CAPIS Global Markets 4/2/2019
Asian Markets Most of the regions core markets had minimal moves following yesterday’s strong gains. Peripherals are outperformers. Consumer staples fell by c. 1% and defensives remain out of favor. Materials and IT gained c. 0.5%. Semiconductor names saw buying interest following a Digitimes report chips prices will rebound during the second half of the…
Asian Markets
Most of the regions core markets had minimal moves following yesterday’s strong gains. Peripherals are outperformers. Consumer staples fell by c. 1% and defensives remain out of favor. Materials and IT gained c. 0.5%. Semiconductor names saw buying interest following a Digitimes report chips prices will rebound during the second half of the year.
Down Under, the RBA left its benchmark rate unchanged at 1.5%, as expected. Overall, the central bank remained balance noting areas of strength and weakness in the overall economy. The AUD gained following the countries budget which is projecting an A$7.1b surplus for FY20.
European Markets
Europe had a sluggish start but moved to the highs after about three hours into the trading session. The markets are currently holding the highs of the day. The auto sector is the standout better by more than 1%. Tech, media, insurance, food/bevies and banks are all better by more than 0.5%. Telecoms and healthcare are down small and retail has lagged all session.
Currency Markets
Bitcoin has surged more than 20.0% during Asian trading. However, there was no fundamental trigger scene. Speculation it was a significant buy order but that is not conclusive. It has pared some of the advance but still strong on the day.
The £ has been trading lower as Parliament once again fails to come to consensus on the Brexit issue. One member of the Tory Party has resigned due to what he called a failure to compromise. PM May is holding a cabinet meeting once again on the matter.
Important International Corporate Headlines
- Ahold -1.7% and peers with U.S. exposure are lower with Amazon having Whole Foods cut prices.
- Singapore Airlines +0.4% grounded two planes citing “premature blade deterioration” in their Rolls Royce -1.5% engines.
- Sources allege Tencent +0.3% plans to raise $5b via a US$ bond issue tomorrow. If so, it will be largest US$ bond issue in Asia outside of Japan thus far for the year.
- TPG sold the majority of its stake in China Intl Capital -2.7% for HK$2.38b. This ends a ten year investment earning them a c. 40% return.
On Our Side of the Pond
- Walgreens Boots Alliance is cutting its FY outlook. Declining prescription reimbursement is eroding margins.
- In the MLP space, UGI is acquiring Amerigas Partners.
Markets & Macro
| Event | Survey | Actual | Prior | Revised | ||
| AU | ANZ Roy Morgan Weekly Consumer Confidence Index | 31-Mar | — | 114.7 | 111.8 | — |
| SK | CPI MoM | Mar | 0.20% | -0.20% | 0.40% | — |
| SK | CPI YoY | Mar | 0.70% | 0.40% | 0.50% | — |
| SK | CPI Core YoY | Mar | 1.30% | 0.90% | 1.30% | — |
| JN | Monetary Base YoY | Mar | — | 3.80% | 4.60% | — |
| JN | Monetary Base End of period | Mar | — | ¥506.3t | ¥497.3t | — |
| AU | Building Approvals MoM | Feb | -1.80% | 19.10% | 2.50% | 2.40% |
| AU | Building Approvals YoY | Feb | -27.00% | -12.50% | -28.60% | -28.90% |
| AU | RBA Cash Rate Target | 2-Apr | 1.50% | 1.50% | 1.50% | — |
| IN | Nikkei India PMI Mfg | Mar | — | 52.6 | 54.3 | — |
| SP | Unemployment MoM Net (‘000s) | Mar | -28 | -34 | 3.3 | — |
| UK | Markit/CIPS UK Construction PMI | Mar | 49.8 | 49.7 | 49.5 | — |
| EC | PPI MoM | Feb | 0.20% | 0.10% | 0.40% | 0.30% |
| EC | PPI YoY | Feb | 3.10% | 3.00% | 3.00% | 2.90% |
| US | Durable Goods Orders | Feb P | -1.80% | -1.60% | 0.30% | 0.10% |
| US | Durables Ex Transportation | Feb P | 0.10% | 0.10% | -0.20% | -0.10% |
| US | Cap Goods Orders Nondef Ex Air | Feb P | 0.10% | -0.10% | 0.80% | 0.90% |
| US | Cap Goods Ship Nondef Ex Air | Feb P | -0.10% | 0.00% | 0.80% | 1.00% |