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Finance Update – Indexes Green Ahead of Earnings


Asia – Russia announces vaccine as “successful & safe”

Asian indices begin the week on a note of optimism as quarterly earnings seep in. The Shenzhen Composite is up 2.95%, the Nikkei 2 and the Hang Seng 1.32% – all this after the Russian Institute for Translational Medicine and Biotechnology announced that is coronavirus vaccine has tasted “successful & safe”.

The Yen has reacted to generally good data over the weekend with a 3 pip increase after Thursday’s PPI entered positive territory at 0.6% MoM in June. This morning’s Tertiary Industry index rose from -6% in April to -2.1% in May.

Meanwhile, Reuters reports that container traffic and production in China is being ramped up in preparation for COVID-lockdown easing throughout the globe. And India has launched talks with the EU on a preferential free trade agreement, hoping to do the same with the UK.

Europe – UK prepping public for no-pact pullout

European equities ended last week in the green led by the Italian FTSE’s 1.34%.

The Euro is up 36 pips this morning after Germany’s trade surplus doubled in May to €7.6 bn, while Italy’s industrial output in May shifted dramatically from a 20.5% contraction in April to a seasonally adjusted 42.1% expansion in May YoY.

Today, the British government will launch a media campaign preparing businesses and the public for a no-deal Brexit. It is also limiting the power of Wales and Scotland to issue financial aid.

Americas – WH taxing French imports at 25%

US Trade Representative Robert Lighthizer announced Saturday 25% tariffs on €1.1 of French imports after France launched “digital” taxes on major (US) technology firms and said it would not ban Huawei from its 5G cellular network.

In NY, benchmarks are looking ahead to earnings season with a DOW that ended the week up 1.44% and a Nasdaq up 0.66%.

The USDX lost 9 cents on the dollar over the weekend despite a marked improvement in jobless claims – 18 mn continuing and 1.3mn new, both which propelled the dollar up a bit on Thursday. PPIs in June, however, continued south in June.

Commodities – Venezuela tankers targeted

Oil is down another 0.64% this morning despite another 4-well contraction in the Baker Hughes rig count thanks to expectations that OPEC will ease its production limits this week.

The US is currently pressuring tanker companies involved in trade with Venezuela to adhere to sanctions. Lloyds, for example, is reportedly refusing insurance for such vessels.

Gold continues up, adding $7 on the ounce, stopping just short of its 10-day resistance at 1809.

Corporate – Pepsi publishing profits

Tesla closed up 10.8% after slashing prices on its new Model Y crossover by $3K. The company says this is its first model to turn a profit in its first quarter of sales.

Quarterly earnings today are in from PepsiCo. Delta Airways, CitiGroup, Wells Fargo & JP Morgan launch the season in full vent tomorrow, which is also the ex-dividend day for Danone.

FedEx and Daimler will be paying dividends today, as well.


03:30 PM GMT UK BoE Gov. Bailey speech. Like-for-like retail sales at 11 PM
06:00 PM GMT US Monthly Budget Statement
10:45 PM GMT NZ Visitor Arrivals & House Price Index (ND). Inflation report at 2 AM
01:30 AM GMT (+1) Australia Business conditions & confidence
ND China Trade Balance

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