News / Analysis
Finance Update – HSBC Bows to ChinaJune 4, 2020
Asia – Phase-1 Trade Deal in Tatters
Asian indexes are mostly up this morning, except the Shanghai Composite, which lost 0.15%.
The Hang Seng is up 0.15% as the island’s legislature votes on the controversial national anthem bill.
Australia surprised to the upside this morning with an $8.8 bn trade surplus. March’s $10.6bn figure was expected to fall to 7.5.
And while China introduces COVID-related parameters for incoming flights, the US Department of Transport said it is banning flights coming in from China as a penalty for victimizing Hong Kong.
Meanwhile, the Wall Street Journal reports that Chinese shipping companies are cancelling US imports covered by the Phase-1 deal between the 2 countries.
Americas – US in Work Data Mode
US equities registered another day of rises led by the DOW’s 2%. US data was mostly good, PMIs adding a point each but still deep into contractionary territory, factory orders contracting by a less-bad-than-expected 13%.
With today’s jobless claims expected to fall for the first time in 2 months, the ADP employment change yesterday showed a “mere” 2.7million jobs contraction.
Europe – ECB Talks Rates
European indexes gained nicely yesterday, the DAX adding 3.88%with other benchmarks not far behind.
The Euro lost a quarter percent during the Asian session after contractionary European PMIs exceeded expectations across the board.
Unemployment in Germany climbed in May to a concerning 6.3%, while the EU figure rose less than expected to 7.3%.
Reuters reports that the UK’s Society of Motor Manufacturers and Traders reported this morning a 90% drop in car sales.
Traders today await the ECB’s meeting to discuss €1/2tn additional stimulus to the corona-stricken economy and perhaps even pushing interest rates into negative territory.
Yesterday, Germany’s Angel Merkel announced a €130 bn stimulus package.
Commodities – Oil Down on OPEC+ Quibbles
This morning finds safe-haven gold at the bottom of its 2-month range just above the 1700 mark.
Oil yesterday surprised with a $2 drop despite the EIA’s confirmation of a 2-million-barrel contraction in supplies.
At fault -OPEC+’s failure to convene today to discuss production cuts in view of a possible increase in US production, now that shale extraction has become feasible once more.
Corporate – Broadcom Earnings Today
Broadcom today announces quarterly earnings.
EPS is expected to come in at $5.14 – nearly in line with the previous quarter’s $5.25, on revenues of $5.69bn – down 3% QoQ.
ANZ shares are up 1.85% this morning after the group announced the sale of its NZ-based asset financing service to Japan’s Shinsei Bank.
Snapchat is down a tenth after announcing it would no longer promote Pres. Trump’s account, while HSBC is up 4.42% after announcing it will support China’s security laws in Hong Kong.
The Hong Kong Shanghai Banking Corp began its life as a repository for opium traders in the 19th century and has since been repeatedly accused of money laundering for organized crime and terror organizations, breaching benchmark regulations, tax avoidance end even funding terror. Cathay Pacific, which supports the protesters is up 3%.
|09:00 AM GMT||EU||Retail Sales. ECB Interest Rate at 11:45. Policy statement at 12:30|
|12:30 PM GMT||US||Trade Balance & Jobless Claims.|
|12:30 PM GMT||Canada||Imports, Exports & Mercantile Trade|
|10:30 PM GMT||UK||Consumer Confidence|
|11:30 PM GMT||Japan||Household Spending. Leading Economic Index at 5 AM (+1)|
|01:00 AM GMT (+1)||Australia||New Home Sales.|