No Picture

The Week’s Key Events: All Eyes On The ECB

September 4, 2017 Tyler Durden 0

With the US markets closed today, market events this week will be dominated by G10 central bank meetings, among which the ECB stands out, but also notable will be the RBA, BoC and Riksbank. Consensus does not expect policy changes yet. There is also a busy calendar for the UK (PMIs, housing, IP and trade balance) along with GDP/IP releases elsewhere. In EMs, there will be monetary policy meetings in Brazil, Poland and Malaysia. Brazil BCB is expected to cut rates by 100bp.

Central bank preview:

  • The ECB remains trapped between a strong(er) EUR and a rapidly shrinking universe of monetizable bonds; as a result Draghi will emphasize the impact of a strong EUR on inflation dynamics but will refrain from disclosing the destiny of QE after the 2018 expiry. Given the recent EUR appreciation, the ECB will prefer waiting for the September FOMC before committing on QE. Most sellside desks call for the October meeting where BofA expects a 6m QE extension at €40bn/month.
  • The RBA is also expected to remain on hold with communication potentially getting more interesting now that forecasts and Parliamentary testimony are out of the way. On the longer term, the domestic housing market in particular to have a more significant influence on monetary policy with the balance of risks favoring rates up.
  • For the BoC, unexpectedly strong economic growth, below neutral o/n rates and the Fed on a hiking cycle means that the Canada should follow with a hiking cycle as well. This said, low inflation and inflation expectations along with CAD appreciation do not argue for urgency. As a result while some have said the BOC’s meeting is “live”, most expected the central bank to remain on hold in September and hikes +25bp in October.

In other data:

  • In the US, we get durable & capital goods orders (F), trade balance, ISM non-mfg and multiple Fed speakers in the agenda.
  • In the Eurozone, beyond the ECB, we have retail sales, industrial production and GDP.
  • In the UK, we have PMIs, industrial production, construction output, and trade balance.
  • In Japan, we have monetary base, PMIs, trade balance and final print of Q2 GDP.
  • In Canada, beyond central bank rates decision, we also have labor market report.
  • In Australia, focus is on RBA’s rates meeting, while other economic releases include trade balance, retail sales, GDP, home loans and investment lending.

Below is a breakdown of key events by day, courtesy of Deutsche Bank:

  • It’s a quiet start to the week today with Eurozone PPI and the Sentix investor confidence reading the only data of note. With the US closed there is no data scheduled across the pond.
  • Onto Tuesday, Japan and China’s (Caixin) service and composite PMIs are due early in the morning. Then we have UK and Italy’s service and composite PMI for August. There is also the final readings for service and composite PMIs for the Eurozone, Germany and France. Elsewhere, the Eurozone’s retail sales and final readings for 2Q GDP are due. In the US, there is factory orders for July and final readings for durable goods and capital goods orders.
  • Turning to Wednesday, Germany’s factory orders for July is the only data due out. Over in the US, the ISM non-manufacturing PMI, the Fed’s Beige book, trade balance and final Markit services and composite PMI are also due.
  • For Thursday, Germany’s industrial production for July are due along with France’s trade balance and current account balance stats. Elsewhere, house price data in the UK and Q2 GDP (final revision) for the Eurozone is due. This is all before the ECB meeting around midday. Over in the US, there is initial jobless claims, continuing claims and final readings for Q2 nonfarm productivity due.
  • Finally, on Friday, Japan’s trade balance and current account balance along with final readings for 2Q GDP will be due in early morning. China will also release its August import / export stats. In Europe, Germany’s trade balance, current account balance and export / imports stats are due. In the UK and France, industrial production, manufacturing production and trade balance stats are also due. Over in the US, there is the final reading for wholesale inventories along with consumer credit data.

