عقود الفروقات هي أدوات مالية معقدة، وتنطوي على مخاطر عالية لخسارة الأموال بشكل سريع بسبب الرافعة المالية. 75.6% من حسابات مستثمري التجزئة يخسرون الأموال عند تداول عقود الفروقات مع هذا المزود. عليك الأخذ بعين الاعتبار ما إذا كنت تفهم طريقة عمل عقود الفروقات، وما إذا كان بوسعك تحمل المخاطر العالية لخسارة أموالك.
Face-to-face Brexit talks resume, FTSE is the laggard
Face-to-face (or is that mask-to-mask?) Brexit talks are to resume in London this weekend, perhaps indicating a last drive to get a deal agreed.
EU chief negotiator Michel Barnier, who is travelling to Britain this evening, called for an ‘urgent’ meeting of European fisheries ministers today ahead of the resumption. Given that this has been one of the three main barriers to agreeing to a trade deal, a meeting of this kind so late in the day may indicate there is a broad framework agreed with the UK, at least on fishing rights.
Barnier is still playing it cool, with a flash this morning saying he told EU national envoys he cannot say at this stage whether a deal is possible. One senior diplomat said Barnier’s presentation was ‘not a particularly bright picture’. I take all this with a pinch of salt – a usual underplaying of the hand as the real work is progressing behind closed doors.
Although it may be a little early to call this, with the fisheries meeting and resumption of in-person talks, there could be a statement over the weekend when markets are closed that is material, which may lead to gapping on Sunday night when FX markets reopen down under.
Cable was steady in the middle of the 1.33-34 region this morning. The exact timing of any announcement is still a question, but GBP support thus far indicates the market has a positive view – big downside risks if it’s no deal. Upside to 1.40 perhaps on a comprehensive trade deal. It’s crunch time for GBP, while USD is starting to bite. DXY retains a bearish bias under 92 as it grinds towards the key horizontal support at 91.70.
European stocks edged a little higher though the FTSE 100 dropped again ahead of Black Friday curtailed session in the US later. European bourses moved tentatively higher but the UK market was the laggard in early trade, sliding almost 1%. The NYSE closes at 1pm eastern time, with the bond market shutting an hour later. Largely we are in a holding pattern until we get greater direction on the pace and durability of a reopening next year. AstraZeneca says it will carry out further global trials after doubts were raised about the results of its clinical trials announced this week.
Economic data is light today, but China’s industrial profits rose 28% in October, rising at the fastest clip in nine years. Black Friday might get some attention for the likes of Amazon, Asos, AO World etc, but it’s all a swizz. Most of the so-called deals are not real deals. Hats off to Next, M&S, Wilko and B&M for not taking part in this dreadful US import.
Oil moved lower ahead of next week’s key OPEC+ meeting in Vienna. WTI (Jan) eased back to take a $44 handle, having risen above $46 earlier this week after EIA inventories on Wednesday showed a surprise draw. The rally through November has closely matched that of the equity market recovery and rotation, which suggests it is largely being driven sentiment and an improving economic outlook next year.
OPEC and allies are expected to delay the planned 2m bpd taper in January for three months. With prices having stabilised, the requirement to do more than that has diminished: 2.2m less production over three months buys time and allows optionality to extend if required. As ever, there is uncertainty over the decision that may affect prices near-term. Beyond OPEC+, watch those gasoline inventory builds and possible move towards tighter restrictions in the US as Covid cases keep rising.
Stocks ease after Moderna rally, Tesla leaps on S&P500 inclusion, OPEC eyes extending cuts
More good news on the vaccine front has delivered another confidence boost to global markets with Wall Street building on Friday’s record highs and European markets nearing breakout from the post-trough bottom-to-top range.
Moderna’s positive vaccine news came exactly one week after Pfizer’s with much the same impact on the market. It may not quite be the game-changer of a week ago, but it adds further support to some of the back-to-normal, value type rotation which has been the outstanding impact on markets so far and had reasserted itself by last Friday after a mid-week pause.
The vaccine news sent the FTSE 100 to close to its best level since the pandemic-induced sell-off.
The early June intra-day high at 6,511 is now only a few points above, whilst the record close at 6,484 is near. News that Moderna’s vaccine is almost 95% effective was not a huge surprise to the markets but underscores the faith being shown in the rotational trade out of growth and into value areas of the market.
This would tend to favour the FTSE vs say the DAX.
Again, as we saw with the Pfizer news, the Nasdaq lagged the Russell 2000, but all boats were lifted by the vaccine update. Among the biggest risers yesterday dwell in the airline/travel arena Rolls-Royce, Whitbread, IAG and Melrose, whilst Carnival, Norwegian Cruise Line, Royal Caribbean and United Airlines led the way on the S&P 500 and Boeing notched big gains at the top of the Dow. Ocado and JustEat declined
In the meantime, we may need to endure more hardships – imminent vaccines are the perfect cover for maintaining lockdowns for longer. The economic recovery is going to be patchy and uneven across sectors as lockdowns and other restrictions – not least the fear factor remaining a strong driver of consumer habits – but the vaccine-led ‘back to normal’ direction is now at last clear.
Poor old AstraZeneca shares fell as Moderna (+9% on the day) made the announcement – there is a risk that the high efficacy of the Pfizer/Biontech and Moderna trials kills off some competing candidates in development.
Pfizer shares also fell 4% as its vaccine is not the only show in town. Biontech says its vaccine will be ready for delivery in early January.
The IATA warned that travel restrictions would curtail the rollout of vaccines – perhaps talking its book a bit but it’s got a point when it calls for the reopening of key passenger routes.
