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[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

 

Today’s coverage:

 

Indices: Europe expected to open down after Wall St indices all hit 6/7wk lows as UST yields surge. APAC mkts down

FX: UST yields continue to climb, pushing USDJPY further into 24yr highs – yen weakness also as BoJ boosts JGB purchases. Watching USDCAD  ahead of expected 75bls BoC rate hike to 3.25%. Watching GBP ahead of Halifax house prices.

Equities: Earnings: SMWH HFD BDEV. Musk requests delay to TWTR court case for more data collection from whistle-blower

Commods: Gold down on stronger USD. Oil on 8mth lows on demand concerns. Base metals all down. BTC $1000 away from 22mth lows  

 

 

 

[MongiIG]

Early Morning Call: US, APAC equity markets fall while USD rises

Europe expected to open down after Wall Street indices hit 6/7-week lows as UST yields surged; APAC markets also down. USD/JPY at 24-year highs; watching USD/CAD ahead of expected 75-bps BoC rate hike to 3.25%.

 

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 07 September 2022 

Equity markets overview

APAC equity markets recorded another session of losses, following the lead of US indices yesterday.

The Nikkei is trading at a seven-week low, while Hong Kong’s Hang Seng is closing down on long-term support, after China's trade surplus unexpectedly dropped to a three-month low in August, mainly because of a softer rise in exports. The ASX 200 fell 1.43%.

Major economic news

Australia's economy expanded by 0.9% in the second quarter (Q2) compared to the previous one, below the 1% expected by economists, but higher than the first quarter's (Q1) 0.7% rise. On a year-on-year (YoY) basis, growth accelerated to 3.6%.

In Europe, indices opened the session lower. German industrial production fell by 0.3% in July month-on-month (MoM). Economists had anticipated a 0.5% fall.

In the UK, Halifax house prices rose by 0.4% in August on a month-on-month basis, bouncing back after last month’s 0.1% fall. At 10am, Eurostat will release the second estimate of Eurozone Q2 gross domestic product (GDP) growth rate. Economists forecast a 0.6% increase quarter-on-quarter (QoQ).

In the US, markets await the July trade balance at 1.30pm. Tonight, the Federal Reserver (Fed) will give its update on the current economic situation with the publication of the Beige Book at 7pm.

Forex overview

The dollar continues to strengthen with the dollar index now trading above 110, a first since June 2002.

Against the yen, the greenback hit a fresh 24-year high. And in a context of global policy tightening, the Japanese currency continues to spiral down against major currencies as the Bank of Japan (BoJ) remains convinced its ultra accommodative stance to support the Japanese economy is the right path to follow. The BoJ has also been boosting its purchase of Japanese bonds which also weakens a currency.

The Bank of Canada (BoC) is set to deliver a fourth consecutive outsized interest rate hike to slow the Canadian economy and drag inflation down from four-decade highs.

All 31 economists surveyed by Bloomberg expect policymakers, led by Governor Tiff Macklem, to raise the benchmark overnight rate by at least 50 basis points, and most say it will be 75 basis points. That would bring the policy rate to 3.25%, the highest amongst major economies.

Earnings overview

Barratt Developments PLC has meanwhile announced a share buyback worth £200 million while posting record annual profit. Adjusted pre-tax profit rose about 15% to £1.05 billion for the year ended June 30, in line with market expectations. Revenue rose by 9.5% to £5.27bn.

Halfords Group PLC has confirmed its full-year guidance, expecting profits to be higher in the second half (H2) of the year.

Commodites

On the commodity front, oil prices are down this morning. WTI and Brent have both broken support and now trade at eight-month lows.

Gold is also trading lower, having fallen overnight below $1,700.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 7 September

FTSE 100, DAX 40 and S&P 500 on back foot as yields surge. EUR/USD, GBP/USD and AUD/USD expected to remain on the back foot. And gold, US natural gas and oil prices slip on stronger US dollar.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Thursday: EUR/USD; USD/JPY; Vistry H1

The big week for interest rates continues on Thursday with the European Central Bank which is widely expected to deliver at least a 50-bps rise, possibly 75-bps. Some analysts say if it is only half a point the euro could suffer.

