Article / 20 July 2017 at 1:55 GMT

Morning Report APAC: Central banks in spotlight as stocks edge higher

APAC Sales Trading Desk / Saxo Capital Markets
Singapore

 

  • WTI rose to 6-week high on the EIA report and Saudi Arabian shipments
  • Gold was almost flat on lower Fed rate hike expectations
  • Miners will benefit after iron ore has made gains for a third day

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)
nnn










Speeches (Singapore Time)

  • 1430 - Japan: Bank of Japan Haruhiko Kuroda speaks at press conference after MPM.
  • 2030 - EU: ECB's Mario Draghi Holds Press Conference.

Overnight news, US

  • Senate majority leader Mitch McConnell confirmed a vote to repeal Obamacare will take place in the senate next week, despite not having the votes to pass.
  • The Congressional Budget Office estimates that a repeal without a replacement of the Affordable Care Act would see 32 million Americans go uninsured.
  • According to Politico, the Trump administration has changed its corporate tax objective for the tax reform agenda to a more realistic 20%-25% from 15% giving the move greater hope of a smoother passage through Congress.
  • After a period of weakness, US housing data appeared to show tentative signs of a turn around. Housing starts rose 8.3% m/m while  building permits increased +7.4% m/m, well above expectations.
  • EIA data out in the US showed a greater than expected decline in both crude and petrol inventories, resulting in a more than 1.5% bounce in oil.
  • In Canada, manufacturing sales picked up sharply from a poorly revised number to beat expectations with a +1.1% m/m increase vs 0.8% expected.
  • Morgan Stanley reported better than expected earnings at $0.87 vs$0.77 estimates. FICC trading revenues declined by -3% which looks comparatively strong versus its investment banking peers.

Overnight news, Europe

  • ECB governing council member François Villeroy said that the risk to deflation was now gone but there was still more to do to for the central bank to reach its 2% target.
 

Foreign exchange

nnn
 
















  • USD: recouped some early losses in a mixed trading day as the market removed risk prior to today’s ECB and BoJ events. Broad ranges were maintained.
  • AUD: Strength in the AUD continues with the currency once again the top performing G10.  Now up 3% inside of 5 days. The AU jobs data will be a key input in ascertaining whether the AUD can continue its current trend.
  • NOK: The Norwegian krone was again the second best G10, as oil rallied after the release of the EIA inventory data. Positive NOK momentum carried the currency to its strongest level since April against the euro, and its strongest versus the USD since October 2016. USDNOK is approaching massive support levels below 8.00, which is not only multi-year lows but also the 23.6% retracement of the entire move from the 2008 lows to the 2016 highs.
  • Emerging Markets: Fairly quiet day in EM space with RUB catching a small bid on stronger oil prices, while the central European currencies fell. The PLN (Polish Zloty) fell sharply, following comments from EU commissioner Frans Timmermans that it was close to triggering Article 7, which constitutes a breach of common values for the 28-country bloc, driven by criticism of the current government's rule of law.

Foreign exchange movements

nnn












 
  • Market is short downside on the USDJPY vol for the next week with strikes below ¥111. The spot has moved more than expected.
  • EUR is seeing surprisingly little interest given today’s ECB decision.
  • AUD market is still short between 0.7950 and 0.80, a rising spot should therefore engender another leg higher in vols.

Rates

nnn



















  • US yields barely changed as no directional catalyst was observed, good US housing data was not able to boost the market’s confidence. USD spreads widened led by long end.
  • European yields was slightly lower thanks to solid 30y bund sale, thin volume trading before ECB meeting today


Commodities

nnn


























 


Equities
nnn

 















  • The Nasdaq and the S&P 500 hit record high once again on the back of a bigger than expected draw down in oil inventories in the weekly EIA data as crude rose 1.5%.
  • Morgan Stanley posted a strong earnings with a 87 cents per shares earnings that beat consensus at $0.76 per share. MS showed resilience in their trading revenue which was a concern for all the banks so far as it lifted the Morgan Stanley to close 3.28% higher.
  • IBM shares dropped 4.2% after its report, holding back the Dow's gains as the Dow constituent dropped to its 52 week low, pressuring for change as all five of IBM's reporting segments registered sales declines
  • Vertex Pharmaceuticals Inc soared 20.8 percent after the company reported stunning data on its cystic fibrosis treatments. The stock march to its all-time high on the back of these results as it closed $159.69, $27.53 higher than previous close.
Asian equities preview