Away from the data, today we’ll have the second round of negotiations for NAFTA in Mexico. On Tuesday US congress returns from the August recess to tackle issues such as the debt ceiling. Elsewhere, Fed Governor Brainard, the Minneapolis Fed President Kashkari and Dallas Fed President Kaplan will speak at separate functions. Turning to Wednesday, UK PM Theresa May will face opposition leader Jeremy Corbyn in parliament and the IMF’s managing director Lagarde will speak at a conference in Korea. President Trump will also meet House Speaker Ryan, Senate Leader McConnell and a few others to discuss the coming debt ceiling. Then onto Thursday, in the UK, Brexit Secretary Davis faces questions in the House of Commons about the state of Brexit talks. In the US, Cleveland Fed President Mester and NY Fed President Dudley are schedule to speak. Elsewhere, the IMF Managing Director Lagarde, BOJ Deputy  Governor and BOK Governor will meet for a two-day conference on growth in Seoul. Finally, on Friday, the Philadelphia Fed President Harker will speak on consumer behaviour in credit.

It is a quieter, holiday-shortened week in the US, where the key economic release this week is ISM non-manufacturing on Wednesday. There are several scheduled speaking engagements by Fed officials this week. Additionally, the Beige Book for the September FOMC period will be released on Wednesday.

Here is a full breakdown of what to expect courtesy of Goldman:

Monday, September 4

  • U.S. Labor Day holiday. US markets are closed, and there will be no major data releases.

Tuesday, September 5

  • 07:30 AM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will give a speech on the economic outlook and monetary policy at a breakfast hosted by the Economic Club of New York. There will be a live webcast of the speech, and audience Q&A is expected.
  • 10:00 AM Factory orders, July (GS -3.3%, consensus -3.2%, last +3.0%); Durable goods orders, July final (last -6.8%); Durable goods orders ex-transportation, July final (last +0.5%); Core capital goods orders, July final (last +0.4%); Core capital goods shipments, July final (last +1.0%): We estimate factory orders declined 3.3% in July following a 3.0% increase in June – driven by a decline in commercial aircraft orders. Core measures in the July durable goods report were strong, with better-than-expected growth and upward revisions in core capital goods shipments.
  • 12:30 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a moderated Q&A at an event hosted by the Carlson School of Management in Minneapolis. Audience Q&A is expected.
  • 01:10 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will also give a speech at a town hall event at the University of Minneapolis. Audience Q&A is expected.
  • 07:00 PM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated discussion at an event hosted by the Dallas Business Club. Audience and media Q&A is expected.

Wednesday, September 6

  • 10:00 AM ISM non-manufacturing index, August (GS 56.0, consensus 55.5, last 53.9): Regional service sector surveys were stronger on net in August, with notable gains in the New York Fed (+12.4pt to +11.7), Richmond Fed (+10pt to +22), Philly Fed (+8.4pt to +31.8), and Dallas Fed (+4.6pt to +15.1) non-manufacturing surveys. We expect the ISM non-manufacturing index to rebound 2.1pt to 56.0 in the August report following a 3.5pt decline in July. Overall, our non-manufacturing survey tracker rose 2.2pt to 56.3 in August, suggestive of a solid pace of growth in business activity.
  • 08:30 AM Trade balance, July (GS -$44.8bn, consensus -$44.6bn, last -$43.6bn): We estimate the trade deficit widened by $1.2bn in July. The Advance Economic Indicators report last week showed a wider goods trade deficit, and elevated export growth in recent months suggests scope for deterioration in the trade balance.
  • 09:45 AM Markit US services PMI, August final (consensus 56.9, last 56.9)
  • 02:00 PM Beige Book, September FOMC meeting period: The Fed’s Beige book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The July Beige Book noted that activity expanded across all districts, though the pace of growth varied. Labor markets continued to tighten, and wage pressures had risen since the prior report. In the September Beige Book, we look for additional anecdotes related to the state of consumption, price inflation, and wage growth.

