Random Market News, 07 June
No updates on 6/8 and 6/9 due to travel.
"Investors are focused on the so-called “Super Thursday” trio events: testimony on alleged Russian interference in the 2016 U.S. presidential election from former Federal Bureau of Investigation Director James Comey, the U.K. general election and a European Central Bank meeting."
"ECB to keep taps open as economic outlook uncertain.
The European Central Bank is likely to keep the money taps fully open at its meeting on Thursday as inflation remains below its target despite stronger economic growth in the euro zone.
Against this backdrop, the ECB is widely expected to keep policy unchanged on Thursday, including its 2.3 trillion euro ($2.59 trillion) bond-buying program and sub-zero interest rates, despite resistance from cash-rich Germany."
"Wall Street gains on Comey relief.
U.S. stocks edged up after written testimony from former FBI director James Comey did not include any big surprise about an investigation into Russian meddling with last year's U.S. presidential election."
"Sinopec strategy to help China move toward unshackling retail pricing.
The unusual move by state-run Sinopec to offer surprisingly high level of discounts on retail oil products in its effort to compete with independent refiners is sending out a strong signal that China may be inching closer to unshackle its domestic market pricing from government control."
"Insurance Companies Continue to Decrease Hedge Fund Exposures.
A.M. Best: Insurance industry's investment allocations to hedge funds declined approximately 28% in 2016."
"PIMCO’s Ivascyn sees no sweeping tax reform, infrastructure spending."
The Trump administration and the Republican-controlled Congress are unlikely to produce sweeping tax or regulatory reform, according to Dan Ivascyn, global chief investment officer for Pacific Investment Management Co. Infrastructure spending will also be muted, he said. You'll probably get some tax reform and it will more likely resemble a tax cut as opposed to broad-based reform."
"Dubai-based Emaar plans to sell 30% of UAE real estate business in IPO.
The funds raised will primarily be distributed as dividends to Emaar’s shareholders, the company said in a statement on Wednesday. Emaar shares jumped as much as 7.1%, the most since January 2016, in Dubai.
The decision to IPO followed an internal review of the company’s asset values."
"BlackRock acquires First Reserve’s equity energy infrastructure operations.
BlackRock has acquired First Reserve’s equity energy infrastructure franchise. No financial terms were disclosed. Included in the transaction are two equity infrastructure funds and their investment advisers."
Implied June 14th rate hike probability ~98.1%.
VIX ~10.39. 10-yr treasury vol (TYVIX) ~4.50.
"Japan GDP Growth Revised Down To 0.3% In Q1
The Japanese economy advanced 0.3 percent on quarter in the March quarter of 2017, below preliminary estimates of a 0.5 percent expansion but at the same pace as in the prior quarter. It was the fifth straight quarter of growth.
Japan's Current Account Surplus Edges Up YoY
Japan's current account surplus edged up to 1.9 JPY trillion in April of 2017 from 1.82 JPY trillion in the same month a year ago and beating market expectations of a 1.7 JPY trillion surplus. The goods surplus stood at 0.55 JPY trillion, compared to a surplus of 0.68 trillion in April 2016, as exports fell 9.9 percent while imports dropped by 22.7 percent. The services account deficit also narrowed to -0.29 JPY trillion from -0.41 JPY trillion while the deficit of secondary income narrowed to -0.16 trillion from -0.2 JPY trillion. In contrast, the surplus on primary income widened slightly to 1.8 JPY trillion form 1.7 JPY trillion a year ago. April data marks the 34th straight month of current account surplus.
Australia's Trade Surplus Falls To 6-Month Low In April
Australia's trade surplus narrowed 85 percent to AUD 0.555 billion in April of 2017 from an upwardly revised AUD 3.169 billion in March. The figure came in below market expectations of AUD 1.95 billion as exports reported a steeper decline than imports. It was the sixth straight month that the nation recorded a trade surplus but the weakest one yet in the series. Compared to the prior month, sales of goods and services decreased by 8 percent to AUD 30.59 billion while purchases of goods and services dropped 1 percent to AUD 30.04 billion. Considering January to April 2017, the trade surplus was recorded at AUD 9.5 billion.
US Consumer Credit Rises Less Than Expected In April
Consumer credit in the United States rose by $8.2 billion in April of 2017, following an upwardly revised $19.54 billion gain in March and way below market expectations of $15.5 billion. It was the lowest increase since December of 2015. Nonrevolving credit went up by $6.6 billion, compared with a $14.2 billion rise in March. Revolving credit increased by $1.5 billion, after rising by $5.4 billion in the previous month.
