Archives of “September 2020” month

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UK government legal department head quits over Brexit – report

  
  Analysis

Jonathan Jones has quit over suggestions that UK PM Johnson plans to row back parts of last year’s Brexit deal

This isn’t a good look as we get into crunch talks this week and the story is sending the pound to fresh lows on the day. Cable is now down to fresh two-week lows of 1.3083.
Sources close to Jones said that he was leaving his position due to plans by the government to challenge parts of the Brexit withdrawal agreement, and that he was ‘very unhappy’ about the whole situation.
His formal departure is expected to be announced later today.
The full story by the FT here (may be gated).

Eurozone Q2 final GDP -11.8% vs -12.1% q/q second reading

  
Analysis, Economy

Latest data released by Eurostat – 8 September 2020

  • GDP -14.7% vs -15.0% y/y second reading
  • Household consumption -12.4% vs -12.2% q/q expected
  • Prior -4.7%; revised to -4.5%
  • Government spending -2.6% vs -2.5% q/q expected
  • Prior -0.4%; revised to -0.7%
  • Employment -2.9% q/q
The second reading can be found here. The mildly higher revision is little consolation as this just reaffirms the biggest slump in the euro area economy on record. The market is more focused on the recovery phase now so this data release means little.

Copper set to gain?

  
  Uncategorized

Via Bloomberg

Via Bloomberg 
Bloomberg was out with a piece yesterday making a strong case for further copper strength. Copper’s prices have been underpinned by a number of factors even as equity markets tumbled into the end of last week. Here are a number of factors influencing copper buyers:
  • The USD has been weak and that helps boost commodity prices including copper.
  •  Supply concerns are lingering especially in top producer Chile.
  • There has been a sharp drawdown in stockpiles in LME tracked sheds and copper holdings have collapsed to lowest since 2005. Looking at outstanding orders to remove metal they haven’t bottomed yet.
  • China has been boosting infrastructure spending after the fall out from COVID-19 which has been helping copper demand.
  • Investors are gaining in excitement over copper with Citi just laying out a bull case for prices at $8000/ton. Alongside this CFTC figures show specs have kept adding to longs
  • There are some bright copper-positives out there like US housing starts which have been doing well. Home building needs a fair bit of copper.
  • Furthermore. the rise in green technology will be copper positive due to the high demand of copper in green technology.
This makes a good case for medium term copper buyers. In terms of where to join this move look for buyers on pullbacks in the near term. The main risks to this outlook are from any sharp reduction in demand on COVID-19 second spikes and related lockdowns.

Eurostoxx futures +0.5% in early European trading

  
Global Indices, Uncategorized
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Some mild optimism flowing in early trades

  • German DAX futures +0.6%
  • UK FTSE futures +0.4%
  • Spanish IBEX futures +0.4%
US futures have also moved higher in the past hour, with S&P 500 futures now up ~0.7% while Nasdaq futures have pared losses to flat levels now and that is feeding to some slight positive momentum to start European morning trade.
In the currencies space, the aussie is also ticking a little higher with AUD/USD now testing 0.7300 and the confluence of its key hourly moving averages @ 0.7294-13.
USD/CAD is also nudged lower from 1.3110 to 1.3090 and testing the confluence of its own key hourly moving averages @ 1.3086-91 currently.

Nikkei 225 closes higher by 0.80% at 23,274.13

  
Analysis, Global Indices

Asian equities fare better on the day

Nikkei 08-09
Japanese stocks saw a modest rebound in trading today, recovering yesterday’s losses while the Hang Seng is up 0.5% and the Shanghai Composite is up by 0.9% currently.
All eyes will be on how US stocks will perform later today following the long weekend, and futures are pointing towards a better return with S&P 500 futures up 0.6% while Nasdaq futures erased earlier losses to flat levels now.
Major currencies are still keeping more mixed and tepid, and are likely to stay that way until we get firmer risk direction from US trading later today.
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