European Commission and Council, iii) an EU monetary fund and iv) an EU cybersecurity agency . On the EU economy, he noted it was growing as now the “wind is back in Europe’s sails” and the migration crisis had been brought under control. On Brexit, he noted that it would be “a very sad and tragic moment in our history…we will always regret this…but I think you (UK) will regret it as well”. Staying in Europe, the ECB’s executive board member and Chief economist Peter Paret noted “the baseline scenario for inflation going forward remains crucially contingent on very easy financing conditions, which to a large extent, depend on the current accommodative policy stance.” Finally, for those of you interested in the upcoming roll of the iTraxx and CDX indices, our team have published the report “CDS Index Roll: Europe & US, September 2017” which describes the index changes and estimates their impact on index spreads. It should be in your inbox, please contact [email protected] if not. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the core August PPI (ex-food and energy) was slightly below market at 0.1% mom (vs. 0.2% expected), although the base effect has helped the annual rate to nudge up to 2.0% yoy (vs. 1.8% previous; 2.1% expected). Notably, the healthcare series within the PPI, which is relevant to healthcare as measured in the core PCE deflator – fell 0.1% mom in August (the largest mom decline since October 2015). Elsewhere, the August federal budget data showed a slightly smaller deficit at -$107.7bln (vs. -$119bln expected) and MBA’s new mortgage applications index rose last week, with the four week average up 5% yoy. In the UK, the July ILO unemployment rate fell to 4.3% (vs. 4.4% expected), which is the lowest level since 1976. However, growth in average weekly earnings was soft and lower than expected at 2.1% yoy (vs. 2.3%). Elsewhere, the claimant count rate was 2.3%, steady on a mom basis and the jobless claims change came in at -2.8k, which is similar to revised figure for the prior month. Over in Germany, the final reading on August inflation was unchanged at 0.2% mom and 1.8% yoy. Elsewhere, the Eurozone’s July IP was broadly in line at 0.1% mom and 3.2% yoy (vs. 3.3% expected), while employment across the euro area rose 0.4% qoq in Q2, leaving through-year growth steady at a solid 1.6% yoy. Looking at the day ahead, in the UK, we have the BOE rate decision, the asset purchase target as well as retail sales data for August. In France and Italy, the final readings on the August inflation are due. Over in the US, the August inflation along with the initial jobless claims and continuing claims are also due. Onto other events, there is the BOE and Swiss national bank official interest rate decision. The ECB governing council member Jens Weidmann will also speak in Frankfurt
Торги на Токийской фондовой бирже (ТФБ) завершились в четверг снижением ведущих индексов после двух дней устойчивого роста. Ключевой для Японии индекс Nikkei, отражающий курсы акций 225 ведущих компаний страны, к окончанию операций снизился на 0,29%, до 19 807,44 пункта. Более широкий TOPIX, фиксирующий курсы акций всех компаний в элитной первой...
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По итогам торгов четверга США индекс Dow Jones вырос на 0,2%, S&P снизился на 0,11%, Nasdaq просел на 0,48%. В результате значение Dow Jones достигло уровня 22203,48 пункта, S&P – 2495,62 пункта, Nasdaq – 6429,08 пункта. Фондовый индекс Бразилии BRSP BOVESPA IND снизился на 0,11% и составил 74 703,12 пункта. Индекс Лондонской фондовой биржи FTSE 100 упал на 1,17% и закрылся на уровне 7 293,5 пункта. Индекс Парижской фондовой биржи CAC 40 прибавил 0,15% и закрылся на уровне 5 225,2 пункта. Индекс Франкфуртской фондовой биржи DAX снизился на 0,11% и к закрытию составил 12 540,25 пункта. Значение японского индекса Nikkei поднялось к настоящему времени на 0,56% и составило 19 918,64 пункта. На текущий момент индекс Китая CSI-300 вырос на 0,06% и находится на уровне 3 832,192 пункта. Индекс фондовой биржи Гонконга HANG SENG снизился на 0,1% и находится на уровне 27 750,06 пункта.
(индекс/цена закрытия/изменение, пункты/изменение, %) Nikkei +89.20 19865.82 +0.45% TOPIX +9.88 1637.33 +0.61% Hang Seng -78.16 27894.08 -0.28% CSI 300 +4.68 3842.61 +0.12% Euro Stoxx 50 +10.58 3523.14 +0.30% FTSE 100 -20.99 7379.70 -0.28% DAX +28.80 12553.57 +0.23% CAC 40 +8.58 5217.59 +0.16% DJIA +39.32 22158.18 +0.18% S&P 500 +1.89 2498.37 +0.08% NASDAQ +5.91 6460.19 +0.09% S&P/TSX -16.60 15126.81 -0.11% Информационно-аналитический отдел TeleTrade Источник: FxTeam
2013 г. стал лучшим для японского фондового рынка с 1972 г. Индекс Nikkei 225 вырос на по итогам уходящего года на 57%, чему способствовали удешевление иены и рост прибыльности японских корпораций. Этот год запомнится экономическими экспериментами, которые проводили многие страны. Самый грандиозный из них проходит в Японии. Японская валюта потеряла около 21% с начала года, что стало одним из главных катализаторов роста. Последний раз подобное удешевление иены наблюдалось только в 1979 г. Чистая прибыль выросла до 5,5 трлн иен ($55 млрд) в целом по 1280 крупнейшим нефинансовым компаниям Японии. Прибыль росла самыми быстрыми темпами с 2010 г., показатель в прошлом году составил 2,25 трлн иен. Рост прибыли был зафиксирован у таких компаний, как Panasonic, которая сократила 71 тыс. рабочих мест, Mazda Motor, перенесшей производство автомобилей в Мексику, и Toyota Motor, которая остановила строительство нового завода. Изменение ВВП Японии, г/г В настоящий момент ситуация на иностранных рынках складывается в пользу японских компаний. Однако ситуация с внутренним спросом остается сложной. По опросу экономистов, проведенном агентством Bloomberg, в следующем году темпы роста зарплат составят лишь 0,6%, в то время как уровень инфляции может превысить 3%. Таким образом, заработные платы будут расти в пять раз медленнее уровня цен. Это дополнительно сократит покупательную способность японцев и может сделать курс экономической политики, проводимый премьер-министром Синдзо Абэ, непопулярным.