Tin tức thì trường

James Knightley, the chief international economist at ING, notes that the U.S. retail sales rose more strongly than expected in August, posting a 0.4% month-on-month gain versus the 0.2% consensus expectation.

• “July’s growth rate was also revised up by a tenth of a percentage point. The report again underlines the point that while not everything is rosy in the US economy, overall it remains some way off recession and market expectations for aggressive Federal Reserve policy stimulus may be misplaced. Together with yesterday’s inflation data, it takes the already remote prospect of a 50bp rate cut next week firmly off the table.
• Overall the data suggest that consumer spending will make another decent contribution to GDP growth in the third quarter. The “control” group that better correlates with consumption rose 0.3% MoM after increasing 0.9% in July. As such we remain on course for a 3Q US GDP figure just above 2%.

Analysts at Nordea Markets say that, while most “vanilla headlines” will center around the expected Fed cut next week (Wednesday), they will be particularly keen to look for clues from the Fed on USD liquidity.

• “We expect a 25bp cut and a signal of another cut to come before year-end in the updated dot plot. This is likely not enough to prompt a dovish market reaction, as this is fully priced in already. The dovish ECB takeaway has not limited the pressure on the Fed (despite a new surge in US core inflation). Trump wants to be paid to borrow, and he is not there yet.
• On the island of Norway, we expect a rate hike next week. We remain very firm in that conviction. Norges Bank’s rate path model is domestically driven in the front, and more globally driven in the back. Domestically, things are still more than decent, and the weak NOK pulls up the path (1% weaker NOK = +10 bps). So, the path will likely be revised a tad up for the rest of 2019, while the long end will be taken lower due to the negative global rates pressure.
• In Sweden, the governments autumn budget is due out on Wednesday 18 Sept. There is lot of talk around the world that fiscal policy will have to step in and do more of the job. Although the government sees room for reforms of SEK 25bn, and we expect a budget deficit of -0.5% of GDP for 2020, Sweden it’s not there yet. Fiscal prudence remains the focal point. The economy will most likely to have to deteriorate more markedly for fiscal policy to play a more important role.
• In general, the open-ended ECB QE program opens the door for more cuts globally, with Turkey being the absolute frontrunner after another big Erdoganish cut this week. The race towards the bottom is not over yet.
• That is why the Bank of Japan should be watched closely on Thursday morning as well. Kuroda has recently hinted that the Bank of Japan could be interested in going deeper into negative, if it helped re-steepen the JPY curve. The Bank of England will likely remain 100% paralyzed by the lack of Brexit clarity on Thursday as well.”

The Commerce Department announced on Friday that business inventories rose 0.4 percent m-o-m in July, following an unrevised flat m-o-m performance in June.

That was above economists’ forecast of a 0.3 percent m-o-m advance.

According to the report, retail inventories surged 0.8 percent m-o-m in July (the largest monthly gain since January), while stocks at manufacturers rose 0.5 percent m-o-m and inventories at wholesalers increased 0.2 percent m-o-m.

Retail inventories excluding autos, which go into the calculation of GDP, grew 0.3 percent m-o-m, as reported last month.

In y-o-y terms, business inventories climbed 4.8 percent in July.

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment rose to 92.0 in early September.

Economists had expected the index would increase to 90.9 this month from August’s final reading of 89.8.

According to the report, the index of current U.S. economic conditions rose to 106.9 in September from 105.3 in the previous month. Meanwhile, the index of consumer expectations climbed to 82.4 this month from 79.9 in August.

The data did indicate that consumers anticipate that the Fed would cut interest rates next week, with net declines in interest rates more frequently expected at present than anytime since the depths of the Great Recession in February 2009, the report noted.

Analysts at TD Securities are expecting the U.S. Fed to lower rates again by 25bp next week, doubling-down after its first rate cut in over a decade at the July meeting.

