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Community Manager
Posts: 951
Registered: ‎20-09-2016

EMEA Morning Call 12.10.17

[ Edited ]

Macro wrap and morning call 

  • Wall Street rises to record highs
  • Weaker US dollar after Fed FOMC minutes, eye on US inflation data.
  • Spanish PM demands clarification of recent events and gives 8 days to drop independence.
  • Crude oil futures rise as Saudi trims exports and OPEC continue to restore balance.
  • Gold prices hit their highest in more than a week on the back of a weaker dollar.
  • Ether trying to push out of it's $310 resistance, whilst bitcoin sits at $4900

2017-10-10 15_54_00-Document1 - Word.pngUK, US and Europe:FOMC minutes last night, showed a few policy makers to be in the dovish camp in relation to the prospect of tightening US rates later on this year. The news has seen recent gains in the dollar to unwind overnight, which has lifted commodity prices, particularly that of gold.


Further gains for the S&P 500 and the Dow were followed by gains for Asian indices, as the drift higher across equity markets continued. The Catalan situation rumbles along in the background, with the central government giving Barcelona five days to clarify its position. Relief gains for the euro meant that European markets found it hard to make sustained gains, although they are looking stronger this morning.

Earnings season gets underway in earnest as JPMorgan publishes its figures, along with Citigroup. Today also sees US PPI figures and the delayed release of weekly crude inventories. In addition we have speeches from ECB president Mario Draghi and two FOMC members.


2017-10-10 15_50_23-Document1 - Word.pngSouth Africa:  We are seeing continued strength in the rand manifest which should aid gains on local financial and retail counters this morning, while weighing on rand hedge industrial counters. With the significant weighting of these rand hedge counters on the South African Top40 bourse, it does suggest that the index will open up marginally lower. On the local catalyst front, Mining and Production data for August is due for release today. 


Markets of interest and client sentiment


Eyes on NZD: FOMC minutes out yesterday implied that a number of Fed chairs are showing concerns that low inflation maybe temporary, which has dampened expectations slightly on the speculated rate hikes. This dovish shift has had a noticeable impact on the 2 year US treasuries and with it, the yield sensitive Australian and NZ dollar. These pairs maybe worth a watch for this calendar quarter. The recent inconclusive general election in New Zealand brought a bit of political uncertainty, and the NZ First party leader has delayed a decision on who will form the next government until next week. Client sentiment is NZDUSD


 63 long.png


Provident Financial: Friday the 13th probably isn't the best date to publish results, and Provident's investors are sure to have this superstitious thought at the back of their minds after such a dramatic turn around in their fortunes. A slip over the last 12 months from 3600p to the 800p level we're seeing at the moment is tough to stomach, so tomorrows update would be a perfect opportunity to enlighten the market of their plans for success. At just seven times forward earnings, along with a forward yield of 6%, the shares do qualify as attractive, but the need for further improvement will undoubtedly deter many. Client sentiment is Provident Financial PLC


 84 prov.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] 

2017-10-12 07_44_25-Forex Economic Calendar.png


Corporate Highlights


LSE - WH Smith said that full-year revenues rose 2% overall to £1.2 billion, but were flat like-for-like. Pre-tax profits were 7% higher at £140 million. High street revenues were down 5% while the travel revenues were 9% higher thanks to higher passenger numbers and weaker sterling. 

LSE - Sky reported a 5% rise in like-for-like revenues, to £3.3 billion, for the three months to September. Earnings rose 11% to £582 million. 161,000 new customers were added, up 51% on the prior year period, helped by the popularity of ‘Game of Thrones’. 

LSE - N Brown saw a 5.6% rise in revenues, to £453.4 million, for the first half, but foreign exchange costs meant that pre-tax profits were only 1.8% higher, at £32.2 million. The firm made market share gains despite a ‘subdued consumer backdrop’. 


JSE - Taste Holdings - The after-tax core earnings adjustment for the current period amounts to R5.3 million (2016: R10.6 million). Accordingly, noting the non-comparability of the core adjustment, the core headline loss per share for the current period is 14.6 cents per share compared to a core headline loss per share of 6.2 cents per share for the prior period.


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