US Mortgage Applications Rise The Most In 10 Months
Mortgage applications in the United States rose by 7.1 percent in the week ended June 2nd 2017, following a 3.4 percent fall in the previous period. It is the biggest gain since the week ended August 5th 2016, data from the Mortgage Bankers Association showed. Refinance applications went up 3.4 percent and applications to purchase a home jumped 10 percent. Average fixed 30-year mortgage rate edged down by 3bps to 4.14 percent.
S&P Downgrades Qatar's Rating To AA-
S&P Global Ratings has downgraded its Qatar's long-term foreign sovereign credit rating by one notch to 'AA-' from 'AA', as country's external vulnerabilities have increased and could put pressure on economic growth and fiscal metrics after a group of governments including Saudi Arabia, the UAE, Bahrain, Egypt, Libya, and Yemen moved to cut diplomatic ties, as well as trade and transport links. The outlook was placed on watch with negative implications.
India Leaves Repo Rate At 6.25%
The Reserve Bank of India held its benchmark repo rate at 6.25 percent on June 7th 2017 as widely expected, saying the decision is consistent with a neutral monetary policy stance. Policymakers added that the inflation outlook for the next months is uncertain and revised down its GVA growth forecasts by 10bps to 7.3 percent for 2017-2018. The reverse repo rate was also left unchanged at 6 percent, following a 25bps cut in April; the bank rate at 6.5 percent and the cash rate at 4 percent.
Spain Industrial Output Rises Less Than Estimated
Industrial production in Spain rose 0.7 percent year-on-year in April of 2017, slightly higher than an upwardly revised 0.6 percent gain in the previous period but below market expectations of a 1.2 percent increase. Production slowed for consumption goods (0.8 percent compared to 1.1 percent in March) and shrank for equipment goods (-4.2 percent compared to 1.1 percent). In contrast, production went up faster for intermediate goods (5.3 percent compared to 3.2 percent) and declined less for energy (-1.9 percent compared to -5.8 percent). On a monthly basis, industrial production edged up 0.1 percent, the first increase in three months.
German Factory Orders Fall More Than Expected In April
German industrial orders declined by 2.1 percent month-on-month in April of 2017, following an upwardly revised 1.1 percent rise in March while market expected a 0.4 percent drop. Overseas demand shrank 3.4 percent, as new orders from the Euro Area declined by 1.4 percent and those from other countries dropped by 4.8 percent. Also, domestic orders decreased by 0.2 percent. By sector, demand fell for capital (-3.6 percent) and consumer goods (-0.8 percent), but increased for intermediate goods (0.1 percent).
Rice Hits 50-week High
Rice increased to a 50-week high of 11.24 USD/cwt."
"145+ Tech Startups Focused On Transforming Capital Markets In One Market Map.
From the front-office to the back-office, a crop of new capital markets tech companies are looking to digitize traditional financial services operations."
"All of the digital money in the world, in one chart.
Bitcoin makes up nearly half of the $100 billion cryptocurrency market cap. So what makes up the rest?"
"AI Detects Autism in Infants (Again).
Back in February, we brought you news of a deep-learning algorithm able to predict autism in two-year-olds based on structural brain changes beginning at six months of age.
Now, the same group at the University of North Carolina has again applied machine learning to the goal of predicting autism, with equally impressive results. This time, instead of structural changes, they were able to detect changes in brain function of six-month-olds that predicted if the children would later develop autism."
"Apple makes iPhone screen fixes easier as states mull repair laws.
Apple Inc customers will soon have more choices as the company looks to reduce long wait times for iPhone repairs at its retail stores."
Random Place of the day – "The Hungarian Geological Institute Building. This hidden art nouveau gem was designed by an architect in search of a national style."
China CN: New Yuan Loans, 12:00 AM ET (down, CNY986bn)
Switzerland CH: Unemployment, 1:45 AM ET (down, 3.1%)
Germany DE: Industrial Production, 2:00 AM ET (up, 0.6% M/M)
France FR: Merchandise Trade, 2:45 AM ET
Switzerland CH: Consumer Price Index, 3:15 AM ET
European Union EZ: GDP, 5:00 AM ET (up, 0.5% Q/Q)
European Union EZ: ECB Announcement, 7:45 AM ET (flat, 0.0%)
Canada CA: Housing Starts, 8:15 AM ET (down, 200k)
USA US: Jobless Claims, 8:30 AM ET (down, 241k)
USA US: Bloomberg Consumer Comfort Index, 9:45 AM ET
USA US: Quarterly Services Survey, 10:00 AM ET
USA US: EIA Natural Gas Report, 10:30 AM ET
USA US: Money Supply, 4:30 PM ET
Australia AU: Home Loans, 9:30 PM ET
China CN: Consumer Price Index, 9:30 PM ET (up, 1.5% Y/Y)
China CN: Producer Price Index, 9:30 PM ET (down, 5.7% Y/Y)