Thursday, September 7

  • 08:30 AM Nonfarm productivity (qoq saar), Q2 final (GS +1.4%, consensus +1.2%, last +0.9%); Unit labor costs, Q2 final (GS +0.1%, consensus +0.4%, last +0.6%): We estimate Q2 non-farm productivity will be revised up in the second vintage by 0.5pp to +1.4%, above the 0.75% trend achieved on average during this expansion. Similarly, we expect Q2 unit labor costs – compensation per hour divided by output per hour –to be revised down by 0.5pp to 0.1% (qoq saar).
  • 08:30 AM Initial jobless claims, week ended September 2 (GS 250k, consensus 242k, last 236k); Continuing jobless claims, week ended August 26 (consensus 1,945k, last 1,942k): We estimate initial jobless claims rose 14k to 250k in the week ended September 2, reflecting a rise in Texas filings related to Hurricane Harvey. Continuing claims – the number of persons receiving benefits through standard programs – have declined in recent weeks, following an early-summer rebound.
  • 12:15 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Federal Reserve President Loretta Mester will give a speech on the economic outlook and monetary policy at an event jointly hosted by the Economic Club of Pittsburgh, World Affairs Council, CFA Society of Pittsburgh, and the Association for Financial Professionals. Audience and media Q&A is expected.
  • 07:00 PM New York Fed President Dudley (FOMC voter) speaks: New York Federal Reserve President William Dudley will give a speech titled “The U.S. Economic Outlook and the Implications for Monetary Policy” at an event hosted by the Money Marketeers of New York University. Audience Q&A is expected.
  • 07:00 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Federal Reserve President Raphael Bostic will take part in a moderated Q&A session on his views about the U.S. economy at an event hosted by the Atlanta Fed.
  • 08:15 PM Kansas City Fed President George (FOMC non-voter) speaks: Kansas City Federal Reserve President Esther George will give a speech on the U.S. economy and monetary policy at the Omaha Economic Forum in Omaha, Nebraska. Audience Q&A is expected.

Friday, September 8

  • 8:45 AM Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Federal Reserve President Patrick Harker will give a speech on “Consumer Finance Issues” at the New Perspectives on Consumer Behavior in Credit and Payments Markets Conference in Philadelphia.
  • 10:00 AM Wholesale inventories, July final (consensus +0.4%, last +0.6%)
  • 03:00 PM Consumer credit, July (consensus +$15.0bn, last +$12.4bn)

Source: BofA, ING, Goldman, DB

The post The Week’s Key Events: All Eyes On The ECB appeared first on crude-oil.news.

The post The Week’s Key Events: All Eyes On The ECB appeared first on aroundworld24.com.

No Picture

Moral Outrage Over Low Wages: Canada Joins Trump With Threats To Leave NAFTA

September 4, 2017 Tyler Durden 0

Authored by Mike Shedlock via MishTalk.com,
The threat of total abandonment of NAFTA took on a second front this weekend as Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor stand…

The post Moral Outrage Over Low Wages: Canada Joins Trump With Threats To Leave NAFTA appeared first on crude-oil.news.

The post Moral Outrage Over Low Wages: Canada Joins Trump With Threats To Leave NAFTA appeared first on aroundworld24.com.

No Picture

Ethereum, Bitcoin Crash After China Declares Initial Coin Offerings Illegal

September 4, 2017 Tyler Durden 0

Ethereum and bitcoin are crashing this morning, after China confirmed its recent threat of an ICO crackdown (reported here last Monday) when the central bank said on Monday that initial coin offerings are illegal and disrupt financial markets, according to statement on China’s central bank website. The PBOC also asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.

The crackdown was announced in a statement on the PBOC’s website in which the central bank said that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed. The regulator said that organizations or individuals that completed initial coin offerings should return the money raised, in move “to protect investors’ rights and properly handle risks,” though it didn’t specify how the money would be paid back to investors.

Taking the recent SEC crackdown on Initial Coin Offerings several steps further, the PBOC also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings, and are also also banned from offering pricing and information services on coins. Most importantly was the PBOC’s determination that “digital token can’t be used as currency on the market” and its warning that “China will strictly punish over sustained offerings and law violations in completed ones.”

The central bank’s Monday directive made no mention of cryptocurrencies such as ether or bitcoin. Bitcoin tumbled over 8%, the most since July on a closing basis, to $4,480. Ethereum was down more than 11% Monday, to just above $310, after trading nearly $400 last week.

“This is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions – the short story is we all know regulations are coming,” Jehan Chu, managing partner at Kenetic Capital in Hong Kong, which invests in and advises on token sales, told Bloomberg. “China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action.”

