Archives of “October 10, 2019” day

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US auctions off 30 year bond at 2.170% vs WI level of 2.169%

  
  Analysis
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US auctions off $16 billion of 30 year bonds

  • High yield 2.17% versus WI of 2.169%
  • Bid to cover 2.25x vs six-month average of 2.23x
  • Dealers took 22.94%. vs six-month average of 27.3%
  • Directs 18.5% vs six-month average of 18.8%
  • Indirects 58.5% vs six-month average of 67.2%
the US treasury completed its refunding by selling 16 billion of 30 year bonds at a high yield of 2.17%. That was slightly above the 2.169% level at the auction time. The bid to cover was near the six-month average. Dealers took a lower percentage than the average at 22.94% suggesting a distribution of the auction to nondealer participants.
Give the auction the C+ to B-

European shares ended the session higher on the day

  
Analysis, Global Indices

US stocks keep gains and trade near highs

the European major indices ended the session today with gains, with France’s CAC and Spain’s Ibex having the largest gains (around 1.25%). THe UK FTSE laggged at 0.28%.

Meanwhile US shares remain higher but below their peaks. All 3 indices were up about 1% at the highs. They are currently between up 0.82% (for the Dow) and 0.88% (for the Nasdaq).
US stocks keep gains and trade near highs_In the European debt market, yields have soared higher with the UK yield up the most at 12.8 basis points on hopes for a successful Brexit deal. The German yield is up 7.9 basis points. France’s yields are up 7.6 basis points.
European yields are soaring higher in trading today

India slowdown crashes Suzuki’s profit forecast-Japanese automaker cuts outlook to 22% drop as key market suffers

  
  Analysis

 

TOKYO — Suzuki Motor expects group net profit to drop 22% to 140 billion yen ($1.3 billion) for the year ending in March, the company said Thursday, as auto sales continue to fall in its mainstay Indian market.

The downgrade reverses an originally forecast 12% gain to 200 billion yen. The Japanese automaker had hoped to recover from an earnings decline in the previous fiscal year, when it booked losses following a vehicle inspection scandal.

Total passenger vehicle sales in India have slumped for 10 consecutive months through August, data from the Society of Indian Automobile Manufacturers shows.

Subsidiary Maruti Suzuki India, the top automaker in the country, has not been immune to the woes. Unit sales in September sunk 27% on the year, falling for the eighth straight month. Maruti Suzuki contributes roughly 40% of Suzuki’s group net profit.

Suzuki now anticipates 3.5 trillion yen in sales this financial year, down 400 billion yen from the previous estimate. The new sales forecast turns a projected 1% year-on-year increase into a 10% decline.

Operating profit is set to plunge 38% to 200 billion yen, down 130 billion yen from the previous guidance. In India, sales incentives have weighed on margins.

In Japan, the corrections to the vehicle inspection process have slowed production. The heavier per-vehicle fixed costs are expected to erode profitability.

Currency pressures are also squeezing earnings. The euro, the U.S. dollar and the Indian rupee have all softened against the yen. This raises the cost of procuring material locally.

Suzuki presents its first-half earnings on Nov. 5.

China vice premier Li: Willing to cooperate with the US on trade balance, market access and investors’ protection

  
  Analysis
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Comments in Xinhua

  • China willing to reach agreement on matters that both sides care about and to prevent friction from further escalation
  • China-US economic and trade relations are very important, with global influence
  • Chinese side came with great sincerity
  • China willing to reach agreement on matters both sides care about
  • Willing to cooperate with the US on trade balance, market access and investors’ protection
Those three issues are key factors for the US. Assume the trade balance comment refers to buying agricultural products. Market access and investor protection is more vague. It could mean ending technology transfer but it could be something far less.
Overall, it’s fairly transparent what China is offering but the US has said previously it doesn’t want a small deal, it wants a big deal. That’s obviously not on the table now and it will be up to the US to decide whether they want escalation or de-escalation.

Barkindo: OPEC’s challenge has always been to depoliticise oil

  
  Uncategorized

Sure, and what exactly is a monopoly again?

  • The world is becoming unpredictable in terms of economic outlook and geopolitics
  • Saudi attack is almost behind us thanks to swift response
  • Number one issue we face today is the risks to the global economy
There is no doubt that the bloc still has a strong hold over the oil market but it has been quite the fall from grace ever since fracking and shale oil made its entrance in 2014.
Shale

China to ask US to end sanctions on its top shipper in trade talks – report

  
  Analysis

Bloomberg reports, citing people familiar with the matter

US China

The report says that Chinese officials plan to ask the US to lift sanctions on the Dalian units of China COSCO Shipping Corp. during trade talks that will take place later today.

The US had previously sanctioned COSCO as well as four other Chinese entities last month for knowingly violating restrictions on carrying Iranian petroleum. It isn’t clear if the Chinese delegation will seek relief for those other companies.
Well, that’s just another thing to add to the list alongside the suspension of tariffs and surely the US will want China to offer more in return if this is the case. If all China is willing to offer is agricultural purchases at the end of the day, I don’t see how this will end well.

The risk flip flop continues..

  
  Analysis

European equities pare losses while bond yields move back up

USGG10YR

Markets are staying indecisive in the European morning as equities recover from earlier losses to sit higher on the session while Treasury yields are now flat again after having been weaker across the curve just less than an hour ago.
This is a bit of a tough market to read as traders are all waiting on US-China trade talks so any relative movement now can easily be passed up as “noise” until we get to see more substantial headlines related to talks in Washington.
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