Meanwhile Japan GDP could move USD/JPY. Then on earnings, UK housebuilder Vistry is on the slate for H1 earnings.

 

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Europe up at the start after the best day on Wall St in a month. Gains for much of Asia overnight as Japan GDP rose more than expected.

FX: GBPUSD sinks to 1985 levels as mkts wake up to the new govt’s economic challenge. This despite USD’s worst days in a month on small retracement…awaiting weekly jobless claims. Watch EUR as ECB sets rates later today

Equities: Earnings – DARK VTY SAFE

Commodities: Oil another big decline on the ongoing recession fears. Gold holding Wedneday’s gains  

 

 

 

[MongiIG]

Early Morning Call: Risk assets climb as USD retraces

Europe expected to start the day up after gains across Wall St and an encouraging GDP number out from Japan.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 8 September

FTSE 100, DAX and S&P 500 on the front foot after bounce. EUR/USD and GBP/USD bounce off multi-decade lows while USD/CAD tops out. And gold, Brent crude and lumber make tentative gains after prolonged period of downside.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Friday: China CPI; French factory production

With little or no corporate data, we look at USD/CNH around the consumer price inflation data out overnight. Then industrial production in France could give a steer to the CAC 40.

Finally, could the weekly Baker Hughes rig count help support the drop in oil?

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

IGTV will lead on a brief message of condolence then deliver an update

Indices: Europe expected up  following a rise on Wall St

FX: USD easing for a 3^rd day

Commods: gold up for 8^th day and oil and other commodities also higher

 

[MongiIG]

Early Morning Call: USD easing for a third day

Europe is expected to open up following a rise on Wall Street. USD is meanwhile easing for a third day. Gold is up for an eighth consecutive day while oil and other commodities are also higher.

 

 

 Jeremy Naylor | Writer, London | Publication date: Friday 09 September 2022 

APAC equity markets

Asia-Pacific equity markets rose overnight, following the lead of US indices yesterday.

China’s CSI 300 and Hong Kong’s Hang Seng outperformed the region, as China consumer price index (CPI) unexpectedly fell in August by 0.1% on a month-on-month (MoM) basis. Economists had anticipated an increase of 0.2%. Year-on-year (YoY), CPI increased 2.5%, slower than the 2.7% recorded in July, and missing expectations of 2.8%.

Producer price index (PPI) hit an 18-month low, as it rose by 2.3%, down from the 4.2% posted in July, and below consensus of 3.1%.

The latest China inflation data lifted industrial metals, easing concerns about falling demand due to higher prices. Copper and aluminium rose as much as 2% on the news.

In Canada at 1.30pm, economists expect the unemployment rate to rise to 5% in August from 4.9% the previous month. And a bit later at 3pm, US wholesale inventories are forecast to show a month-on-month rise of 0.8% for the month of July, down from 1.9% in June.

Currency markets

On the currency markets, the dollar basket is off its two-decade high, and on track to post its first weekly decline after three straight weeks of gains. The euro is back above $1, after the European Central Bank (ECB) raised its interest rates by 75 basis points (bps) and signalled that more hikes were to come. The main refinancing rate now stands at 1.25% and the deposit facility rate at 0.75%, both at their highest level since 2011.

In its statement, ECB Chief Christine Lagarde said she expects interest rates to rise further as “inflation remains far too high and is likely to stay above our target for an extended period.” Inflation increased by 9.1% in August, and the ECB's new projections see it peaking near this level just before the end of this year.

The ECB also cut its growth projections. It expects economic stagnation over the winter months with growth to fall sharply in 2023, down to 0.9% from 2.1%.

Commodities

The dip in the dollar brings some support to gold, now set for a small weekly gain.

Oil prices are off their multi-month lows but poised to post a second week of losses in a row. Markets await Baker Hughes rig count data tonight at 6pm.

Last week, total rig count fell by five to 760, which was entirely due to a decline in oil rigs in operation. The number of producing oil rigs fell by nine to 596, while the number of gas rigs rose by four to 164.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 9 September

FTSE 100, DAX 40 and S&P 500 recover despite rate hikes. EUR/USD, GBP/USD recover further from multi-decade lows while EUR/GBP falters. And gold, oil and copper prices edge higher.

