Archives of “November 2019” month

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Japan November Reuters Tankan survey -9 vs -5 prior

  
Analysis, Economy
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Soft manufacturing survey data

Reuters tankan
  • Prior was -5
  • Weakest since March 2013
  • Non-manufacturing index +12 vs +25 prior
  • Non-manufacturing index hits lowest since Oct 2016
  • 3 month future forecast shows manufacturers index at -3 and non-manufacturers at +10
The typhoon at the start of the month along with the consumption tax hike hammered this survey, particularly on the non-manufacturing side.
Digging into the numbers the retail index fell to -15 from +30 in a troubling drop.
The BOJ has argued that solid domestic demand would offset external weakness but that’s not the way it appears to unfolding.
Pressure is growing for fresh government and/or central bank stimulus.

International Monetary Fund wants Indian government to be more credible, transparent on fiscal numbers

  
  Analysis
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New Delhi needs to become more “transparent” on the fiscal numbers as it is a “laggard” among the G20 peers on this front, a senior official from the International Monetary Fund said here on Wednesday.

The government has been missing its budgeted fiscal targets for the past few years and there is a need for a “credible fiscal consolidation” which is more ambitious as well, the official said, adding this is more so as government has not addressed how it will make up for the massive Rs 1.45 lakh crore tax giveaways in the form of corporate tax cuts.

The comments come amid allegations of the budget math not adding up with some pointing to a Rs 1.7 lakh crore hole in the estimates, and also over 100 economists questioning the official data computation.

“Fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing,” the fund’s deputy director Anne-Mary Gulde said speaking at an NSE event here. 

“India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress,” she added.

She said there is also a need for more credible fiscal consolidation as such a move will help reduce the relatively high level of debt and free up financial resources for the private sector. (more…)

Buy EUR/USD on a break of 1.12; sell if trade talks break down – SocGen

  
Analysis, Forex
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What’s the trade in the euro

Societe Generale Research discusses EUR/USD outlook and stays sidelined in the near-term.
 
“EUR/USD remains firmly in the bottom half of the last 5 years’ range, but the trade-weighted euro is only about 1% lower than it was 5 years ago, when the ECB was ramping up its policies to weaken the currency and hadn’t yet unveiled January 29015’s bazooka. The EUR/CNY rate (the bilateral rate with the biggest single share in the basket) is higher than it was 5 years ago. That higher EUR/CNY rate significantly limits the potential upside for EUR/USD, unless we see USD/CNY fall back. The last week hasn’t seen the euro able to break through its 200-day average, or any other technical/psychological barrier, but the fall back in USD/CNY does provide support on the downside for the euro,” SocGen notes.
 “However, if a US/Chinese trade deal results in a narrower trading range for USD/CNY, it will also limit the possible range for EUR/USD going forwards. In the meantime, EUR/USD is a buy if it can break 1.12, and a sell if the US/Chinese trade talks break down,” SocGen adds.

US considering scheduling Trump-Xi meeting after NATO summit in London

  
Analysis, Politics

Are the details worked out?

I am not suggesting that Phase I of the US/China trade deal is in jeopardy but the focus from the White House is on the when and the place.  I wonder if the horse is getting in front of the cart?.  This was suggested by CNBC’s Kayla Tausche.
A senior administration official is now on the newswires saying that the US is considering scheduling the Trump/Xi meeting to sign the interim US/China trade deal after the NATO summit in London scheduled for December 3. They add no decision yet has been made.
This idea was suggested by CNBC’s Kayla Tausche, but is now being released by the White House.

Major indices closed the session with mixed results

  
Analysis, US Market

S&P up. Dow unchanged.  NASDAQ down

The NASDAQ and Dow close at a record yesterday. Today, both were lower at the close so no new records. The NASDAQ composite was down for the 2nd straight day in a row. The final numbers are showing:
  • the S&P index up 2.16 points or 0.07% at 3076.78. The high reached 3078.34. The low extended to 3065.89
  • The NASDAQ index fell 24.052 points or -0.29% at 8410.62. The high reached 8426.57. The low extended to 8379.328
  • The Dow is ended the day nearly unchanged at 27492.5, down -0.07 points or a negligible percentage change
Below is a graphical representation of the percentage high percentage low in percent’s close of the North American and European stock indices today.
S&P up. Dow unchanged.  NASDAQ down_

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.
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