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Some Fairytale Bliss

09.06.2018 Thur, Sunny， Air Perfect

Summary：意大利预算问题继续搅动欧洲市场，市场似乎理解意政府要价并不高，英德在脱欧立场上做出重大让步的消息（后被德国以外交辞令予以否认）提振欧洲资产。美股受科技股高管面临国会质询而有所调整。新兴市场有可能短期企稳，但是提示美股风险的大机构队伍还在扩大。

Euro Session:

Asian bourses dropped in a sea of red led by jakarta comp(-4.52%) as EM pain persisted. EM FX and Fixed income continue under stress. $Asia firmly bid across the region with the high yielders IDR and INR the focus of attention.

EU was telling a quite different story from EM bleeding. Trapped in the deep water of Italy , single items from all the related could easily incent volatile into the market. Early in the morning, Salvini said "ITALY'S LEAGUE TARGETS 2019 DEFICIT SLIGHTLY ABOVE 2%" .It is the “opening bid” for what the government is asking for and there will have to be a back and forth with Brussels. EUR fell on this and rebound by the final reading of DEU and EMU PMI confirming the stabilization of EMU economy.

Followed their Asia counterparties' weakness, EU equities gapped lower while 10yr BTP rallied another 8 bps after being boosted 13bps on Tuesday. Other news, Merkel says she welcomes the candidacy of Manfred Weber for European Commission president. Later, a breaking news hit the tape just before New York open.

Economy data:

3:45, ITA Aug service PMI 52.6 vs 53.1, prior 54

ITA Aug composite PMI 51.7, lowest since Oct 2016, 52.2 consensus , prior 53

3:50, FRA Aug service PMI 55.4 vs 55.7, preliminary 55.7,prior 54.9

FRA Aug composite PMI 54.9 vs 55.1, preliminary 55.1,prior 54.4

4:00, DEU Aug service PMI 55 vs 55.2 , preli 55.2, prior 54.1

DEU Aug composite PMI 55.6 vs 55.7, preli 55.7, prior 55

EMU Aug service PMI 54.4 vs 54.4, pre 54.4

EMU Aug composite PMI 54.5 vs 54.4, pre 54.4

US Session:

Around 8:30, report that UK and DEU will drop key Brexit demands boosted EUR , GBP and the yield of BUND and UST, even the equities. Soon after that, The green paper and UST traded in tight range even after the Germany government says position on Brexit is unchanged by the midnight.

Dow Jones rallied by more than 150pts but ended the day touch higher (0.33%) at 25,974.99. SPX edged 6.8pts (0.24%) down to 2,887.93. Nasdaq Composite surrendered 92.736pts (1.15%) and settled at 7,995.96 on the concerns that executives of the tech heavyweights faced scrutiny on Capitol Hill.

As to Fed, Kashkari Says Wages, Inflation Hint U.S. Not at Full Employment. Bullard said that most of his FOMC colleagues see a high chance of a September Fed rate hike, but he warned that he thinks financial market moves, including the flatness of the yield curve, are suggesting rates are already at neutral or restrictive territory.

As to Trump, he flirted with an October government shutdown as he stumped for a border wall, and said he’ll discuss issue with GOP leaders. Trump later said that he’s not prepared to make a deal that China wants to make, though a trade agreement with South Korea is complete

Economy data:

Canada July trade balance narrowed from a C$0.74bn deficit to a C$0.11bn deficit.

US Aug MBA Mortgage application -0.1%, prior -1.7%

US July trade deficit -50.1bn vs -50.2, prior -45.7in July, just shy of consensus. Notably, the US trade deficit in goods with China rose to a record $36.8bn and the trade deficit with the EU also rose to a record $17.6bn.

Key Data And Events Ahead:

DEU factory orders

US ADP, Nonfarm productivity, Initial jobless claims, Markit US service and composite PMI, durable goods order

Comments:

Heavy data for US tonight. With the strongest ISM prints, we could see the strength of USD could be justified by those headlines coming out. And then, don't be too complacent about Italy budget issue. There are still three weeks before the deadline. Di mao and Salvini could do anything any time before that. So I won't be surprised to see the EUR was under pressure within the next 20 days or so. Notably, EUR is already the 3th best performed currency since Aug among G10 based on USD. With the month end impeding , it could easily get worse with the downside room is relatively adequate although the smooth process of Brexit could strongly generate upside risk.

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近期重要时间点：

9月13日，ECB议息

9月18日，EU A50会议

9月18-20日，半岛峰会

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

0905 1055 Sleepy Eyes Chuck Todd of Fake NBC News said it’s time for the Press to stop complaining and to start fighting back. Actually Chuck, they’ve been doing that from the day I announced for President. They’ve gone all out, and I WON, and now they’re going CRAZY!

0905 1105 The already discredited Woodward book, so many lies and phony sources, has me calling Jeff Sessions “mentally retarded” and “a dumb southerner.” I said NEITHER, never used those terms on anyone, including Jeff, and being a southerner is a GREAT thing. He made this up to divide!

0905 1135 Jim Mattis Calls Woodward Book 'Fiction': 'Product of Someone's Rich Imagination' https://t.co/HGMDiH98nx via @BreitbartNews

0905 1145 “Secretary Mattis Nukes Woodward Allegations” https://t.co/H5bPjsVXNb

0905 1935 Isn’t it a shame that someone can write an article or book, totally make up stories and form a picture of a person that is literally the exact opposite of the fact, and get away with it without retribution or cost. Don’t know why Washington politicians don’t change libel laws?

0905 2120 Almost everyone agrees that my Administration has done more in less than two years than any other Administration in the history of our Country. I’m tough as hell on people & if I weren’t, nothing would get done. Also, I question everybody & everything-which is why I got elected!

0905 2125 The Trump Economy is booming with help of House and Senate GOP. #FarmBill with SNAP work requirements will bolster farmers and get America back to work. Pass the Farm Bill with SNAP work requirements!

0905 2140 Just like the NFL, whose ratings have gone WAY DOWN, Nike is getting absolutely killed with anger and boycotts. I wonder if they had any idea that it would be this way? As far as the NFL is concerned, I just find it hard to watch, and always will, until they stand for the FLAG!

0905 2155 Thank you General Kelly, book is total fiction! https://t.co/J5iUONhRin

0905 2155 Thank you General Mattis, book is boring & untrue! https://t.co/Bq79ZjF3Dk

0906 0315 Join me tomorrow night at 7:00pm MDT in Billings, Montana for a MAKE AMERICA GREAT AGAIN RALLY! Get your tickets here: https://t.co/fyHduA2Peo

0906 0520 Today, it was my honor to welcome the Amir of Kuwait to the @WhiteHouse! https://t.co/b5iqsajpOj https://t.co/8wtucJrtEl

0906 0600 The Failing New York Times! https://t.co/SHsXvYKpBf

0906 0620 TREASON?

0906 0750 Does the so-called “Senior Administration Official” really exist, or is it just the Failing New York Times with another phony source? If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!

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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