Archives of “June 18, 2019” day

rss

China has cut its holding of US Treasuries to the lowest in almost two years

  
  Analysis

As we head into China trade for the session, this news from the US afternoon Monday.

China cut its US Treasury holdings to the lowest in almost two years
  • holdings of notes, bills and bonds declined by $7.5 billion in April to $1.11 trillion
Japan remained the second-biggest holder of Treasuries
  • 1.06 trillion in April, down from $1.08 trillion a month earlier

Japan Reuters Tankan (June) – manufacturing index drops again (halves from May!)

  
Analysis, Economy

The monthly poll from Reuters tracks the Bank of Japan’s tankan quarterly survey.

  • Japan manufacturers index +6 in June vs +12 in May
  • non-manufacturers index +22 in June vs +27 in May
  • Japan manufacturers September index seen at +11, non-manufacturers +21
Manufacturers’ business confidence to a more than 2-1/2-year low
  • service-sector mood fell for the first time in four months
  • Both are expected to remain under last month’s levels over the coming three months
—
Reuters poll of 505 large- and mid-sized companies, in which 263 firms responded:
  • indexes are calculated by subtracting the percentage of pessimistic respondents from optimistic ones. A positive figure means optimists outnumber pessimists.
Next official, BOJ, tankan is due in July

Brazilian conglomerate Odebrecht has filed for bankruptcy protection

  
  Analysis

Odebrecht SA, one of the companies at the heart of Brazil’s massive Car Wash corruption scandal, on Monday filed for bankruptcy protection.

Once one of the world’s biggest engineering and construction groups, the conglomerate said it was planning to restructure some $13bn in debt in what would be one of the region’s largest in-court debt restructurings.

In November, the cash-strapped construction unit of the group said it would miss a $11m debt payment to “preserve liquidity.”

The conglomerate has been battered by the long-running Car Wash corruption probe, which implicated scores of Brazilian politicians and businessmen in a massive contracts-for-kickbacks scheme.

In 2016, Marcelo Odebrecht, then chief executive of the Odebrecht group, was found guilty of channelling hundreds of millions of dollars to politicians across a dozen countries in exchange for favours. 

The same year, the conglomerate and its petrochemicals unit Braskem pleaded guilty to violating US anti-bribery laws and agreed to pay fines totalling at least $3.5bn.

ICYMI – India’s new retaliatory tariffs on the US

  
  Analysis

An ICYMI on another trade war escalation this time US-India.

  • A new set of Indian tariffs on 28 US products kicked in on Sunday
  • New Delhi says the higher duties are in retaliation for US tariffs on steel and aluminum imposed last year
The further background to this is India has a big surplus in trade with the US for goods. And a smaller surplus in services. The new tariffs are seen as small and symbolic. but they could raise the ire of you-know-who (tweeter in chief).

Mexican President says Mexico could win trade war with the Uited States

  
Analysis, Politics

Mexico’s president Lopez Obrador says the country could win trade war with the US

  • But that would be a pyrrhic victory it does not seek
—
A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has also taken a heavy toll that negates any true sense of achievement. 
Thanks Wikipedia ….

GBP/USD sits at six-month low with CPI to come

  
Analysis, Forex

UK CPI is due Tuesday

UK CPI is due Tuesday
Cable is down only 50 pips today but the decline is doubly disappointing because it comes after a sharp fall on Friday and because it broke through the May 31 support level. That’s an area that should have provided some decent support ahead of the FOMC meeting.
Instead, cable is already breaking down with little support now separating it from the January flash-crash low of 1.2441.
The main hurdle ahead of the FOMC decision is the UK CPI report on Tuesday at 0830 GMT. The consensus is for a 0.3% m/m and 2.0% y/y rise. A miss to the downside would further wound the BOE hawks and compound the pain from last week’s poor GDP and industrial production numbers.

Overnight -US stocks drift higher as investors eye central banks

  
Analysis, US Market

Wall Street drifted higher following cautious trade across global markets, as investors kept their sights on a string of central bank meetings coming later this week.

Gains in energy and real estate shares helped the S&P 500 climb 0.1 per cent on Monday in New York, with materials and utilities the benchmark’s main laggards.

The technology sector also gave US stocks a boost. The tech-heavy Nasdaq Composite rose 0.6 per cent, aided by gains of more than 4 per cent for Tesla and Facebook.

Deutsche was the top performer on Frankfurt’s Xetra Dax 30, with shares in the company up 1.4 per cent against a slip of 0.1 per cent for the overall index. The Europe-wide Stoxx 600 was 0.1 per cent softer, while the index tracking its banks was up 0.1 per cent.

London’s FTSE 100 advanced 0.2 per cent and the CAC 40 in Paris rose 0.4 per cent.

Attention was turning to a significant roster of central bank meetings scheduled for this week, that are due to test perceptions of the dovish stance taken recently by a series of global monetary policymakers. (more…)

Go to top