International Summary

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International Summary

"CAPIS International Summary 8/18/16"

posted by Matthew Kiselica on 08/18/2016 at 3:14 am

by Matthew Kiselica

08/18/2016 at 3:14 am

Asian Headlines

A very mixed reaction around the region following yesterday’s Fed minutes.  Overall, there was no clear direction while Japan lagged and Hong Kong lead to the upside.  The “Greenback” was generally weaker on back of the aforementioned Fed release.

Japan suffered due to the US$ decline as the ¥ once again traded stronger than the “century” mark.  All major sectors in Japan retreated with the “best” performing sectors of basic materials and energy off by about 0.75%. While still hoping for a T-Mobile/Sprint merger, Softbank -4.6% announced it had completed its ¥250b buyback.  July exports suffered the largest decline since 2009 of 14% vs. -13.7% estimated. Imports dropped 24.7% leaving a trade surplus of ¥ 513.5b.

It was key earnings that caused the Hong Kong to trade well.   While Ping An’s +2.5% NI beat was due in part due to disposals, the figures still showed solid underlying trends and a lower overall tax rate.  Tencent’s +5.2% Q2 profit and sales surpassed estimates thanks to strong mobile games adds and online advertising jumping by 60%. Lenovo +2.2% also beat and expects its Motorola smartphone business to make up for its declining computer unit.  China Unicom’s +7.8% results appear to show performance has bottomed and a strong increase in 4G users will drive results growing forward.  Mainland markets struggled following property price data for July that showed new home prices fell m/m in 16 of the 70 cities tracked.  In June, prices declined in only 10 cities.

While the weaker US$ was also a problem for S. Korean exporters,  gains in the Samsung Group moved the KOSPI higher.  Samsung Life +5.4% plans to buy a 9.14% stake of Samsung Securities +3.5% from Samsung Fire & Marine +2.5% and an additional 8.02% shares from Samsung Securities itself.  This drove Samsung Elec. +4.7% to an all time high.

Australia’s unemployment rate dropped in July to 5.7% from 5.8% as part time jobs surged amid a national election and census count. Treasury Wine +11.5% profits more than doubled as earnings from Asia outpaced those in its home market.

 European Headlines

Europe has been trading up small since the open and pulled back from its highs of about 0.5%.   Most sectors are green with basic resources ahead by over 2% followed by financials and industrials.  Healthcare is the only sector in the red. Volumes are lower by 20.0%.

Nestle -1.0% is trading well despite organic sales growth lagging consensus (3.5% vs. 3.7% expected).  CFO Roger stated its performance bottomed during Q2 and the company would meet its FY estimates.

A trifecta on earnings is blowing wind power generator Vestas +9.0% higher.  Q2 revenues were stronger, the company raised its FY margin guidance and announced a share buyback.

The US$ strength has continued but the £ is especially stronger following better than expected U.K. retail sales which were well ahead of expectations in all readings.

Cisco is trading lower pre-market after announcing job cuts amounting to 7% of its total workforce.   Wal-Mart raised forecasts.  Fed Chair Yellen will be speaking at the annual Jackson Hole symposium today.

Market Prices and Macro Data

init

Event Survey Actual Prior Revised
FR ILO Unemployment Rate 2Q 10.10% 9.90% 10.20%
FR Mainland Unemp. Change 000s 2Q -15k -74k -3k -7k
FR ILO Mainland Unemployment Rate 2Q 9.90% 9.60% 9.90%
JN Machine Tool Orders YoY Jul F -19.70% -19.60%
EC ECB Current Account SA Jun 28.2b 30.8b 31.8b
EC Current Account NSA Jun 37.6b 15.4b 16.5b
UK Retail Sales Ex Auto Fuel MoM Jul 0.30% 1.50% -0.90%
UK Retail Sales Ex Auto Fuel YoY Jul 3.90% 5.40% 3.90%
UK Retail Sales Inc Auto Fuel MoM Jul 0.10% 1.40% -0.90%
UK Retail Sales Inc Auto Fuel YoY Jul 4.20% 5.90% 4.30%
IT Current Account Balance Jun -7185m 3189m
HK Unemployment Rate SA Jul 3.40% 3.40% 3.40%
HK Composite Interest Rate Jul 0.26% 0.26%
EC Construction Output MoM Jun 0.00% -0.50% 0.00%
EC Construction Output YoY Jun 0.60% -0.80% -0.40%
EC CPI MoM Jul -0.50% -0.60% 0.20%
EC CPI YoY Jul F 0.20% 0.20% 0.20% 0.10%
EC CPI Core YoY Jul F 0.90% 0.90% 0.90%
EC ECB account of the monetary policy meeting

About the Author

Matthew Kiselica headshot
MatthewKiselicaFVP,Manager of International Trading

Matthew Kiselica joined CAPIS in 2010 and has over twenty-five years of industry experience. Prior to CAPIS, he was vice president of Cazenove’s global sales trading desk in New York. Matthew is a board member for the National Psoriasis Foundation. He earned his bachelor’s degrees in fina...

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