Hong Kong analyst views

  • China Comm Cons (1800 HK): H Shares Raised to Buy at DBS Vickers.
  • China Mer Port (144 HK): Raised to Outperform at Daiwa, price target $HK27.
  • China Yongda (3669 HK): China Yongda New Buy at UBS, PT $HK10.10.
  • Luk Fook (590 HK): Raised to Hold at HSBC, PT $HK29.

Hong Kong stocks

  • Chipbond Declines to Comment on Report of BOE Group (200725 CH) Deal.
  • China Oilfield Services (2883 HK) H1Net Loss of About 370m Yuan.
  • China Unicom End-June Subscribers at 409.7 Mln.
  • Cinda Real Estate (600657 CH) Plans 7.8b Yuan Huainan Real Estate Buy.
  • GD Power (600795 CH) Jan.-June Power Generation Rises 3.36% on Year.
  • Glencore (805 HK): South Africa Proposes Restrictions on Mining, Prospecting Rights.
  • Huadian Power (600027 CH) Jan.-June Power Generation Rises 2.33% Y/y.
  • Logan Property Buys 49% Jinjun Real Estate Stake for 2.09b Yuan.
  • Luk Fook (590 HK) April-June Same-Store Sales Rise 5% on Year.
  • Minmetals (600058 CH) Unaware Of National Cold Merger Plan, Unit says.
  • MMG (1208 HK): Southern Copper, Antamina Peru Operations Unaffected by Strike.
  • Muyuan Foodstuff (002714 CH) H1Net 1.2b Yuan vs 1.07b Yuan Year Ago.
  • PetroChina (857 HK) Lubricant Unit Posts More Than 350M Yuan Profit in H1.
  • Sanan Optoelectronics (600703 CH) Prelim. H1Net 1.51bn yuan.
  • Standard Chartered (2888 HK) Hires Two For Syndicated Loans Team in Hong Kong.
  • Naspers Lifts Johannesburg Stocks as Tencent Tencent (700 HK) Rallies to Record.
  • Tencent (700 HK): China Orders Websites to Step Up Self-Censorship.
  • ZTE (000063 CH) First Half Preliminary Net 2.29 bn yuan.

Japan analyst view

  • New buys at Nomura: Anicom (8715), F-Tech (7212), Kanamoto (9678), Link And Motivation (2170), Nishio Rent All (9699), OSJB Holdings (5912), Shoei Foods (8079), UT Group (2146).
  • Chugai Pharma (4519): Raised to neutral from underperform at Mizuho.
  • Fuji Seal (7864): Rated new buy at Haitong.
  • GMO Internet (9449): Cut to equalweight from overweight at Morgan Stanley MUFG.
  • Life Corp. (8194): Cut to neutral from buy at Okasan Securities.
  • Start Today (3092): Raised to overweight from equalweight at Morgan Stanley MUFG.
  • TDK (6762): Raised to buy from neutral at UBS.
  • Tokyo Seimitsu (7729): Rated new neutral at Okasan Securities.

Japan stocks

  • Bandai Namco (7832): To raise stake in Toei Animation (4816) to 11%.
  • CRE (3458): Lifts full-year group operating profit forecast by 12% to ¥5bn.
  • East Japan Railway (9020): To retire 0.96% of shares on July 25.
  • Edia (3935): To conduct 2-for-1 stock split on September 1.
  • Fuji Electric Industry (6654): First Eagle cuts stake to 6.5% from 7.6%.
  • H2O Retailing (8242): Delivery fees and Hankyu Hanshin Dept. inspected by Japan FTC.
  • Ichiyoshi Securities (8624): 1Q group operating profit forecast ¥1.1bn.
  • J Front Retailing (3086): Daimaru probed on suspicion of antitrust law violation.
  • Kose R E (3246): Lifts half-year group operating profit forecast by 49% to ¥1.4bn.
  • Medical Ikkou (3353): Drops full-year group operating profit forecast by 8.9% to ¥1.5bn.
  • Mitsubishi UFJ Financial Group (8306): Tokyo Stock Exchange to fine Morgan Stanley MUFG Securities ¥80mln and suspend securities trading for its proprietary account from July 31 to August 2.
  • Ryohin Keikaku (7453): Templeton Investment and others raise stake to 6.4%.
  • Takamatsu Construction Group (1762): To buy back up to 1.7% of shares out.
  • Toshiba (6502): Cuts off Western Digital workers’ access to info after appeal.
  • Yasunaga (7271): Lifts full-year group operating profit forecast by 62% to ¥1.2bn.

