AsiaMost major indexes throughout Asia are closing in the green this morning, led by New Zealand’s Dow Jones, which added 1.97% as the NZD plunged 150 pips on the central bank’s decision to slash interest rates by a full 50 basis points – on expectations of half of that – to 1%. Home loans in Australia contracted by 0.9% in June, triple that in May, adding impetus to an already plunging Australian Dollar – 400 pips in the past 2 weeks! In Japan, banks are warning the BoJ against further monetary stimulus – specifically lowering already negative interest rates. Meanwhile, on the trade war front, Reuters reports that China has warned India not to succumb to US pressure on Huawei sanctions, threatening consequences for Indian firms operating in China.
USAcross the front, President Trump tweeted yesterday that “massive amounts of money from China and other parts of the world were pouring into the U.S. economy.” Yesterday’s Investor’s Business Daily & TechnoMetrica Institute’s Economic Optimism index fell by another point and a ½ to 55.1; the Redbook Index of same-store sales growth added a tick to 1.1% MoM; Jolts’ Job Openings fell 0.1% to 7.35mn from 7.38 in May; and the yield on 3-year T-Bills fell a tenth to 1.562%. US indexes recovered somewhat yesterday as short-traders took profit. The DJIA hit the 25000 point, after losing more than 2200 points to Trump’s Thursday Twit, then rose to hit resistance at 26000. James Bullard yesterday told the French Press Agency (AFP) that the FOMC would need 6 months to determine the effect of the latest rate cut before continuing in a like vein.
EuropeThe Euro this morning hit resistance at 1.1250 as Germany published a tragic 1.5% MoM contraction in industrial production, slapping the YoY figure down to -5.2%, and France’s trade deficit widened to €-5.2 bn. Equities yesterday lost between 0.13% (CAC) and 0.78% (DAX), the FTSE recording its 6th straight loss in a row. And HSBC will pay a €295 mn fine in Belgium for fraud and money laundering. The bank, which began life as a repository for opium-war profits, which killed upward of a million Chinese in the 19th Century, has been implicated in money laundering 4 times since the turn of the millennium, breaching Iran sanctions, funding terror and the Libor scandal in 2014, tax avoidance in 2015, and much more.
CommoditiesOil bounced off support at $53.20 after the API revealed a 3.4mB decline in reserves – half of last week’s figure. gold trading continues to shine, despite refusing this morning to cross the dramatic 1500 mark, as investors continue to flock towards safe-havens. The VIX hit an 8-month high of 2350 before returning to bounce off support at 19. And despite the uncanny resemblance, of late, between the gold chart and that of bitcoin, traders polled by Reuters say that the latter is not becoming another safe-haven asset thanks to its “immunity from geopolitical tensions”, but rather reflecting the potential for swift gains in a troubled market.
CorporateThe Walt Disney Company yesterday reported a worse-than-expected decline in earnings, pushing shares down 5%, following a 27% rise since this year began. Losses are being ascribed to a less-than-stellar integration of Fox, as the company prepares for the November launch of its streaming service, plus the recent increase in streaming costs. Yesterday the company announced that it would bundle Disney+ (the anticipated streaming service) with Hulu and ESPN+ – all 3 Disney properties.
|07:30 AM GMT – UK||Halifax House Prices (Jul)|
|08:00 AM GMT – China||Foreign Exchange Reserves (Jul). Imports, Exports & Trade Balance tomorrow morning (ND)|
|11:00 AM GMT – US||MBA Mortgage Applications (Aug 2). Consumer Credit Change (Jun) at 19:00|
|14:00 PM HMT – Canada||Ivey Purchasing Managers Index (Jul)|
|14:30 PN GMT – OIL||EIA Crude Oil Stocks Change (Aug 2)|
|23:01 PM GMT – UK||RICS Housing Price Balance (Jul)|
|23:50 PM GMT – JPY||Bank Lending (Jul), Foreign Investments in Stocks & Bonds (Aug 2) Current Account & Trade Balance (Jun)|