Another slow day in terms of markets news. The biggest news probably was that of Canadian oil line shut down that send crude futures rise almost 3%.
Next week should get more interesting with US retail sales data on Tues, August industrial production data on Wed and CPI data on Friday . Europe will release its industrial production on Tues and inflation data on Wed.
Stock market continues to drift higher on little news. This week has been good for energy but mainly due to today’s news. Metals, Ags are flat. Currencies didn’t move anywhere. Bonds yields have risen both in US and Europe.
Australia continues to go strong on EM exposure
• Australia's job market keeps growing, adding 30,900 jobs in August, driving the unemployment rate down to 5.1%.
• Strong job numbers are fueling speculation that RBA would need to hike rates but given the weakness in housing and low inflation are putting downward pressure on rates. But at this point the market seems to be pricing in near certain rate hike in the next meeting in Oct.
• Despite all the swings, no currency has moved all that much. In the past 3 months AUD is the only G10 currency that strengthened more than 1% versus USD. Everything else has been basically flat.
More good news out of Europe, France
• July French Industrial production climbed faster than expected as companies started putting more money into investments.
• Investment by French companies increased in the second quarter for the first time in two years, driving a 0.6 percent gain in gross domestic product. While companies may maintain investment to boost productivity, the pace of economic expansion may be curbed by government efforts to reduce the budget deficit and a cooling global economy.
• It remains to be seen whether corporate investments can overcome sluggish customers and government austerity measures. My guess is no. However, relatively strong European data continues.
UK PPI fell to 6 months low
• Falling oil prices weighed more than rising food prices.
• Input prices for materials and fuels purchased by manufacturers rose 8.1% in the year to August but fell 0.5% between July and August. The monthly drop also reflected falls in the price of crude oil which countered a 1.4% rise in the price of home produced food products – mainly due to higher wheat prices.
China – export falls, import rises
• Good news – rising imports suggest Chinese economic slowdown might be less severe than expected
• Bad news – does lower export mean weakening global demand?
• I don’t think weakening global demand is much of news as everyone expects pretty noticeable slowdown in Q3 and Q4 especially from US and Europe. I think the more important news is on the import side. As I have stated before I do not believe things are as bad in China as many fear. Commodity imports for instance remains very strong.
Enbridge shuts major Canada-US oil line due to leak
• CALGARY, Alberta, Sept 9 (Reuters) - Enbridge Inc shut down the largest of its three major oil pipelines on Thursday, reducing supply on the main transit route for Canadian crude into the United States.
• The incident, just six weeks after Enbridge was forced to shut a smaller part of its Lakehead system, pushed prompt crude futures towards $75 as it may ease a glut at the Cushing, Oklahoma delivery point for U.S. crude futures.
China crude imports rebound, new refineries open
• BEIJING, Sept 10 (Reuters) - China imported 13 percent more crude oil in August over a year earlier, in a strong rebound after a pullback the previous month, as firms start new refineries amid stronger-than-expected fuel demand.
• China brought in 20.9 million tonnes of crude last month, or 4.92 million barrels per day (bpd), 450,000 bpd higher than July when imports dipped for the first time in 16 months, the General Administration of Customs said on its website
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