Archives of “October 17, 2019” day

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US weekly EIA energy inventories +9281K vs +3000K expected

  
Analysis, Crude
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Weekly US oil inventory data from the EIA:

  • Prior was +2927K
  • Gasoline -2562K vs -1500K exp
  • Distillates -3823K vs -2500K exp
  • Cushing +1276K
  • Refinery utilization -2.6%
The headlines aren’t as bad as they look because the API numbers from late yesterday were so bearish. The drop in refinery runs and draws in products takes the sting out of the report:
  • Crude +10500K
  • Cushing +1600K
  • Gasoline -934K
  • Distillates -2900K

S&P 500 trades at a three-week high as the optimism extends

  
Analysis, US Market

S&P 500 starts strong

S&P 500 starts strong
US stocks continue to bask in the glow of the China trade truce.
The S&P 500 is up 16 points to 3006 and trading has been narrow since the open. Shares of Netflix, JPMorgan and Alcoa are higher after reporting earnings. That’s the highest since Sept 24 and about 0.7% from the all-time high.
I’m watching Netflix as a bit of a barometer. It closed at $287 before earnings yesterday after the close. It opened at $318 but has given up virtually all the gains and is at $292.

Labour’s Corbyn: Johnson’s deal is worse than May’s

  
Analysis, Economy
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Comments by Labour leader, Jeremy Corbyn

Corbyn
  • Best way to sort Brexit is to have a second referendum
  • Johnson’s “sell out” deal should be rejected
Earlier in the day, it is said that Labour lawmakers have been whipped to vote for a second referendum on Saturday. If that is the case, it means that Johnson will find any further support for his deal to be lacking.

What happens now that Boris Johnson has managed to strike a Brexit deal?

  
  Analysis
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We have been down this road before

Johnson

A Brexit deal is only as good as its chances to pass a vote in parliament. Just ask Theresa May how that worked out for her.

For all the optimism we’re seeing in the pound over the past week, all of that now hinges on whether or not Boris Johnson can get this deal through a parliamentary vote.
So, what are the key signs to watch for that?
The most obvious telltale sign is to watch for the stance adopted by the DUP. Just be reminded that Johnson doesn’t have a working majority in parliament so he will need all the support he can get at this point in time.
As it stands, the DUP isn’t quite on board yet so that means there is still a high chance of the deal failing to get through a vote in parliament.
What would that mean if we see such a scenario? Again, it just puts us back to a similar position when Theresa May was trying to get her Brexit deal through a vote – where she failed three times by the way.
Another possibility is if Johnson decides to couple his deal with a referendum vote in order to sway Labour lawmakers to get on his side. But that is likely a long shot and one he is almost certainly not going to pursue.
Otherwise, I still reckon it is a tall order for this Brexit deal to pass a vote in parliament at this juncture. But if the DUP and ERG gets on board, I think the pound has the potential to first head towards 1.33 before looking towards 1.35 next.

Cable hits five-month highs as pound jumps after UK and EU reach Brexit agreement

  
Analysis, Forex

Cable looks towards the 1.30 handle next

GBP/USD D1 17-10

The pound is posting solid gains on the day as Boris Johnson manages to strike a deal with European leaders, although now the big question remains, is the DUP on board and can Johnson get this through a parliamentary vote?
There is plenty of optimism so far but it has to be put into context. Theresa May also had a Brexit deal but could not get hers through parliament at the end of the day. Will it be different for Johnson?
Update: A couple of news sources are reporting that the DUP isn’t quite on board just yet and that is seeing the pound pare some of its gains. Cable back down to 1.2920 from a high of 1.2990 earlier.

China commerce ministry: The goal is to stop the trade war, remove all tariffs

  
Analysis, Economy

Is that a hint on the stance that they are about to take moving forward?

US-China
  • Hopes that China can make progress with the US in removing tariffs
  • Currently working on text with the US
  • Wishes both sides can reach an agreement as early as possible and make progress on cancelling tariffs
Just in case you forgot about this “little” report here from earlier in the week.
It could be a subtle hint about what will be discussed in the next round of talks but I may be reading too much between the lines here.
I mean that’s quite a bit of mention about removing/cancelling tariffs, no? ¯\_(ツ)_/¯

UK Times says Corbyn preparing to support a 2nd referendum on possible new Brexit deal

  
  Analysis
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UK Labour Party leader Corbyn

  • Said to be getting set to put any deal deal to a second referendum
  • is understood to support backing an amendment to a new vote on a withdrawal agreement that the prime minister hopes to put before parliament on Saturday
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UK house of Commons is set to sit on Saturday in the hope of getting a deal approved
  • if that vote passes, the prime minister will still need to pass legislation to implement the agreement through both houses of parliament by the October 31 deadli

US SEC charges 18 traders in a manipulation scheme … profits over $31 million

  
  Analysis
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The US Securities and Exchange Commission has obtained an asset freeze against the 18 traders

  • scheme to manipulate more than 3,000 U.S.-listed securities
  • for over $31 million in illegal profits
The SEC alleges that the traders, who are primarily based in China, manipulated the prices of thousands of thinly traded securities by creating the false appearance of trading interest and activity in those stocks, thereby enabling them to reap illicit profits by artificially boosting or depressing stock prices. 
For example, according to the SEC’s complaint, the traders used multiple accounts to place several small sell orders to drive down a stock’s price before using a different set of accounts to buy larger amounts of the stock at the artificially low prices. After accumulating their position, the traders then flipped the script and placed several small buy orders to push up prices so they could then sell their stock at artificially high prices.
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