Today, European markets were flat to a little negative as investors looked to take stock of the pre-vaccine, post-pandemic outlook. Asian shares were mixed but of note the Nikkei 225 in Japan trades at its highest in almost 30 years.
Tesla shares in Frankfurt rose over 10% after gaining 13% in US after-hours trade following news that the car maker will be admitted to the S&P 500 in December. It’s now less than 10% off its all-time high. Talk of possible inclusion in the S&P 500 was a big factor in driving the stock higher earlier this year and the disappointment of being initially snubbed left the shares down. Inclusion in the index will require funds to buy the stock.
Airbnb announced plans to press on with its stock market listing this year despite the obvious hit to the travel sector from the pandemic.
In a filing on Monday the company reported it had made a profit of $219 million in the third quarter, on $1.34 billion in revenue. This was down on a small amount from the $227 million in profit during the same quarter last year – its only profitable quarter in 2019 – which was on $1.65 billion in revenue.
However, the first half of the year was exceptionally tough for Airbnb as it chalked up net losses of $916 million on revenue of $1.18 billion. It plans to list on the Nasdaq under the ticker ABNB.
The Asian recovery story has been helping to lift the mood – China industrial production up 6.9% in the 12 months to October and Japan’s 5% Q3 GDP rebound are encouraging, whilst a mega trade pact involving 15 key Asian economies is fuelling optimism. Greater Chinese influence in the region is assured – good for GDP but not so good for many other aspects of free society.
The euro shrugged off fears of a full-blown crisis within the EU after Hungary and Poland vetoed the €1.8tn budget and the €750 pandemic recovery fund. As ever with the EU, a way will be found to get around the problem. But it does raise a risk that the ultimate fund is punier than it might have been and arrives far too late. EURUSD trades at week highs above 1.1870 at send time.
Brexit – the endgame approaches. We are in the final few days of talks if, realistically, both sides want to get the treaty ratified at home.
The departure of Dominic Cummings is a problem for the UK government as it seems to strengthen the ‘deal at any cost’ voices within, which weakens the British position and likely as not has only led to the EU hardening its stance.
Expect lots of sources comments on the wires reflecting the posturing that is still going on, but the real work is taking place out of the public gaze. David Frost, the UK’s top negotiator, is reported to have said a deal could be done by next Tuesday.
Cable is steady at 1.32.
Rear-view economic data is meaningless right now due to the combination of near-term lockdowns scrubbing a few percentage points off activity and growth, and the prospect of vaccines seeing everything back to normal next year.
Nevertheless, US retail sales on tap later seen at +0.5% (+0.6% core).
Retailers have done well during the pandemic as consumers have spent less on experiences like holidays and dining out and more on stuff from gadgets to groceries.
But how have consumers in the US fared since the end of $600-a-week stimulus cheques? September saw a blow-out for the sector as retail sales grew at the fastest pace in three months, rising 1.9% after a +0.6% move in August.
Consumers have built up a lot of savings and are ready to deploy these in the economy – October may see another strong month though the election may be a factor.
In September department stores sales rose 9.7%, whilst clothing sales were up 11%, but are still down 7.3% and 12.5% respectively on last year. Meanwhile, Fed chair Jay Powell is to deliver a keynote speech at the 25th Bay Area Business Hall of Fame event, where Nancy Pelosi will be attending.
Oil prices were supported as the JMMC meetings continue with a clear indication that OPEC and allies are looking to postpone the planned increase in production in January by several months.
As part of the deal struck back in April between OPEC and allies led by Russia, daily production cuts would be reduced by 2 million barrels per day from January.
However, with demand slowing amid fresh lockdowns and stifled consumer confidence, it’s thought that OPEC+ will maintain cuts of 7.7 million bpd for a further three to six months, instead of tapering the cut to 5.7 million bpd in January. Forecasts for weaker demand in 2021, with the surplus seen at a max of 1.5m bpd vs 0.2bpd under previous forecast, indicate that OPEC+ will need to act.
الأسبوع المقبل: المستهلك الأمريكي في محور الاهتمام مع مبيعات وأرباح التجزئة
هل يكون هناك اتفاق على خروج بريطانيا من الاتحاد الأوروبي هذا الأسبوع أم لا يكون؟ من يدري، فالمحادثات مستمره حتى وقتنا هذا لكن الموعد النهائي يقترب. في الوقت ذاته نتطلع إلى المستهلك الأمريكي هذا الأسبوع مع أرقام مبيعات التجزئة لشهر أكتوبر وتحديثات أرباح كل من Wal-Mart وHome Depot وTarget وغيرهم.
