Friday, June 9, 2017

Political Turmoil Hits FX; Big Tech Sells Off on Friday

TradeTheNews.com Weekly Market Update: Political Turmoil Hits FX; Big Tech Sells Off on Friday
Fri, 09 Jun 2017 16:12 PM EST

US stock markets digested a host of headline risk late in the week, with the Dow remaining at lofty levels while the Nasdaq sold off into Friday afternoon. Geopolitics largely ruled the roost, with terrorist attacks in London and Tehran, a Saudi rift with Qatar, former FBI Director Comey's testimony, and a surprise result in the UK election all registering on traders' radar screens. The ECB boosted its economic growth outlook for the Eurozone midweek, but kept interest rates on hold, though Mario Draghi said the ECB would continue its bond-buying program and will remain in the market for 'a long time.' The EUR/USD fell below 1.1200 on Thursday to hit its lowest point in June, and later that evening the pound weakened sharply when it became clear the UK election would result in a hung parliament. Crude was down ~3% on the week, hurt by US inventory builds, despite diplomatic turmoil between the Gulf states. Treasury yields lifted marginally and gold pared back its recent gains as safe haven assets came under pressure.Stocks were mostly higher, but large cap tech sold off on heavy volume on Friday, with profit-taking apparently triggered by a short seller note on Nvidia. The late drop in stocks lifted the VIX volatility index off of a two-decade low.For the week, the DJIA gained 0.3%, while the S&P slipped 0.3% and the Nasdaq lost 1.6%.

On the political front, Mexico came to agreement with the US government to cut its exports of refined sugar, a deal that bodes well for upcoming NAFTA renegotiation talks later in the summer. The House of Representatives passed a repeal of Dodd-Frank financial regulation on a party-line vote, though the replacement bill will likely have trouble in its current form in the Senate as it would be subject to filibuster rules. There was also some chatter this week that a GOP Obamacare replacement health care bill was making progress behind the scenes in the Senate, but no timeline was announced.

In corporate news, Macy's shares dipped on Tuesday along with other department store retailers after its CFO talked down margins at its analyst day. Nordstrom popped higher Thursday on word the Nordstrom family is considering taking the retailer private. Airlines climbed on continued softness in oil and Delta comments that it's on track to expand margins over the balance of the year. And NVIDIA led the Nasdaq lower on Friday after Citron's Andrew Left reiterated his cautious comments and said over-optimism has led people to discount the tech manufacturer's competition.


SUNDAY JUNE 4
World Bank maintains both 2017 and 2018 global GDP growth forecast; Warns on emerging market growth
*(HK) HONG KONG MAY COMPOSITE PMI: 50.5 V 51.1 PRIOR (2nd straight expansion)
(CN) CHINA MAY CAIXIN PMI SERVICES: 52.8 V 51.5 PRIOR (4 month high)

MONDAY JUNE 5
(FR) FRANCE MAY FINAL SERVICES PMI: 57.2 V 58.0E (confirms 11th month of expansion)
Evergrande reports May contracted sales CNY38.2B v CNY21.7B y/y
(US) Q1 FINAL NONFARM PRODUCTIVITY: 0.0% V -0.2%E; LABOR COST: 2.2% V 2.4%E
(US) MAY FINAL MARKIT SERVICES PMI: 53.6 V 54.0 PRELIM
(US) APR FINAL DURABLE GOODS ORDERS: -0.8% V -0.5%E; DURABLES EX TRANSPORTATION: -0.5% V -0.4% PRELIM

TUESDAY JUNE 6
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50% (AS EXPECTED)
*(EU) EURO ZONE JUN SENTIX INVESTOR CONFIDENCE: 28.4 V 27.4E (highest reading since July 2007)
FAST Reports May Net Sales $383.5M, +14.9% y/y
August gold future approachs April high of $1300
(US) APR JOLTS JOB OPENINGS: 6.044M V 5.75ME (record high, first time above 6M)
*(US) S&P AFFIRMS UNITED STATES OF AMERICA SOVEREIGN RATING AT AA+; OUTLOOK STABLE
(AU) AUSTRALIA Q1 GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.7% V 1.6%E (ties longest expansion on record but at slowest annual pace since 2009)

