Daily Market View – 4.12.2018

Asia

Chinese indexes are reacting quite muted this morning following yesterday’s handshake exhuberance. The Nikkei lost 2½% as the yen added 50 pips to the dollar. Biggest losers in Tokyo include Nissan, Nintendo and  Kobe steel. Also early this morning, the Royal Bank of Australia maintained an even percent-5 as its interest rate decision,

Europe

More contention over the Brexit deal between Theresa May and parliament keeping the pound down despite favourable data yesterday. They’re demanding May reveal the full extent of the legal advice received vis-à-vis customs rules. The data – Manufacturing is up 2 full points, towering over the rest of the Union in November, and support at the 1-27 mark still holding strong. Otherwise, European indexes followed the rest of the world up yesterday, Italy’s FTSE disregarding the continued budget spat with the union and adding 2¼% and its UK counterpart – 1-18.

US

US indexes lst night ended up just over a percent, but futures this morning have given back nearly half the win. Meanwhile, t-bonds remain unimpressed with Sunday’s Trump-Xi embrace, losing point 0-15 on the 3 month yield and gaining a paltry point 0-2 on the 6. Yesterday’s manufacturing PMI is divided between a 1/10th point drop according to Markit but a point and a ½ INCREASE based on the ISM. Considering that over time, Markit’s survey enjoys a higher correlation to official figures, down is probably the way to go. Construction spending continues to contract, and vehicle sales are down 50 K – still, not as bad as expected.

Commodities

In commodities, we have oil currently entering a new range between 52 and $54 per barrel, gold peaking overnight at 12-42, and bitcoin losing another 5% leaving it back below the 4,000 mark.

Events

Ahead today, another speech from England’s Mark Carney at 9:15  GMT. At 10, PPIs for the EU, and at 5 to 2, the Redbook index. The API presents crude oil reserves at 9:30, and at ½ past midnight, Japan’s market PMI and Australia’s gross domestic product.

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