خروج بريطانيا من الاتحاد الأوروبي؟
حتى وقت الكتابة، محادثات خروج بريطانيا من الاتحاد الأوروبي مستمرة لكن دون نهاية منظوره. لقد رأينا الكثير من المواقف المعتادة لكن حتى الآن يبقى الطرفان على خلاف حول ما يطلق عليه تكافؤ الفرص وحقوق الصيد. كما هو الحال دائمًا، سيبقى الجنيه الاسترليني حساسًا من جهة المخاطر التي تتصدر الأنباء. ارتفع زوج الجنيه الاسترليني/الدولار الأمريكي ليبلغ 1.33 في الأسبوع الماضي، ليصل إلى أعلى قيمة له منذ بداية سبتمبر، لكن كيف سيكون وضع السوق في حالة الخروج دون اتفاق ودون تمهيد من الفترة الانتقالية في نهاية ديسمبر؟
مبيعات ومكاسب التجزئة الأمريكية
ستُختبر ثقة المستهلك الأمريكي هذا الأسبوع حيث ننظر إلى أرقام مبيعات التجزئة لشهر أكتوبر وبعض تحديثات الأرباح الكبرى من أمثال Wal-Mart وTarget وHome Depot وLowe’s وTJX. لقد كان أداء تجار التجزئة أداءً جيدًا أثناء الجائحة مع انخفاض إنفاق المستهلكين على أشياء كالعطلات وتناول الطعام في الخارج وارتفاع إنفاقهم علي أمور مثل الأدوات والبقالة. كيف صار حال المستهلكين في الولايات المتحدة منذ انتهاء شيكات التحفيز التي كانت تبلغ 600 دولار كل أسبوع؟
كان سبتمبر شهر ازدهار حيث نمت مبيعات التجزئة بأسرع معدل في ثلاثة أشهر، مرتفعًا بنسبة 1.9% بعد تحرك أكبر من 0.6% في شهر أغسطس. لقد راكم المستهلكون الكثير من المدخرات وهم مستعدون لضخها في الاقتصاد؛ قد يكون شهر أكتوبر شهرًا قويًا آخر بالرغم من أن الانتخابات قد تؤثر على ذلك. ارتفعت مبيعات المتاجر الكبرى 9.7% بينما ارتفعت مبيعات الملابس 11%، لكنها لا تزال منخفضة عن العام الماضي بنسبه 7.3% و12.5% على الترتيب.
شهد الأسبوع الماضي حركة كبيرة نتيجة للنمو والزخم في أسهم القيمة والأسهم الدورية مع قيادة أنباء من Pfizer عن اللقاح للتجارة المنتعشة. بالرغم من حدوث بعض الاعتدال في التدفقات في وقت لاحق من الأسبوع، كان Nasdaq 100 تحت ضغط بينما ارتفع مؤشر الشركات الصناعية ذات رأس المال الصغير Russell 2000 بصورة جيدة. وقفزت أيضًا الأسهم الأوروبية لاسيما مع بلوغ FSTE 100 أعلى قيمه في عدة شهور بمكوناته الدورية القوية. اكتشف ماذا تعتقد بنوك الاستثمار الكبرى في وول ستريت أنه سيحدث للأسواق هذا العام و في عام 2021.
هل يواصل دونالد ترامب الضغط من أجل مطالبه؟ تعيد جورجيا عد كل الأصوات باليد. لقد أوشكت الأسواق على إنهاء العد على الرئيس، لكن هل المستثمرون متفائلون أكثر مما ينبغي بشأن الأزمة الدستورية المحتملة في الولايات المتحدة؟ الحقيقة هي أن أغلب الجمهوريين يعلمون أنه خسر، لكن عيونهم على إعادة انتخابات مجلس الشيوخ في جورجيا في يناير، ويدركون أن ترامب قادر على الحصول على الأصوات للتغلب على الديمقراطيين. إذا أخذ الديمقراطيون كلا المقعدين سينقسم مجلس الشيوخ إلى 50:50 ويكون الصوت المرجَّح في هذا الموقف مع نائب الرئيس.
أهم البيانات الاقتصادية لهذا الأسبوع
|Sun Nov 15||11:50pm||JPY||Prelim GDP Price Index y/y|
|JPY||Prelim GDP q/q|
|Mon Nov 16||12:01am||GBP||Rightmove HPI m/m|
|2:00am||CNH||Fixed Asset Investment|
|CNH||Industrial Production y/y|
|CNH||Retail Sales y/y|
|4:30am||JPY||Revised Industrial Production m/m|
|USD||Empire State Manufacturing Index|
|3:30pm||AUD||CB Leading Index m/m|
|Tue Nov 17||12:30am||AUD||Monetary Policy Meeting Minutes|
|USD||Core Retail Sales m/m|
|USD||Retail Sales m/m|
|USD||Import Prices m/m|
|2:15pm||USD||Capacity Utilization Rate|
|USD||Industrial Production m/m|
|Wed Nov 18||12:30am||AUD||Wage Price Index q/q|
|GBP||Core CPI y/y|
|GBP||PPI Input m/m|
|GBP||PPI Output m/m|
|10:00am||EUR||Final CPI y/y|
|EUR||Final Core CPI y/y|
|Tentative||GBP||Bank of England Monetary Policy Report Hearings|
|3:30pm||USD||Crude Oil Inventories|
|Thu Nov 19||12:30am||AUD||Employment Change|
|1:30pm||CAD||ADP Non-Farm Employment Change|
|USD||Philly Fed Manufacturing Index|
|3:00pm||USD||CB Leading Index m/m|
|USD||Existing Home Sales|
|3:30pm||USD||Natural Gas Storage|
|11:30pm||JPY||National Core CPI y/y|
|Fri Nov 20||12:01am||GBP||GfK Consumer Confidence|
|12:30am||JPY||Flash Manufacturing PMI|
|7:00am||EUR||German PPI m/m|
|GBP||Retail Sales m/m|
|GBP||Public Sector Net Borrowing|
|1:30pm||CAD||Core Retail Sales m/m|
|CAD||Retail Sales m/m|
|All Day||All||G20 Meetings|
أهم تقارير الأرباح لهذا الأسبوع
لا تنس متابعة حلقاتنا الخاصة اليومية لموسم الأرباح في XRay للمزيد من التحديثات
|17-Nov||Walmart||Q3 2021 Earnings|
|18-Nov||NVIDIA||Q3 2021 Earnings|
|17-Nov||Home Depot||Q3 2020 Earnings|
|18-Nov||Lowe’s Companies||Q3 2020 Earnings|
|19-Nov||Intuit Inc||Q1 2021 Earnings|
|20-Nov||Naspers||Q2 2021 Earnings|
|18-Nov||Target Corp||Q3 2020 Earnings|
|18-Nov||TJX Cos. Inc||Q3 2021 Earnings|
|16-Nov||Vodafone Group||Q2 2021 Earnings|
الأسبوع المقبل: هل تستمر مخاطر الانتخابات وخروج بريطانيا من الاتحاد الأوروبي؟
سنكون قد تجاوزنا سباق الرئاسة الأمريكي، وسيولي المستثمرون تبعات السياسة النوعية اهتمامهم، ومع هذا يبدو أن دونالد ترامب لا ينوي المغادرة دون عراك. فهل تهتم الأسواق حقًا بما إذا كانت النتيجة النهائية ستبقى محور شك لمدة أطول بعض الشيء؟ حتى الآن يميل المزاج للمخاطره مع بقاء مجلس الشيوخ جمهوري. في الوقت ذاته ستزداد أهمية المباحثات التجارية لخروج بريطانيا من الاتحاد الأوروبي بالنسبة للجنيه الاسترليني وأسهم المملكة المتحدة مع نفاد وقت الاتفاق.