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Europe expected to open up after one of the biggest single day rallies since mid-June. FTSE100 bumping up against 200-day SMA. APAC up - Japan travel stocks climb on border relaxation for tourists. Mainland China  & HK closed today for mid-Autumn Moon Festival  

FX: USD holding Friday’s losses. Yen a little weaker after Friday’s gains on words of support from the Japanese govt. GBP awaiting UK monthly GDP and trade data at 7am  

Equities:  Oracle fiscal Q1 earnings after the bell this evening – watch the numbers as these are the first since the company bought medical software tech biz Cerner

Commods: Gold easing back into Friday’s gains and same price action for oil

 

 

 

[MongiIG]

Early Morning Call: watching sterling amid slow UK economic growth in July

Europe expected to open up after one of the biggest single day rallies since mid-June. USD holding Friday’s losses while GBP in focus as UK economy grows less than anticipated in July.

 

 Jeremy Naylor | Writer, London | Publication date: Monday 12 September 2022

Equity marketws overview

Asia-Pacific equity markets rose overnight, as did US indices on Friday.

Japan’s Nikkei 225 ended the session up 1.16%, Australia’s ASX 200 rose 1.02%. Hong Kong and Mainland China indices are closed today for the Mid-Autumn Moon Festival.

In Europe, indices also started the session higher, although the UK session is hesitant, after the latest UK gross domestic product (GDP) data showed less than expected growth of 0.2% in July. Industrial production increased by 1.1% in July year-on-year (YoY), less than the 1.9% anticipated.

Last Friday, the Bank of England (BoE) postponed this week's interest rate decision following the death of Queen Elizabeth II. "In light of the period of national mourning now being observed in the United Kingdom, the September 2022 meeting of the Monetary Policy Committee (MPC) has been postponed for a period of one week. The Committee's decision will be announced at 12 noon on 22 September."

This marks the first postponement of the BoE since it became operationally independent 25 years ago.

Since the highs of January this year, US indices are in a downward trend. After the recent bear market summer rally, equity markets are on the way down again and some analysts are suggesting that they could drop further as the Federal Reserve (Fed) is due to accelerate the unwinding of its balance sheet this month.

The Federal Reserve's balance sheet has more or less doubled since the pandemic, to $9 trillion. In June it began unloading some of the Treasuries and mortgage-backed securities it holds at a pace of $47.5 billion. This month, the Fed will be ramping up the pace to $95 billion, $60 billion in Treasuries, and $35 billion of mortgage securities.

To some, combined with higher interest rates and the soaring dollar, the acceleration of quantitative tightening could further weigh on asset prices. The latest comments from Fed officials suggest that the bank could come up with yet another oversized interest rate increase. Fed board member, Christopher Waller, said on Friday he was not convinced the inflation was yet "moving meaningfully and persistently downward", and on that basis would be supporting a significant increase at the Fed's next meeting on September 20-21.

This Tuesday, we'll get the last round of inflation data before Fed bankers meet. Economists expect the headline figure to decelerate to 8.1% in August YoY, from 8.5% in July, but core inflation is seen rising to 6.1% YoY, after hitting 5.9% the previous month.

In Japan, senior government officials say the country must take steps as needed to counter excessive declines after the 24-year lows last week. The comments from Seiji Kihara, the deputy chief cabinet secretary of Prime Minister Fumio Kishida's government, are the latest to highlight authorities' deep concern about the yen's slide.

Kihara also said the government will consider "in the not-so distant future" relaxing strict border measures to further open Japan's borders to overseas visitors, such as by scrapping a cap on the daily number of entrants.

Corporate news overview

Little news is expected on the corporate front this Monday. Oracle Corp (All Sessions) is expected to report its quarterly results tonight after the US closing bell. Analysts anticipate the group to post earnings of $1.08 per share, which is about 5% higher than the same quarter last year. Revenue is forecast to rise by about 17% to $11.33 billion.

The market will be particularly attentive to the group's level of debt. Following the merger with Cerner Corp, liabilities increased by about $20bn to $57.6bn. As for the full-year forecast, current estimates are of earnings per share (EPS) of $5.25, on sales of $49.80bn.

