Happy Fri - APAC Global Macro Morning
6 Sep 2019
O/N & Levels:
US Econ data smashed it across ISM non-mfg, Factory Orders & ADP: 56.4a 54.0e, +1.4%a 1.0%e & 195k a 148k p… once again continuing the trend of US economic out-performance vs. RoW
Worth noting German factory orders continue to eat dirt at -2.7%a -1.5%e, yet we did have upward revisions on the previous number.
Risk-on in equities continues with +1.3% on SPX to 2976, early doors Asia but we are +20 to 25bp on US equity futures – suggesting a strong positive open for the region.
We also saw a continued lift up in yields, this time a little more significant as we got back above that 1.50% lvls on UST, and are now sitting at c. 1.56% with bunds & JGBs also wider at c. -59bp & -25bp.
Gold & Silver were hit particularly hard – combination of profit taking (they have been on fire) & yields no doubt – falling back by -2.2% & -4.8% respectively. These leaves us around $1520 & $18.70 lvls respectively.
Again don't mistake the tactical for the strategic
Brent crude ground up higher by 41bp to 60.95 & copper saw a +1.8% pop to 262.45.
On the currencies side of things, the big movers were in Cable +66bp to 1.2323 (given Bojo’s initiatives falling apart) & DollarYen +52bp to 107.03. With the likes of AUDJPY & NZDJPY doing quite well at over +70bp apiece.
US: Super Friday with NFP 163k e 164k p, AHE 3.0%e 3.2%p & U/R 3.7%e/p
=> Fed Chair Powell speaks @ 12:30am (note this is an event in Zurich & subject will be the economy)
CA: Jobs data 18.9k e -24.2k p, U/R 5.7%e/p, IVEY PMI
EZ: GDP 1.1%e/p & U/R, GER Industrial Production
Next wk will have a GDP & Inflation theme in regards to data points coming through, yet real focus will be all about ECB on Thu – with the market expecting a reduction in the rate to -50bp from -40bp & further ‘stimulative’ measures
US/CH is always a constant risk – yet if Trump stays put, given China has indicated that they are willing to go to the US in Oct, it could make for calmer waters… as we could potentially be in a risk on pocket – which is likely to be tested on Sep 18 Fed date
In addition to ECB, we will also have rate decisions out of Turkey 17.13%e 19.75%p & Malaysia 3.0%e/p
Also worth noting China will be out on next Friday for Mid-autumn festival
TGIF & wishing everyone a fantastic wkd ahead