Glitch in the Matrix

Glitch in the Matrix

08.24.2018， Fri， Sunny ， Air Perfect

Summary：EU bull cheered on strong PMI and then hit badly by the strong rebound of green paper. The rest was pretty quiet ahead of JH symposium.

Euro Session:

Most Asia equities more or less shrugged off the mutually imposing tariffs on 16bn imports made while USDCNY reacted vehemently by decreasing more than 200 pips.

 

The following sessions after Tokyo time were heavily loaded with all three Markit PMI. Both EU equities and EGBs opened cautiously before those headlines. But the fast weakening of CNY did put pressure on EUR and GBP, even the better France PMI could not reverse the downtrend. Until 3:30, the stronger GE PMI finally reversed some loss. The edge higher EC PMI capped the rebound at 4:00, which pleased the equities.

 

After that, EU market returned to low volatile condition showing respect for JH. And since Merkel had shift focus from ECB to EC, Weidmann hawkish comments to start exiting very expansionary ECB policy was overlooked.

There is one thing we should be alert to that once GE and FR were good at the cost of mediocre rints of Eurozone as a whole, even Italy could be in trouble, followed by spain, protual...

Economy data:

3:15,France Aug preliminary Markit composite PMI 55.1 vs 54.6, prior 54.4.

France Aug preliminary Markit Manufacturing PMI 53.7 vs 53.5, prior 53.3

France Aug preliminary Markit Service PMI 55.7 vs 55.1, prior 54.9

3:30, GE Aug preliminary Markit composite PMI 55.7 vs 55.1, prior 55.

GE Aug preliminary Markit Manufacturing PMI 55.2 vs 54.3, prior 54.1

GE Aug preliminary Markit Service PMI 56.1 vs 56.5, prior 56.9

4:00,EC Aug preliminary Markit composite PMI 54.4 vs 54.5, prior 54.3.

EC Aug preliminary Markit Manufacturing PMI 54.6 vs 55.2, prior 55.1

EC Aug preliminary Markit Service PMI 54.4 vs 54.4, prior 54.2

US Session:

NY session was quiet bound by a very tight range in UST. Front end biased on offer tone while the long end was constrained tightly in 1bp range. 2s10s reached another cycle low of 20.5bps. US equities dropped with trade-sensitive shares from Caterpillar to Boeing leading losses. Contrary to FI and equity, USD first was heavily hit by Trump words of "if I was impeached..." in a interview on FOX, then recovered step by step, and finally made the biggest daily gains in two months.

Economy data:

8:30, initial jobless claims 210k vs 215k, proor 212k

9:00, FHFA house price index 0.2% mom vs 0.3% mom, prior 0.2% mom revised up to 0.4%

9:45,US Aug preliminary Markit composite PMI 55.0, prior 55.7.

US Aug preliminary Markit Manufacturing PMI 54.5 vs 55, prior 55.3

US Aug preliminary Markit Service PMI 55.2 vs 55.8, prior 56

10:00, US jul new home sales 627k vs 645k , prior 631k revised up to 638k

Key Data And Events Ahead:

GE GDP Q2F

US Durable goods orders

Powell address of "Monetary Policy in a Changing Economy"

Comments:

Yesterday when I finally pressed the button of "sending" on the editing page of this notes, the sentiment of highly depressed expressed by his latest t in the morning "the only thing I have done wrong is to win an election that was expected....." came into my mind. I do hope I was wrong. The leader is well supposed to be iron-minded. Once he became weak or even tired, the country followed. A distracted executive branch is generally regarded as negative for the economy, for fear that there is nobody with a hand on the ‘economic steering wheel. It could not be a good thing for the uni-super-power to feel no more strength in this blue planet.

 

And let's check what we get right now. EMs are still bleeding, Argentina, turkey , brazil and now it is South Africa. Housing market did not see any good sign as the new home sales failed to tell a pink story. And it should be well noted that FOMC members did not see those July headlines.As to trade, Trump made it clear he himself still committed to the trade. No wonder why the green could rebound so vehemently overnight. Coupled with criticism from Trump on Fed chair, Powell could be supposed to at least a little dovish at Jackson Hole while the hawkish tone could catch the market off-guard. Some whisper say shot once 10yr fell below 2.80%. If I am authorized, why not now?

Wow! U.S. 2s10s just dips below 20bps. Japan CPI is accelerating ! The foundation of CPI is strong globally.

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24-6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,日本LDP选举

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 (取消了，说是因为预算问题)

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

Appendix：his t overnight

0823 1026 I have asked Secretary of State @MikePompeo4USA to closely study the South Africa land and farm seizures and expropriations and the large scale killing of farmers. “South African Government is now seizing land from white farmers.” @TuckerCarlson @FoxNews

0823 1401 NO COLLUSION - RIGGED WITCH HUNT!

0824 0212 It was my great honor to host the Foreign Investment Risk Review Modernization Act Roundtable today at the @WhiteHouse! https://t.co/TjtI7ddtZM

0824 0322 I have authorized an emergency disaster declaration to provide Hawaii the necessary support ahead of #HurricaneLane. Our teams are closely coordinating with the state and local authorities. You are in our thoughts! https://t.co/lrhwbdUavj

0824 0512 .@cindyhydesmith has helped me put America First! She’s strong on the Wall, is helping me create Jobs, loves our Vets and fights for our conservative judges...

...Cindy has voted for our Agenda in the Senate 100% of the time and has my complete and total Endorsement. We need Cindy to win in Mississippi!

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.

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