• “We also expect the IOER rate to decline by 25bp, as the effective Fed funds rate (at 2.13%) remains well-below the upper bound of the Fed's target range. In explaining its decision, we anticipate the Fed will emphasize that the factors that led them to ease last month have failed to dissipate. In fact, global growth remains disappointing and trade uncertainty has only increased.
• We also expect the FOMC to continue to characterize the additional accommodation as a "mid-cycle adjustment" or "insurance cuts" and not the beginning of an easing cycle. However, they will not close the door to additional cuts, and we look for another 25bp cut in October and further 75bp of easing in 2020.
• Our view on an October cut relies on the 1998 insurance cut scenario, when the Fed eased rates 75bp at consecutive meetings. Furthermore, research cited by the Fed argues for easing sooner given the proximity to the zero lower bound. A new escalation in the US-China trade war, which led to higher tariffs in the intermeeting period, has clearly raised the stakes and is a notable new development for the Fed.
• Chair Powell had judged those risks as having "returned to a simmer" in July. This was also flagged by Vice Chair Clarida, who noted that "the global outlook has worsened" since the FOMC last met. The recent rapprochement between US and Chinese officials may ease concerns, but the uncertainty on the trade front should continue to linger.
• On net, we believe that foreign and domestic developments since the July meeting are supportive of additional easing by the Fed in September.”

U.S. stock-index futures rose slightly on Friday amid new signs of progress in trade relations between the United States and China.

Global Stocks:

Simon Murray, an analyst at Westpac, notes that the ECB has cut the deposit rate, moved to a tiered reserve system, restarted asset purchases, repriced TLTRO's, and strengthened forward guidance.

• “Having previously paved the way for the introduction of additional stimulus at the July meeting, the ECB’s well-telegraphed announcement of new stimulus overnight largely met expectations. The stimulus package consists of five parts.
• Firstly, the deposit rate was cut 10bps to -0.5% but no changes were made to the repo rate (0%) and MLF rate (0.25%).
• The ECB have also moved to a tiered reserve system. For each bank, a multiple of six times minimum reserves will be exempt from the deposit rate charge and instead receive a juicy 0.0%. This moves the ECB’s negative interest rate policy more into line with the likes of Switzerland and Japan with the tiered system designed to protect policy transmission through the bank lending channel.
• Thirdly, the ECB are restarting net asset purchases. The program will begin in November at a €20bn per month pace and will persist for as long as necessary. No changes to the composition of asset purchases were announced (currently ~80% sovereign bonds), although the ECB will now also purchase private sector securities below the deposit rate.
• Four, the pricing of TLTRO-III (new cheap loans to the banks) has been adjusted. Previously, the incentive rate was tabled at the deposit rate +10bps but now does not include a premium. This effectively means new loans will be at least 10bps cheaper than the loans being replaced but could be lower if the deposit rate is cut again. Maturity of new loans were also extended to 3 years from 2.
• Lastly, calendar dependence of forward guidance has been removed. Guidance is now purely state dependent, with stimulus to continue until the ECB “has seen the inflation outlook converge to a level sufficiently close to, but below 2%.
• All up, the stimulus package broadly came in line with our own expectation. We did not anticipate the repricing of TLTRO-III but had expected a larger €40bn per month asset purchase program. We continue to believe the program will be lifted to that pace in 2020 and the deposit rate will be reduced to a low of -0.7%.”

(company / ticker / price / change ($/%) / volume)

The Commerce Department announced on Friday the sales at U.S. retailers rose 0.4 percent m-o-m in August, following a revised 0.8 percent m-o-m advance in July (originally a gain of 0.7 percent m-o-m), primarily supported by higher auto buying.

Economists had expected total sales would increase 0.2 percent m-o-m in August.

Excluding auto, retail sales were unchanged m-o-m in August after an unrevised 1.0 percent m-o-m surge in the previous month, missing economists’ forecast for a 0.1 percent m-o-m gain.

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, and are used in GDP calculations, rose 0.3 percent m-o-m in August after a 0.9 percent m-o-m rise in July.

In y-o-y terms, the U.S. retail sales surged 4.1 percent in August, accelerating from an advance of 3.4 percent in the previous month.