هل يغادر دونالد ترامب دون عراك؟
على الأرجح لا، لكن هل لهذا الأمر أهمية؟ في وقت الكتابة بدا أن دونالد ترامب سيخسر الانتخابات على الأرجح، لكن يبدو أنه لا يرغب في الرحيل دون معركه قانونيه. سيجرب الرئيس كل السبل، لكن لم يتضح ما إذا كان بإمكان شيء أن يمنع جو بايدن من أن يصبح رئيسًا. تفاعلت الأسواق بارتياح في الأسبوع الماضي مع بيت أبيض أزرق ومجلس شيوخ أحمر، وهذا أمر جيد لأسهم النمو مثل شركات التكنولوجيا الضخمة، وجيد بدرجة أقل لأسهم القيمة.
خروج بريطانيا من الاتحاد الأوروبي
الوقت يمر، وتقاطعات الجنيه الاسترليني عرضة لمخاطر كبرى، لكن 1.30 تبقى نقطه الارتكاز للجنيه الاسترليني. يرغب كلا الطرفين في اتفاق، لكنهما لا يريدانه مرتفع التكلفة. على أي حال، قد تقول أن الضرر الاقتصادي والاستجابة المالية-النقدية يقدمان في واقع الأمر غطاءً للخروج دون اتفاق. سيكون الاجتماع غير الرسمي لرؤساء الدول في برلين والمقرر عقده يوم 16 نوفمبر في محور التركيز، وهو الموعد الذي سيرغب قبله ماكرون وميركل وآخرون في الحصول على نص لختام الأمر، لكن ابق على استعداد لتقاطع العناوين الرئيسية قبل ذلك.
أهم البيانات الاقتصادية لهذا الأسبوع
على صعيد البيانات الاقتصادية، فإن معظمها يبدو متراجعًا، فقد دخلت أوروبا الغلق الآن، وتتأقلم الولايات المتحدة مع تداعيات الانتخابات الرئاسية. راقب تقرير الناتج المحلي الإجمالي للمملكة المتحدة، بينما يصدر بنك الاحتياطي النيوزيلندي استدعاء معدل فائدته يوم الأربعاء.
افتح التقويم الاقتصادي في المنصة لتحصل على قائمة كاملة بالأحداث.
|Mon Nov 9||5:00am||JPY||Leading Indicators|
|7:00am||EUR||German Trade Balance|
|9:30am||EUR||Sentix Investor Confidence|
|11:50pm||JPY||Bank Lending y/y|
|Tue Nov 10||12:01am||GBP||BRC Retail Sales Monitor y/y|
|12:30am||AUD||NAB Business Confidence|
|7:00am||GBP||Claimant Count Change|
|GBP||Average Earnings Index 3m/y|
|7:45am||EUR||French Industrial Production m/m|
|9:00am||EUR||Italian Industrial Production m/m|
|10:00am||EUR||ZEW Economic Sentiment|
|EUR||German ZEW Economic Sentiment|
|11:00am||USD||NFIB Small Business Index|
|3:00pm||USD||JOLTS Job Openings|
|6:01pm||USD||10-y Bond Auction|
|11:30pm||AUD||Westpac Consumer Sentiment|
|11:50pm||JPY||M2 Money Stock y/y|
|Wed Nov 11||1:00am||NZD||Official Cash Rate|
|NZD||RBNZ Monetary Policy Statement|
|NZD||RBNZ Rate Statement|
|2:00am||NZD||RBNZ Press Conference|
|6:00am||JPY||Prelim Machine Tool Orders y/y|
|All Day||EUR||French Bank Holiday|
|All Day||CAD||Bank Holiday|
|All Day||USD||Bank Holiday|
|Tentative||GBP||NIESR GDP Estimate|
|11:50pm||JPY||Core Machinery Orders m/m|
|Thu Nov 12||12:01am||GBP||RICS House Price Balance|
|4:30am||JPY||Tertiary Industry Activity m/m|
|7:00am||EUR||German Final CPI m/m|
|GBP||Prelim GDP q/q|
|GBP||Construction Output m/m|
|GBP||Goods Trade Balance|
|GBP||Index of Services 3m/3m|
|GBP||Industrial Production m/m|
|GBP||Manufacturing Production m/m|
|GBP||Prelim Business Investment q/q|
|9:00am||EUR||ECB Economic Bulletin|
|10:00am||EUR||Industrial Production m/m|
|All Day||EUR||Eurogroup Meetings|
|USD||Core CPI m/m|
|4:00pm||USD||Crude Oil Inventories|
|7:00pm||USD||Federal Budget Balance|
|9:30pm||NZD||BusinessNZ Manufacturing Index|
|Fri Nov 13||7:30am||CHF||PPI m/m|
|7:45am||EUR||French Final CPI m/m|
|All Day||EUR||ECOFIN Meetings|
|10:00am||EUR||Flash Employment Change q/q|
|EUR||Flash GDP q/q|
|1:30pm||USD||Core PPI m/m|
|2:30pm||GBP||CB Leading Index m/m|
|3:00pm||USD||Prelim UoM Consumer Sentiment|
|USD||Prelim UoM Inflation Expectations|
|3:30pm||USD||Natural Gas Storage|
أهم تقارير الأرباح لهذا الأسبوع
لا تنس متابعة حلقاتنا الخاصة اليومية لموسم الأرباح في XRay للمزيد من التحديثات
|9-Nov||McDonald’s Corp.||Q3 2020 Earnings|
|9-Nov||Softbank Corp.||Q2 2020 Earnings|
|10-Nov||adidas||Q3 2020 Earnings|
|10-Nov||Deutsche Post AG||Q3 2020 Earnings|
|11-Nov||Tencent Holdings Ltd||Q3 2020 Earnings|
|11-Nov||Semiconductor Manufacturing International Corp||Q3 2020 Earnings|
|11-Nov||Air Products and Chemicals Inc.||Q4 2020 Earnings|
|11-Nov||Hong Kong Exchanges and Clearing Ltd||Q3 2020 Earnings|
|12-Nov||Walt Disney||Q4 2020 Earnings|
|12-Nov||Cisco Inc.||Q1 2021 Earnings|
|12-Nov||Siemens AG||Q4 2020 Earnings|
|12-Nov||Deutsche Telekom AG||Q3 2020 Earnings|
|12-Nov||Merck KGaA||Q3 2020 Earnings|
