CAPIS Global Recap – 10/01/2019
Asian Headlines As noted yesterday China is celebrating their National Day holiday for the balance of the week with Hong Kong shut for trading today along with the mainland. Hong Kong will reopen tomorrow but watch for possible weakness with reports out that police there are using live ammunition with one protester said to be…
Asian Headlines
As noted yesterday China is celebrating their National Day holiday for the balance of the week with Hong Kong shut for trading today along with the mainland. Hong Kong will reopen tomorrow but watch for possible weakness with reports out that police there are using live ammunition with one protester said to be hit. Markets that were open saw gains on the session apart from India post the move higher in the States Monday. IT and Material names led in Japan with broad gains seen Down Under as Health Care and Industrials surged.
Tankan readings out of Japan were mixed with its Large Manufacturing Index at 5 for the 3Q, ahead of the flattish 1 expectation reading but light vs the previous 7 seen. It was noted this is now the 3rd consecutive decline. The Large all-industry Capex reading was 6.6% vs 7.0% estimated and 7.4% prior. Their Economic Minister addressed the increase in sales taxes that went into effect today (to 10% from 8%) as he noted measures have been put into place to offset the increase. Also, the Ministry of Finance sold ¥2.1T in 10 JGB’s to yield -.158% with the bid-to-cover at its lowest level since 2016.
Down Under, the RBA lowered its cash rate by the expected 25bps to .75%. They noted increasing signs of a turnaround in housing adding employment is strong with labor force participation at record highs. Despite that though they see low rates expected for an extended period.
Indices in India pared losses brought on by selling in financial names. The last few days have seen losses with a credit crunch in focus on defaults and lending curbs in some of their shadow lenders. Firms like Yes Bank have fallen sharply with bad loans and larger haircuts leading to continued downgrades on like names.
- Aluminum producer UACJ -5% said they will restructure their operations in a bid to boost profit by ¥10B. Within that 2k employees will lose their jobs with capex pared by ¥67B over the next several years. The company postponed their FY forecast as well.
- Samsung -.4% said they will shut its last phone production facility in China as higher labor costs coupled with weak demand have weighed. India and Vietnam are the beneficiaries of the move with smartphone production there to increase.
European Headlines
After a better start European indices have pared initial gains and mixed on the day. Again, the mix of sectors up vs down is evenly split with Autos out front while Food and Personal goods pull back less than a percent. Inflation for the region came inline for September with Markit Manufacturing for the EU inline at 45.7. Germany continues to see contraction in manufacturing with the inline reading of 41.7 while the UK fared a bit better, up to 48.3 vs 47.4 previously. France retained its lead, finishing just over 50.0. While these readings were expected their release has led to earlier positive sentiment giving way. Results from Switzerland and Sweden though were not expected with both showing further contraction with Sweden moving from expansion into contraction with its 46.3 result.
Also dragging on markets the WTO pared their FY19 trade growth for the world to 1.2%, down from 2.6% prior. Additionally, FY20 was cut to 2.7% from 3.0% with trade conflicts in focus. Bonds are to the downside today with oil up a percent.
- Spanish telco Masmovil Ibercom is up 13% post upping its FY19,20,21 guidance. The firm signed an agreement with Orange for all future 5G needs.
- Ferguson’s +4% earnings report pleased investors with a divi increase helping. Soc Gen said cost controls are leading to solid margins. Despite a broadly flat US market the company said its order books support modest growth.
- UK food retailer Greggs -9% retained their FY view with growth moderating as expected. In anticipation of a difficult breakup with the EU they are stocking up on longer-lasting ingredients and altering some recipes to do without some perishable ingredients.
- After CEO Thiam retained his position yesterday CS -1% is lower today. CPP Boueehas took the blame for the botched investigation of their former wealth-mgmt head.
