News / Analysis
Finance Update – The Ennui SetUpAugust 4, 2020
Asian markets are taking yesterday’s cue with only the Shenzhen Composite down 0.96%. Australia’s S&P/ASX leads with a 1.95% surge after the nation’s central bank decided to maintain its 0.25% interest rate overnight. June’s trade surplus widened to $8.2 bn, failing to meet expectations of 8.8.
In Japan, consumer inflation rose beyond expectations to double the previous month – 0.6% for July. The country’s foreign minister, Toshimitzu Motegi, is expected to land in the UK this month for trade and investment talks.
Reuters this morning reports that China purchased only 5% of its required $25 bn in energy products from the US, based on its Phase-1 trade agreement.
European benchmarks all thrived yesterday, the Dax reading a 2.71% increase.
Manufacturing PMIs exceeded expectations throughout the continent, except in the UK where it dropped 3 ticks to 53.3 in July.
In Germany, the IFO Institute this morning reports that car manufacturing is back on the rise.
Indices closed in the green yesterday, the Russel 2000 leading with a 1.8% gain.
The dollar index lost 40 cents after Markit’s manufacturing PMI showed a 0.4 point contraction rather than the expected 0.7 point increase. Gain returned, however, when the Institute for Supply Management returned with a better-than-expected 1.6 point increase to 54.2.
FED officials Kaplan, Bullard, Evans and Barkin said through several publicly broadcast venues that US households will require increased government spending ahead of a meeting between the administration and lawmakers, which are locked in a dispute over further measures. The treasury yesterday announced it expected to borrow an additional $2.16tn in H2 of this year.
Leaprate yesterday revealed that Apple (+2.52%) had purchased Mobeewave, a Canadian electronic payments tech company that will enable iPhones as payment devices. And Google yesterday issued $10mn worth of investment-grade bonds with a record-low 0.45% coupon.
Meanwhile, GM has called for reopening racketeering charges against Fiat/Chrysler, saying the company had hidden bribe payments to GM unions.
In earnings, Bayer this morning reported a 2.5% decrease in revenues to €10.05 bn, while BP reported a $6.7 bn loss. Yesterday, AIG reported a $7.9 bn net loss, posting 66 cents in earnings per share, and Ferrari missed expectations with €9 mn net profits – 95%
Today, Rolls Royce reports alongside Disney, Prudential, Western Union, Devon Energy, Sony, Ralph Lauren, Exelon, Transdigm, Microchip and Fox.
|09:00 AM GMT||EU||PPIs|
|12:55 PM GMT||US||Redbook Index. ISM NY Business Conditions at 1:45 PM and factory Orders at 2.|
|01:30 PM GMT||Canada||Markit Manufacturing PMI|
|08:30 PM GMT||Oil||API Weekly Crude Oil Inventories|
|10:30 PM GMT||Australia||Construction Index. Commbank Services & Composite PMI at 11 PM.|
|10:45 PM GMT||NZ||Unemployment & labour costs.|
|01:45 AM GMT (+1)||China||Caixin Services PMI|