Daily Briefing – Thursday, March 2, 2017
Manufacturing across the Eurozone picked up but less well than expected. Manufacturing PMIs for the zone ere down from 55.5 to 55.4, down for France, England and Germany, but surprisingly up 2 full points in Italy at 55. As France edges towards elections, the country’s extreme right drew the lines yesterday when Marine Le Pen attacked German Chancellor Merkel, calling Germany a “servant to America”, rejecting what she called the “vassilization” of Europe by Germany. Inflation reports from Germany yesterday indicate the nation has overstepped inflation targets and is now 2.2%. Jobless claims yesterday fell by 14,000 in January – more than expected – putting unemployment at its lowest level in the quarter of a century since unification – 5.9%. And, in Britain, the pound continues a week-long drop as the FTSE bounced upward by 1.6% yesterday. The nation’s consumer debt is up to 1.4mn GBP and mortgage approvals by more than 1.6 bn to 69.93 bn GBP.
Risk appetites are soaring in Asia, with indexes up: the Nikkei added nearly a percent, the Kospi half. Still, Chinese and Hong Kong benchmarks were down. Australia’s S&P/ASX200 rose by 1.26% as its trade surplus increased to 1.3 bn AUD in January – less than expected, as commodity prices increased towards the January reading.
The USDJPY surged early yesterday evening after the US Fed’s Lael Brainard speaking at Harvard joined voices calling for a March interest rate hike. Investors await Janet Yellen’s speech tomorrow (following Evans, Powell and Fischer) for further indications, with odds for a hike currently estimated at 70%. Yesterday, the Atlanta Fed downgraded its estimates for GDP growth in Q1 this year from 2.5% to 1.8, echoing the sentiments of – among others – Goldman Sachs, JP Morgan and the Bank of America.
Oil prices continued to fall overnight after US oil inventories rose by another 1.5mB – the 8th straight week of increases, putting the current inventory reading at 520 million barrels. Meanwhile, gold lost 1/3% as the USD strengthened on yesterday’s Fed comments.
SNAPCHAT is expected to go public tomorrow at $17 a share, expecting to raise $3.4 bn on the New York Stock Exchange after reporting $404 mn in revenues for 2016 – that’s 8 times 2015’s. And in Germany, Deutsche Telecom reported a 2.2 bn Euro loss for last year’s Q4 in spite of 19.54 bn Euro revenues – 9.4% higher than the previous year.
|10 AM GMT||EU: Unemployment, Consumer & Producer Price Indexes|
|1:30 PM GMT||US: Continuing & Initial Jobless Claims|
|1:30 PM GMT||Canada: GDP Q4 2016|
|3 PM GMT||US: Snapchat IPO (NYSE)|
|11:30 PM GMT||Japan: CPI, Unemployment & Household Spending|