Commodities

On the commodity markets, oil markets have started the week in the red. Friday’s Baker Hughes total rig count fell by 1 to 759, due to a fall of the number of oil rigs in operation. The Number of producing oil rigs fell by five to 591, while the number of gas rigs rose by four to 168.

According to research institute Energy Aspects, China's oil demand could fall this year. Crude imports are already down 4.7% during the first eight months of the year compared to the same period in 2021, and the ongoing zero-COVID policy is very likely to affect travel during the mid-Autumn festival that started this weekend.

Energy Aspects estimates that fuel demand could fall by 380,000 barrels per day, to just over eight million barrels per day (bpd).

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 12 September

FTSE 100, DAX and S&P 500 on the up as the new week begins. EUR/USD, GBP/USD recover further from multi-decade lows while EUR/GBP stalls. And gold, Brent crude and lumber on the rise as the dollar loses traction.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

 

[MongiIG]

Market data to trade on Tuesday: DAX; EUR/USD; OCDO

Could the German ZEW economic sentiment index bring a halt to the gains on the DAX? It’s one of the main releases that could give a steer to the market.

Outside of this US inflation data is expected to give a renewed boost to the dollar. And we’re watching a Q3 release from Ocado (OCDO).

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Mixed European open after a second day of solid gains. Wall St and APAC mkts up

FX: Watching EURUSD ahead of an expected fall in US CPI data as fuel and travel costs drop and an expected drop in German ZEW data

Equities: Earnings – OCDO FEVR. ORCL up 3.1% in earnings last night. Sky reports Schneider is close to buying the reminder of Aveva (AVV) it doesn’t already own

Commods: Gold down after hitting a 2wk high. Oil resting back into 3 days of gains. Lumber is now up 25% over 4 sessions

 

 

 

[MongiIG]

Early Morning Call: GBP rises against USD, after lower than expected UK unemployment rate

Watching sterling after a lower-than-expected UK unemployment rate. USD meanwhile little changed ahead of CPI data. ORCL up 3.1% in earnings last night.

 

 Jeremy Naylor | Writer, London | Publication date: Tuesday 13 September 2022

Equity markets overview

Global equity markets ended the session higher yesterday, after concluding on a positive note last week.

In the US, the NASDAQ Composite outperformed the Dow Jones and the S&P 500.

In Japan, the Nikkei 225 ended the session 0.25% higher. Producer price index (PPI) in the country rose by 0.2% in July on a month-on-month (MoM) basis, below the 0.4% anticipated by economists. Year-on-year (YoY) factory gate prices rose by 9%, broadly in line with expectations.

In Australia, the SPDR S&P/ASX 200 Fund rose 0.65%, as Westpac consumer confidence rose for the first time in nine months. The index climbed up to 84.4 in September, from 81.2 the month before. The increase was a surprise to some economists given the soaring cost of living and the recent 50-basis point (bps) increase of the Reserve Bank of Australia's (RBA) official cash rate. The index is still down 20% from September last year.

NAB business confidence also rose to 10 for the month of August, from eight in July.

In the UK, the unemployment rate unexpectedly fell to 3.6%. Economists were anticipating it to remain at 3.8%. Sterling reacted positively to the news.

Later this morning, Germany's ZEW economic sentiment is expected to fall further to -60 in September, from -55.3 in August. And at 1.30pm, we'll get the last US inflation reading before Federal Reserve (Fed) bankers meet. Economists expect the headline figure to decelerate to 8.1% in August YoY, from 8.5% in July. However, core inflation is seen rising to 6.1% YoY, after hitting 5.9% the previous month. The dollar is little changed ahead of CPI data.

Earnings overview

Elsewhere on the equity market, look out for Ocado Group PLC. Sales in the third quarter (Q3) missed expectations, rising by 2.7% to £532 million. The number of active customers rose by 23% YoY, sending the number of average orders per week up by 10.7%. But while customers and orders have grown, customers are spending less. The average basket value is down 6% to £116.

Ocado now expects a small sales decline over the full 2022 year and close to break-even core earnings.

Fevertree Drinks PLC posted a pretax profit of £17.6m, to be compared to the £25.3m reported a year ago. Revenue rose by 14% to £160.9m.

