Random Market News, 19 July
"ECB chief Mario Draghi is expected to highlight the euro area's strengthening economy while underlining the need for caution as the bank inches toward ending its stimulus. But interest rates will not rise anytime soon.
The European Central Bank (ECB) has been buying bonds worth 60 billion euros ($69 billion) every month and its current plan foresees no change in the level of bond-buying at least until the end of December this year. The central bank might then gradually reduce the volume of its purchases."
"PBOC Sheds Light on the Fiscal Factor as It Seeks Calmer Markets.
Central bank is flagging government spending as liquidity spur.
China is seeking a ‘neither tight nor loose’ monetary stance.
China’s central bank is offering investors an unprecedented running commentary on how it deals with one of the most unpredictable actors in the market: the government."
"A net 48% of money managers believe global monetary policy is "too stimulative," the highest reading since April 2011 and up from a net 47% in June, said Bank of America Merrill Lynch's monthly fund manager survey released Wednesday.
The July survey also found that a crash in global bond markets and a policy mistake by the Federal Reserve or European Central Bank are viewed as the biggest tail risks to the market, according to 28% and 27% of managers, respectively.
On global growth and profit expectations, only a net 38% of investors predicted a stronger economy over the next 12 months, down from a net 39% in June and a net 62% in January. Additionally, only a net 41% of investors predicted global profits will improve over the next year, the lowest reading since the U.S. election and down from a net 43% in June."
"Japan-EU Free Trade Deal Will Rival NAFTA in Size.
Trade flows between the EU and Japan are significant. According to the IMF’s Direction of Trade statistics, the EU’s exports of goods to Japan totaled $64.2 billion in 2016, making it the EU’s fifth largest export market for goods and the second largest export market in Asia, after China. Japan exported $73.7 billion in goods to the EU in 2016, making it Japan’s third largest goods export market, after the United States and China. Looking at the combined GDP of the two partners, the agreement would create an economic trading bloc of comparable size to NAFTA (in 2016, $21.3 trillion in nominal GDP for EU-Japan, $21.1 trillion for NAFTA)."
"Argentina just issued a 100-year bond. Despite a history of defaults over the past 100 years, investors seem happy to try their luck for the next 100. Are they being wise or foolish?
One factor in favour of investors is that the yield on the hard-currency bond when it was issued was 7.9%. If recoveries after defaults are expected to be 40%-50%, they will not have to wait many years to break even.
Argentina just issued $3bn (€2.6bn) of debt that the government said it didn’t need."
"The U.S. ranks 17th globally in retirement security, down three spots from last year, the Natixis Global Asset Management 2017 Global Retirement Index shows."
Implied rate hike probability on July 26th ~3.1%, September 20th ~8.2%; 0% probability of rate cut through June 13th, 2018.
VIX ~9.79. 10-yr treasury vol (TYVIX) ~3.87.
"US Stocks Book Fresh Records Boosted By Earnings
Wall Street closed moderately in the green on Wednesday July 19th of 2017, as oil prices climbed over 1 percent and banks and technology shares rose on strong corporate earnings, with all three major indices reaching new records. The Dow Jones advanced 66 points or 0.3% to 21641. The S&P 500 gained 13 points or 0.5% to 2474. The Nasdaq climbed 41 points or 0.6% to 6385.
Stocks in Hong Kong Hit 24-month High
Hang Seng increased to a 24-month high of 26745.
Stocks in Singapore Hit 23-month High
STI increased to a 23-month high of 3328.
Eurozone Construction Output Rises at Slower Pace in May
Construction output in the Eurozone rose by 2.6 percent year-on-year in May 2017, easing from an upwardly revised 3.3 percent gain the previous month. Building activity increased 2.5 percent (3.4 percent in April) and civil engineering went up 2.8 percent (2.6 percent in April). Among the member states for which data is available, the largest increases were recorded in Germany (6.4 percent), France (4.2 percent), and Italy (2.9 percent), while construction output contracted in Spain (-5.6 percent). On a monthly basis, construction activity shrank 0.7 percent after rising by 0.3 percent in April.