Apple (AAPL) target lowered to to $165 from $187 at Goldman Sachs

The Labor Department reported on Friday the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, fell 0.5 percent m-o-m in August, following a revised 0.1 percent m-o-m gain in July (originally a 0.2 percent m-o-m advance). Economists had expected prices to decline 0.4 percent m-o-m last month.

According to the report, the August decline was driven by a drop in fuel prices (-4.3 percent m-o-m), while prices for nonfuel goods were flat m-o-m.

Over the 12-month period ended in August, import prices dropped 2.0 percent, weighed down by declines in both fuel (-8.7 percent) and nonfuel (-1.0 percent) prices.

Meanwhile, the price index for U.S. exports dropped 0.6 percent m-o-m in August, following an unrevised 0.2 percent m-o-m increase in the previous month.

Lower agricultural (-2.5 percent m-o-m) and nonagricultural (-0.4 percent m-o-m) prices both contributed to the August fall.

Over the past 12 months, the price index for exports dropped 1.4 percent, weighed down by lower prices for non-agricultural exports (-1.6 percent).

Broadcom (AVGO) reported Q3 FY 2019 earnings of $5.16 per share (versus $4.98 in Q3 FY 2018), beating analysts’ consensus estimate of $5.13.

The company’s quarterly revenues amounted to $5.515 bln (+8.9% y/y), generally in line with analysts’ consensus estimate of $5.519 bln.

The company also reaffirmed guidance for FY 2019 revenues at $22.5 bln versus analysts’ consensus estimate of $22.62 bln.

AVGO fell to $297.11 (-1.15%) in pre-market trading.

Christopher Graham, an economist at Standard Chartered, suggests that the recent UK political developments have prompted them to revise their Brexit-related probabilities with the most likely outcome according to our probability tree is no-deal (48%), ahead of a deal (32%) and remain (20%).

• “These are conditional end-state probabilities and are dependent on the following assumptions:
• We now think the prospect of a delay beyond 31 October is highly likely (80%), while the probability of a deal being reached (10%) or the UK leaving without a deal (10%) by this date are low-risk events.
• We assume an extension request will be accepted by the EU. Following this, we assume an early general election (GE) will be called, most likely for late November/early December.
• Based on recent polling, we think the Conservative party has a c.40% chance of winning a majority and being returned to government, most likely resulting in a no-deal outcome. A Labour-led government (either a majority or in an electoral pact) also has a 40% chance of coming to power and would most likely opt for a second referendum. We attach a 20% probability to either a hung parliament or minority Conservative government.
• Given these electoral probabilities, we view the prospect of a no-deal (40%) and a second referendum (40%) by end-January 2020 as high, while there would still be a small prospect of a deal being reached with the EU (20%).
• If a second referendum is called, we think Remain (60%) would have an advantage over both leave options – deal (20%) and no-deal (20%).”

Anders Svendsen, an analyst at Nordea Markets, suggests that the U.S. activity indicators have disappointed, the trade war has escalated and a bigger part of the yield curve has been inverted since the July FOMC meeting and in other words, the Fed has plenty of reasons to turn more dovish.

• “We expect the Fed to cut its key policy rates by 25 bp at next week’s FOMC meeting – which would be the second consecutive rate cut in the current easing cycle – taking the Fed Funds corridor to 1.75-2.00% with an Interest On Excess Reserves (IOER) rate of 1.85%. Two hawks will likely dissent...again.
• We expect the Fed to signal its intention to “act as appropriate to sustain the expansion”, which we take to mean that more rate cuts are likely if and only if the outlook worsens. The outlook has worsened, though – perhaps enough for the new dot plot to show a third rate cut later this year.
• A rate cut is more or less priced in by the market so the words of Mr Powell and the outcome of the dot plot chart will likely be what determine market reactions. We expect a softer stance from the Fed, which should satisfy the fairly dovish market expectations going forward. In our view, it would be a massive hawkish surprise if the Fed were to leave rates unchanged.”

Analysts at TD Securities are expecting the U.S. retail sales to increase 0.3% m/m in August, following the stronger 0.7% rise in the prior month.