As described previously, ICOs are controversial digital token sales that have seen unchecked growth over the past year, raising $1.6 billion and surpassed traditional venture capital raising pathways. They have been deemed a threat to China’s financial market stability as authorities struggle to tame financing channels that sprawl beyond the traditional banking system. Widely seen as a way to sidestep venture capital funds and investment banks, they have also increasingly captured the attention of central banks that see in the fledgling trend a threat to their reign.

While hardly the world’s biggest coin offering market, China accounts for about a quarter of the blockchain based capital raising activity YTD: there were at least 43 ICO platforms in China as of July 18, according to a report by the National Committee of Experts on the Internet Financial Security Technology. Sixty-five ICO projects had been completed, the committee said, raising 2.6 billion yuan ($398 million).

Incidentally, just as we speculated in late July, when the SEC announced its own crackdown on initial coin offerings, a move we deemed would be beneficial in the long run for weeding out the various criminal and ponzi schemes that have proliferated in the unregulated market, so today’s move by China is seen by some as favorable for blockchain dynamics:

“This is a positive move given the rapid proliferation of low quality and possibly fraudulent coin sales promising the moon,” said Emad Mostaque, London-based co-chief investment officer at Capricorn Fund Managers Ltd. “There is tremendous value in the model but we need to see more separation of high quality, ethical offerings versus those seeking to circumvent securities law for a quick buck.”

Indeed, the SEC signaled greater scrutiny of the sector when it warned that ICOs may be considered securities, though it stopped short of suggesting a broader clampdown. The regulator reaffirmed its focus on protecting investors, however, and said issuers must register the deals with the government unless they have a valid excuse. The vast amount of money amassed in a short span of time has also attracted cyber criminals, with an estimated 10 percent of money intended for ICOs looted away by scams such as phishing this year, according to Chainalysis, a New York-based firm that analyzes transactions and provides anti-money laundering software.

China will likely eventually allow token sales, according to Chu of Kenetic Capital, however only on approved platforms, and may even vet projects individually. “I think they will allow the sale of tokens in a format which they deem safe and more measured,” he said.

The post Ethereum, Bitcoin Crash After China Declares Initial Coin Offerings Illegal appeared first on crude-oil.news.

The post Ethereum, Bitcoin Crash After China Declares Initial Coin Offerings Illegal appeared first on aroundworld24.com.

No Picture

India’s <b>crude oil</b> production remains flat, natural gas output grows 5.69 per cent in July

September 4, 2017 http://crude-oil.top/ 0

New Delhi: India’s total domestic crude oil production in July remained almost flat, declining 0.53 percent to 3,061 Thousand Metric Tonne (TMT) as …

The post India’s <b>crude oil</b> production remains flat, natural gas output grows 5.69 per cent in July appeared first on crude-oil.news.

The post India’s <b>crude oil</b> production remains flat, natural gas output grows 5.69 per cent in July appeared first on aroundworld24.com.

No Picture

“Is This Time Different?”: Global Risk Pares Losses Despite Report Of Imminent N.Korea ICBM Launch

September 4, 2017 Tyler Durden 0

Having started off with a sharp gap lower following Sunday’s news of the latest, 6th nuclear test by North Korea, global stocks and US futures pared losses in the overnight session, despite reports of North Korean preparations for yet another missile launch, while the yen trimmed its risk-off gains even as gold kept its upside and the South Korean Kospi closing 1.2% lower, with traders asking whether “this time will be different:, or inversely, will today’s market reaction will be a carbon copy of what happened last Monday, when stocks gapped sharply lower on North Korea missile launch fears, only to surge 1% by the end of the week, as shown in the chart below.

Still, concern that U.S. President Donald Trump has few viable options to rein in North Korea has disrupted a three-week-long rally in emerging markets, sending stocks to the biggest loss since Aug. 11: The MSCI index of world stocks dropped 0.7%, led by consumer-discretionary and industrial-goods sectors, as the relative strength index, a measure of momentum, fell to 60 from 68 on Friday.

The South Korean Kospi extended declined at the close, down 1.2% after Yonhap reported South Korea had detected North Korea’s preparation for an ICBM missile launch.  The index fell as much as 1.7% at the open Monday before paring back some of its decline to a 0.9% drop; volatility among South Korean stocks surged as much as +15%, although absent further escalation, that spike will likely be faded in the coming days.

