Random Market News, 3 July
No update tomorrow, July 4th.
"The G20 summit in the northern German city of Hamburg will be held from July 7-8. The Group of 20 leading economic nations accounts for roughly two-thirds of the world population and 80 percent of world trade."
"Brexit Winner Frankfurt Gets Another Shot at Finance Stardom.
Germany’s banking center emerges as main alternative to London.
‘It’s a bit boring, a bit dull. But then, so are many bankers’."
"Chinese Pension Inflows Surge.
For the first five months of the year, 1.58 trillion yuan (US$232.4 billion) flowed into pension funds in China, a nearly 24% surge from the same period last year, according to China’s Ministry of Human Resources and Social Security.
Total expenditure in the period increased 23.2% to 1.35 trillion yuan, leaving a balance of around 226 billion yuan. The cumulative balance stood at 4.08 trillion yuan at the end of May."
Median age in China is 37.1, US is 37.9.
"Oil major Total marks return to Iran with gas field deal.
France’s Total signed a deal with Tehran on Monday to develop phase 11 of Iran’s South Pars, the world’s largest gas field, marking the first major Western energy investment in the Islamic Republic since the lifting of sanctions against it.
The project will have a production capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, Total said in a statement, adding that the gas will supply the Iranian domestic market starting in 2021.
The first stage of the South Pars development will cost around $2-billion, Total added."
"Fed says Yellen was hospitalized for a few days, returning to work this week."
Implied rate hike probability on July 26th ~3.1%, September 20th ~18.4%; 0% probability of rate cut through June 13th, 2018.
VIX ~11.22. 10-yr treasury vol (TYVIX) ~4.82.
"Eurozone Jobless Rate Steady At Over 8-Year Low
The unemployment rate in the Euro Area came in at 9.3 percent in May 2017, unchanged from the previous month's figure and slightly above market expectations of 9.2 percent. The jobless rate remained at its lowest level since March 2009. A year earlier, the unemployment was higher at 10.2 percent.
Eurozone Factory Activity Growth Strongest Since 2011
The final IHS Markit Eurozone Manufacturing PMI came in at 57.4 in June 2017, better than the earlier flash estimate of 57.3 and above May's final figure of 57. The reading pointed to the fastest rate of expansion in the manufacturing sector since April 2011, as new work rose at a faster pace and employment growth remained close to May's 20-year record high. Also, business sentiment towards production in one year’s time improved to the highest level since mid-2012. Growth picked up in Austria, Germany, the Netherlands, Ireland, Italy and France and the Greek PMI moved back into expansion territory for the first time since August 2016. Meanwhile, Spanish factory activity growth slowed, but remained strong.
US Stocks End Mixed As Tech Rout Extends
Wall Street closed mixed on Monday, as technology shares slipped anew and energy stocks continued to rise on the back of higher crude oil prices, with the WTI trading around 2 percent higher. The Dow Jones gained 130 points or 0.6 percent to 21479. The S&P 500 edged up 6 points or 0.2 percent to 2429. Contrastingly, the Nasdaq lost 30 points or 0.5 percent to 6110.
US Factory Activity Growth At Near 3-Year High: ISM
The Institute for Supply Management’s Manufacturing PMI in the US rose to 57.8 in June 2017 from 54.9 in May and way above market expectations of 55.2. The reading pointed to the strongest rate of expansion since August 2014, as output, new orders and employment grew at faster pace.
US Manufacturing Growth Slows To 9-Month Low: Markit
The seasonally adjusted IHS Markit final US Manufacturing PMI came in at 52 in June 2017, slightly below the earlier flash estimate of 52.1 and compared with May's final reading of 52.7. The figure pointed to the weakest pace of expansion since September last year, as output, new business and employment growth slowed.
ANZ Bourses Extend Losses On Monday
Equity Markets in Australia and New Zealand fell on Monday July 3rd, extending heavy losses already sustained on Monday. The ASX 200 shed 37 points, or 0.65 percent, to 5,684.5 for its lowest close in 2 weeks as utilities, healthcare and consumer goods dragged the index lower. Fairfax Media led the decliners (-10.5 percent) after the company announced two suitors had retracted interest for a takeover. The big four banks were all marginally down. The broader All Ordinaries lost 36.5 points, or 0.6 percent to 5727. Meanwhile, New Zealand's NZX 50 shed 23 points, or 0.3 percent, to 7588.4.
Singapore Manufacturing PMI Edges Up In June
The Singapore Manufacturing PMI increased to 50.9 in June of 2017 from 50.8 in the previous month. The reading pointed to the 10th straight month expansion in the factory activity, as new orders, new exports orders, inventory, output rose at a faster pace. In contrast, employment contracted further. Meanwhile, the PMI for electronics sector decreased to 52.1 from 52.4 in May.
South Korea Inflation Rate Slows To 1.9% In June
South Korea’s inflation rate slowed down to 1.9 percent in June of 2017 from 2.0 percent in the previous month, slightly below market expectations of 2.0 percent. It was the third straight month that the inflation rate remained at the central bank's target of 2.0 percent. Lower inflation rate was mainly explained by a 0.9 percent increase in prices of industrial products (vs 1.4 percent in the previous month). In contrast, the fresh food index climbed by 10.5 percent in June (vs 5.6 percent in May). On a monthly basis, consumer prices decreased by 0.1 percent (vs expectations of no change).
South Korea Factory Activity Returns To Growth In June
The Nikkei Manufacturing PMI for South Korea rose to 50.1 in June of 2017 from 49.2 in May. It was the first expansion in factory activity since July 2016, as new orders records its first rise since May 2016 alongside renewed purchasing activity which rose for the first time this year and marked the strongest accumulation of stocks of purchases since the end of 2008. This was offset by continued reductions in output and employment while external sales fell again, primarily due to declining demand from China. Moreover, business sentiment strengthened to a 14-month high while input costs were relatively stable. In addition, output charges declined for the second straight month.