• “The gain should be helped by another firm increase in sales in the key control group as consumer fundamentals remain sound. In the details, the steady increase in core sales and a small rebound in auto purchases should more than offset a decline in sales at gasoline stations, which reflects a notable drop in gasoline prices in August.”

• Governments with fiscal space should act
• There is a very strong view in the ECB that fiscal policy must take charge
• Fiscal policy and structural reforms are needed to get full benefits from ECB policy
• Underlying euro area inflation is muted

• There are still clear pathways to finding a sensible outcome to this unfortunate situation
• EU solidarity with Ireland remains absolute
• Onus is on the UK to find a workable solution to the Irish border

• Restart of QE is not in-line with economic circumstances
• There are sound reasons to doubt effective of ECB package
• There are no risks of deflation, no signs of a recession

Analysts at National Australia Bank notes that global economic growth slowed further in Q2 2019 as major advanced economy (AE) GDP growth declined to its slowest pace since mid-2016.

“We expect the down trend in AE growth to continue through to early 2020 as the US-China trade dispute and other factors weigh on growth. Growth in the five largest emerging markets economies also slowed, including in India, where growth fell to its lowest level since early 2013. In the face of the global slowdown, central banks are moving to support activity; the European Central Bank cut rates this month and the Fed is expected to follow suit. Global growth of 3.1% is forecast for 2019, before edging up to 3.2% in 2020 (previously 3.3%) and returning to its long-term trend (3.5%) in 2021. Key to the upturn is the support from easier monetary policy and cyclical recoveries in Latin America and India, as well as no further escalation in trade disputes or current geo-political risks being realised.”

According to the report from Eurostat, hourly labour costs rose by 2.7% in the euro area (EA19) and by 3.1% in the EU28 in the second quarter of 2019, compared with the same quarter of the previous year. In the first quarter of 2019, hourly labour costs increased by 2.5% and 2.7% respectively. 

The two main components of labour costs are wages & salaries and non-wage costs. In the euro area, the cost of wages & salaries per hour worked grew by 2.7% and the non-wage component by 2.9% in the second quarter of 2019 compared with the same quarter of the previous year. In the first quarter of 2019, the annual changes were +2.7% and +2.1% respectively. In the EU28, the costs of hourly wages & salaries rose by 3.1% and the non-wage component rose by 3.0% in the second quarter of 2019. In the first quarter of 2019, annual changes were +2.9% and +2.1% respectively.

In the second quarter of 2019 compared with the same quarter of the previous year, hourly labour costs in the euro area rose by 2.1% in industry, by 2.4% in construction, by 2.9% in services and by 3.0% in the (mainly) nonbusiness economy. In the EU28, labour costs per hour grew by 2.5% in industry, by 3.1% in construction and by 3.3% in both services and in the (mainly) non-business economy.

According to the report from Eurostat, the first estimate for euro area (EA19) exports of goods to the rest of the world in July 2019 was €206.5 billion, an increase of 6.2% compared with July 2018 (€194.5 bn). Imports from the rest of the world stood at €181.7 bn, a rise of 2.3% compared with July 2018 (€177.6 bn). As a result, the euro area recorded a €24.8 bn surplus in trade in goods with the rest of the world in July 2019, compared with +€16.9 bn in July 2018. The surplus was expected to shrink to €17.4 bn from €20.6 bn in June 2019. Intra-euro area trade rose to €165.6 bn in July 2019, up by 1% compared with July 2018.

In January to July 2019, euro area exports of goods to the rest of the world rose to €1 369.3 bn (an increase of 3.6% compared with January-July 2018), and imports rose to €1 243.2 bn (an increase of 3.5% compared with January-July 2018). As a result the euro area recorded a surplus of €126.1 bn, compared with +€120.5 bn in January-July 2018. Intra-euro area trade rose to €1 168.7 bn in January-July 2019, up by 1.9% compared with January-July 2018.

The European Central Bank is ready to step up its use of monetary policy tools and introduce new ones if necessary, governing council member Bostjan Vasle told Slovenian national news agency STA.

Vasle told STA the ECB could increase volumes and change the conditions for bond purchases.