Belgium Consumer Confidence Strongest In Over 10 Years
Belgian consumer confidence index increased to 2 in July 2017 from -2 in the previous month. It is the highest reading since May of 2007, as households became less worried about rising unemployment over the next twelve months (3 from 8 in June) and expect to save more in the future (5 from -2). Also, opinion concerning the financial situation improved (1 from -1) while expectations regarding the country's economic situation remained stable at 4.
US Crude Oil Inventories Fall for 3rd Week
Stocks of crude oil in the United States fell by 4.727 million barrels in the week ended July 14th, 2017, following a 7.564 million drop in the previous period and higher than market expectations of a 3.214 million decline. Gasoline stocks decreased by 4445 thousand, compared to expectations of a 655 thousand decline.
US Mortgage Applications Rise 6.3% in Latest Week: MBA
Mortgage applications in the United States jumped 6.3 percent in the week ending July 14, 2017, following a 7.4 percent drop in the previous period, data from the Mortgage Bankers Association showed. Applications to purchase a home went up 1.1 percent and refinance applications rose 13 percent. The average fixed 30-year mortgage rate was unchanged at 4.22 percent.
Portugal Posts Largest Current Account Gap in 6 Years
The Portuguese current account deficit widened to EUR 1,427 million in May 2017 from EUR 826 million in the same month a year earlier. It was the largest current account deficit since June 2011, as the primary income gap rose to EUR 1,734 million from EUR 1,349 million the previous year and the goods deficit increased to EUR 1,168 million from EUR 764 million. Meanwhile, the services surplus increased to EUR 1,364 million from EUR 1,148 million in the same period last year, with tourism revenues rising to EUR 1,337 million from EUR 1,116 million. The secondary income surplus went down to EUR 112 million from EUR 140 million in May 2016. In the January to May period, the current account deficit widened to EUR 1,056 million from EUR 749 million in the same period of 2016.
Russia Producer Inflation Slows To 14-Month Low
Producer prices in Russia increased 2.9 percent year-on-year in June of 2017, slowing from a 5.9 percent rise in May. It is the smallest producer inflation since April of 2016 as prices rose at a slower pace for mining (0.5 percent from 5.4 percent in May), manufacturing (3.1 percent from 5.7 percent) and electricity, gas and water supply (5 percent from 7.6 percent). On a monthly basis, producer prices fell 0.3 percent.
Canadian Dollar Hits 14-month High
USDCAD decreased to a 14-month low of 1.2579.
Australian Dollar Hits 26-month High
AUDUSD increased to a 26-month high of 0.79595."
"Digitalization Boosts Demand for Supply Chain Software.
If big numbers impress you, try the number $13 billion on for size. That’s how big analyst firm Gartner says the supply chain management (SCM) market will be by the end of this year, or at least that part of the market comprised of software revenue. That’s a gain of 11% from 2016.
In fact, the SCM software market is on pace to exceed $19 billion by 2021, as software as a service (SaaS) enables new revenue opportunities."
"Online freight marketplaces ‘not a threat to forwarders’.
Forwarders and shippers unwilling to implement digital solutions will increasingly be left behind by rivals able to generate cost savings and service improvements through new technologies, according to 25-year logistics veteran Alex Ruf."
"‘Pop-up’ automated sorting centre unveiled as e-logistics solution.
Prime Vision and Unmanned Life say the ‘pop-up’ sorting centre can be deployed in any building in less than a day, and recently performed a live demonstration of their Autonomous Sorting solution in The Netherlands. With an empty warehouse as a venue, the presentation demonstrated a sorting centre manned only by autonomous robotic unmanned vehicles (UVs)."
"Kuehne + Nagel has acquired two companies, the USA based leading airfreight forwarder of perishables products CFI - Commodity Forwarders Inc., and perishables specialists in Kenya Trillvane Ltd. With this acquisition, Kuehne + Nagel expands its global perishables network by adding more than 150,000 tonnes of perishables and further strengthens its position in providing end-to-end international and domestic fresh chain solutions."