Europe’s Stoxx Europe 600 Index declined, with all industry sectors in the red, after a Monday morning report from Yonhap that Pyongyang is preparing to launch an intercontinental ballistic missile heightened investors’ unease. European equity markets opened lower and stay within a tight range, with tech and banking lagging.

Both USD/JPY and U.S. equity futures fell, but have stayed within overnight ranges and in the case of the Yen, much of the latest gains have been unwound, while European government bonds advanced and Swiss franc led currency gains.

The euro strengthened even as economists expect European Central Bank President Mario Draghi to express concern Thursday about the currency’s rise. Industrial metals including copper and nickel extended a rally. US Treasuries and bund futures briefly hit session highs on Korean concerns before fading. The German curve steepened, with focus on upcoming supply this week.

Having surged to the highest level since the Trump election victory, spot gold edged modestly lower from overnight high, tagging $1,334 in early trading.

Currencies, as a group, erased losses thanks to an advance in offshore yuan; otherwise, most currencies are lower against the dollar.

Meanwhile, China’s onshore yuan extended gains to a 15-month high as North Korea’s nuclear test failed to dent bullish sentiment on the currency. The Chinese exchange rate traded in Hong Kong’s overseas market rose for a 14th day, the longest rally on record. In onshore markets, the CNY climbed 0.5% to 6.5245 per dollar; the currency climbed 1.35% last week, the strongest showing in CFETS data going back to April 2007. The PBOC strengthened the yuan reference rate by 0.37%, the most since Aug. 10, to 6.5668 against the greenback.

It wasn’t just the Yuan that proved immune to Korean worries: shares in mainland China rose as strength in commodity producers outshone concerns about North Korea saying it successfully tested a hydrogen bomb over the weekend. Hong Kong’s benchmark fell for a third day. The Shanghai Composite Index rises 0.4%, most in a week, to 3,379.58

What happens next for global risk is in the hands of China and the US as the North Korean conflict is rapidly escalating into a proxy war of the world’s two most powerful nations.

US markets are closed on Monday for holiday.

Top Overnight Headlines

  • South Korea has continued to detect preparations related to another ICBM launch by North Korea according to a Defense Ministry official
  • Trump says U.S. considers new sanctions, stopping all trade with any country doing business with North Korea; Mattis says ’many military options’ available
  • Mnuchin says debt limit hike should be linked to Harvey aid
  • China says using force to resolve the North Korea issue isn’t an option: Reuters
  • China says U.S. President Trump’s trade threat over North Korea is “unacceptable” and “unfair”
  • U.K. government has proposed extending the next round of Brexit negotiations on a rolling week-by-week basis until breakthrough is reached on financial settlement according to people familiar: Politico
  • U.K. Aug. Construction PMI: 51.1 vs 52.0 est; weakest reading since July 2016, Markit note reduced levels of commercial building
  • U.K.’s Davis dismisses reports of GBP50 billion EU payment as ’nonsense’
  • Portugal outlook changed to positive from stable by Moody’s
  • Ex-PBOC adviser urges free float of yuan rate: Securities Journal

In European equities, risk-off sentiment following North Korea’s nuclear test has hit European shares in early trading this Monday, with all sectors in negative territory, led by financials. In regards to stock specific movers, Fiat Chrysler are down around 3 percent after its CEO said that Fiat had received no offer for the firm.

In fixed income, EGB’s trading a better levels following the aforementioned newsflow out of North Korea. Peripheral bonds outperforming against their German counterpart as spreads tighten. Eyes could be on the performance of PGB’s vs. Bunds after Moody’s placed Portgual’s sovereign rating on positive outlook, as such a possible upgrade to investment grade from junk may see the spread narrow to YTD lows at mid-220bps.

In currencies, JPY/CHF: Safe haven flow dominating sentiment to begin the week, which came after reports that North Korea successfully launched its most powerful so-called H-Bomb to date. In turn, USD/JPY  slipped to the mid-109s while USD/CHF broke through 0.96 as risks are seemingly skewed to the downside as markets digest and monitor the situation. Aside from the tensions on the Korean Peninsula, concerns over the US debt limit will keep a lid on risk appetite, providing further headwinds for the greenback. The soft NFP report on Friday and dampened risk sentiment has underpinned EUR this morning. Although the currency remains below 1.1900 as the ECB meeting is likely to cap near term gains as speculation mounts over potential comments from Draghi and Co. regarding the recent appreciation in EUR.