Risks include U.S. policy, China's economic slowdown and Britain's departure from the European Union and could lead to a further slowing in the eurozone and lower inflation, he said.

"Because of the changed economic conditions, a reaction of other economic policies is needed, particularly fiscal policy and not just monetary policy," said Vasle.

"Actions of just one policy cannot change the flow of economic developments when considering the state we are in and the challenges ahead of us," he added.

He said current concerns are focused on an economic slowdown in the eurozone, rather than a recession.

ANZ analysts note that several developments in China in the past one week have partly eased concerns about the economy’s near-term outlook, including the progress on the China-US trade talks and the announcement of required reserve ratio cuts and pre-emptive fiscal policy.

“China’s near-term policy focus will be on boosting domestic demand and further opening up financial market. We see chances for China to reduce the open market operations (OMO) or medium term lending facility (MLF) rates in Q4 amid the global trend of monetary policy easing.”

In view of FX Strategists at UOB Group, the Kiwi Dollar could be losing some upside traction.

24-hour view: “NZD traded between 0.6399 and 0.6450 yesterday, wider than our expected 0.6400/0.6440 range. The underlying tone has weakened and the risk for today is tilted to the downside. From here, barring a move above 0.6435, NZD is expected to decline to 0.6385. For today, the major 0.6365 support is likely out of reach”.

Next 1-3 weeks: “While NZD finally touched the 0.6450 level that was first indicated on Monday (09 Sep, spot at 0.6425) yesterday, it retreated quickly and ended the day just above the low. Upward momentum has waned considerably and the odds for further NZD strength above 0.6450 have diminished. However, only a break of 0.6365 (no change in strong support level) would indicate that the recovery that started last week has run its course”.

• We do not see a pronounced recession to follow

• However, indicators don't point to an economic turnaround either

• Exports are moving sideways at the moment

• Private consumption still providing noticeable support to the economy

• Recovery in industrial sector not in sight after weak start to Q3

According to Axel Rudolph, analyst at Commerzbank, GBP/USD’s advance from its current September low at 1.1958 continues to have the May and June lows at 1.2506/59 in its sights and between these levels and the mid-July high at 1.2580 the cross may short-term struggle.

“Further up lies strong resistance between the seven month resistance line, 200 day ma and the June high at 1.2705/84. Once a weekly Friday chart close above the 1.2310 August high has been made, we will change our weekly outlook to a bullish one. Minor support below yesterday’s low at 1.2233 is seen between the early and mid-August lows at 1.2080/15 and major support at the 1.1958 current September low. A slip through the 1.1958 recent low would put the 1.1491 October 2016 low (according to CQG) on the cards.”

The most likely outcome of Brexit is that the United Kingdom will leave the European Union within weeks with no agreement in place on its future relationship, according to a new CNBC survey of chief financial officers (CFOs).

Britain and Northern Ireland is set to leave the superstate trading bloc on October 31. It is the third deadline for the U.K.’s departure after previous extensions were granted in order to resolve how Britain would withdraw and conduct future trading with EU members.

According to the latest CNBC Global CFO Council quarterly survey, published Friday, 43.5% of chief financial officers now view no deal as the most likely scenario. Almost a third (32.3%) predict a deadline extension, 8.1% expect a deal can be struck by the end of October, 3.2% foresee a second referendum while the remainder (12.9%) are not sure. The strengthening no deal view marks a sharp rise from the second quarter survey which had almost no respondents predicting no deal with most of the opinion that a further deadline extension would happen.

New Austrian National Bank Governor Robert Holzmann does not expect the European Central Bank to stick to its current policy for decades, saying it met “pushback” at a governing board meeting this week.

The European Central Bank approved a fresh stimulus package as expected on Thursday, cutting interest rates and approving a new round of bond purchases to prop up euro zone growth and halt a worrisome drop in inflation expectations.

Asked whether the new measures were a mistake, Holzmann told : “I’m sure this idea crossed the mind of some people and it definitely crossed my mind.”