WEDNESDAY JUNE 7
(IR) Shooting reported inside Iran Parliament and reports of hostages taken - Twitter sources
(UK) MAY HALIFAX HOUSE PRICE M/M: +0.4% V -0.2%E; 3M/Y: 3.3% V 3.0%E
(CH) CHINA MAY FOREIGN RESERVES: $3.054T V $3.046TE (4th straight increase and longest streak since Jun 2014)
(EU) OECD Economic Outlook; Raises 2017 Global GDP forecasts from 3.3% to 3.5% (highest since 2011)
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; AS EXPECTED
(IR) Iran Revolutionary Guards spokesperson: Saudi Arabia was behind terrorist attacks in Tehran today - press
(US) Association of American Railroads weekly rail traffic report for week ending June 3rd: 500.2K carloads and intermodal units, +9.8% y/y (21st straight week of gains)
(QA) Pres Trump reportedly told Qatari leaders in a phone call that he is ready to find a solution to Gulf crisis - Qatar press
(US) Senate Intel Committee posts former FBI Dir Comey's opening statement for tomorrow's Senate testimony
(US) Freedom Caucus' Meadows (R-NC): if Dems to vote for clean debt limit, let's vote now
(JP) JAPAN Q1 FINAL GDP Q/Q: 0.3% V 0.6%E; ANNUALIZED GDP: 1.0% (3-quarter low) V 2.4%E
(AU) AUSTRALIA APR TRADE BALANCE (A$): +0.56B V +2.00BE (6th consecutive surplus, smallest surplus in 6 months)
(CN) CHINA MAY TRADE BALANCE (CNY): 281.6B V 324.1BE
(CN) China Passenger Car Association (PCA): May vehicle sales 1.78M units, +1.2% y/y; YTD sales 9.05M units, -0.9% y/y
(CN) CHINA MAY TRADE BALANCE: $40.8B V $47.8BE

THURSDAY JUNE 8
(EU) EURO ZONE Q1 FINAL GDP Q/Q: 0.6% V 0.5%E; Y/Y: 1.9% V 1.7%E (highest annual pace since 2015)
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
(EU) ECB STATEMENT AMENDS ITS FORWARD GUIDANCE: Removes "lower" on interest rate outlook
(EU) ECB's Draghi: Sees interest rates at present level well past end of QE; to preserve favorable conditions needed
UBI.IT Priced €400M rights offering share offering at 26% discount
(EU) ECB's Draghi: Council did not vote on language change; did not hear any dissent - Q&A
(EU) ECB's Draghi: Could still cut interest rates if necessary should the situation worsen - ECB press conf Q&A
(MX) MEXICO MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 6.2% V 6.2%E; CORE CPI M/M: 0.3% V 0.3%E
(US) Former FBI Dir Comey: the shifting explanations of firing confused and concerned him; Trump had repeatedly said he was doing a good job - testimony to Congress
(US) Fed reports Q1 Financial Accounts: Household Change in Net Worth: $2.347T v $2.043T prior
(JP) BOJ's Kuroda: Japan is no longer experiencing deflation; long way to go until Japan price stability target is achieved - comments in UK
(US) Pres Trump's attorney: Comey hearing established that Trump was not being investigated for colluding or attempting to obstruct FBI investigation
(US) House passes Dodd-Frank financial law replacement bill - press
(UK) UK exit poll shows Prime Min May's Conservative Party set to win 314 seats; may fall short of majority and could be a hung parliament - NOP/Ipsos MORI poll
(PE) PERU CENTRAL BANK (BRCP) LEAVES REFERENCE RATE UNCHANGED AT 4.00%
(CN) CHINA MAY CPI M/M: -0.1% V 0.1% PRIOR; Y/Y: 1.5% (4-month high) V 1.5%E
(CN) CHINA MAY PPI Y/Y: 5.5% V 5.6%E; 5-month low

FRIDAY 6/9
(FR) FRANCE APR INDUSTRIAL PRODUCTION M/M: -0.5% V +0.2%E; Y/Y: 0.6% V 1.2%E
(UK) APR INDUSTRIAL PRODUCTION M/M: 0.2% V 0.7%E; Y/Y: -0.8% V -0.3%E
(UK) PM May: I will now form a government; Brexit talks to start in 10 days as expected
(CA) CANADA MAY NET CHANGE IN EMPLOYMENT: +54.5K V +15.0KE; UNEMPLOYMENT RATE: 6.6% V 6.6%E
(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.3% from 2.2% on 6/2; maintains Q3 GDP forecast at 1.8%, unchanged from 6/2
NVDA Citron makes cautious comments again; sets $130 price target