Trump returns, big tech faces antitrust concerns
Don’t be afraid: President Trump returned to the White House, but it might not be for much longer. Whilst Trump almost revelled in his victory over the virus, telling Americans not to fear it, Joe Biden’s lead in the polls is rising. Trump has work to do in the battlegrounds to swing back in his favour.
Wall Street climbs on stimulus hopes
Wall Street rallied as we saw decent bid come through for risk that left the dollar lower and benchmark Treasury yields higher amid hopes that policymakers in Washington are close to doing a deal on stimulus. House Democrat leader Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke yesterday but failed to reach agreement on a fresh stimulus package.
Negotiations are due to resume today and whilst the mood seems to be better, getting agreement so close to the election will be tough but not impossible.
The S&P 500 rose 1.8% to close at the high of the day above the 3,400 level but the intra-day high at 3,428 from Sep 16th remains the top of the channel that bulls will look to take out – failure here may call for a retreat towards the middle of the range again.
Stimulus hopes will drive sentiment, but election risk is also a factor. Vix futures for Oct at $30.86 compared with November’s $32.23.
European markets turned lower in early trade on Tuesday as bulls failed to follow through on the relief rally on Monday – still very much range bound.
Benchmark yields rose firmly with 10-year Treasuries breaking out of the recent dull range towards 0.80%, settling at 0.77% near 4-month highs. The 30-year yield also hit its highest since Jun 9th.
With polling and odds improving for a Democrat clean sweep, the market is starting to price in more aggressive stimulus, greater issuance and bigger deficits. Fed chair Jay Powell speaks later today about the US economic outlook at the National Association of Business Economics annual meeting.
Cable eyes Brexit latest Brexit headlines
Brexit talks rumble on – are we closer to a deal? Deadlines are fast approaching and on the whole it seems more likely than not that we at least see a skinny deal or sorts.
EC vice president Maros Sefcovic has been on the wires this morning underlining that ‘full and timely’ implementation of the withdrawal agreement is not up for debate. The British Parliament and government say otherwise.
Meanwhile the European Parliament is not budging on its demands over the EU budget – whilst the recovery fund was announced to much fanfare, it needs to be delivered for Europe’s economy to recover more quickly than it is.
Democrats to target tech giants
Big tech stocks need monitoring after reports that a Democrat-led House panel will call for an effective breakup of giants like Apple, Amazon and Alphabet. It comes after a long anti-trust investigation by the panel led by Democratic Representative David Cicilline.
If approved and legislation is enacted, it would be the most significant reform in this area since Teddy Roosevelt. Certainly, the concentration of capital in a handful of big tech stocks is worrisome for lots of reason. Even if approved, getting from draft to legislation will not be easy. However, if there were a Democrat clean sweep, it could open the door to some aggressive reforms.
As I noted over a year ago, given that the FAANGs have been at the front of the market expansion in recent years, any breakup or threat of it may act as a drag on broader market sentiment. Calls have been growing louder and louder for the authorities to at least look at antitrust issues for the tech giants.
Political pressure is building – lawmakers sniff votes in tackling big tech. The shift really happened two years ago with the Facebook scandals, which really broke the illusion that Silicon Valley is in it for the little guy.
AUDUSD sinks on dovish RBA meeting
The Reserve Bank of Australia left interest rates on hold, refraining from a cut below 0.25% but maintaining a decidedly dovish bias that still indicates a further cut may occur this year.
