Asian benchmarks this morning flirted with the zero line this morning after hitting 7-month highs on the US’s excellent NFP report Friday. The Shenzhen was down nearly a percent, the Hang Seng up a half, and the Nikkei down 0.14%. In China, the State Council is encouraging targeted cuts to required reserve ratios to banks financing small and medium sized enterprises, to help push economic growth. In Japan, despite a ½ trillion yen trade surplus last night, Bank of Japan Governor Haruhiko Kuroda told his managers overnight that the Japanese economy was expanding moderately, but that consumer inflation – still between 0.5 and 1% – was dictating continued quantitative easing. His assessment on regional growth is reportedly the bleakest in 6 years, moreover, as both imports and exports continue faltering.
Parliament is doing its best to agree on a deal that will convince the European Parliament to extend the April 12 deadline for Brexit once again. Theresa May’s outreach to opposition leader Jeremy Corbin have failed to result in any give or take on either side, so far, regarding custom union rules, amongst others. Hopes are now for a June 30 deadline. Meanwhile, German data this morning shows a 1.3% contraction in exports and 1.6% in imports, as Brexit, global woes and trade disputes take their toll. This morning’s EU consumer confidence index should reflect the impact of the numbers on the union.
Reacting to Chinese President Xi Jingping’s optimistic message to him, President Trump on Thursday announced that the upcoming deal between the two trade powers was close to being signed. The US dollar also received some tailwind from Friday’s excellent employment figures – a better than expected NFP that shot past expectations to 196K, and earnings and participation that – while slowing – were also better than expected.
Oil rose on Friday despite a 15-rig extension of active oil rigs, according to Baker-Hughes. And gold trading seems to be emerging from its 10-day sideways trend this morning after the People’s Bank of China increased its gold reserves for a 4th month in a row, according to the Wall Street Journal. Finally, Bitcoin is testing the 5250 resistance level for the 2nd time in less than 4 days, forming a pendant after peaking at 5321 this morning.
A week before quarterly earnings season enters full steam, Facebook is once again under fire from New Zealand’s privacy commissioner, who called the company morally bankrupt and called for government regulation. In an immediate follow-up, the UK government published plans to form a regulatory body to force the removal of harmful content within a given time-span or face harsh fines – an action directed primarily at Facebook, whose shares have shown a recent sensitivity to such public statements – losing almost a dollar a share over the weekend. Meanwhile, American Airlines extended its grounding of 737 Maxes, as the industry awaits the manufacturer’s “fixes” for technological bugs that caused the crashes of Lion Air and Ethiopian Airlines last month.
|08:30 AM GMT – EUR||Sentix Investor Confidence (Apr)|
|12:15 PM GMT – Canada||Housing Starts & Building Permits (Feb)|
|14:00 PM GMT – US||Factory Orders (MoM) (Feb)|
|01:30 AM GMT (+1) – AUD||Home Loans (Feb)|
|N.D. – China||Foreign Exchange Reserves (MoM) (Mar)|
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