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Daily Analysis – Wednesday, February 22, 2017

  Europe

Austria inflation has hit the 2% inflation target – the first in the Eurozone, whose PMI readings yesterday were at a 5-year high. With Q1 GDP up 0.6% growth, today’s CPI is up 1.8% YoY for January. Germany’s sentiment also increased beyond expectations at 110 for business climate and 104 in expectations. England’s 9.4 bn GBP budget surplus from yesterday is its highest in 16 years. Q4 GDP disappointed at 2% YoY, and the FTSE 100 rose 1/3% on financial shares.

Asia

Hong Kong’s economy is set to grow by 2-3% in 2017, according to finance secretary, Paul Chan. Inflation should level at the 1.8% region. GDP data this morning for last year’s Q4 indicates 3.1% growth. Yesterday’s excellent manufacturing PMI from Japan pushed the yen higher overnight tonight’s investments and leading economic index reports expected.

US

 

US shares continue to rise with retail numbers surprising upwards. After yesterday’s disappointing PMIs, Goldman Sachs officials reported they believe an equities reversal is expected as soon as President Trump’s tax reforms disappoint and the 1% drop in corporate earnings begin to reflect in indexes. The USD continued its week-long increase yesterday despite profit taking during the Asian session. And tonight, the FOMC minutes may indicate the number of voting members likely to vote for an interest hike.

 

Commodities

Russian state controlled and soon to be privatized oil conglomerate Rosneft yesterday revealed Q4 profits doubling YoY, while Saudi Arabia informed Morgan Stanley, JP Morgan and HSBC they would be underwriting the country’s national energy company’s upcoming IPO. ARAMCO is currenctly valued at #2 tn, and SA plans to sell 5% of that. As gold continues to trend between 1225-1245 while Russia 37 metric tonnes purchased this past month.

Shares

Bayer results for Q4 2016 this morning showed profits plunging 26%, while this afternoon, Tesla’s report will echo a 48% increase in value over a 3 month period.

 

Week’s Events

1:30 PM GMT Canada: Retail Sales
1:55 PM GMT US: Redbook Index, followed by existing home sales at 3 and the FOMC minutes at 7.
9:30 PM GMT API weekly oil report
11:50 PM GMT Japan: Foreign investments.

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