Hurts Makes Progess

Hurts Makes Progess

08/20/2018，Mon， Sunny， Air Perfect

Summary：Potential trade easing boosted the market. Let's reading papers releasing from Jackson Hole!

Euro Session:

Asia time saw A share a poor session mainly dragged down by the medicine sectors while the warm tone swiped through Chinese name USD bonds with frequently "lift' on Bloomberg screen. An ex-commissioner of BOJ said the rang of 10yr JGB could be allowed to +-0.4%, which was shrugged off by the market easily. Based on their sneaky style, BOJ could taper its JGB purchase subject to the constraint that Yen does not appreciate rather than a further widening of the acceptable range.

 

EU equities opened mixed as the same as EGBs. After being boosted somewhat by the stronger EU current account balance, EUR and GBP continued to on sideway. And USCNY tended to the downside after the report that US could press China to let the YUAN appreciate.

 

5 o'clock EC HICP was just ok with no big fuss.

Economy data:

4:00, ECB current account balance SA 23.5bn, prior 22.4bn revised up to 24.4bn.

5:00, EC HICP final 2.1% yoy vs 2.1%, preliminary 0.3% mom vs -0.3%, prior 0.1%.

core HICP final 1.1% yoy 1.1% , preliminary 1.1%.

US Session:

In most part of US session, UST could be seen in treading water with a generally risk off bias until breaking headlines from the WSJ on trade talks, which led to a recovery in risk , pulling 10s back to unchanged on the session as equities jumped to their highs of the sessions. The report said that China and the US have a roadmap toward an easing of tensions began with this week’s low level meetings being the first in what will hopefully be a series of meetings, making basements for a summit at “multilateral meetings in November.” As to equity and FX, Indu, SPX and NASDAQ were higher and the USD was weaker following the trade report.

Economy data:

8:30, Canada July CPI 3.0% yoy vs 2.5% yoy. But core readings 1.9% yoy vs 2.0% yoy.

10:00,US August preliminary U of Michigan sentiment index 95.3 vs 98,prior 97.9.1. The expectations component held steady at 87.3 in August but the current conditions index slipped nearly 7 points to 107.8. US 1yr ahead inflation expectations index was unchanged at 2.9%, while the 5-10yr ahead index rose from 2.4% to 2.5%.

 

Key Data And Events Ahead:

Tuesday: UK PSNB ex banks

 

Wednesday: South Africa CPI, FOMC Meeting Minutes

Thursday: Japan Manufacturing PMI

France Markit Manufacturing PMI

France Markit Services PMI

Germany Markit Manufacturing PMI

Germany Markit Services PMI

Eurozone Markit Manufacturing PMI

Eurozone Markit Services PMI

US Markit Manufacturing PMI

US Markit Services PMI

US: Jackson Hole Economic Symposium (23-25 Aug)

 

Friday: Japan CPI

Japan CPI Ex Fresh Food

Japan CPI Ex Fresh Food, Energy

Germany GDP Q2

US Durable Goods Orders

Comments:

Not a lot of data tonight or tomorrow, so we will see UST could go back and forth with trade and politics headlines. If it could be simply decided by the economy fundamental , 10yr UST yield could be hovering above 3.22% for a while now. Why it is constrained in such a tight range? I think trade tension and EU dilemma could be the two main factors. Now even before the potential easing of trade tension, LFs had sneakily shift their UST position from elevated level into negative territory under the back ground of 10yr short position maintaining its historical high level. Seemingly the bearish dealers has taken every chance adding their short position. This time ,I do not think it could over crowded only because the downside room is very limited due to the economy fundamental. So, another asymmetric trading opportunity is coming around. As to EUR, before the Italy budget is finally settled , it could be under constant pressure. 1.12 is hard to get through , but is easy to get tested.

 

As to GBPEUR, I have misjudged. Based on the latest material , May is treading water now instead of taking a leisure time. Her agreement is possible, but has very little support among MPs, the public and the party membership base and will likely change under pressure from all sides. What is perhaps most worrisome is this unpopularity is not easing as people get used to the idea, but hardening.

 

PS: CNY about to appreciate !

个人微信zhangke8639，欢迎同业交换名片。公众号更新速度快一点儿....排版也好一点点儿....

近期重要时间点：

8月20-23日，200bn听证会，期间可能有贸易谈判

8月23-5日，Jackson Hole 研讨会,Powell讲话在24日，Monetary Policy in a Changing Economy

8月26日，意大利财长Tria访华

9月3日，第二批A股纳入MSCI

9月5日，200bn听证会后申诉材料提交截止日

9月13日，ECB议息

9月18日，EU A50会议

9月20日，EU非正式峰会

9月26日，FOMC

9月，日本LDP选举,半岛峰会在平壤

9月27日，意大利提交财政预算案

10月16日，EU A50会议

10月25日,ECB议息

10月31日，BOJ议息

11月6日，美国中期选举开始

11月8日，FOMC

11月11日，美国阅兵

12月13日，ECB议息，EU 峰会

12月20日，FOMC

12月22日，改革开放40周年

2019年3月21日，EU 峰会

2019年3月29日，脱欧谈判截止

Disclaimer：This material was prepared in private name and out of pernaonal hobby,definitely based upon facts and robust analysis with delicate consideration of highly professionality.But with no means to conduct any trade , and before using the contents of this note in any internal or external communication, please ensure you are comfortable and fully aware this could not be sufficient enough as any action base.

Up till now, Subscribers have amounted to 3951 ！

$(01810)$$(HSI)$$(.DJI)$$(TSLA)$$(HUYA)$