Australia analyst views

  • ANZ Bank (ANZ): Raised to buy at Citi.
  • Cimic (CIM): Cut to sell at Morningstar.
  • BHP Billiton (BHP): New BHP chairman flags board changes, asset review to investors; Cut to neutral at Citi, PT $A25.50.
  • National Australia Bank (NAB): Raised to neutral at Citi.
  • NextDC (NXT): Cut to hold at Moelis & Company, PT $A4.85.
  • Telstra (TLS): Raised to buy at Morningstar.
  • Triton Minerals (TON): Initiated at Edison with no rating system.
  • Westpac (WBC): Raised to overweight at Morgan Stanley, PT A$32.70; Raised to neutral at Citi.
Australia stocks
  • Australian Treasurer sees economy building momentum: Australian.
  • Alumina (AWC): Alcoa Q2 adj. EPS beats ests.
  • ALS (ALQ): Annual meeting scheduled; NOTE: Co. in May said planned to offer H1guidance at AGM.
  • Ausnet (AST): Annual meeting expected; NOTE: Co. in May targeted A$1b contracted energy infrastructure assets by 2021.
  • Commonwealth Bank (CBA): Is said to consider options for life insurance ops: AFR.
  • CSL (CSL): FDA accepts CSL Behring supplemental BLA for Hizentra indication.
  • Evolution (EVN): 4Q production report expected; NOTE: Co. in April forecast FY17 gold output 800k-860k oz.
  • Fletcher (FBU): Cuts FY earnings target on buildings unit.
  • Fortescue (FMG): Iron ore extends gains a third day, closes above $70, according to a price index compiled by Metals Bulletin.
  • Graincorp (GNC): Australia wheat output seen down more than forecast: USDA FAS.
  • Origin Energy (ORG), Oil Search (OSH): Citi cuts Origin, Oil Search on weaker LNG, oil.
  • Perseus (PRU): Raised to overweight at Morgan Stanley, PT $A0.38
  • Santos (STO): Q2 production report expected; NOTE: Co. in April affirmed 2017 output target 55-60 mln narrels of oil equivalents.
  • South32 (S32): Q4 production report expected; NOTE: Co. in April forecast FY17 Cannington silver output 16.5mln oz.
  • Sydney Airport (SYD): Scheduled to release June passenger data.
  • Woodside (WPL): Q2 production report expected; NOTE: Co. in April forecast 2017 output 84-90mmboe.
  • WorleyParsons (WOR), Beach Energy (BPT), Karoon (KAR): Oil climbs as U.S. crude and gasoline supplies keep shrinking
  • Bank of New York Australia ADR Index +3.1%, most since March 15.
  • BHP Billiton ADR +1% to $A25.03 equivalent, 0.8% premium to last Sydney close.
  • Rio Tinto ADR -0.3% to $A57.05 equivalent, ~12% discount to last Sydney close.
  • Companies trading above 20/50/200 day moving average, Bollinger upper band with RSI above 70: None among screened stocks.
  • Companies trading below 20/50/200 DMAs, Bollinger lower band with RSI below 30: TLS, GTY, RSG.


nnn



 WTI has soared to a six-week high on an EIA report of low US crude and petrol inventories, and a slide in Saudi shipments to the US. Photo: Shutterstock

 

– Edited by Robert Ryan


This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.  


Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.

Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.

Copyright | Disclaimer | Risk Warning | Privacy Policy | Contact Us
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail