October 3rd, 2017
Daily Market Commentary
- Canada’s stock benchmark continued to claw back its losses for the year, closing at its highest since April even as oil prices fell the most in three weeks. The S&P/TSX Composite Index rose 70 points or 0.5 percent to 15,705.00 on the first trading day of the fourth quarter. The index is now only 217 points from the all-time high it reached in February.
- Donald Trump is pairing a fresh trade challenge over Canadian wine with his administration’s ongoing dairy dispute. The U.S. filed a second complaint Monday with the World Trade Organization against Canada over British Columbia’s restrictions on wine sales. The U.S. alleges the province’s regulations discriminate against imports by only allowing B.C. wine to be sold on regular grocery store shelves and has requested WTO consultations on the matter.
- While hedge funds and other large speculators raised net long positions in the Canadian dollar to the most in almost five years in the week ended Sept. 26, the loonie began the new quarter near a four-week low. Investors are looking to a speech Tuesday by Bank of Canada Deputy Governor Sylvain Leduc that should shed more light on monetary policy.
- DHX Media Ltd., the producer of popular children’s television shows like Teletubbies and Caillou, is considering a sale after poor quarterly results contributed to a 30 percent drop in the share price in less than two weeks. The Halifax, Nova Scotia-based company’s board has initiated a strategic review focused on maximizing shareholder value, DHX said Monday in a statement.
- European stocks take a breather after rising for eight sessions in a row, while cyclical sectors such as mining and banks add to recent gains fueled by strong macro data. The Stoxx 600 is little changed at 390.5. The benchmark’s 14-day RSI is at 76, signaling overbought territory. German markets are closed for a holiday.
- Traders appear to be taking a breather after the themes of tighter U.S. monetary policy, a potentially more hawkish Federal Reserve chief and strong U.S. PMI data helped to drive recent gains for both the dollar and stocks. Goldman Sachs Group Inc. analysts see the greenback as having room to run, thanks to solid growth prospects and the chance that Fed interest-rate hikes will prove more aggressive than market players currently anticipate.
- Asian stocks gained for a third day after U.S. factory data and America’s tax cut proposal bolstered optimism in global economic growth. Hong Kong markets reopened after a long weekend while Chinese and South Korean markets remain closed for the rest of the week.
- Oil steadied near $50 a barrel in New York after slumping on Monday, as OPEC member Libya worked to revive output at its biggest oil field. West Texas Intermediate futures were little changed after dropping 2.1 percent to a one-week low on Monday.
- Gold holds near lowest level in more than 6 weeks as strong U.S. factory data, tax reforms proposed by President Donald Trump’s administration continue to buoy dollar and drive U.S. equities to fresh highs.
- U.K. construction unexpectedly shrank for the first time in more than a year in September as Brexit weighed on investment in commercial building. IHS Markit’s Purchasing Managers’ Index fell to 48.1, the lowest since the aftermath of the EU referendum in 2016 and far weaker than economists had forecast.
- The offshore yuan touched a seven-week low, weighed down by strength in the greenback and a lack of cues from a shuttered mainland market. The Chinese currency retreated as much as 0.26 percent to 6.6904 per dollar in Hong Kong, the weakest intraday level since Aug. 16. It was trading little changed at 6.6716 as of 5:06 p.m. local time. Onshore markets are closed the whole of this week for the National Day holidays.
- Royal Dutch Shell Plc and its partners Eneco Holdings NV and Mitsubishi Corp. are seeking to sell a stake in two Dutch offshore wind-farm projects that may cost $1.4 billion to develop, two people familiar with the plan said.
- Chinese H shares soared the most since April last year after the People’s Bank of China said it would cut the reserve-requirement ratio for lenders and the nation’s official factory gauge rose to a five-year high.
- Ryanair Holdings Plc added the fewest number of passengers in six months in September as the first of more than 20,000 flight cancellations prompted by a pilot shortage began to weigh on growth. The customer count rose by 1 million to 11.8 million, Ryanair said Tuesday, the smallest increment since the carrier added 900,000 passengers in March.
- President Donald Trump arrives in Puerto Rico on Tuesday to confront a natural disaster that has exposed his inexperience at governing and raised questions about his competence to handle a major crisis. Trump’s visit offers a chance to show his commitment to rebuilding an island that remains almost completely without power and short on food, water, medicine and other supplies nearly two weeks after Hurricane Maria.
- Ireland faces a rebuke from European Union authorities for failing to collect a year-old tax bill of as much as 15 billion euros ($17.6 billion) from Apple Inc. The European Commission may issue a so-called non-compliance action as soon as this week, according to a person with knowledge of the matter, who asked not to be named because the information is private.
- Indonesia’s central bank should avoid cutting interest rates further because borrowing costs are at an appropriate level even as loan growth remains subdued, according to the chief of the country’s biggest lender.
- Reliance Communications Ltd.’s shares plunged to a record low after the company aborted a plan to merge with Aircel Ltd., dealing a blow to the Indian mobile phone carriers’ plans to pare debt and gain scale to take on bigger rivals. Shares of the company fell 10.7 percent Tuesday to 17.15 rupees, the lowest level since it began trading in March 2006.
- Russia’s central bank expects to merge two of the country’s top five lenders that it took over in the past several weeks before putting them up for sale, First Deputy Governor Dmitry Tulin said in an interview with the Tass news agency.
- Abu Dhabi, home to about 6 percent of the world’s oil reserves, aims to raise $10 billion from a dollar bond sale as early as Tuesday to help plug a budget deficit. Encouraged by Saudi Arabia’s $12.5 billion sale last week, the biggest sovereign deal in emerging markets this year.
- Dutch soft-drink bottler Refresco Group NV said it’s reviewing a 1.6 billion-euro ($1.9 billion) takeover bid from PAI Partners SAS after the French private equity company raised a previous rejected offer.
- Saudi Arabia is looking at unprecedented deals to acquire oil and gas assets in Russia, deepening ties between the world’s largest energy exporters as the Saudi king prepares to visit Moscow later this week. OPEC’s biggest crude producer is considering investing in Russia’s largest oil drilling contractor, Eurasia Drilling Co., and Novatek PJSC’s proposed Arctic LNG 2.
- Ola scored $2 billion in new funding from a group of investors including SoftBank Group Corp. and Tencent Holdings Ltd., a person familiar with the matter said, helping bankroll Uber Technologies Inc.’s fiercest rival in India.
- Separatist activists are taking to the streets of Barcelona on Tuesday to press home their demands for independence after winning an illegal referendum at the weekend. Public transport and shops were closed as demonstrators gathered in the center of the Catalan capital to protest the police violence that marked Sunday’s vote and reinforce their demands for a split with Spain.
*All sources from Bloomberg unless otherwise specified