Archives of “December 2019” month

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European shares end the day lower

  
Analysis, Global Indices
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German DAX, -0.66%. UK’s FTSE, -0.68%

the major European stock indices are ending the day with declines. The provisional closes are showing:
  • German DAX, -0.66%
  • France’s CAC, -0.79%
  • UK’s FTSE, -0.68%
  • Spain’s Ibex, -0.74%
  • Italy’s FTSE MIB, -1.06%
  • Portugal’s PSI 20, -0.62%
In the European debt market, yields moved sharply higher with the UK 10 year benchmark note leading the way with a rise of 11 basis points.
German DAX, -0.66%. UK's FTSE, -0.68%_In other markets as European traders exit:
  • Spot gold is higher by $5.60 or 0.37% at $1516.18. It is trading at the highs for the day with the low down at $1510.86
  • WTI crude oil futures are down $0.17 at $61.54, after failing to hold above the $62 level. The high price for the day reach $62.34
The US stocks are trading lower on the day led by declines in the NASDAQ index
  • S&P index -14 points or -0.44% at 3226
  • NASDAQ -51.18 points or -0.57% at 8955.82
  • Dow -129 points or -0.45% at 28514

US yields are also higher with the yield curve steepening. The 2 – 10 year spread has widened out to 34.28 basis points from 29.4 basis points on Friday.

US yields are higher

Your guide to China’s ‘big bang’ 2020.100% foreign ownership in financial industry.

  
  Analysis
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China will accelerate opening up of its commercial banking and securities sectors, among others, next year.

For example:
  • foreign insurers can apply to set up 100%-owned units offering life insurance (this segment accounts for three-quarters of the Chinese insurance market)
  • from January 1 overseas firms will be allowed to set up their own entities to trade futures
  • offshore firms will be able to apply for licenses to start wholly owned mutual fund management firms in April
And, plenty more here at the link

Heads up for China PMIs due this week, Tuesday and Thursday

  
  Analysis

The official China PMIs from the NBS are due on Tuesday December 31 at 0100GMT

  • Manufacturing expected 50.1, prior 50.2
  • Non-manufacturing expected 54.2, prior 54.4

Following on Thursday 2 January at 0145GMTwe’ll get the private survey Caixin/Markit Manufacturing PMI for December

  • expected 51.6, prior 51.8
And, next week, due on Monday 6 January at 0145 GMT its the Caixin/Markit PMIs for Services & also the Composite
  • Services expected 53.4 prior 53.5
  • Composite prior 53.2
Expectations, as you see, are for steady sort of levels. With the phase 1 trade deal approaching signing (so we are led to  believe) steady PMIs should act as a support for ‘risk’, while downside surprises in the numbers will likely be forgiven.

Monday morning open levels – indicative forex prices – 30 December 2019

  
Analysis, Forex

Welcome to the start of the new FX week. Trading liquidity will be less than normal this and week as a holiday mood carries on.

And of course, the thinnest liquidity time of the forex week is right about now.
It improves as more Asian centres come on online.
Not too much change from late Friday levels:
  • EUR/USD 1.1178
  • USD/JPY 109.47
  • GBP/USD 1.3090
  • USD/CHF 0.9750
  • USD/CAD 1.3075
  • AUD/USD 0.6976
  • NZD/USD 0.6697

Aramco’s IPO has lessons for Asia’s state-owned oil companies

  
  Analysis
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Saudi Aramco, Saudi Arabia’s state-controlled oil company, held a record-breaking initial public offering earlier in December, becoming the world’s most valuable listed company, ahead of Apple of the U.S.

The listing on the Riyadh stock market on Dec. 11 gave Aramco a market value of $1.877 trillion. The $25.6 billion raised was also a record, breaking the previous mark set in 2014 by China’s e-commerce leader, Alibaba Group Holding.

The IPO has set off speculation about how the stock flotation will affect other state-owned oil producers, especially in Asia.

According to the International Monetary Fund’s latest forecast, Saudi Arabia will incur a fiscal deficit of 178.5 billion riyals ($47.57 billion) in 2019, staying in the red for the sixth consecutive year. The economy of the kingdom is greatly affected by the price of crude oil, which generates 70% of government revenue. As the world moves toward alternative forms of energy to combat climate change, the risks of relying heavily on oil will grow.

In 2016, Saudi Arabia adopted the Vision 2030 plan aimed at reducing its dependence on oil and creating a sustainable growth model. The listing of Aramco is key to the shift. (more…)

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