Archives of “November 6, 2019” day

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The US/China deal can be delayed until December: Senior Trump administration official

  
  Analysis
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Negative moves in stocks… Yields move lower… Gold moves higher

  • Trump/Xi meeting to sign US–China trade deal could be delayed until December as discussions continue over terms and venue
  • Still possible US – China trade deal pack will not be reached, but deal more likely than not
  • Europe a likely venue for the Trump-Xi meeting with Switzerland and Sweden among sites under consideration. Iowa is not a likely
  • Push for more tariffs rollbacks not seen derailing progress toward trade deal
  • Believes China sees quick trade deal as best chance for favorable terms, given Trump’s electoral and impeachment pressures
The stocks have moved to a new session lows (modest declines are picking up steam a bit).
  • S&P index fell to a low of 3067.26. We currently trade at 3069.5
  • NASDAQ fell to a low of 8387.61. We currently trade at 8389.32
  • Dow fell to 27420.17 with the price currently at 27435
US yields moved lower as well with the 10 year at 1.824%, -3.5 basis points.
Gold prices have moved higher with spot gold up $9 or 0.61% at $1493 currently.
WTI crude oil futures have moved lower they trading near session lows at $56.33 (currently at $56.42).
The USDJPY has moved to a new session low at 108.83. The 200 hour moving average comes in at 108.659.  There is a risk off in risk pairs like USDCAD, AUDUSD and NZDUSD.

European shares marginally higher in trading today

  
Analysis, Global Indices

Spain’s Ibex down marginally. German Dax up 0.2%

The major European shares are closing the day mostly higher with the Spanish Ibex the exception. The provisional closes are showing:
  • German DAX, +0.2%
  • France’s CAC, +0.2%
  • UK’s FTSE, unchanged
  • Spain’s Ibex, -0.4%
  • Italy’s FTSE MIB, unchanged
In the European debt market, the benchmark 10 year yields are ending the session lower:
Spain's Ibex down marginally. German Dax up 0.2%_
In other markets, a snapshot is showing:
  • spot gold is up $5.10 or 0.35% at $1488.62
  • WTI crude oil futures are down $0.44 or -0.75% at $56.79
in the US stock market the major indices are currently trading mixed:
  • S&P index is up 1.2 points or 0.04% at 3075.80
  • NASDAQ index is still down -22.6 points or -0.27% at 8412.10
  • Dow is up 12.50 points or or 0.05% of 27505
In the forex market, the major indices remain bunched together with the JPY and NZD the strongest and the CAD the weakest.  The USD is a little higher overall with the largest gain vs the CAD and largest decline vs the JPY.

Crude oil inventories for Nov 1 week 7929K versus 2000K estimate

  
Analysis, Crude

Crude oil inventories for November 1, 2019 week

A much larger build crude oil inventories
  • crude oil inventories 7929K vs 2000K estimate
  • gasoline inventories -2828K vs -2000K estimate
  • distillates inventories -622K vs -1250K estimate
  • Cushing OK crude inventories 1714K vs 1572K last week
  • US refinery utilization -1.7% versus 0.73% estimate
  • crude oil implied demand 17544 vs 18482 last week
  • gasoline implied demand 10153.3 versus 10435.9 last week
  • distillates implied demand 5269.9 versus 5275.4 last week
The big surprises the crude oil inventory which came in much higher than expectations and even above the better-than-expected private data last night.

China announces plans for the economy

  
  Analysis
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Some plans from the China government to support the economy

  • Plans to deepen medium and small lenders reforms, and to improve their governance and internal risk control
  • To deepen state owned enterprise reforms, support medium and small firms to develop
  • To improve legal environment that supports private economy and foreign entities
  • to prevent various kinds of risks and to keep a stable economy
  • to support capital replenishment of small to medium banks via multiple channels
  • to strengthen financial infrastructure supervision and development
  • to make financial institutions, local governments and financial regulators to carry out their responsibilities
  • China is set a punitive compensation system for intellectual property infringement (is that internally in China or does it include compensation to foreign companies that are subject to IP infringement?)
A list of “to do’s” as the US -China trade talks continue toward a Phase I fnish line (which is not yet reached).

China and France getting cosy

  
  Analysis

China strengthening European ties

China strengthening European ties
  • China and France reaffirm their firm support for the Paris Climate Change agreement and consider it an irreversible process
  • Sign protocol to finalise agreement by end Jan 2020 on building of nuclear waste treatment facility in China
Adam pointed out earlier that if there is a worsening of US China trade relations there will be a push and pull between US and China over Europe. With the UK out of the EU then the US’s special ally is now out of the European big boys club. Potential for severe political splits across the globe ahead if relations don’t quickly improve.
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