News / Analysis
Finance Update – The Presidential PerturbationSeptember 30, 2020
Chinese indices are slightly up this morning, the Hang Seng, Shenzhen and Kospi adding about 0.8%.
The ASX is down -1.8% and the Nikkei -1.37% after the Yen bounced off support at 0.9460 following an excellent 4.6% increase in MoM retail sales and a better-than-expected 1.7% MoM increase in industrial production. Construction increased by 28.5% following July’s 22% decline, and housing starts contracted by 9.2% – a per cent better than expected.
The Yuan continues unhinged despite a better-than-expected improvement in NBS PMIs and despite a 1-tick deterioration in the Caixin Manufacturing PMI. The NZD continues a weathered ascent thanks to last night’s 0.3% increase in building permits and an improved activity outlook – -5.4% – half the expected decline. Business confidence, however, dropped 2.5 points to -28.5 in September.
European indices were mainly in the red last night led by Portugal’s PSI20’s -1.35%. The CAC40 was least damaged at -0.23%.
The Euro added 50 pips during the European session, losing some of that in Asia, after considerable improvements in all sentiment markers, save the industry, which failed to improve as much as expected and remaining deeply negative.
German CPIs were in the red, falling to -0.4% YoY in the preliminary September tally, while this morning’s retail sales for August shows a 3.1% increase MoM – not enough, though, to prevent a continuing drop in the yearly measure.
The pound is slightly down after jumping half a cent on central banker Andrew Bailey announcement to a Queen’s University Belfast audience that negative interest rates were not being ruled out. UK Mortgage approvals shot up to 84.7K, and BRC Shop price losses remained level with July at -1.6%. Parliament yesterday gave itself the authority to break the Brexit deal despite the action’s perceived illegality. This morning’s data shows a marked improvement on expectations, house prices up 5% YoY and Q2’s GDP contracting by 19.8% – half a per cent better than expected.
With Biden leading post-debate polls on average 6 to 4, US indices closed between a quarter and a half per cent down, each.
The USD continued sliding after wholesale inventories increased by 0.5%. Home prices, on the other hand, added 3.9% – a tick higher than expectations. The nation’s goods trade deficit widened to $82.94bn in August and September’s consumer confidence index increased by 17 points to 101.8.
In addition, the WTO yesterday approved 4$bn of EU tariffs on US imports in retaliation for the government’s Boeing subsidies.
WTI fell steeply to the tune of $2 per barrel yesterday before temporarily regaining about a third on the API’s 0.83mB inventories decline.
And gold recovered some of last week’s losses before Asia woke up.
Alibaba’s (+3.32%) chief financial officer yesterday told investors that the company’s cloud unit should become profitable by the end of 2021. The unit’s revenue grew 59% YoY during Q2, according to Reuters.
Google is up a half per cent ahead of the US Department of Justice’s anti-trust lawsuit, launching next week. Pfizer is down 0.6% after Chinese immuno-oncology drug manufacturer CStone announced the US multinational was purchasing 10% of the company.
Today, expect earnings from Philip Morris, and dividends from Broadcomm, Pepsi, Prologis, Western Union, Vienna Insurance, Ameren and the Hess Corporation.
|08:50 AM GMT||Germany||Unemployment|
|09:00 AM GMT||Italy||CPIs|
|11:00 AM GMT||US||Mortgage Applications. ADP Employment change at 12:15 PM. Personal consumption & GDP at 12 :30. Chicago PMI & Pending Home sales at 2.|
|12:30 PM GMT||Canada||GDP & Raw materials price index|
|10:30 PM GMT||Australia||Performance of Manufacturing Index. CommBank PMI at 11.|
|11:50 PM GMT||Japan||Manufacturing outlook & all industry indexes. Also, foreign investments in bonds & shares. Manufacturing PMI at 0:30 AM (+1)|