Random Market News,
05 June 2017
"Markets Face Three Big
Geopolitical Risks This Week.
Persian Gulf troubles coincide with
U.K. vote and Comey event."
"Analysis: Qatar diplomatic
crisis not seen impacting oil, LNG shipping."
"Qatar Airways Middle East
landing & airspace restrictions; wider ramifications for global aviation.
Three of the four countries banning
Qatari flights from landing are party to the Transit Agreement: Bahrain
(12-Oct-1971), Egypt (13-Mar-1947) and the UAE (25-Apr-1972).
There is no police force to enforce
commercial international compacts and, while ICAO [International Civil Aviation
Organization, https://www.icao.int/Pages/default.aspx] nominally has dispute resolution
powers, they have scarcely been resorted to in 70 years and are largely
ineffective. "
"JPMorgan Has a Surprisingly
Simple Theory for Low Volatility.
The strategists look at the size of
revisions to global growth forecasts made by the bank’s analysts as a proxy for
macroeconomic surprises generally, and overlay this with implied market
volatility levels across rate, credit, equity, currency and commodity markets.
The result: economic surprises and volatility move in a "remarkable"
lockstep, according to the JPMorgan team."
"Under Pressure: Is Inflation
Back?
We consulted specialists across the
GSAM investment platform on the range of factors driving inflation, from the
temporary glitches that may be clouding the near-term outlook, to the secular
drivers that should prevail in the longer term. On balance, we believe a
gradual normalization of global price pressures is under way, but the process
will remain uneven for the foreseeable future."
"Invesco Global Sovereign Asset
Management Study 2017.
Key themes:
Shift from investment strategy to
business model.
Increasing appeal of perceived ‘safe
haven’ markets.
Attraction to real estate for
matching and flexible participation.
Environmental, social and governance
(ESG) growth dependent on performance data.
Central bank risk appetite driven by
financial market exposure."
http://igsams.invesco.com/dist/pdf/igsams-2017-emea.pdf
"Supreme Court limits SEC's
power to recover ill-gotten gains.
In a 9-0 ruling, the Supreme Court
found that the SEC's recovery remedy known as "disgorgement" is
subject to a five-year statute of limitations. The justices sided with New
Mexico-based investment adviser Charles Kokesh, who previously was ordered by a
judge to pay $2.4 million in penalties plus $34.9 million in disgorgement of
illegal profits after the SEC sued him."
http://www.reuters.com/article/us-usa-court-sec-idUSKBN18W1UQ
Data dump.
Implied June 14th rate hike
probability ~94.6%.
http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
VIX ~10.07. 10-yr treasury vol
(TYVIX) ~4.37.
http://www.cboe.com/products/vix-index-volatility/volatility-on-interest-rates
10yr Sovereigns.
https://www.investing.com/rates-bonds/government-bond-spreads
FX.
https://www.investing.com/currencies/streaming-forex-rates-majors
Equity.
https://www.investing.com/indices/major-indices
Commodities.
https://www.investing.com/commodities/real-time-futures
News feed.
"Japan Average Cash Earnings
Beats Consensus in April
Average cash earnings in Japan rose
by 0.5 percent year-on-year in April 2017, following an upwardly revised 0
percent gain in the previous month and above market expectations of a 0.3
percent rise. It was the highest growth in cash earnings since December 2016.
By industry, earnings increased the most for: mining & quarrying of stone
& gravel (+6.2 percent); followed by finance & insurance (+4.1 percent);
wholesale & retail trade (+3.6 percent); and living-related & personal
services & amusement services (+3.4 percent). Conversely, earnings for
"electricity, gas, heat supply & water" decreased the most (-6.1
percent).
US Unit Labour Costs Rise Less Than
Expected
Unit labor costs in the US nonfarm
business sector increased a seasonally adjusted annualized 2.2 percent on
quarter in the first three months of 2017, final figures showed. It compares
with a 3 percent gain in the preliminary estimate and a downwardly revised 4.6
percent drop in the previous period. It is the highest gain in three quarters,
reflecting a 2.2 percent increase in hourly compensation while productivity was
unchanged. Unit labor costs increased 1.1 percent over the last four quarters.