| Event | Survey | Actual | Prior | Revised | |||
| SK | 80) | Business Survey Manufacturing | Oct | — | 73 | 72 | — |
| SK | 81) | Business Survey Non-Manufacturing | Oct | — | 74 | 72 | — |
| AU | 82) | AiG Perf of Mfg Index | Sep | — | 54.7 | 53.1 | — |
| AU | 83) | CBA Australia PMI Mfg | Sep F | — | 50.3 | 49.4 | — |
| SK | 84) | CPI MoM | Sep | 0.50% | 0.40% | 0.20% | — |
| SK | 85) | CPI YoY | Sep | -0.30% | -0.40% | 0.00% | — |
| SK | 86) | CPI Core YoY | Sep | 0.70% | 0.60% | 0.90% | — |
| AU | 87) | ANZ Roy Morgan Weekly Consumer Confidence Index | 29-Sep | — | 114.7 | 110.1 | — |
| JN | 88) | Jobless Rate | Aug | 2.30% | 2.20% | 2.20% | — |
| JN | 89) | Job-To-Applicant Ratio | Aug | 1.59 | 1.59 | 1.59 | — |
| JN | 90) | Tankan Large Mfg Index | 3Q | 1 | 5 | 7 | — |
| JN | 91) | Tankan Large Non-Mfg Index | 3Q | 20 | 21 | 23 | — |
| JN | 92) | Tankan Large Mfg Outlook | 3Q | 0 | 2 | 7 | — |
| JN | 93) | Tankan Large Non-Mfg Outlook | 3Q | 16 | 15 | 17 | — |
| JN | 94) | Tankan Large All Industry Capex | 3Q | 7.00% | 6.60% | 7.40% | — |
| JN | 95) | Tankan Small Mfg Index | 3Q | -6 | -4 | -1 | — |
| JN | 96) | Tankan Small Non-Mfg Index | 3Q | 8 | 10 | 10 | — |
| JN | 97) | Tankan Small Mfg Outlook | 3Q | -8 | -9 | -5 | — |
| JN | 98) | Tankan Small Non-Mfg Outlook | 3Q | 1 | 1 | 3 | — |
| SK | 99) | Trade Balance | Sep | $5000m | $5973m | $1723m | $1653m |
| AU | 100) | CoreLogic House Px MoM | Sep | — | 1.10% | 1.00% | — |
| SK | 101) | Exports YoY | Sep | -9.60% | -11.70% | -13.60% | -13.80% |
| SK | 102) | Imports YoY | Sep | 0.80% | -5.60% | -4.20% | — |
| IR | 103) | AIB Ireland PMI Mfg | Sep | — | 48.7 | 48.6 | — |
| SK | 104) | Markit South Korea PMI Mfg | Sep | — | 48 | 49 | — |
| JN | 105) | Jibun Bank Japan PMI Mfg | Sep F | — | 48.9 | 48.9 | — |
| AU | 106) | Building Approvals MoM | Aug | 2.00% | -1.10% | -9.70% | — |
| AU | 107) | Building Approvals YoY | Aug | -20.00% | -21.50% | -28.50% | -28.20% |
| AU | 108) | RBA Cash Rate Target | 1-Oct | 0.75% | 0.75% | 1.00% | — |
| IT | 109) | Bank of Italy to Release 2Q Credit Conditions and Risk | |||||
| SP | 110) | Current Account Balance | Jul | — | 3.2b | 2.1b | 3.8b |
| SP | 111) | Spain Budget Balance YtD | Aug | — | -14.94b | -13.92b | — |
| IN | 112) | Markit India PMI Mfg | Sep | — | 51.4 | 51.4 | — |
| JN | 113) | Vehicle Sales YoY | Sep | — | 12.80% | 4.00% | — |
| UK | 114) | Nationwide House Px NSA YoY | Sep | 0.50% | 0.20% | 0.60% | — |
| UK | 115) | Nationwide House PX MoM | Sep | 0.10% | -0.20% | 0.00% | — |
| SW | 116) | Swedbank/Silf PMI Manufacturing | Sep | 52 | 46.3 | 52.4 | 51.8 |
| SZ | 117) | Retail Sales Real YoY | Aug | — | -1.40% | 1.40% | 1.50% |
| AU | 118) | Commodity Index SDR YoY | Sep | — | 1.80% | 6.20% | 6.30% |
| AU | 119) | Commodity Index AUD | Sep | — | 120.6 | 124.9 | 125 |
| NO | 120) | DNB/NIMA PMI Manufacturing | Sep | 53.5 | 50.4 | 53.8 | 53.9 |
| NE | 121) | NEVI Netherlands Manufacturing PMI | Sep | 51 | 51.6 | 51.6 | — |
| SP | 122) | Markit Spain Manufacturing PMI | Sep | 48.2 | 47.7 | 48.8 | — |
| SZ | 123) | PMI Manufacturing | Sep | 46.7 | 44.6 | 47.2 | — |
| IT | 124) | Markit Italy Manufacturing PMI | Sep | 48.1 | 47.8 | 48.7 | — |
| FR | 125) | Markit France Manufacturing PMI | Sep F | 50.3 | 50.1 | 50.3 | — |
| GE | 126) | Markit/BME Germany Manufacturing PMI | Sep F | 41.4 | 41.7 | 41.4 | — |
| EC | 127) | Markit Eurozone Manufacturing PMI | Sep F | 45.6 | 45.7 | 45.6 | — |
| GR | 128) | Markit Greece Manufacturing PMI | Sep | — | 53.6 | 54.9 | — |
| UK | 129) | Markit UK PMI Manufacturing SA | Sep | 47 | 48.3 | 47.4 | — |
| DE | 130) | Danish PMI Survey | Sep | — | 50.2 | 48.7 | 48.6 |
| EC | 131) | CPI Core YoY | Sep A | 1.00% | 1.00% | 0.90% | — |
| EC | 132) | CPI Estimate YoY | Sep | 1.00% | 0.90% | 1.00% | — |
| IR | 133) | Unemployment Rate | Sep | — | 5.30% | 5.20% | 5.30% |