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Daily Analysis – Thursday February 16, 2017


Banks were at a three-week high, thanks to optimistic earnings; and car shares on expectations of future M&As. As European imports drop and exports stagnate, the EUs trade balance was up for 2016 by 238.7 bn Euros. In the UK, unemployment dropped for the fourth  ¼ in Q4, with inflation eroding wages. Still, the kingdom’s economy is the rapidest growing of the G7, and yesterday, the BoE revised its proposals for fighting interbank lending rate manipulation.



Asian markets were beset by falling USD yesterday. The Nikkei was driven half a percent down and the KOSPI a tenth – all following US Fed head Janet Yellen’s expressed caution. Chinese direct investments fell 9.2% in January – they had climbed 5.7% the previous month. And Japanese foreign investments increased by 176 bn Yen.


US indexes rose above record highs for the 5th session in a row, with the Dow Jones Industrial and the Standards & Poors 500 both up half a percent, while the Nasdaq rose 0.64% – all this after President Trump talk of a “massive tax plan”. Data yesterday showed a 0.4% retail sales rise and a 0.6% rise in consumer prices – its highest increase in four years. The Empire State Manufacturing Index yesterday tripled up to 18.7 for February.



The EIA report yesterday shows another dramatic inventory increase – 9.5 million barrels – resulting in a drop of 0.3% in prices. Also, the  weak USD enabled pushed gold out of its 4-session drop – up 0.12% this morning.



SodaStream rose  6.8% yesterday (up 25% on the year), beating quarterly report expectations, as healthy drinking replaces soda and BDS draws attention to the company. Yahoo shares are up thanks to expectations of  a Verizon take-over. CISCO showed revenues fell for a 5th quarter in a row, but shares recovered showing a 2% gain over the session. AT&T shares are up 50c on the the AT&T – TIME/WARNER merger.


Week’s Events

12:30 PM GMT EU: The Central Bank (ECB) opens its monetary policy meeting, following this morning’s trade balance report from Italy.
1:30 PM GMT US: Housing & Building starts, Initial & Continuing Jobless Claims and the Philadelphia Fed Manufacturing Survey, which is a faithful guide to US manufacturing conditions.
9:30 PM GMT New Zealand: Business PMI followed 15 minutes later by Retail Sales.


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