According to Sky News, Schneider Electric SA is nearing a deal to take full control of Aveva Group PLC for about £3.5 billion. Schneider and Aveva's Boards are said to be discussing a price of more than £30 per share for the 40% Schneider doesn't own. Aveva declined to comment, while Schneider did not immediately respond to a request for comment.

In the US, Oracle Corp (All Sessions) posted an adjusted profit of $1.03 per share, compared with estimate of $1.07. Oracle added the earnings per share (EPS) would have been eight cents higher without a "significant impact" from the strong greenback. Total revenue was in line with expectations, up 17.7% to $11.45 billion. Cloud services revenue, including contribution from the newly acquired Cerner Corp, rose by 45% to $3.6 billion.

In terms of guidance, Oracle expects revenue to grow between 21% and 23% in the second quarter (Q2) on a constant currency basis.

Reuters reported yesterday afternoon that Goldman Sachs Group Inc (All Sessions) will cut jobs as early as this month, according to a source close to the matter. Goldman Sachs usually trims about 1% to 5% of its staff each year but didn't part with any staff during the two years of the pandemic.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 13 September

FTSE 100, DAX 40 and S&P 500 await US CPI data. Continued dollar weakness drives rebounds in EUR/USD and GBP/USD, while weakening USD/JPY. And lumber and Brent crude oil rally while gold rise pauses.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Wednesday: EUR/GBP; RDW

UK inflation data out on Wednesday could be key for the pound - IGTV’s Jeremy Naylor looks at EUR/GBP.

Elsewhere, Redrow (RDW) earnings are expected to give some colour on the pressures highlighted around the UK housebuilders from recent notes on the sector by HSBC and Berenberg.

 

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

The entire mkt has swung around the US inflation data  - 75bps now being priced in at next weeks Fed meeting

Indices: Expected to open down in Europe after some of the biggest losses in months – London again one of the least worst performers while tech leaning indices hit hardest

FX: USD basket rose. EURUSD down below parity again & USDJPY within a few ticks of a new 24yr high – BoJ confirms intervention on the cards. Watching GBPUSD GBPEUR today as we await UK CPI

Equities: Mostly drowned out by the inflation noise. TWTR approves Musk deal. IBM to take a $5.9bln hit to shift pension liabilities across to Fidelity. Earnings: RDW DNLM TLW IBM

Commods: Gold biggest slide since 5 July on USD rise. Oil down for a second day today. BTC sinks in biggest drop since June supported at the $20,000 level

 

 

 

[MongiIG]

Early Morning Call: volatility remains in the markets after US CPI data

The entire market has swung around the US inflation data with a 75bps rate hike now being priced in at next week's Fed meeting.

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 14 September 2022 

Equity market overview

European equity markets opened today’s session lower, falling further in reaction to higher-than-expected consumer price index (CPI).

Yesterday, US indices tumbled, with tech stocks leading losses. The Nasdaq Composite dropped 5.16%.

Overnight APAC equity markets also tanked. The Nikkei 225 shed 2.78% and S&P/ASX 200 lost 2.58%. Yesterday the headline CPI figure fell on a year-on-year (YoY) basis, although not as much as expected: 8.3%, after 8.5% the previous month. Economists had anticipated 8.1%.

Core CPI pace accelerated more than expected: 6.3%, compared to consensus of 6.1%. US treasury yields rose on the news, and the yield curve inversion widened. There is now little doubt for the market that the Federal Reserve (Fed) will go for another oversized hike.

Shortly after the release of CPI data, Fed swaps showed a 75 basis-point (bps) hike fully priced for September. And as the day progressed, the odds of a 100 bps hike by the Fed increased to 35%.

In the UK, consumer price index rose by 9.9% in August YoY, lower than the 10.2% expected. Producer price index (PPI) also decelerated in August to 16.1%, from 17.4% the previous month. Sterling hardly reacted to the news.

In the US at 1.30pm, producer price index is expected to fall 0.1% in August MoM. Year-on-year, the index is expected to rise 8.8%, decelerating from the 9.8% recorded in July.

In France, prime minister, Elisabeth Borne, is due to give an update on the gas price gap plan. It is expected to be kept in place next year, and French consumers should expect a 10% increase. The 30 cents rebate on fuel prices should disappear in 2023.

