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News / Analysis

Finance Update – It’s In the Blood


Americas – Markets await Powell’s Hole Speech

Markets are optimistic this morning after the US’ Food & Drug Administration (FDA) approved the use of blood plasma from recovered patients as a Covid-19 treatment option, according to Reuters.

US index futures continue to new highs after closing up Friday, as punters gear up for the first virtual Jackson Hole Summit ever, this week. Fed Head Powell is slated to explain his bank’s policy framework on Friday.

Meanwhile, initial jobless claimants shot above the million mark last week, but the continuing figure was green, adding 400K rather than the 600K expected. PMIs in the US improved markedly, manufacturing up 2 points to 53.6 and services up 4 to 54.8. Existing home sales also increased by over a million 7 units to 5.86mn MoM in July.

Retail sales in Canada increased by 23.7% in June, nearly a point less than the desired.

Asia – Keqiang Confident

Asian benchmarks are all in the green this morning led by the Hang Seng at 1.68% and the Nikkei leading the rear at 0.24% as PM Shinzo Abe raises COVID concerns by visiting the hospital again.

Chinese banks are reporting earnings this week, as the government demands they ease pressure on COVID-struck businesses. Steps include sacrificing about $200bn-worth of profits, “disposing” of about $490 bn worth of bad loans and slashing bankers’ salaries, according to Reuters.

China’s annualised GDP increased by 3.2% in Q2, with PM Li Keqiang estimating the economy will be adding 9 million new jobs by year’s end.

The AUD weathered some weakness as the week ended after Combank produced PMIs dropping well into contractionary regions for services and composite, while losing a mere tick in manufacturing.

And the NZ Dollar is still recuperating from Sunday night’s retail sales figures showing a tragic 14.6% contraction (QoQ) in Q2.

Europe – PMIs tank

European indices ended the week mixed, the FTSE and DAX up 0.16% and the CAC40 down 0.3%.

Preliminary PMIs for August on Friday were mostly in the red across the region, except for manufacturing in Germany and the UK, both up 2 points, with services in the UK shooting up nearly 4 points to 60.1.

The Gfk Group’s consumer confidence marker for Britain last week remained at -27, below expectations, while retail sales expanded by a better-than-expected 3.6% (MoM) in July.

Commodities – Oil down on Rig Count, up on hurricanes

WTI sank by a dollar and a half on Friday after Baker Hughes revealed an additional 25 rigs online last week. The commodity has since regained half its losses as storms close in on the Mexican Gulf, threatening production. Mexico, which accounts for 17% of US oil supplies, has closed down 58% of offshore output and 45% of Natural Gas rigs, according to Reuters.

And gold is back below the 2K mark.

Corporate – Apple splits

Apple shares ended the week up 5.5% ahead of tonight’s 4-for-1 stock split. Last week, the company became the first US public company to exceed $2 trillion in market capitalisation.

Also, expect earnings from Relx and dividends from Prudential. Reuters estimates that the global pandemic will cost shareholders about 17-23% of this year’s dividend payments.


ND Germany BUBA Monthly Report. GDP, Business climate & expectations at 6 AM (+1)
09:00 AM GMT Switzerland ZEW expectations
12:30 PM GMT US Chicago Fed National Activity Index


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