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News / Analysis

Finance Update – Curiouser & Curiouser


Europe – Brexit negotiators turn to Twitter

With the Huffington Post this morning reporting on a Twitter spat between UK chief negotiator David Frost and his EU counterpart Michel Barnier, European benchmarks closed mixed – the FTSE up 0.48% and the DAX down 0.05%.

PM Johnson will today bring his proposal to renege on all former Brexit agreements to Parliament, where the idea is reportedly anathema to some of his own partners, too, Reuters reports.

Britain’s July Trade Deficit fell to £-2.363 bn while other markers exceeded expectations – industrial production expanding by 5.2% MoM and manufacturing production by 6.3%. On Friday, the National Institute of Economic and Social Research declared it expected GDP to increase by 7% in the current quarter.

The Euro maintains some upward momentum after ECB maintained its interest rate at 0%. Industrial output in Italy exceeded expectations, falling just over a per cent to 7.4% in July rather than halving.

France’s performance was not as good – plunging to 3.8% from 13% in June. Germany and Spain’s CPIs came in level for August, while the latter’s industrial production exceeded expectations, contracting by only 6.4% – half the June figure.

In other news, Leaprate reports that Euronext is negotiating the purchase of Italy’s Borsa Italiana.

Americas – Stone to Trump: declare Martial Law

Not to be outdone by the European way of doing things, Roger Stone is proposing that US President Trump declare martial law in case of an election loss.

Notwithstanding, index futures are up between 1 and 1.5% this morning after closing mixed yesterday – the DOW up a half per cent and the Nasdaq down 0.6%. Downward pressure was applied by Congress, which voted against the proposed $500 bn stimulus. Democrats had vied for an additional $3 tn.

The US Treasury on Friday reported a better-than-expected $200 bn deficit, more than triple July’s figure but still 45 bn less than expected. August’s CPI climbed to a better-than-expected 1.3% YoY while the PPI increased by 0.3% MoM as did July’s wholesale inventories.

Labour news was less positive – initial Jobless Claims remaining at 884K and the continuing figure climbing to 13.384 million claimants.

Asia – Japan optimistic on new PM

Asian indices are up this morning led by the Shenzhen Composite at 0.75%. Shares were led higher as Shanghai’s new STAR electronic board received permission from the securities regulator to list ETFs.

With a 0.56% raise, the Nikkei seems optimistic as the nation awaits the premiership of Yoshihide Suga, replacing Shinzo Abe and his potential cabinet lineup. Japan’s PPI improved in August to -0.5% YoY, and Industrial production for July expanded by 8.7% MoM.

The Yuan’s recent rise was stemmed overnight when the central bank lowered its rate against the USD by 25 pips. And in further signs of economic recovery, China house prices added another 4.8% in August.

Commodities – ECB fears stablecoins

Oil continues its 5-day sideways trend after Baker Hughes reported a 1-rig reduction in active oil wells. Prices are being buoyed by a tropical storm in the Mexican Gulf threatening production while downward pressure is provided by BP’s report this morning that the outlook for post-COVID oil demand will remain grim.

And Bitcoin continues above the 10K mark after 5 European finance ministers called upon the European Commission to begin considering regulation for stablecoins to protect the Euro from potential offerings from major tech firms.

ECB head Christine Lagarde told a Deutsche Bundesbank’s conference on banking and payments that the EU has fallen behind digital asset development, according to CoinDesk, and that governments and central banks risked losing their monetary role in their own countries.

Corporate – ByteDance teams with Oracle

Oracle was down 0.58% on Friday before ByteDance’s Sunday announced it was dropping plans of a US sale of TikTok to pursue a partnership with the US computer tech firm.

Also awaiting today’s open, Nvidia was down 1.2% Friday while Japan’s SoftBank is up 9% as the former revealed its intention to by Arm Holdings from the latter for about $40 bn, helping nudge the Nikkei up overnight.

Today, expect dividends from MetLife Insurance, AstraZeneca, Pfizer and Merck. Also from Broadcom, Motorola, Invesco, Iron Mountain, Best Buy, Sempra Energy, Viacom-CBS and BlackRock.


09:00 AM GMT EU Industrial Production
ND UK Inflation report hearings & Brexit Parliamentary vote. Unemployment at 6 AM (+1)
03:30 PM GMT US 3 & 6 month Treasury Bill Auctions
10:00 PM GMT Australia Westpac Consumer Survey. RBA Minutes & house prices at 1:30 AM (+1)
02:00 AM GMT (+1) China Retail Sales, Industrial Production & Fixed Asset Investments


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