The RBA said it will keep monetary policy easy “as long as is required” and will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3% target band. It kept its options open and stressed that it will continue to consider additional monetary easing.
After a decent run since the Sep 25th low AUDUSD was smacked down from its 50-day SMA at 0.7210 to trade around 0.7150. Currently contained by its 50- and 100-day SMAs.
The dollar index broke the horizontal support and the 21-day SMA, with the price action testing the trendline off the September lows. After the RSI trend breach and the MACD bearish crossover flagged yesterday was confirmed. 50-day SMA around 93.25 is the next main support.
The softer dollar gave some support to GBPUSD as it tests the top of the range and big round number and Fibonacci resistance at 1.30 this morning. Markets are also pushing back expectations for negative rates in the UK, which may be feeding through to a stronger pound.
Brexit risks remain but the odds of a deal seem to be better than evens, at least a ‘skinny’ deal that keeps dollar-parity wolves from the door.
The weaker dollar, higher inflation outlook is pushing up gold prices, which have broken above $1,900 but faces immediate resistance at the 21-day SMA on $1,916. Yesterday’s potential MACD bullish crossover has been confirmed.
Sterling’s RoRo Yo-Yo day
The pound endured some wild whipsaws today on a range of Brexit headlines. First sterling slid through the morning as the EU lodged its legal complaint over the internal market bill. GBPUSD hit the LOD at 1.2820 by 10am.
But then GBPUSD rallied aggressively through 1.295 on reports officials were close to entering the tunnel, with the FT’s Whitehall correspondent quoting one as saying: ‘We’ve gone from about 30% chance of a deal to the other way around. I think it’s almost certain we’ll enter the tunnel.’ The implication that officials see a 70% likelihood of a deal got sterling bulls running the stops.
Sterling pushed up to a fresh two-week high, but the 1.30 round number was not tested as the rally ran out of legs at 1.2980. The 1.30 level is the big horizontal and Fibonacci resistance to unlock the move to the mid-1.30s once a Brexit deal is signed.
However, cable was back down almost one big figure again, taking a 1.28 handle after an EU official said there is no sign of a landing zone on fisheries, or level playing field. At send time GBPUSD was sitting on the 1.29 round number around the mid-point for the day.
What we learned from this:
Sterling is on the hook to some wild price swings on headlines, which we knew would be the case. No one wants to try 1.30 unless there are more concrete rumours from ‘sources’. Talks wrap up tomorrow – more market-moving headlines to come.
Twitter is a very good source of information for trading – cable shot higher a couple of minutes after the initial 70/30% tweet. Algos were slow to respond for once – shows they don’t read Twitter very well – yet (H/T @PriapusIQ).
It does seem like there are tentative signs of ‘progress’ despite all the chuntering around the internal market bill, which looks increasingly like a sideshow to the main event of trade talks.
In short, a deal seems more likely than not. I’ve moved from 60/40 to 50/50 after the IMB to back to 60/40 again.
Equity markets hungover ahead of Presidential debate + Brexit breakthrough?
There is the whiff of a hangover for investors this morning as European shares stumbled after an exuberant rally in the previous session that left the major bourses around 2-3% higher to start the week. We haven’t made it back to the key mid-Sep levels and bulls may be looking at downside risks in the shape of the slowing economic recovery and pre-election jitters.
Nancy Pelosi and Steve Mnuchin may be able to cut one last stimulus deal before the election, but it still looks like the odds of it passing the House and Senate are less than evens.
First presidential debate in focus
It’s all going to kick off later tonight, as the first US presidential debate takes place in Cleveland. The fun starts at 9pm US eastern time and will last one and a half hours. Trump won in Ohio, a typical battleground rust belt state, by eight points last time around but it is leaning towards Biden in 2020, according to the polls.
But we know polls only tell a portion of the story – it’s in the battlegrounds where it counts.
JPM did an investor survey of potential election outcomes – 79% said the worst-case scenario is a Democrat president and Senate, whilst 49% said the best case would be a Republican president and Senate.
We know which way Wall Street is leaning, but there is not a clear sense that the result will materially impact the course of equity markets. As discussed last week, whilst a Democrat clean sweep – the Blue-nami – would mean higher taxes and regulation, other factors may play into the bulls’ favour, notably the chance of a comprehensive fiscal package.
More importantly, the global recovery from the pandemic, the Fed and earnings will be key drivers for equities after the election. The only thing the market wants is to get the election out of the way – the real danger to near-term valuations would be a long period of legal disputes post-election, which may mean price action continues to chop sideways within the range set in the second half of September.
Vix futures are starting to look interesting again with the spread from Oct to Nov widening to $2 with the near month trading at $31 and November at $33, with December at $31.
Sterling up on hopes of breakthrough in Brexit talks
Brexit breakthrough? Hopes of a deal are on the up, amid reports that the EU is prepared to ditch its requirement to reach a broad agreement before drafting a text. This means they can start on the joint legal text whilst there are still a few outstanding issues that need to be resolved.
This has positive overtones, but the two sides still appear no closer on these critical last steps. European Commission Vice President Maros Sefcovic said yesterday: “The UK’s positions are far apart from what the EU can accept.”
Sterling drove to a two-week high, with GBPUSD rising to 1.29 before paring gains to sit around 1.2850 this morning.
Bank of England deputy governor warns over negative rates
But it the rally was less about Brexit than it was about comments from Dave Ramsden, the deputy governor of the Bank of England, who sounded a strong sound of caution over negative interest rates. The MPC seems to be airing its dirty laundry in public – the comments came only a day after Silvana Tenreyro pointedly backed negative rates.
