September 4, 2019

Daily Market Review – Wednesday, September 4, 2019

Daily Market Review – Wednesday, September 4, 2019

Asia

Markets across Asia are closing in a glowing green this morning, led by 0.93% in Shanghai and a glowing 3.4% uptick in the Hang Seng after Hong Kong exec Carrie Lam announced today she would formally withdraw her much-debated extradition law. Even the Nikkei eked out 0.18% as the Yen performed a bearish pendant during the session. Across the Straits, China’s services sector continues growing with a Caixin PMI reading of 52.1 in August. And further south, last night’s services index from Australia shows a dramatic improvement to 51.4 in August from 43.9 the month before but a slight drop in the CBS’ services and composite PMIs. GDP early this morning came in as expected with a downgrade from 1.7 YoY for Q2 to 1.4% growth.

Europe

European indexes were cautiously optimistic yesterday as Parliament wrested control over Brexit from UK PM Boris Johnson. Both the Euro and the Pound shared the mood, the latter adding nearly 200 pips since hitting a 3-year low yesterday. Upon his defeat, Johnson stated he would call for early elections, and Winston Churchill’s grandson was expelled from the Conservative Party for voting against the PM. The European Commission is expected today to propose legislating financial assistance for businesses and individuals impacted by a no-deal Brexit. The EU’s Production Price Index yesterday regressed to 0.2% for July while Britain’s construction PMI lost another 1/3 percent, providing a 45-point reading in August.

US

US indexes closed in the red again yesterday, with dollar futures losing 0.13% on mainly negative data. ISM’s Prices Paid sentiment indicator continued to contract in August at 46 points, and construction spending failed to hit 0.3% growth in July, coming in a third of that. As for the Manufacturing PMI, ISM has it at a contractionary 49.1 – its first measured contraction in 3 years – while Markit delivered a green 50.3. Yields on the 6-month bill increased to 1.825 while the 3-month bill receded to 1.93. The 10-year bill, at 1.4290% is at a 3-year low, and the 2-year – 1.4640%. Adding to the downward pressure, aside from Trump’s usual anti-EU, China and Fed rants, were voices in the FED yesterday loudly diverging on policy, with St. Louis’s Bullard calling for more rate cuts and Boston’s Rosengren nixing the idea, given a strong US economy.

Commodities

Gold refused resistance at 1560 yesterday as risk was alleviated in Europe somewhat following Johnson’s parliamentary defeat. It is presently testing support at 1545. And Bitcoin broke through the 10.5K mark at the US open after Van Eck, a securities management firm announced the release of an institutional bitcoin ETF, which – not being available to retail traders – would not require SEC approval.

Corporate

Walmart has finally reacted to a string of mass shootings outside its stores by ceasing handgun ammo sales. The company is also calling for stronger background checks – a voice in the dark of corporate America. The Kroger grocery chain last year ceased selling guns.

Economic Calendar

Today’s Top Economic Events
TIME/PLACERELEASE/DATA
07:50 AM GMT – FranceMarkit PMI Services & Composite (Aug). Germany’s at 7:55, the EU’s at 8:00 and UK’s at 8:30
09:00 AM GMT – EURetail Sales (Jul)
11:00 AM GMT – USMBA Mortgage Applications (Aug 30). Trade balance (Jul) at 12:30, Redbook Index (Aug 30) at 12:55, and Beige Book at 18:00
12:30 PM GMT – CanadaLabour Productivity (Q2), Imports, Exports & International Merchandise Trade (Jul). Monetary Policy Report, Rate Statement & Decision (Sep 4) at 14:00
20:30 PM GMT – OILAPI Weekly Crude Oil Stock (Aug 30)
23:50 PM GMT – JapanForeign Reserves, Foreign Investment in Bonds & Stocks (Aug 30)
01:30 AM GMT (+1) – AustraliaExports, Imports & Trade Balance (Jul)

For more, visit our Economic Calendar