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Community Manager
Posts: 226
Registered: ‎20-09-2016

EMEA Morning Call 11.10.17

[ Edited ]

Macro wrap and morning call 

  • Japanese Nikkei gains continue to 21-month top
  • Dollar holds around a two week low, whilst Euro holds gains
  • Oil prices tick up on signs of tighter near-term supply
  • Catalonian president suspends independence declaration
  • Russian central bank has blocked crypto websites. BTC remains at $4750 and ETH holds $300.
  • FOMC today at 19.00 BST.


2017-10-10 15_54_00-Document1 - Word.pngUK, US and Europe: Record highs for the Dow and the S&P 500 were followed up by a 21-month high for the Nikkei, as markets shrugged off both the Catalan declaration of independence and a fresh overflight of Korea by US nuclear bombers. The Catalan president signed the declaration, but then announced that he was suspending the move in order to seek mediation with Madrid. No response has yet been forthcoming from Spanish PM Rajoy, but an emergency cabinet meeting is expected today.

 

Commodity prices are relatively flat this morning although oil has rallied in excess of 2% since yesterday morning following news that Saudi Arabia has cut November allocations by 560 000 barrels per day. Markets are pricing in a  re-balancing in crude oil after years of the commodity being in oversupply.

Fed minutes today provide the main economic meat for the session, with voting member Kaplan having said last night that the US is making good progress on full employment. Elsewhere, US earnings season begins to dominate, with Blackrock and Delta Airlines on the list for today, although the real start will be tomorrow when the big banks begin publishing their numbers.

 

2017-10-10 15_50_23-Document1 - Word.pngSouth Africa: The Jse All-Share Index is expected to continue to trade around all-time highs as US markets made new closing highs last night and Asian markets have tested multi-year highs this morning. The rand continues to clawback gains against the majors in a risk on environment.  Local market gains may be stifled by strength in the rand. Local counters Billiton and Sasol might be ones to watch with the move in oil, while financial counters look to continue to gain following the short term currency strength. 

 

Markets of interest and client sentiment

 

Russia blocks crypto?: The Russian central bank yesterday decided to ban websites of exchanges that offer cryptocurrencies such as Bitcoin and Ether to retail investors. The banks first deputy governor said that the bank has seen rising interest in cryptocurrencies but believes that coins such as bitcoin fall under a high yielding asset rather than a form of payment. A flash crash in bitcoin was seen across some exchanges to a low of $4200 but quickly recovered to the $4800 level. IG's multi-feed price didn't see a crash. Client sentiment is Bitcoin (USD).

 

62 bitcoin.png

 

All client sentiment snapshots are correct to the best of our ability.

They are a snapshot taken around 8am UK time on the day of posting.

These percentages are subject to change.

   

Daily FX Economic Calendar

High and Medium Importance Events (times BST) [Link] 

2017-10-11 07_49_19-Forex Economic Calendar.png

 

Corporate Highlights

 

LSE - Hargreaves Lansdown reported that assets under administration rose 4% to £82 billion for the three months to 30 September. The period also saw net new business of £1.54 billion and 30,000 new clients. Year-to-date total net revenue rose 15% to £104 million.

LSE - Mondi said that third-quarter profits were 8% higher at €245 million, but that full-year performance is forecast to be modestly below expectations. Higher costs and currency losses outweighed higher average selling prices for the period. Like-for-like sales volumes were above the same period a year ago. 

LSE - Dunelm saw a 24.8% rise in total revenue for the first quarter, while like-for-like revenues rose 9.3%. Gross margin however was down 220bps from the same period a year ago.  

 

JSE - Mondi Group: Underlying operating profit for the third quarter of 2017 of EUR245 million was 8% above the comparable prior year period (EUR227 million). The Group benefited from higher average selling prices partly offset by higher costs and negative currency effects. Underlying operating profit was in line with the second quarter of 2017, with the positive pricing momentum seen across most product segments offset by rising costs, negative currency effects and the usual seasonal downturn in Uncoated Fine Paper.

 

JSE - Exxaro Resources Ltd today announces that it has completed its sale of 22,425,000 Class A ordinary shares of Tronox Limited (NYSE:TROX), a NYSE-listed company engaged in the mining, production and marketing of inorganic minerals and chemicals, in an underwritten public offering in the United States (the "Disposal"). The number of shares sold includes 2,925,000 Class A ordinary shares purchased through the underwriters' exercise of an option to purchase additional shares at the public offering price. The net proceeds from the sale of the Class A ordinary shares in the offering is approximately USD474 million (approximately ZAR6,536 million).

 

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