Anyways it looks there is some clear ideological disputes among rate setters that needs to be worked out over the autumn, implying as Andrew Bailey suggested last week that negative rates are not likely on the near horizon, albeit they are being considered actively.
The problem for the Bank would be an unemployment crisis into Christmas that could put pressure on the MPC to act.
The dollar peeled off its recent two-month highs in the 94.60 region which is offering the near-term resistance. The pullback called for last week has been slow to emerge with a couple of retests of this level but near-term weakness is certainly becoming more evident.
Elsewhere, oil markets remain trapped in a tight range but could be heading for a pullback as global inventories start to build. API numbers later today, EIA numbers on tap Wednesday. Watch the Chinese numbers too as global inventories swing to builds.
Surging cases numbers cripple demand, whether rational or not. Contango spreads indicate softer demand and inventory builds ahead. The price action alone on WTI is a not a pretty picture for bulls.
Coming up, there is a slew of Fed speakers later today with Clarida, Quarles, Harker and Williams on the slate. Richard Clarida is probably the most important, with the Fed governor due to speak on Future Considerations for Treasury Market Resilience. Meanwhile, the Treasury market is completely dead as yields remain trapped in their tight ranges.
Chart: The S&P 500 is still trapped by the moving averages
The market rallied 1.6% on Monday and ran slap into the 50-day SMA, shy of the 21-day SMA. We have to see whether this marks the swing high and calls for another pullback.
Risk appetite resurfaces, HSBC shares soar
Risk appetite has returned after last week’s turbulence. European bourses rose 1-2% in early trade on Monday after Wall Street’s rally on Friday lifted the boats. The S&P 500 was still down for the week, but with the broad market -10% from its all-time highs at the low, those looking for a correction after the hot summer rally may have found it already.
The market tested 3200, which is where it reached at the peak in June before the pullback and where it closed 2019. Bonds have not taken part in the drawdown – US 10-year Treasuries have barely budged this month and remain stuck around 0.66%. This might imply that the September sell-off is more about a repricing of risk assets based on valuations and profit-taking after the summer run-up, rather than deeper fears about a prolonged stagnation in the economy.
Volatility likely on US presidential debate, NFP this week
Nevertheless, with the first US presidential debate and the last jobs report before the election coming this week, there is ample scope for markets to remain volatile. Until we clear the highs from a fortnight ago – 3400 on SPX, around 3300 on Stoxx 50 and 6,000 on the FTSE, the downside bias remains.
Rising numbers of coronavirus cases imply a softer recovery, depressed consumer sentiment and the need for more fiscal support to generate upside. Markets don’t seem to be moving too much on vaccine news and rumours – there may be a realisation that a vaccine is not a silver bullet that will repair all the damage done in 2020, even if it makes 2021 look brighter.
Ping An adds to HSBC stake
HSBC shares rallied 10% after Ping An Asset Management increased its stake in the bank. HSBC’s largest shareholder only marginally bolstered its holding to 8% from 7.95%, but the vote of confidence translated into a very substantial rally for the shares both in Hong Kong and London.
HSBC had lately sunk to a 25-year low after being named in reports relating to money laundering, so maybe this was some simple averaging-in by Ping An. Shares are only back to where they were a fortnight ago – when stocks have been beaten down as much as HSBC they are often ripe for larger percentage swings as investors try to figure out what is the real value.
If you think Britain’s banks are fundamentally sound, shares are priced compellingly. Lloyds at 25p trades at 0.35 of book value.
BoE Tenreyro defends negative rates
Bank of England rate setter Silvana Tenreyro defended negative rates in an article over the weekend, in what we could construe as a careful piece of choreography to communicate the bank’s shift towards a state of outright financial repression.
She said there were ‘encouraging’ signs that there are no longer the same obstacles to cutting rates to below zero. But she’s been positive on negative rates for several months so we should probably not read too much into her comments.
Andrew Bailey remains the most important voice of the MPC and whilst he did not seek to quell speculation last week that the Bank is considering how to use negative rates, he did stress that it’s not in a hurry to pull them out the toolbox.
Brexit talks in focus for GBP
Brexit talks resume this week and despite all the noise, both sides want a deal. Whilst the UK threw a spanner in the works with the internal market bill, the real substance of the trade deal is what matters. On that front the EU and UK are about 90% there. The problem is the remaining elements and without these sorted there is no deal.
Nevertheless there is hope that they will enter the ‘tunnel’: the period of closed, detailed talks that would lead to a deal. If there is white smoke this week then sterling will rally strongly, but I would expect this to drag on for a while longer, for deadlines to be missed and for GBP crosses to remain exposed to negative headline risk.
The euro retained its downside bias after more jawboning from the ECB. Ignazio Visco, Italy’s central bank governor, said the euro’s recent strengthening is “worrying us because it generates further downward pressures on prices at a time when inflation is already low”. A slate of ECB speakers this week are likely to lean hard on governments to deliver fiscal support.
Chart: GBPUSD tests near-term resistance at 1.28
Nikola shares tumble (again)
Volume leaders today include Apple as normal, as well as Peloton after a blow-out earnings report – EPS of $0.27 almost treble the street consensus of $0.10 indicating the stay-at-home Covid trend is playing out well for the brand. A new cheaper version of its bike should help, too. Apple shares were flat, with Peloton up just +1%, well below its highs.
Hidenburg Research slams Nikola, shares tumble
Nikola shares fell about 15% on high volumes after the Hindenburg Research article. Whilst shares had fallen yesterday following publication, it seems investors have taken fright at the lack of any detailed refutation by Nikola.
