Deutsche Bank shares up 5%

Asia

Asian indexes this morning are closing in the red, led by the Shenzhen composite at -2.7% and pulled down by Friday’s dismal efforts in Europe and the US.

In a positive sign for the stagnating economy, overall household spending in Japan tripled to 4% YoY in May, while foreign reserves grew by $14mn.

Machinery orders continue to contract, in May by 7.8% MoM. BoJ Governor Haruhiko Kuroda said this morning that he expects the economy to expand and inflation to gradually hit the 2% targe line.

Europe

European indexes closed in the red Friday across the board as both the Euro and pound seemed to be cushioning a 2-week downtrend. After failing to deliver on May’s factory orders on Friday (an 8,6% contraction YoY), this morning’s industrial production data also shows a continuing decline – at -3.7% YoY, double the month before.

A 1.1% expansion in exports, however, managed to surprise traders to the upside and increase the country’s trade surplus by €1.7bn to €18,7bn. France’s trade deficit also improved in May to €-3.2bn, while house prices in the UK contacted by 0.3% MoM in June.

A Deloitte survey published this morning estimates that about 2/3 of responding company officials expect to cut hiring over the next 3 years and nearly half expect to cut spending due to Brexit uncertainties. The Confederation of British Industry expects business investments to fall by 1.3% in 2019, according to Reuters.

US

As UK Ambassador to the US – in a leaked memo – calls the Trump administration dysfunctional, US indexes closed down a tenth after hitting all-time highs on Friday, the S&P poised to cross the $3,000 mark after performing a double top at 2955.

The Friday night slip downwards is being ascribed to extremely strong employment data, which may put a halter on expectations of a fed rate cut this month. Nonfarm Payrolls in June increased by a surprising 224K jobs, while earnings slipped to 0.2% MoM.

The unemployment rate increased by a click to 3.7% as more people enter the work-seeking force – a sign of increased employment optimism, overall. Meanwhile, in Canada, the unemployment rate also added a tenth to 5.5% in June.

Commodities

Gold trading bounced off support at 1390 as last week ended as the US’s employment data weekend the dollar, sending signals that the Federal Reserve may ignore its commander-in-chief’s demands for a rate cut once again.

And oil continues to falter along the $57-58 range, as tensions rise in the Gulf over Iran’s crossing its agreed-upon enrichment threshold and Europeans decide if to react.

Last week, the UK detained an Iranian tanker bound for Syria in violation against sanctions.

With more and more legislators calling upon Facebook to cease development of its Libra crypto-infrastructure, bitcoin continues consolidating towards the 11,500 mark. The US Congress’ Financial Services Committee Chairwoman Maxine Waters, Investor Protection Chair Carolyn Maloney, Housing and Insurance Subcommittee Chairman William Lacy Clay, Oversight and Investigations Subcommittee Chairman Al Green and Financial Technology Task Force Chairman Stephen F. Lynch signed a letter to the company heads stating “that these products may lend themselves to an entirely new global financial system that is … intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns … for investors, consumers, and the broader global economy.”

Shares

As we prepare for quarterly earnings season next week, Deutsche Bank shares are on the rise after the company announced yesterday an $8,3bn restructuring plan that calls for 18,000 job cuts. And in another blow to Boeing, a Saudi Arabian budget airline, Flyadeal, following the lead of FlyDubai, has decided to move a $6bn purchase of 737MAX’s to Airbus.

Economic Calendar

For more, visit our Economic Calendar