CAPIS Global Markets 6 5 2019
Asian Markets Most markets advanced with Japan leading the way. The ¥ gave back some of its recent gains providing relief to exporters. Australia moved higher with RBA Gov. Lowe making dovish comments following yesterday’s rate cut. The Chinese May Caixin Services PMI is below expectations hitting a 4 month low. S. Korea also had…
Asian Markets
Most markets advanced with Japan leading the way. The ¥ gave back some of its recent gains providing relief to exporters. Australia moved higher with RBA Gov. Lowe making dovish comments following yesterday’s rate cut. The Chinese May Caixin Services PMI is below expectations hitting a 4 month low. S. Korea also had disappointing macro data. Its currency a/c turned negative for the first time since 2012. This was in part due to large offshore dividend payments. Full figures in our macro section. India (along with many Muslim nations) was closed for the start of Ramadan.
Japanese names provided a lift to most sectors. Consumer discretionary, IT, industrials and telcos each gained c. 1%. Energy, healthcare and utilities lagged finishing around the flat line.
Important Headlines
- Toyota Motors +2.5% sees the potential cost increases due to the proposed Mexican tariffs of up to $1b.
- While Byd -0.4% fell today, China is taking steps to bar entry to the electric vehicle space. Additionally, it will foster key, efficient providers in the space.
- China Vanke’s +2.8% May contract sales rose 35.0% to CNY 58b.
European Markets
The region has been to the upside since the open. Most of the markets have managed to maintain headway despite negative news regarding Italy. The EU is initiating the process to take disciplinary action due to the nation’s debt. Italian equities have fallen with banks taking the brunt of the selling. The Italian 10 yr. yield is higher c. 10 bps. and the € has pulled back from earlier gains to the flat line.
Most markets are to the upside. Industrial, tech, travel/leisure, personal goods and tech are better by c. 1% or more. Banks are off c. 0.5% with insurance and autos down small.
Corporate Snippets
- Late yesterday, word hit Renault-flat is holding off on a Fiat Chrysler -1.1% merger decision until tomorrow. However, a major hurdle appears to have been cleared. Apparently, both Italy and France have warmed up to the potential deal.
- Norsk Hydro +3.7% has provided a positive surprise to the markets. The company’s Q1 underlying profit beat an expected loss. Revenues and EBIT are also ahead of consensus. The icing on the cake is the company provided clarity regarding the final impact of cyber attack during the quarter.
- U.K. subprime lender Non-Standard Finance -6.4% is electing to let its hostile bid for Provident Financial +15.11% lapse.
On Our Side of the Pond
- Salesforce is seeing strong gains pre-market following results. The company’s growth shows no signs of ebbing. The company’s Q1 revenues range starts at what the Street was expected.
- Mind you eye in Ford. China is fining its Chinese jv CNY 162.8m for monopoly violations.
- Bombardier is conducting talks regarding the potential sale of its regional jet unit to Mitsubishi Heavy. This news hit the tape well after the Japanese close.
- The Fed Beige Book will be released later today.
Markets & Macro
| Event | Survey | Actual | Prior | Revised | ||
| SK | Foreign Reserves | May | — | $401.97b | $404.03b | — |
| AU | AiG Perf of Services Index | May | — | 52.5 | 46.5 | — |
| AU | CBA Australia PMI Services | May F | — | 51.5 | 52.3 | — |
| AU | CBA Australia PMI Composite | May F | — | 51.5 | 52.2 | — |
| SK | BoP Current Account Balance | Apr | — | -$664.8m | $4819.6m | — |
| SK | BoP Goods Balance | Apr | — | $5668.0m | $8467.3m | — |
| JN | Nikkei Japan PMI Composite | May | — | 50.7 | 50.8 | — |
| HK | Nikkei Hong Kong PMI | May | — | 46.9 | 48.4 | — |
| JN | Nikkei Japan PMI Services | May | — | 51.7 | 51.8 | — |
| AU | GDP SA QoQ | 1Q | 0.50% | 0.40% | 0.20% | — |
| AU | GDP YoY | 1Q | 1.80% | 1.80% | 2.30% | — |
| CH | Caixin China PMI Composite | May | — | 51.5 | 52.7 | — |
| CH | Caixin China PMI Services | May | 54 | 52.7 | 54.5 | — |
| IN | Nikkei India PMI Services | May | — | 50.2 | 51 | — |
| IN | Nikkei India PMI Composite | May | — | 51.7 | 51.7 | — |
| SP | Industrial Output NSA YoY | Apr | — | -2.00% | -0.10% | -0.20% |
| SP | Industrial Output SA YoY | Apr | -0.20% | 1.70% | -3.10% | -3.00% |
| SP | Industrial Production MoM | Apr | 0.50% | 1.80% | -1.20% | — |
| SP | Markit Spain Services PMI | May | 52.5 | 52.8 | 53.1 | — |
| SP | Markit Spain Composite PMI | May | 52.1 | 52.1 | 52.9 | — |
| IT | Markit/ADACI Italy Services PMI | May | 49.8 | 50 | 50.4 | — |
| IT | Markit/ADACI Italy Composite PMI | May | 49.3 | 49.9 | 49.5 | — |
| FR | Markit France Services PMI | May F | 51.7 | 51.5 | 51.7 | — |
| FR | Markit France Composite PMI | May F | 51.3 | 51.2 | 51.3 | — |
| GE | Markit Germany Services PMI | May F | 55 | 55.4 | 55 | — |
| GE | Markit/BME Germany Composite PMI | May F | 52.4 | 52.6 | 52.4 | — |
| EC | Markit Eurozone Services PMI | May F | 52.5 | 52.9 | 52.5 | — |
| EC | Markit Eurozone Composite PMI | May F | 51.6 | 51.8 | 51.6 | — |
| IT | Istat Releases the Monthly Economic Note | |||||
| UK | New Car Registrations YoY | May | — | -4.60% | -4.10% | — |
| UK | Markit/CIPS UK Services PMI | May | 50.5 | 51 | 50.4 | — |
| UK | Markit/CIPS UK Composite PMI | May | 51 | 50.9 | 50.9 | — |
| UK | Official Reserves Changes | May | — | $2309m | $1517m | — |
| EC | PPI MoM | Apr | 0.20% | -0.30% | -0.10% | — |
| EC | PPI YoY | Apr | 3.10% | 2.60% | 2.90% | — |
| EC | Retail Sales MoM | Apr | -0.50% | -0.40% | 0.00% | — |
| EC | Retail Sales YoY | Apr | 1.50% | 1.50% | 1.90% | 2.00% |
| US | MBA Mortgage Applications | 31-May | — | 1.50% | -3.30% | — |
| US | ADP Employment Change | May | 185k | — | 275k | — |
| CA | Labor Productivity QoQ | 1Q | 0.40% | — | -0.40% | — |
| US | Markit US Services PMI | May F | 50.9 | — | 50.9 | — |
| US | Markit US Composite PMI | May F | — | — | 50.9 | — |
| US | ISM Non-Manufacturing Index | May | 55.4 | — | 55.5 | — |
| US | U.S. Federal Reserve Releases Beige Book |