"South Korean yards see shipbuilding market improving as new orders rise.
The country’s largest shipbuilder Hyundai Heavy Industries (HHI), and its affiliate yards, have secured new orders worth a combined $4.2bn for 72 ships in the first six months, representing a significant increase from $1bn for 13 ships in the year-ago period, local media Yonhap reported."
"Prime Day proves lucrative for non-Amazon retailers.
Online sales for other retailers grew 44% on Prime Day 2017 compared with last year's event, Salesforce Commerce Cloud finds."
"During General Mills, Inc.’s annual investor day, held July 12, company executives outlined a number of strategic priorities. E-commerce represents approximately 1.5% of the company’s total sales in the United States today, and management expects the number to grow to 5% by 2020.
“Last fiscal year, our e-commerce sales grew 60% in the U.S, which is 20 points faster than the growth in on-line food today,”"
"AsiaInspection Report: Supplier audits remain essential.
The Hong Kong-based consultancy has just released its 2017 Q3 Barometer, a quarterly synopsis on outsourced manufacturing and quality control measures indicating that supply chain transparency is far from adequate nearly everywhere in the Pacific Rim’s emerging markets matrix."
"Fake Malaria Meds Meet Their Match in a Handheld Spectrometer.
Up to 35 percent of antimalarial drugs are useless. Engineers are combatting this counterfeit menace.
But these knockoffs can’t fool chemistry. That’s why engineers from Global Good, a philanthropic invention lab in Bellevue, Wash., are trying to solve the counterfeit problem with a handheld device that uses optical spectrometry to check the chemical composition of medications."
"Engineered liver tissue expands after transplant.
To help address that shortage, researchers at MIT, Rockefeller University, and Boston University have developed a new way to engineer liver tissue, by organizing tiny subunits that contain three types of cells embedded into a biodegradable tissue scaffold. In a study of mice with damaged livers, the researchers found that after being implanted in the abdomen, the tiny structures expanded 50-fold and were able to perform normal liver tissue functions."
"Lithium Ion Advances Could Make Electric Vehicles as Cheap as Gas Power in 10 Years.
Energy storage is one of the main limitations of solar power.
But a new meta-analysis of the progress of green energy forecasts coming lithium-ion improvements will make electric vehicles as cheap as their gasoline-only counterparts in about a decade – and residential energy storage of solar as economically attractive after 2035."
"Global standard coming for next-generation mobile service.
Common specs for 5G to lower costs and speed 'internet of things'."
"Leap Motion, the US-based creator of motion tracking technology for virtual and augmented reality, has raised $50 million in a Series C funding led by clients advised by J.P. Morgan Asset Management, according to the company’s announcement on Tuesday."
"LiveStories raises $10 million to help you access public health and census data.
The Seattle-based startup sources data from federal, state, and local governments, including The Bureau of Labor Statistics, the U.S. Census, and the Centers for Disease Prevention and Control."
"Google’s right to be forgotten appeal heading to Europe’s top court."
"The Court of Justice of the European Union (ECJ) heard arguments on Wednesday over whether to allow a class action suit against Facebook, brought by Austrian privacy activist Max Schrems - and about 25,000 other users across the globe."
"Holiday Nostalgia Train.
Once a year a vintage subway train runs from Manhattan to Queens, with a detour through the 20th century."
CH: Merchandise Trade Balance, 2:00 AM ET
DE: PPI, 2:00 AM ET
HK: CPI, 4:30 AM ET
GB: Retail Sales, 4:30 AM ET
EZ: ECB Announcement, 7:45 AM ET
US: Jobless Claims, 8:30 AM ET
US: Bloomberg Consumer Comfort Index, 9:45 AM ET
EZ: EC Consumer Confidence Flash, 10:00 AM ET
US: Leading Indicators, 10:00 AM ET
US: EIA Natural Gas Report, 10:30 AM ET
US: Fed Balance Sheet, 4:30 PM ET
US: Money Supply, 4:30 PM ET
https://tradingeconomics.com/calendar (More complete listing, including consensus)