What was once a conspiracy theory is now fact, but buried on page B11 when it should be front page news in the WSJ
Archives of “September 17, 2019” day
rssFrench Central Bank keeps 2019 keeps growth forecast at 1.3%
2020 growth revised lower to 1.3% from 1.4%
The central bank of France is out with their latest projections for GDP growth:
- 2019, 1.3%. Unchanged from their previous estimate
- 2020, 1.3%. Down from 1.4% in their previous estimate
- 2021, 1.4%, Unchanged from there previous estimate
European major indices are ending with mixed/modest results
Little changes up and down on the day
The European stock markets are ending the day mixed with mostly modest changes for most of the major indices. Italy’s FTSE MIB fared the worst, while France rose modestly higher.
The provisional closes are showing
- German DAX, unchanged
- France’s CAC, up 0.2%
- UK’s FTSE, unchanged
- Spains Ibex, -0.5%
- Italy’s FTSE MIB, -0.76%
In the benchmark 10 year note sector, yields are higher with Italy Portugal and Spain up the most.
In the forex market as London/European traders look to exit, the EUR is the strongest while the AUD is the weakest. The USD has weakened in the NY session after being marginally higher earlier.
US overnight repo rate jumps to 10%, highest in years.
Christine Lagarde gains European Parliament approval to lead ECB
The vote today was merely a formality
This confirms she will become the ECB’s first female president, succeeding Draghi w.e.f 1 November for a term of 8 years. The vote was 394-206 in her favour, with 49 abstentions.
Germany September ZEW survey current situation -19.9 vs -15.0 expected
Markets eventually need to deal with the China reality
The situation in Saudi Arabia and focus on the Fed has took the spotlight away from China’s economic worries to start the week
- China’s Premier Li says maintaining economic growth of 6% or more is very difficult
- China Industrial Production in August 4.4% y/y (expected +5.2%)
- China Retail sales for August: 7.5% y/y (expected +7.9%)
I still don’t think markets are paying much attention to the message emanating from China to start the new week, and that may be a sign of complacency.
Industrial production slowed to its weakest in 17 ½ years while retail sales slumped more than expected and the PBOC is still showing no signs of easing its lending rates just yet – as evident by today’s MLF operations.
Prospects of a trade deal may sound attractive for risk sentiment but it isn’t going to be a massive game changer to the slowing Chinese economy in my view. Domestic demand is weakening and that will continue to eat away at global economic growth.
Markets may be a bit distracted for the time being amid oil news, central bank focus, and hopeful optimism surrounding trade talks. But don’t expect that to stay the course for too long. The longer the ramifications of the above go unnoticed, the greater the hit it will have on markets when reality snaps back in.
Nikkei 225 closes higher by 0.06% at 22,001.32
Tokyo’s main index returns from the long weekend to finish near flat levels today
It’s a bit of a mixed bag in Asia as Japanese stocks are playing catch up to the events in Saudi Arabia so we’re seeing O&G stocks do the heavy-lifting in Tokyo, offsetting geopolitical tensions that are weighing on risk sentiment elsewhere.
Meanwhile, Hong Kong and Chinese stocks were more pressured due to domestic factors with the city protests still causing some unrest in the former while the latter is dragged down by disappointment that China did not lower its one-year lending rate earlier today.
The Hang Seng is down by 1.5% while the Shanghai Composite is down by 1.7% currently. The risk mood overall remains more cautious but nothing suggestive of major flows as we begin European trading. USD/JPY sits just a tad higher at 108.20 currently.
Update on the Saudi attacks whodunnit – more from 3 unnamed sources
An update on speculation of who it was responsible for the attacks on the Saudi oil facility
This via NBC, citing “three people familiar with the intelligence told NBC News“:
- American intelligence shows that the attack on a major Saudi oil facility was launched from Iran
- A congressional source says Democrats familiar with the details do not dispute that the attack was carried out by Iran
- “This attack had a level of sophistication we have not seen before,” the congressional source said. “You will not see Democrats pushing back on the idea that Iran was behind it.”
What will be Trump’s response? And, does anyone doubt its coming?
Comments welcome.
Trump: It is looking like Iran was responsible for attacks on Saudi Arabia
Trump comments to reporters:
- Says he doesn’t want war with anyone but the US is prepared
- US has a lot of options but he’s not looking at options yet; the US wants to find out who was responsible
This is going to grab headlines and might boost oil but I’m a bit less enthusiastic. Trump has a fairly strong anti-war bent that’s been one of the few consistent themes in his Presidency. There is certainly some reluctance here from him.