But as things change, the policy and the forward guidance could adapt as well, he said. “The policy may change - not tomorrow, not (the day) after tomorrow - but I wouldn’t think that it is now there for the next decades.”

Sterling could soar as high as $1.50 if lawmakers agree a Brexit deal before the U.K. leaves the European Union, one strategist has told CNBC.

Hans Redeker, global head of FX strategy at Morgan Stanley, said the British currency could be heavily influenced by the outcome of next month’s European council meeting.

“You could see that there (will) be an agreement,” he said. “Under those circumstances sterling would certainly rally, and it would be a rally which is going to catapult it against the U.S. dollar — maybe into the $1.40 and $1.50 handle.”

British Prime Minister Boris Johnson is due to meet with EU leaders at a crucial summit on October 17 and 18, where he is expected to renew negotiations for a deal before Britain’s scheduled departure from the bloc on October 31.

However, Redeker told that Johnson securing a deal was “not yet” Morgan Stanley’s base case, adding that the pound could still tumble further.

Nomura Research discusses its expectations for next week's BoJ September policy meeting.

"We see five reasons for the BOJ to consider it's changing its policy framework and rate cuts more seriously over the next few months, unless major positive surprises from US-China trade negotiations change the recent trend of global flattening and JPY strength. 1. The efficacy of forward guidance has deteriorated 2. 10yr yield target range has already lost substance 3. The JGB yield curve flattens anyway 4. Yield differential movement keeps supporting JPY 5. The market has priced in a possibility of rate cuts. The impact of rate cuts on USD/JPY may be muted, but  market positioning has shifted to JPY long positions. Thus, a BOJ decision to cut rates can still lead to position unwinding and JPY weakness," Nomura concludes.

As reported by the Federal Statistical Office (Destatis), the selling prices in wholesale trade fell by 1.1% in August 2019 from the corresponding month of the preceding year. In July 2019 and in June 2019 the annual rates of change had been -0.1% and +0.3%, respectively. From July 2019 to August 2019 the index fell by 0.8%.

In August 2019, prices in the wholesale of petroleum products, which were down by 6.1%, had the greatest impact on the overall development compared with the same month of the previous year. There were also sharp price declines compared with the previous year in the wholesale trade of waste and residual materials (-10.0 %), cereals, raw tobacco, seeds and animal feed  (-9.0 %) and data processing equipment, peripheral equipment and Software (-6.3 %). 

By contrast, prices for live animals (+13.7 %) and meat and meat products (+5.4 %) were higher at wholesale level than in August 2018.

Danske Bank analysts are expecting the US Fed to cut again next week in line with market pricing.

“We expect the Fed to repeat its easing bias and to lower its dot plot to signal one more cut is on the cards but without a pre-commitment to this. If the Fed cuts next week, we still expect a 25bp cut at each of the next four meetings, taking the target range to 0.75-1.00% in March. We stick to our 1% target for US 10-year Treasury yields. We see a potential for the Fed to disappoint the market, which would weigh on EUR/USD. We still look for EUR/USD to trade close to 1.10 on 1-3M.”

EUR/USD

Resistance levels (open interest**, contracts)

$1.1211 (2138)

$1.1190 (1849)

$1.1166 (1437)

Price at time of writing this review: $1.1069

Support levels (open interest**, contracts):

$1.1024 (13288)

$1.0983 (4475)

$1.0939 (3153)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date October, 4 is 91967 contracts (according to data from September, 12) with the maximum number of contracts with strike price $1,1050 (13288);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2481 (488)

$1.2440 (264)

$1.2417 (181)

Price at time of writing this review: $1.2348

Support levels (open interest**, contracts):

$1.2282 (696)

$1.2250 (409)

$1.2173 (1026)

Comments:

- Overall open interest on the CALL options with the expiration date October, 4 is 14761 contracts, with the maximum number of contracts with strike price $1,2500 (1740);

- Overall open interest on the PUT options with the expiration date October, 4 is 14322 contracts, with the maximum number of contracts with strike price $1,1900 (1467);

- The ratio of PUT/CALL was 0.97 versus 0.94 from the previous trading day according to data from September, 12

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.