Markets returning from Labour Day overnight find Chinese markets up, led by the Hang Seng at 0.8%. The Nikkei is down a quarter percent on a Yen that seems to be gradually trending northward over the past week – a trend that sharply reversed overnight.
The pound waxes positive after UK PM May signalled she may be prepared to compromise with Labour’s Corbyn and consider a customs union with the EU – one of the major points of internal Brexit debate. With a relatively strong economy (housing prices and earnings up, and unemployment down) pushing for a hike, but Brexit uncertainty dictating caution, chances for an interest rate change later today are negligible. On the other hand, British mortgage approvals in March fell by 3k to 62,341, and Markit’s Manufacturing PMI in April dropped 2 points to 53.1 – a 2-month low. In Germany, this morning, retail sales contracted MoM, pushing the yearly figure below expectations to -2.1% in March. Throughout the Union, today’s PMIs begin with a nicely unexpected increase in Spain and Italy, and a reversal into contraction in Switzerland.
After his Open Markets Committee elected to maintain a 2.5% base rate, Fed chair Jerome Powell, defying the boss, yesterday told the press that weak inflation is transient and there is currently no need to cut interest rates. The Bank did cut its interest rate on excess reserves slightly, but Powell stressed this should not be seen as a hint for any upcoming easing. This occurred mere hours after manufacturing data diverged between the Markit institute, which put the number up 2/10 to 52.6 in April, and the ISM, which plunged the index way below expectations to 52.8. Construction spending, and mortgage applications also continued to contract, the latter, though, not as bad as expected. The dollar jumped 40 cents on the FED’s announcement after falling steadily for the past week. Manufacturing also fell in Canada yesterday to a contractional 49.7 in April, the result – a 40 pip drop in the CAD that erased the previous day’s dramatic gains.
With Blockchain processor Bitpary announcing that, forthwith, US tax payers will be able to get tax refunds in Bitcoin, this morning’s chart finds the currency up that critical $150 that raises it above the 5300-support level. And finally, oil is southern bound again after being repelled from support at $63 yesterday, as the EIA reports a much worse than expected (2mB) increase in inventories – a whopping 9.9 million barrels!
In earnings news, hedge fund giant Berkshire Hathaway this morning solved a conundrum surrounding its quarterly release next week – slated for this coming Friday by some, Monday by others. Apparently, the company will post its quarterly earnings on the internet on Saturday! Meanwhile, today we are expecting reports from Israeli drug firm Teva and sporting upstart, Under Armour.
|07:45 AM GMT – Italy||Markit Manufacturing PMI (Apr)|
|07:50 AM GMT – France||Markit Manufacturing PMI (Apr)|
|07:55 AM GMT – Germany||Markit Manufacturing PMI (Apr)|
|08:00 AM GMT – EU||Markit Manufacturing PMI (Apr)|
|08:30 AM GMT – UK||Markit Construction PMI (Apr), followed by Interest Rate Decision & Inflation Report at 11:00, and a speech by Gov. Carney at 11:30.|
|11:30 AM GMT – US||Challenger Job Cuts, Continuing & Initial Jobless Claims (April 19) at 12:30, and Factory Orders (Mar) at 14:00|
|01:30 AM GMT (+1) – Australia||Building Permits (Mar)|
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