US Services Sector Growth Slows
Slightly In May: ISM
The ISM Non-Manufacturing PMI index
for the United States fell to 56.9 in May of 2017 from 57.5 in April, slightly
below market expectations of 57. Production and new orders rose at a slower
pace while employment picked up. The majority of respondents’ comments continue
to indicate optimism about business conditions and the overall economy.
US Factory Orders Post First Drop In Five Months
New orders for manufactured goods in the United States fell 0.2 percent
month-over-month in April 2017, following an upwardly revised 1 percent gain in
March and in line with market expectations. It was the first drop in new orders
for US-made goods since November last year, as orders fell for electrical
equipment, appliances and components (-2 percent), transportation equipment
(-1.4 percent) and machinery (-0.7 percent). Compared with the same month a
year ago, factory orders were up 4.4 percent.
Mexican Peso Gains 1.9% Amid
Electoral Outcome
The Mexican Peso appreciated 1.9
percent around 4 p.m. NYT to a 29-week low of 18.33 after President Peña's
party won a key election ahead of the 2018 presidential race. The centrist PRI
retained the governorship over leftist Morena in the State of Mexico (13.2% of
the electoral roll) by a thin margin of 3 pps on Sunday.
Brazil Service Sector Returns To
Contraction In May
The seasonally adjusted Markit Brazil Services PMI Business Activity Index fell
to 49.2 in May 2017 from a near two-year high of 50.3 in April and way below
market expectations of 50.8. Output dropped after rising in April for the first
time in 26 months and incoming new business expanded at the slowest rate in
four months. Also, employment continued to contract, as service providers'
sentiment towards the 12-month outlook remained weak amid political uncertainty
and security concerns. On the price front, input cost inflation reached a
four-month high while output charges rose at a slower pace."
https://tradingeconomics.com/stream
"SoftBank’s India solar
ambitions may gain from Modi’s EV push.
SoftBank, which has said it will
invest up to $20 billion along with Foxconn Technology and Bharti Enterprises
in solar projects in India, estimates the electrification drive could create a
requirement for over 150 gigawatt (GW) of additional power.
India has an ambitious target to
generate 100 GW of solar power by 2022 and while President Donald Trump is
pulling the United States out of the Paris accord on climate change, India is
sticking to its renewable energy commitments."
https://www.dealstreetasia.com/stories/softbanks-india-solar-ambitions-may-gain-modis-ev-push-74307/
"Heavy Dose: Deals To
Pharmaceutical Startups Reach New High.
The majority of deals to pharma
companies are seed, angel, and Series A rounds."
https://www.cbinsights.com/blog/pharma-startup-funding-deals-investments/
"Are indoor farms the next step
in the evolution of agriculture?
This year, it will open another
plant factory at Kansai Science City, on the borders of Kyoto, Nara and Osaka
prefectures. Between the two factories the company will be able to produce
50,000 heads of lettuce each day.
What makes the new facility
different is the level of automation: tasks such as raising seedlings,
replanting and harvesting will be done by machines and guided by artificial
intelligence, a move that will cut labor costs by 50 percent and boost
profitability. In 2016, Spread was awarded a gold medal at the Edison Awards in
recognition of its role in agricultural innovation."
"Grave of Carl Friedrich Gauss.
The man who gave his name to magnetic measurement is buried in the city where
he did his best work.
It’s hard to fully comprehend how
important Gauss has been to mathematics and the sciences. His contributions
include groundbreaking proofs and discoveries in algebra and geometry, numbers
theory and statistics, physics and astronomy."
http://www.atlasobscura.com/places/grave-of-carl-friedrich-gauss
"Welcome to the Comedy Wildlife
Photography Awards."
https://www.comedywildlifephoto.com/gallery/2016_finalists.php
Australia AU: RBA
Announcement, 12:30 AM ET
European Union EZ: Retail
Sales, 5:00 AM ET
USA US: Gallup US ECI, 8:30
AM ET
USA US: Redbook, 8:55 AM ET
USA US: JOLTS, 10:00 AM ET
(down, 5.725m consensus)
Australia AU: GDP, 9:30
PM ET
http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html