Ostwald, Marc
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08:33 (11 minutes ago)
to Marc
- Busier day for economic data though much already published; digesting
unsurprising rate hold from RBA, Japan Wages, UK BRC and Barclaycard
Consumer Spending, German Production and Trade; US Jolts Job openings
and Consumer Credit the other items of note; US sells 3-yr, API
Crude inventories also due
- Japan Labour Cash Earnings: large upside 'beat' not only paced by
special payments (aka bonus), signalling wage growth finally getting
some traction
- UK: Barclaycard data suggest weak BRC Sales mostly a function of World
Cup
- German Industrial Production: another 'miss', but again details sit
uncomfortably with broad array of survey and Bundesbank evidence
- Charts: Japan total Labour Cash Earnings and Regular Pay; Shanghai
Crude vs WTI future; Turkish Lira vs USD
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** EVENTS PREVIEW **
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The data schedule has rather more substance today, even if the bulk of potentially significant items has already been published - Japan Labor Cash Earnings, UK BRC Retail Sales, German & various European Industrial Production and/or Trade, with the US JOLTS Job Openings the only other item of note, above all the sub-index on the "Quit Rate" (see chart). The RBA held rate as expected, and the statement stuck to a resolutely neutral line, but it is Friday's Statement on Monetary Policy (SOMP) that is of greater interest, above all the increased concern that the RBA has expressed about the household debt burden, and a softening housing market. Earnings are reasonably plentiful featuring amongst others: Beiersdorf, Commerzbank, Deutsche Bank, Standard Life Aberdeen, Snap and Walt Disney. The US also kicks off its "quarterly" refunding with $34 Bln of 3-yr T-Notes, which on "When issued" yield of 2.75% look to offer alot more attractions from the aspect of relative returns and capital protection than the 10 (WI 2.95%) and 30-yr (WI 3.10%) due over the next two days, and equally to to its G7/European peers. Eminently US/China Trade tensions, Brexit negotiations and developments in Iran, both in terms of US sanctions and domestic unrest will continue to be the overarching themes, while tonight's API oil inventories data will be closely watched, as oil markets look to be increasingly ambivalent on direction, though the overnight surge in Shanghai Crude futures does offer an interesting counterpoint.
In terms of the overnigth data, the most encouraging tiems is obviously the Japan Labour Cash Earnings surging 3.6% y/y vs. expectations of a dip to 1.7% from May's 2.1%, with the July data likely to see a further pick-up in so far as July 2017 saw a sharp but passing drop to -0.6%. While the rise was paced by above all by Special
Payments (7.9% y/y), there was also a very solid rise Overtime Pay (3.5% y/y) and Contractual Cash Earnings rose 1.5% y/y, which was the highest reading since 1997 (see charts). UK BRC Retail Sales were disappointing at 0.5% y/y vs. expectations of a rise to 1.5% from June's 1.1%, however high street spending looks to have been restrained by the World Cup, and the steady profile of Barclaycard Consumer Spending at 5.0% y/y vs. June's 5.1% suggests more money was being spent going out. As for German Industrial Production, this disappointed at -0.9% m/m, though was a much smaller 'miss' vs. a forecast of -0.4% than yesterday's Orders, and the details again look rather anomalous in so far as drop was above all paced by a -3.2% m/m for Construction, which every survey and the Bundesbank has stated to be in a boom phase, the like of which has not been seen since the reunification building boom. The strength of energy output (2.9% m/m) also appears to give the lie to the weakness, even if this would have been partially due to the hot weather.
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As some of you may be aware ADMISI were involved in organising the ADM UK Feeding Your Food Business Event. The event took place on Wednesday 20th June at The Tate Modern, London. This was the third annual event to take place and we had a total of 113 total attendees with 34 ADM staff and 79 clients. A short video was taken of the event, to view this video
https://www.youtube.com/watch?v=hsbD0UNqTGU&feature=youtu.be
We had four key speakers (2 external / 2 internal) presented the following subjects:
* David Hightower from the USA Hightower Report speaking on grains/agriculture markets
* John Kemp from Thomson Reuters speaking on the energy requirements of the food industry
* Eddie Tofpik speaking on the subject of technical data (ADMISI)
* Marc Ostwald discussing world economics/Brexit (ADMISI)
and the four presentations can be found here:
http://www.admisi.com/customer-services/market-commentary
from Marc Ostwald