Japan Factory Activity Eases Slightly In June
The Nikkei Japan Final Manufacturing PMI came in at 52.4 in June of 2017, higher than a preliminary 52 and compared to 53.1 in May. It was the tenth straight month of expansion, although growth in output and new orders eased. Meantime, new export orders rose at the fastest pace since February and business confidence remained optimistic. On the price front, average input costs continued to increase and price inflation continued to rise. Also, suppliers' delivery times lengthened due to stronger global demand and restricted supply.
Mexico Manufacturing PMI At 13-Month High
The Markit Mexico Manufacturing PMI increased to 52.3 in June of 2017 from 51.2 in April and above market expectations of 51. The reading pointed to the strongest expansion in the factory activity since May of 2016, as output, new orders and employment rose at a faster pace. Also, despite greater production requirements, manufacturing firms reported moderate purchasing activity. On the price front, input price inflation was among the lowest seen for a year-and-a-half.
Stocks in Mexico Hit All-Time High
Mexico IPC increased to an all-time high of 50278, as domestic and US political uncertainty continues to decrease and economic resilience gradually reinstates consumer and investor confidence. In relevant economic news, the Markit Mexico Manufacturing PMI increased to 52.3 in June of 2017 from 51.2 in April and above market expectations of 51.
Kenya Producer Inflation Highest Since 2015 In Q2
Producer prices in Kenya increased 6.44 percent year-on-year in the second quarter of 2017, following a 3.38 percent rise in the previous period. It is the highest producer inflation since the last three months of 2015, as cost surged for manufacture of food products (15.93 percent s 6.34 percent in Q1) and wood and wood products (10.29 percent vs 8.22 percent) while it grew at the same pace for water (15.27 percent, the same pace as in Q1). On a quarterly basis, producer prices went up 1.61 percent.
South Africa Manufacturing Slips Back Into Contraction
The seasonally adjusted ABSA Manufacturing PMI for South Africa fell to 46.7 in June of 2017 from 51.5 in the previous month. The deterioration was broad based with four of the five main subcomponents decreasing: business activity (45.4 from 52.3 in May); new sales orders (43.7 from 54.1); employment (47.1 from 47.4) and inventories (48.9 from 49.7). Meanwhile, cost pressures eased (61.3 from 68.3) on the back of drop in oil prices and the stronger rand. Several domestic data releases, such as the economy having entered a technical recession and business confidence plunging to recession-low levels, and continued uncertainty on the political front, likely explain why respondents were notably more pessimistic about business conditions going forward. In addition, the factory sector is also bracing itself for a possible strike in the steel and engineering sectors if a wage agreement is not reached soon.
Wheat Prices Hit Near 2-Year High
Wheat prices surged to the highest level since July 17th, 2015, on Monday after the US Department of Agriculture cut its acreage estimate for plantings on Friday, that expected to be the lowest on record since the series began in 1919. Prices jumped 4.8% to $5.3 a bushel around 11:40 AM New York time."
"Recovery from cyber attack ‘long and complicated’, Maersk admits.
Operations mostly restored and IT restoration ‘progressing well’, but bookings backlogged and 1,500 customer applications need to be relaunched."
"EU authorities have approved a JV between Japanese carriers Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha (K Line)."
"US-listed shipowners go on a buying spree during first half.
International Seaways’ purchase of two Suezmax newbuild resales is just the latest example of a much broader trend: US-listed shipping companies are aggressively raising capital to buy tonnage in 2017, but are placing very few fresh orders."
"Transportation issues loom as Temple’s freight industry booms.
A recent KTMPO report shows that Texas roads are becoming congested with freight trucks. In 2011, trucks moved more than 46 percent of all freight in Texas. By 2040, it’s estimated that freight truck movement will increase by 78 percent and will account for 56 percent of all freight moved."
"Hub and spoke network leads to cost reductions at BCA Automotive."
"On Thursday evening, the world’s biggest startup campus officially opened. Around 3,000 people are going to work in this huge building. TechCrunch walked around the building with the President of France Emmanuel Macron and other officials."
"The Fintech 250: The Tech Startups Redefining The Financial Services Industry.
The Fintech 250 raised nearly $32B across 766 deals since 2013."
"Six months after acquisition, SoFi is shutting down Zenbanx.
Online lending company SoFi is closing down Zenbanx, the online banking provider it bought earlier this year. In an email sent to Zenbanx customers, the company announced that it will close all accounts at the end of next month.
Back in February, SoFi took its first step toward adding checking and credit cards to its suite of financial services through its acquisition of Zenbanx."
"Broadcom wins U.S. antitrust consent to buy Brocade: FTC.
Chipmaker Broadcom Limited has won U.S. antitrust approval to buy Brocade Communications Systems, the Federal Trade Commission said on Monday."
"Controlling a single brain chemical may help expand window for learning language and music.
Scientists have discovered that curtailing activity of the neuromodulator adenosine extends the critical period of auditory learning in mice and offers promising results for humans."
"Meenakshi Amman Temple.
This ancient Hindu temple is covered in thousands of colorful statues and has a long mythological history." http://www.atlasobscura.com/places/meenakshi-amman-temples
AU: RBA Announcement, 12:30 AM ET
GB: PMI Construction, 4:30 AM ET
EZ: PPI, 5:00 AM ET
JP: PMI Composite, 8:30 PM ET
CN: General Services PMI, 9:45 PM ET
https://tradingeconomics.com/calendar (More complete listing)