News / Analysis
Finance Update – Trump Kills Relief BillOctober 7, 2020
Chinese indices are mainly neutral this morning, the Hang Seng up 0.79% and the Nikkei down 0.18% following Japan’s leading economic index, which added 2 points, rather than the expected 3.
Australia’s ASX is up 1.25% despite yesterday’s dismal Trade Balance report and a 6-point drop in the AiG’s Services Index; and the NZ dollar is down a 1/10th per cent after the Global Dairy Trade price index fell to 2.2%.
The Yuan saw some irregular volatility overnight.
European indices were mainly up to the tune of about a half per cent yesterday, Austria’s ATX gaining 1.59% but Holland’s AEX losing 0.46%.
The Euro bounced off support this morning at 1.1744 after Germany reported a 0.2% decline MoM in Industrial Production and France’s trade deficit expanded to €-7.71 bn in August.
Markit yesterday published a 2-point improvement in Britain’s Construction PMI (56.8). The pound added some traction as Brexit talks took on a rosy colour when social security rights talks shot forward. Fisheries, competition and dispute resolution still remain in a quagmire. Meanwhile, the nation’s National Audit Office also warned that £26bn could be lost from the government’s COVID loan scheme to fraud.
US markers closed down yesterday led by the Nasdaq’s 1.57% drop after Pres. Trump halted talks on the Congressional relief package, while FED head Jerome Powell told the NABE that the US federal budget is on an “unsustainable path”.
The USD flattened its rise at 93.91 after August’s Trade Deficit increased to $67.1 bn, the Redbook index fell a tick to 2.1%, and Jolts Job Openings dropped 200K to 6.49mn in August.
The Loonie lost 0.16% overnight after Canada released a worse-than-expected improvement in its Merchandise Trade Surplus.
WTI is up to 39.93 after peaking yesterday at 40.84 following a 0.95mB increase in crude inventories and Trump’s COVID relief bill obliteration. WTI lost 1.57% and Brent 1.31% during the Asian session after Refinitiv revealed China’s imports for September were down to 11.71mbpd from June’s 12.9 – launching fear of the beginning of a downtrend.
And gold plunged by over $40 an ounce yesterday on closed Chinese markets due to the nation’s celebration of the establishment of the PRC.
All major cryptos are down this morning after the UK’s FCA banned sales of crypto derivatives to retail investors and Ripple Chairman Chris Larsen said his company would leave the US unless the SEC improve its policies. Meanwhile, China’s deputy central banker Fan Yifei told Sibos 2020 conference attendees that the nation’s digital Yuan pilot had seen 11,300 consumer wallets processing about $162mn-worth of transactions. The pilot is being expanded to include Beijing, the Yangtze River Delta region, the provinces of Tianjin, Hebei and Guangdong, Hong Kong and Macau, with central and western China joining in the near future.
With congressional talks steaming ahead, Twitter (-3.61%) and Facebook (-2.26%) have begun removing COVID misinformation penned by the US president. House Democrats yesterday said that Amazon, Apple, Google and Facebook enjoy “monopolistic powers” and antitrust laws should be changed to promote diversity.
Meanwhile, Facebook has begun closing down QAnon groups and pages, classifying them as a dangerous militarized movement that promotes violence. The group has been praised by Trump and other Republicans.
Barclay’s (+3.27%) private European banking head, Gerald Mathieu yesterday told Reuters the company was planning to launch services in France, Italy, Spain and Germany next year, adding to current operations in Monaco, Switzerland and Ireland.
Walmart (-0.83%) overnight announced it would begin selling Medicare insurance in 50 states. It already offers low-cost dental care and counselling. And Apple announced a release date for its 5G iPhone12 – October 13.
Earnings season budding, Levi Strauss yesterday reported better-than-expected revenues – dropping 27% YoY with PS at 7 cents. Ecommerce revenues soared by 52%. Today, look out for Tesco as Ericsson, Merck and Seagate pay dividends.
|08:00 AM GMT||Italy||Retail Sales|
|08:30 AM GMT||UK||House Price Index.|
|11:00 AM GMT||US||Mortgage applications. FOMC minutes at 6 PM and consumer credit change at 7.|
|02:30 PM GMT||OIL||EIA Crude Oil Stocks Change|
|11:50 PM GMT||Japan||Trade Balance, Current Accounts & Foreign Investments|
|Midnight GMT||NZ||Business Confidence|
|06:00 AM GMT (+1)||Germany||Trade Balance & Current Accounts|