A statement today from the company only said the allegations are not accurate and described the report as a ‘hit job’. If it is a hit job, it’s been a very well timed one with the stock having jumped only a couple of days prior on the tie-up with GM. But the lack of detail from the company so far has left investors unimpressed.
Without being able to comment on the details of the report, short attacks can and do happen, and more often than often there is rarely smoke without fire.
Equities move higher into the weekend
Elsewhere, the S&P 500 ticked higher after testing yesterday’s cash close at 3,339, with the 50-day line offering further support untested at 3,321.90. Yesterday’s tap on the 21-day SMA at 3,425 looks a long way off. Nasdaq also higher as risk is catching some bid into the weekend.
European equity markets are closing the day out with some decent weekly gains in the bag. Overall we have seen a real divergence between the US and Europe this week with equity markets this side of the pond doing better. Partly that is down to the rotation out of tech, but also we need to be aware of election risk that will play an increasing role in driving sentiment over the next month and a half.
Crude oil found some bid as the risk sentiment improved as the US session progressed.
Listening to the usual talking heads it seems there is more appetite for value after the three-day tech rout saw the penny drop for many that valuations had gotten out of hand. Let’s see how that goes with Ocado and Next on stage next week.
Brexit headline risk keeps pressure on GBPUSD
In FX, DXY ran out of gas at 93.38 as it tries to make another stab at the top of the descending wedge. GBPUSD tried three times to break below 1.2770 today but the level has just about held for now – sterling remains exposed to Brexit headline risks and bulls may be thin on the ground.
Post fix it looks pretty meek and liable to further downside into the weekend with UK-EU trade talks next week in focus. The current consolidation range looks pretty bearish and flaggy but we should always caution that sellers can get exhausted into the weekend just much as buyers can and there may be some profits being taken.
Sterling stabilises after Brexit furore, equities steady
Sterling stabilised after testing new six-week lows yesterday following the testy exchanges around the internal market bill, but the pound remains highly exposed to negative news around Brexit talks.
The EU Commission said the bill has damaged trust and would, if adopted, represent a serious breach of the withdrawal agreement and of international law. The British position remains resolute. The UK government legal opinion is that it remains a sovereign matter of UK domestic law.
This is serious brinkmanship, and trade talks appear close to collapse. Moreover, it is opposed by the devolved regimes in Scotland and Wales – if it passes and there is no deal, the relationship between Westminster and Holyrood will be close to breaking point and it could accelerate and heighten demands for Scottish independence.
The EU wants the offending bill pulled by the end of the month or they may launch legal action – but stopped short of saying they will walk away from the trade talks. The EU doesn’t want to be the first to walk away. Nevertheless, there has been a material escalation of no-deal risks, which was reflected in the pound’s price action yesterday.
The clock is ticking and whilst we continue to stress that a deal will always look further away than it is due to the nature of the posturing and public statements, the move on the internal market bill comes somewhat out of left-field (although it was actually reported back in Feb that the govt was working on it) and it does not pertain to the talks themselves.
We should also note that it is not guaranteed to pass both British chambers in its current form. Europe’s finance ministers are gathering today so expect a lot of headlines criticising the British – plus ca change. The good news is there is UK-Japan trade deal ‘in principle’ – hopefully that means cheaper wagu steak.
Euro up after ECB meeting, UK GDP disappoints
GBPUSD dropped under 1.28 but has found some support at this level and pared back losses a touch. Against the euro, the pound plunged to its weakest since March, as the single currency also found bid after the European Central Bank sounded a bit more optimistic on the economy and a little less dovish than the market had thought.
The ECB indicated it would not overreact to the appreciation of the euro, which was a green light for the currency to rally. ECB sources suggested they don’t think the euro is overvalued and don’t want to start a currency war – let’s wait and see what happens when 1.20 gets tested again.
Meanwhile, Britain’s economy faces even greater uncertainty from Brexit as it tries to rebuild in the wake of the pandemic. GDP rose 6.6% in July, but this was short of expectations and still well below pre-pandemic levels. All areas of manufacturing, particularly distillers and car makers, saw improvements, the ONS said without a hint of irony.
In July, monthly GDP was 11.7% lower than the pre-pandemic levels seen in February 2020.
The good news is that because of the way the UK measures education in GDP numbers, means things should pick up as the number of pupils returning to school rises. It also means the decline in GDP might not be so bad compared with peers as it looks.
Among the service sector, accommodation & food services remain worst hit, but we know it got a big – albeit temporary – boost in August from the Eat Out scheme.
Impasse over US stimulus continues
European markets were flat on Friday after US markets pulled back on Thursday, declining for the fourth day in five, with the Nasdaq down another 2% and the and the S&P 500 falling 1.75% on the back of the previous session’s rally.
The resumption of the downtrend came as Senate Republicans failed to pass their $500bn stimulus package, with Democrats complaining it does not go far enough. The impasse has doused hopes Congress can agree a package in the near-term and could give a tailwind to bears who have the bit between their teeth. US futures are higher.
Concerns about the US economy remain. US jobless claims just aren’t heading in the right direction. The total number of people claiming benefits in all programs for the week ending August 22 was 29,605,064, an increase of 380,379 from the previous week. In the week to Sept 5th initial claims hit 884,000, unchanged from the previous week’s revised level. The previous week’s level was revised up by 3,000 from 881,000 to 884,000. US CPI numbers out later today are the main eco event to watch, but the furore over the internal market bill is not going away.