Yesterday evening, French finance Minister, Bruno Le Maire, cut France's 2023 growth outlook to 1% from 1.4%. Inflation is seen falling to 4.2% in 2023, from 5.3% this year.

Elsewhere, Redrow PLC says that housing demand is moderating to historical levels following two strong years for the sector. The house builder posted a 31% rise in annual profit to £410 million.

Dunelm Group PLC reported a 32% rise in profit before tax for the year at £209m and expects to deliver about 50% gross margin in 2023, slightly lower than the 51.2% it saw in 2022.

In the US, Twitter's shareholders voted yesterday to approve a deal with Tesla CEO, Elon Musk, to buy the company for $44 billion.

Commodities

On the commodity market, oil prices are little changed this morning, after reacting negatively to US CPI data yesterday afternoon. There was also no reaction to the latest API inventories.

Yesterday evening the American Petroleum Institute reported a crude oil stock increase of six million barrels, as the Department of Energy released 8.4 million barrels from its Strategic Petroleum Reserves.

Gasoline stocks fell by 3.23 million barrels, while distillates stocks rose by 1,75 million barrels.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 14 September

FTSE 100, DAX 40 and S&P 500 see biggest losses in months. EUR/USD, GBP/USD, and AUD/USD hit hard after US core CPI rise. And gold and oil struggle but natural gas holds up despite strengthening dollar.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Thursday: USD/JPY; EUR/USD; ADBE

Currency markets remain one of the main areas of interest for traders, and long USD is the preferred option. IGTV’s Jeremy Naylor looks at the potential for 32-year highs for USD/JPY and new two-decade lows for EUR/USD.

Also, earnings at Adobe (ADBE) could be of interest as the stock breaks a new recent lower low.

 

 

 

 

[MongiIG]

Early Morning Call: European equity markets hesitant while yen weakens

Equity markets in Europe are hesitant this morning, following small gains in the US yesterday and in the APAC region overnight.

 

 

 

 Jeremy Naylor | Writer, London | Publication date: Thursday 15 September 2022

Equity market overview

Equity markets in Europe are hesitant this morning, following small gains in the US yesterday and in the APAC region overnight.

In Japan, trade deficit more than doubled in August compared to July to its biggest shortfall on record. Imports jumped 49.9% in the year to August, more than the 46.7% expected, driven by costs of crude oil, coal and liquefied natural gas.

Japan is particularly vulnerable to energy costs as it imports around 94% of its primary energy supply. The weakness of the yen, now at a 24-year low against the dollar, makes it more expensive, which leads to importing inflation.

Unlike other major central banks, the Bank of Japan (BoJ) has so far adopted an ultra-accommodative policy, prioritising its support to the economy, which led to a depreciation of the yen, now down nearly 30% this year. Yesterday, the BoJ conducted a rate check with banks, suggesting it is planning to take measures to tame sharp yen falls.

In Australia, the unemployment rate rose to 3.5% in August from 3.4% the previous month, but only because more people went looking for work. Net employment rose 33,500, in line with market forecasts, after a 41,000 fall in July.

In the US, we expect a few macroeconomic indicators, starting at 1.30pm with initial jobless claims. 226,000 new claimants are expected for last week’s retail sales. The past four weeks have showed a steady decline, from the 252,000 recorded in the first week of August.

Also, at 1.30pm, economists expect retail sales to remain flat for the second month running on a month-on-month (MoM) basis. Then at 2.15pm industrial production, anticipated to increase by 0.1% in August month-on-month (MoM), followed at 3pm by business inventories, expected to have increased by 0.6% in July MoM.

Earnings overview

Kier Group PLC posted a 20% operating profit increase to £121 million. Revenue remains unchanged at £3.3 billion. Kier Group sees no change in its current market outlook.

Wickes Group Limited reported earnings and revenue broadly unchanged in the first half (H1) and reiterated that the DIY market has softened.

Adobe Systems Inc is expected to show a rise in quarterly earnings and revenue tonight after the US closing bell. Analysts estimate earnings of $3.33 per share. For the same quarter last year, the company reported earnings of $3.11 per share. Revenue is forecast to increase 12.6% in revenue to $4.43bn.

Tech stocks have been particularly affected by soaring inflation and associated interest rate increases. Since its November 2021 highs, the stock has fallen nearly 50%.