In commodities, WTI and Brent crude futures slipping this morning, more notably in Brent as WTI is somewhat supported as several refineries resume activity. RBOB gasoline futures easing after emergency stocks had been released amid early indications that the damage to infrastructure were not as bad as initially feared.

* * *

DB’s Jim Reid concludes the overnight wrap

With August behind us and the weather here in the UK yesterday already starting to resemble autumn it feels like the final push into the end of the year is well and truly on. This week should be an interesting one with the highlight likely coming this Thursday with the ECB meeting. We aren’t expecting any policy announcements – indeed our economists expect Draghi’s strategy to be one whereby he and the ECB wrap the QE exit step in dovishness when it is announced in October – but the risk is perhaps that Draghi says very little at all and buys even more time for the ECB. In this regard, what Draghi does or doesn’t say about the euro is what most in the market will probably be looking out for. It feels like the consensus expect Draghi to address the recent appreciation but we’d imagine that he will probably have to also strike a bit of a  delicate balance given that the data is holding up pretty well still. Draghi’s job was perhaps made ever so slightly easier by that fact that the single currency closed on Friday 1.75% off Tuesday’s highs but it is still up 3.50% since the ECB last met back in July.

Anyway that is for Thursday. In the meantime, it feels like déjà vu writing this again this morning as the weekend headlines are once again dominated by the latest North Korea missile test. Yesterday’s test was called a “perfect success” by the Korean Central News Agency with the underground explosion supposedly ten times more powerful than previous detonations. The explosion also caused a magnitude 6.3 earthquake and all the talk is that the test has reached new ground in terms of potential magnitude and power. President Trump responded to the latest test by saying that “the United States is considering, in  addition to other options, stopping all trade with any country doing business with North Korea”. Treasury Secretary Mnuchin confirmed that he is drafting a sanctions package to send to Trump and Defence Secretary Mattis said that the US has “many military options” when questioned about a possible response. Other world leaders also had their say. Germany Chancellor Angela Merkel said that North Korea’s latest actions had reached a “new dimension” while Russia’s Putin and China’s Xi Jinping also responded and agreed to “appropriately deal with” the latest test. An emergency UN meeting has been called for today.

The latest development has seen markets in Asia start the week with a risk-off tone although moves overall have been fairly modest still. In terms of safe havens, Gold is up +0.61%, while the Yen and Franc are +0.41% and +0.38% respectively. Equity markets across Asia are down with the Nikkei (-0.86%) and Kospi (-0.79%) standing out the most, while the ASX 200 (-0.49%) and Hang Seng (-0.47%) are also in the red. Markets in China are flat.

It’s worth noting that the US is off today for the Labour Day holiday so we will have to wait until tomorrow to see how cash markets across the pond respond although S&P 500 futures are down around -0.32% as we go to print. In terms of other news from the weekend, in Germany, Merkel and her Social Democratic opponent Martin Schulz took part in a TV debate where they clashed over refugee policy with Merkel standing by her view on keeping the country’s borders open and Schulz attacking Merkel for her early response to the refugee crisis in 2015. This was actually the only live TV debate between the two leaders before the election on September 24th and the latest polls show Merkel as holding a roughly 13-14% lead over Schulz after the latter had at one stage closed that gap completely earlier in the year. According to Bloomberg two flash polls released after yesterday’s debate were scored a draw and a Merkel win.

Elsewhere, here in the UK, Brexit Secretary David Davis called a Sunday Times report suggesting that PM Theresa May was to approve a £50bn Brexit Bill as “nonsense”. The report also suggested that May won’t disclose any details on kick starting trade talks until after the Tory Party conference in October. Conversely, EU negotiator Barnier said the British people need to be “educated” about the price they will pay for quitting the EU.

