AsiaAsian markets, especially Hong Kong, reacted mutely overnight to HK Chief Exec Carrie Lam’s folding to anti-extradition protests Saturday. These continue with the demand that the proposed law be cancelled and Lam step down. Additionally, Reuters this morning reports that Hong Kong tycoons are beginning to move personal assets offshore (read: Singapore), in fear of extraditions and trials on the mainland. North of the border, retail sales in China increased by a pleasing 8.6% in May but industrial production fell to 5% growth from April’s 5.4% – an indication that the economy continues marching towards a consumer-focused services base. In Japan, analysts expect the central bank on Wednesday to maintain its stimulus program in light of continued trade and geopolitical uncertainties. Industrial production in April continued to contract, but capacity utilization increased by 0.7%.
EuropeAfter trending sideways throughout the week, the pound sterling delivered a resounding drop below what had been support at 1.2650, which now seems to be indicating resistance – this after Hard-Brexit’s Boris Johnson won the Conservative Party’s leadership vote. Johnson is projected to to be the favourite for elections, to be held at the end of July. Reuters this morning reports that UK companies are set to cut investments by 1.3% in 2019 – a 10-year record – due to Brexit uncertainties. On the other hand, today marks the opening of the London-Shanghai Stock Connect project, which will enable UK-listed companies to sell shares in Shanghai and London investors to trade through Huatai Securities – one of China’s largest brokerages. On the mainland, data last week came in mostly red, with Italy’s seasonally adjusted industrial sales and orders in a strong MoM contraction. Industrial production for the entire zone on Thursday shows a continuing contraction (-0.4% YoY) but better than the expected -0.5% in April.
USAlongside the UK and Japan, the FOMC is expected to ignore President Trump’s continued call for interest rate cuts on Wednesday. Meanwhile, the Atlanta Fed downgraded its GDP growth for 2019 from 3.1% to 2.1%, jobless claims increased beyond expectations, an import/export prices also disappointed with a 0.3 and 0.2% contraction, respectively. Friday’s retail sales for May also disappointed with a 0.5% increase – a 1/10th below expectations; and only industrial production pleased with a 0.4% increase. The 3 & 5 year bond inversion continues, which some see as a precursor to a recession, but most pundits agree that the FED will only cut rates in the year’s 3rd quarter. In corporate news, top chipmakers including Intel, Micron, Broadcom and Qualcomm are lobbying the government to ease its ban on Huawei, which – besides being Chinese – is also the world’s largest telecom equipment manufacturer. In 2018, Huawei purchased about $11bn from such companies, and it now threatens to seek its chips elsewhere.
CommoditiesWith bitcoin now firmly above the 9000 mark, this morning finds oil trending sideways along the 52.40 mark and gold in the 1343 region. The crypto is now at a 13-month high as the number of unique daily transactions (not including inter-exchange) on Friday passed the 1 million mark.
SharesAlibaba will propose a 1:8 stock split at its next July 15 meeting ahead of the expected $20bn OPI to be held later this year in Hong Kong.
|n.d. – UK||Inflation Report Hearings|
|09:00 AM GMT – EU||Labour Cost (Q1)|
|12:30 PM GMT – US||Empire State Manufacturing Index (Jun), NAHB Housing Market Index at 14:00|
|12:30 PM GMT – Canada||Foreign & Canadian Portfolio Investment in Canadian Securities (Apr)|
|21:00 PM GMT – NZ||Westpac Consumer Survey (Q2)|
|01:30 AM GMT (+1) – China||House Price Index (May)|
|01:30 AM GMT – Australia||House Price Index (Q1) and RBA Meeting Minutes|