Archives of “December 9, 2019” day

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China says hopes to reach trade agreement with US that satisfies both sides as soon as possible

  
  Analysis

Comments by the Chinese assistant commerce minister

  • Says China is to actively boost imports
The trade headline is nothing new but the one on imports comes after we saw a bit of a boost in the November data over the weekend
With exports still slumping amid weaker global trade conditions, perhaps China can look towards boosting domestic demand to try and get its economy back on track next year.
For now, it is still early days though. One positive data point doesn’t make a trend.

Cable trades to fresh seven-month highs to start the week

  
Analysis, Forex

The pound stays underpinned ahead of the UK election this week

GBP/USD D1 09-12
Early bids have helped push the pound to a high of 1.3181, closing in on the May high of 1.3185 as we get into what will be a crucial week for the pound.

It is all about the election now and so far the polls are still suggestive of Boris Johnson coming out on top with traders holding out some hope for a majority outcome as well.
As for cable, looking at the weekly chart:
GBP/USD W1 09-12
We can see that buyers are looking poised for a key upside break after closing last week above the 100 and 200-week moving averages. This week, the 50.0 retracement level @ 1.3168 will be a key level to watch out for but it all depends on the election outcome.
If we do see yet another hung parliament result, expect the pound to undo its good work since October as we go back to the drawing board in this whole Brexit debacle.

European equities keep more flat to start the day

  
Analysis, Global Indices

Little change at the open to start the new week

  • Eurostoxx -0.1%
  • Germany DAX -0.1%
  • France CAC 40 flat
  • UK FTSE -0.2%
  • Italy MIB +0.1%
The risk mood remains more steady as we begin the session, leaving little movement among European stocks as we begin the day. It’s a bit of a waiting game right now as we look towards key central bank meetings and possibly further trade developments during the week.

Japan GDP, final for Q3: 0.4% q/q

  
Analysis, Economy
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Third quarter economic growth in Japan, this the final (link to the preliminary is below)

  • GDP sa q/q  0.4%, ahead of the preliminary result.
  • GDP annualised sa 1.8%
  • GDP nominal q/q 0.6%
  • GDP deflator (an inflation indication)
  • Private consumption 0.5% q/q
  • Business spending 1.8% q/q
For the preliminary readings and those for Q2, here is the report:
  • Japan GDP (preliminary) for Q3 0.1% q/q (vs. expected 0.2%)
The growth figures are well ahead of the preliminary release. A relatively string report. Some of the strength in consumer activity will be ‘front loading’ ahead of the sales tax hike that came on October 1 I guess (although this did not show up to much extent in other data).

South Korea’s vice fin min says watching markets for impact of North Korea issues

  
Analysis, Politics
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Sounding a warning for volatility related to NK missile tests and other geopolitical issues

This comes after North Korea’s state media KCNA reported on Sunday that the country had conducted a “very important” test at its Sohae rocket-testing ground. NK have previously agreed to close the facility. But, no, they have not.
US President Trump had words on the NK tests over the weekend:
  • “Kim Jong Un is too smart and has far too much to lose, everything actually, if he acts in a hostile way. He signed a strong Denuclearization Agreement with me in Singapore,” 
  • “He does not want to void his special relationship with the President of the United States or interfere with the U.S. Presidential Election in November” 

Its a big week coming up (FOMC, UK election & more) – Asian events to take note of also

  
  Analysis
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Its a huge market week with loads of central bank decisions and more:

  • FOMC (Wednesday 11 December)
  • ECB, SNB and UK election (Thursday 12 December )
Also, take note of events in Asia that could well be significant also:
  • China inflation data for November on Tuesday 10 December
  • Philip Lowe, Governor of the Reserve Bank of Australia. speaks. Also on Tuesday
  • Bank of Japan’s quarterly Tankan survey is on Friday December 13
And, while not during market hours, Sunday December 15 will bring US President Trump’s latest mood swing decision on tariffs on China. Which should set up a volatile Monday morning (the 16th)
Its a huge market week with loads of central bank decisions and more:

China has ordered government offices, public institutions to remove foreign computer equipment & software

  
  Analysis
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The Financial Times reports on the latest from China

China’s administration has ordered all government offices and public institutions to remove foreign computer equipment and software within three years
  • targets Chinese buyers to switch to domestic technology vendors
Sounds like the Chinese version of the Trump admin’s directive to halt ourchases of Chinese tech?
Here is the FT link, may be gated.
And Huawei we go!
Financial Times China microsfot dell
This is unlikely to be viewed as a positive for US-China relations. Should be a ‘risk’ negative.

Here is what’s on the economic calendar in Asia today

  
  Analysis

Plenty on the data agenda for the session.

2145 GMT New Zealand Q3 Manufacturing data

2350 GMT Japan GDP, final for Q3

  • GDP sa q/q
  • GDP annualised sa
  • GDP nominal q/q
  • GDP deflator (an inflation indication)
  • Private consumption
  • Business spending
  • For the preliminary readings and those for Q2, here is the report: Japan GDP (preliminary) for Q3 0.1% q/q (vs. expected 0.2%)

Also at 2350 GMT Japan Balance of Payment Current Account for October

  • BoP Current Account Balance expected Y 1806.8bn, prior Y 1612.9bn
  • BoP Current Account Adjusted expected Y 1731.1bn, prior Y 1485.2bn
  • Trade Balance BoP basis expected Y 138.8bn, prior Y 1.1bn

And, more at 2350 GMT from Japan, bank lending for November

So, a stack of data due from Japan. Its often the case that the data release do not have too much immediate yen impact and I suspect today will be no different. As a general guide though, data disappointments will tend to yen negative (they’ll be read as keeping the BoJ on their massive easing path and perhaps preparing to add more). With such a load of data the results are likely to be mixed.

0110 GMT BOJ JGB purchase operation

  • Bank of Japan Japanese Government Bond purchases in the 10-25, 25+ years left until maturity window
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