Meanwhile in the US it’s worth noting that Congress will return from the August recess on Tuesday with the debt ceiling debate almost certain to be front and centre. Over the weekend Mnuchin noted that the debt limit should be linked into a package of relief for victims of Tropical Storm Harvey. The suggestion on Friday was that the House could plan a vote on funding as a standalone bill this week but the latest comments suggest that this is less likely now. Assuming lawmakers don’t get in the way of relief efforts, one would imagine that this perhaps lowers the risk around the debt ceiling as time ticks down towards the end of month deadline.

Now just recapping the macro data on Friday. In the US, the main focus was a softer than expected August employment report, with the change in nonfarm payrolls coming in at 156k (vs. 180k). Adding to the disappointment, the unemployment rate was a tad higher at 4.4% (from 4.3%) and average hourly earnings rose just 0.1% mom (vs. +0.2% expected), leaving growth at +2.5% yoy.

However, we would still characterize the labour market as being in solid shape and note that the August reports can be impacted by difficulties in seasonaladjustment around the holiday period. Further, our US economics team notes that they would not be surprised to see subsequent positive revisions (since 2010, August payrolls have been revised up by +55k on average between the initial and third prints). Elsewhere, the August ISM manufacturing was higher than expected at 58.8 (vs 56.5 expected), marking the best reading since March 2011. Moving along, the University of Michigan consumer confidence print was softer than expected at 96.8 (vs 97.5) but the final Markit US manufacturing PMI was revised up slightly to 52.8 from 52.5.

In Europe, UK’s manufacturing expanded at the strongest pace in four months, with the August PMI at 56.9 (vs. 55.0 expected). In Italy the manufacturing PMI was also higher than expected at 56.3 (vs. 55.3 expected) while the final reading for 2Q GDP was confirmed at +0.4% qoq and +1.5% yoy. Elsewhere, other final Markit manufacturing PMIs were broadly in line with the flash estimates, with the Eurozone at 57.4 and France at 55.8, but Germany was a tad lower at 59.3 (vs. 59.4 flash).

By the end of play markets ended slightly firmer with the S&P 500 closing +0.20% and Stoxx 600 up +0.60% driven by gains in mining names. Bond yields rose in the US and Europe, with UST 10y up 5bp to 2.166% and core European bond yields up around 2bps. The US dollar index was broadly unchanged on Friday and has dipped 0.20% this morning. Elsewhere, WTI oil edged up 0.3% and US gasoline prices fell 1.8% on Friday (first decline in the week) and have fallen a further 2.8% this morning.

Taking a step back, it’s worth noting that the current rally in the S&P 500 is the 3rd longest since WWII without a 3% selloff, but our asset allocation chief strategist Binky Chadha remains constructive. He noted that the market remains overdue for a pullback and rising domestic and geopolitical risks provide plenty of potential catalysts. But as in past episodes, he views the economic and market context dominating. On the economic front, Binky sees further upside to global growth, with PMIs having further to recoup pre dollar and oil shock levels, a strengthening in the US labour markets and capex, while Binky also expects earnings growth to sustain in the double digits. On the market front, he sees the demand-supply picture for US equities becoming more supportive with inflows on a turn up in data surprises and higher rates as inflation picks up.

The post “Is This Time Different?”: Global Risk Pares Losses Despite Report Of Imminent N.Korea ICBM Launch appeared first on crude-oil.news.

The post “Is This Time Different?”: Global Risk Pares Losses Despite Report Of Imminent N.Korea ICBM Launch appeared first on aroundworld24.com.

No Picture

Three years after the war: Gaza youth speak out

“At bedtime, I am afraid to turn the lights off. I am not a coward, it is just that I worry that this bulb hanging from the ceiling is the last light that remains (shining) in my life.” Soon after he penned these words, Moath Alhaj, a young artist from a Gaza refugee camp, passed away in his sleep. After disappearing for two days, Moath’s friends broke down the door of his house and found him huddled with his blanket in a place in which he lived alone for 11 years. Moath lived in the Nuseirat Refugee Camp, one of Gaza’s most crowded camps, a name which is associated with historic hardship, war, and legendary resistance. Raised in the United […]

The post Three years after the war: Gaza youth speak out appeared first on aroundworld24.com.