Commodities

According to the EIA, crude inventories rose by 2.4 million barrels last week, about three times more than analysts’ expectations. The gains were boosted by an 8.4-million-barrel release from the US strategic petroleum reserves.

US gasoline stocks fell by 1.8 million barrels in the week, while distillate stockpiles increased by 4.2 million barrels.

Finally, gold is trading at eight-week lows and is closing down on July support.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 15 September

FTSE 100, DAX 40 and Nasdaq 100 stabilise in the short-term. EUR/USD, GBP/USD and EUR/GBP continue to slide. And gold, Brent crude and lumber at risk of another leg lower.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Friday: China & UK retail sales

Following slightly weaker US retail sales, traders now look to Friday’s China and UK retail sales. We look at charts for USD/CNH and GBP/USD with both showing continued weakness for any currency against the mighty dollar.

Then we look at US crude around the weekly rig count.

 

 

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

More evidence last night that the US economy is in trouble, hitting risk assets. A stark message for the Fed next week as its rate trajectory is crippling growth

Indices: Wall St hitting new recent lower lows after corporate warnings. Europe expected to open down. APAC down overnight

Equities: FedEx down 15% after hours as it warned about the outlook

FX: USDCNH consolidating above 7 yuan, 26mth highs, despite good China retail sales data and fixed asset investment. GBP awaiting UK retail sales at 7amUK 

Commods: Gold crashes through support to go to near 28-mth lows, technically little to stop it down to $1451.  Oil down on renewed growth concerns

 

 

 

 

[MongiIG]

Early Morning Call: equity markets down while FedEx warns of slowdown

FedEx pulls annual earnings guidance and warns of falling volumes worldwide. GBP lower amid worse than expected UK retail sales. Gold crashes through support to near 28-month lows, technically little to stop it down to $1451.

 

 

 

 

 

 

 Jeremy Naylor | Writer, London | Publication date: Friday 16 September 2022 

 

Equity markets in Europe opened the session in the red, following the lead of the US and Asia-Pacific region, as FedEx Corp warned its businesses have neem affected by the global economic slowdown.

Macro-economic overview

As China is still dealing with an ailing property market and the impact of COVID curbs, the country published better-than-expected macroeconomic data. Industrial production increased by 4.2% in August from a year earlier, the fastest pace since March, beating expectations of a 3.8% expansion.

Retail sales rose 5.4% from a year ago, beating forecasts for 3.5% growth, while fixed asset investment grew 5.8% in the first eight months of 2022 from the same period a year earlier, above a forecasted 5.5% rise and up from January-July's growth of 5.7%. This had little impact on the yuan. USD/CNH now trades at a 26-month high.

Reserve Bank of Australia (RBA) governor, Philip Lowe, said overnight that interest rates are closer to normalisation. "At some point, we will obviously not be increasing rates by 50-basis points (bps) at each meeting, and we're getting closer to that point," Lowe told a parliamentary economics committee, adding "we are at 2.35%, so we're getting closer to the range that you think is normal but we're probably still on the low side."

In just five months, the RBA has raised its key cash rate by 225 basis points to a seven-year high.

UK retail sales fell more than expected in August, by 5.4% on a year-on-year (YoY) basis. It is the biggest decline so far this year, as sales fell in all main sectors.

Equities

FedEx shares tanked in extended trading yesterday after a warning that its fiscal first quarter (Q1) results were hit by a fall in global volume and withdrawing its financial forecast.

A week before publishing its fiscal Q1 earnings, FedEx said it expected to post earnings of $3.44 per share, well below analysts’ consensus of $5.17. It said revenue should also fall short of expectations at $23.20 billion.

According to FedEx, the global slowdown accelerated in August, and is expected to continue though the current quarter. So far the group estimates these headwinds to be responsible for a $500 million fall in revenue at FedEx Express, and $300m at FedEx Ground.

FedEx CEO, Raj Subramaniam, said in a statement that "Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations."

FedEx says it will shut some office locations, reduce the number of hours worked, and consolidate some sorting facilities. The warning had a ripple effect on its competitors and retailers.

