IPO plans leak
Reuters reports that Aramco plans to list just 1% of Aramco on Riyadh’s stock exchange this year and another 1% in 2020.
It’s a small listing and it’s not on a western exchange.
Archives of “September 9, 2019” day
rssThe question is not if but how much will the ECB deliver this week – Danske Bank
The firm outlines its expectations ahead of the ECB meeting this week
Analysts at the firm say that “the question is not if the ECB will announce new initiatives but how much it will deliver” instead. I think that’s an argument that everyone already has figured out by now. So, let’s see what they are expecting:
“We expect the ECB to announce (1) a 20bp cut in the deposit rate (other key rates unchanged) and that the extended forward guidance (‘at present or lower…well past the horizon of net asset purchases’) will remain; (2) a 12-month QE restart of €45-60bn per month, albeit also acknowledging the downside risks given the recent hawkish communications from a few Governing Council members; and (3) a tiering system.”
At this stage, a cut to the ECB deposit facility rate, a tiering system and a change in forward guidance message is all but guaranteed. The big question is whether or not we will see the reintroduction of QE this week.
Tariffs threat to see euro fall to 1.07 against the dollar in three months – ING
ING lowers their forecasts for the euro
The firm argues that the euro will weaken to levels last seen in 2017 against the dollar due to threats stemming from US trade policy. Noting that:
“Further deterioration in the US-China trade war will drive the euro lower. But there is also a non-negligible risk of the US imposing, or at least threatening to impose auto tariffs on Eurozone exports. An overhang of such tariffs should weigh on the euro.”
Expanding further, the firm also views that the market already has “very aggressive” expectations of the Fed easing and that makes it hard for the US central bank to surprise and precipitate dollar weakness against the euro.
Adding that the dollar still enjoys high carry and that makes its positioning for a decline – in terms of yields – as “unattractive”.
Also, they no longer see EUR/USD as being undervalued so that won’t provide a supportive factor to the pair and notes that short positions are not stretched:
“This means that EUR shorts can still be built and positioning does not act as a limiting factor behind the EUR/USD fall.”
Iraq oil minister says that it is too early to talk about deeper production cuts
This just reaffirms expectations heading into this week’s meeting
A similar message to what we heard from Oman earlier in the session. As such, don’t expect any major announcements – though there may be rumoured headlines to slip through – to follow after the OPEC+ JMMC meeting this Thursday.
Fed rate cut this month still on track after Friday’s NFP
Friday’s August jobs report data is here:
- August non-farm payrolls +130K vs +160K expected
A response to the result via Credit Agricole, in brief:
- still-growing labour market and “average hourly earnings was stronger than expected, good news for wage inflation”
Data doesn’t change the outlook for the Fed, CA expect a 25bp cut in Sep then again sometime in Q4
Here is UK PM Johnson’s cunning plan to stop Brexit extension beyond October 31
Earlier post on the UK media report on Prime Minister Boris Johnson plan to sabotage Brexit extension
- UK press reports on UK PM’s plan to sabotage any Brexit extension
The background to this is Parliament have voted to require the PM to request an extension from the EU beyond October 31 (conditions apply but that’s the gist of it). Johnson plans to send an accompanying letter saying the UK government does not want the extension, that is it wants an exit on October 31.
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Also, more from the weekend here:
- EU officials adamant on no further Brexit extension
Big German banks warn against further rate cuts (expected from the ECB this week)
Both Deutsche and Commerzbank Banks have weighed in against forecast further cuts from the European Central Bank this week:
- would benefit those with assets
- further burdening savers.
- neither sustainable, nor responsible
The central bank is expected to cut as [part of measure to support the Eurozone economy. As an example of the slowing of the EZ economy was the data from Germany last week:
- Germany July industrial production -0.6% vs +0.4% m/m expected
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European Central Bank policy meeting is on September 12,
Its an amusement to debate who wins, who loses, and what the ECB should of should not do. Nothing wrong with that. Its also of more direct to use to traders to debate will the ECB will or will not do. I’ll have previews of what to expect upon approach to the meeting, but for now, here is something for EUR bulls and bears:
- EUR/USD to stay weak, ECB next week
- Risk for EUR is positive for next week’s ECB meeting – BAML
Can you imagine what the oil market would look like the day after this?
A ban on fracking?
Presidential candidates say all kinds of unrealistic things and this most-certainly falls into that category but it’s a line that’s ringing alarm bells in the oil and gas industry.
It’s from on tweet from Elizabeth Warren on Friday evening. She’s currently the odds-on favorite to win the Democratic nomination:
On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking-everywhere.
A fracking ban would cut the knees out of US oil and gas. Prices of both would skyrocket and corporate bankruptcies wouldn’t be far behind. The election is now 14 months away and I don’t want to be writing about it every day but it won’t be long before political risks begin to dominate US markets and this is a hint at what the stakes might be.
Thought For A Day