Another big drag on stocks on Wall Street yesterday was digital media and marketing software firm, Adobe Systems Inc. While it topped the earnings target for its fiscal third quarter (Q3), sales were a bit below expectations. But the real reason it fell was on the news that it is to acquire Figma, a web-first collaborative design platform, for about $20 billion.

Commodities

Gold is on track to post its worst week in two months, after falling yesterday to a 28-month low. The precious metal started falling on Tuesday after US consumer price index (CPI) unexpectedly rose in August, a bearish momentum that could continue until the Federal Open Market Committee (FOMC) meeting next week.

Markets are currently pricing in a 75-basis-point Federal Reserve (Fed) rate hike.

Oil prices are little changed this morning as the market awaits Baker Hughes data. Last week, Baker Hughes total rig count fell by one to 759, due to a fall of the number of oil rigs in operation. The number of producing oil rigs fell by five to 591, while the number of gas rigs rose by four to 168.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 16 September

Rout in FTSE 100, DAX 40 and S&P 500 continues. GBP/USD slides to 37-year low, EUR/USD also lower while EUR/GBP rallies. And gold, oil and cotton prices come under selling pressure again.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Early Morning Call: currency markets calm before the storm

USD/JPY little changed despite core inflation in Japan rising 2.8% YoY - the fastest rate of increase since late 2014. AUD/NZD at 6½-year highs as RBA indicates more rate rises ahead, albeit it at a slower pace.

 

 

 Jeremy Naylor | Writer, London | Publication date: Tuesday 20 September 2022 09:05

Macro overview

Equity markets in Europe opened higher, after a positive session in the US and Asia-pacific region.

Currency markets are little changed this morning, as traders are awaiting a series of central bank announcements this week. In China, the People's Bank of China (PBoC) kept key rates steady at its September fixing. As widely expected, one-year loan prime rate remained at 3.65%, while the five-year rate which is a reference for mortgages, was maintained at 4.3%.

After reading the minutes released overnight, there is no doubt the Reserve Bank of Australia (RBA) will continue to raise rates, but nonetheless said there was a case for slowing the pace of increases. "All else equal, members saw the case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises."

Still, after the 50 basis-point (bps) increase earlier this month, markets are still expecting another half-point hike in October.

Later this week several central banks are meeting to decide on their rates. At the last Federal Open Market Committee (FOMC) meeting in July, when the Federal Reserve (Fed) hiked interest rates by 75 basis points, Fed chair Jerome Powell said that "another unusually large increase could be appropriate" at the bank's next meeting.

US consumer price index (CPI) unexpectedly rose in August, which led the market to wonder if the Fed could hike by more than 75 basis points at its September meeting. The latest market expectations show that a majority still expects rates to rise by 75 basis points, while the latest data shows that 17% see a full percentage point increase.

On Thursday morning, the Bank of Japan (BoJ) is widely expected to keep its ultra-accommodative policy in place. The short-term interest rate is poised to remain at -0.1%, and 10-year bond yields target around 0%.

That said, the narrative of late has been more around an increasingly needed support of the Japanese yen. There is no doubt the weak yen is importing inflation.

Earlier today, Japan consumer price index (CPI) rose more than anticipated in August. The headline figure rose by 3% year-on-year (YoY), and core CPI accelerated its pace to 2.8%, a near eight-year high, exceeding the Bank of Japan 's 2% target for a fifth month in a row.

Also on Thursday, The Bank of England (BoE) will decide on its interest rates, having delayed its meeting after the passing of Queen Elizabeth II. Economists expect another 50 basis-point hike, which would take the main rate to 2.25%.

As opposed to the Fed and the European Central Bank (ECB), the BoE hasn't yet opted for a larger, one might say more courageous rate increase of 75-basis points, which is one of the reasons why GBP/USD has fallen some 15% in the past eight months.

Equities

Elsewhere on the equity market, Haleon PLC posted a 13.4% increase in revenue in the first half (H1) to £5.19 billion. Adjusted operating profit increased by 21.1% to £1.19bn.

Positive momentum seen in the first half of the year has continued in the third quarter (Q3) but at a slower pace than expected.

Kingfisher PLC, meanwhile, reported a fall of 29.5% in adjusted pre-tax profit fell by 29.5% in H1 to £472 million. Sales fell 2.8%, in line with group's expectations.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.