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Spoiled Child

09.19.2018 Wed， Cloudy， Air Perfect

Summary：欧洲资产在A50峰会前有所调整，但May传递的乐观信息提振了EUR和GBP。美债遭到持续抛售，美股则在纳指带动下小幅反弹。贸易紧张还有拯救的可能，毕竟这一阶段开始双方都要感到疼了。

Euro Session:

Treasure **res jumped on 200bn news but soon after A share opened, Asia market shrugged off the negative impact. USDCNH retreated half of the early gains coupled with DXY while ADXY even drifted lower. As the market waiting for the statement from DOC, it was reported that HE was on a special meeting engaged on tariffs. I do hope they have preliminary arrangement. A share rallied strongly in the late session while news said that China will boost infrastructure investment against the tariff.

TY traded a touch higher than 3% when EU session stepped in. EGBs opened flat except BTP declined as Di Maio clashed with Tria over budget proposals. Soon DOC declare "CHINA TO LEVY RETALIATORY TARIFFS SIMULTANEOUSLY WITH U.S". EU equities opened higher and stepped firmly. Some analysis said EU could fill in the supply gap due to the Sino-US trade tension.

Both cable and sterling slid from a six-week high as the latest phrase to describe Brexit was the last mile which French official called difficult. What's more, Tusk warned a no-deal Brexit was still a possibility which triggered profit-taking ahead of the A50 EU summit.

As to mid-east, Putin and Erdogan has agreed on Idlib demilitarized zone. Erdogan said Turkey will reinforce its military outposts there while the rebels there are mostly Al-Qaeda allied troops at present which made it harder for US to interfere while US wish to export LNG to Germany as early as 2022. How or how long can Uncle Sam bearing Russia and Turkey forces patrolling there ?

Around 6:00 this morning, report said May says exit deal virtually agreed, rules out 2bn vote. Both EUR and GBP rallied on this while only Tory Brexiter and labor could reverse some gains later.

Economy data:

4:00, ITA Aug industrial orders -2.3% mom vs 3.6% mom, nsa 2.8% yoy vs 4.9%.

US Session:

Helped by block trade in treasure **res and active IG issuance , UST saw aggressively selling off in a straight line around 8:00 when market shrugged off the trade tension of 200bn. TY sliced through 3%, easily taking out Monday's lows, with yields printing as high as 3.055%. Equities also ignored the trade issue led by Nasdaq up another 1% at high.

Economy data:

8:30, Jul. Canada Manufacturing Sales 0.9% m/m vs. +0.6% , prior 1.1% revised up to 1.3%

10:00,US Sep. NAHB Housing Market Index 67 vs 66, prior 67.

Key Data And Events Ahead:

UK CPI, retail,PPI

ECB Praet address

US initial jobless claim , leading index, Existing home sales

10yr tips

Comments:

US Stock market is like a "spoiled child." The more reasons/worries thrown at it for sharper correction, the more it shrugs it off. Just before US equities opened, China announced that it will levy 5%-25% tariffs on $60bn of US goods, effective September 24th. The tariffs will be levied on 5,207 US products. China said it hopes the US will stop trade frictions, and hold a dialogue. What's interesting is A share went strong with AUD, which could mean market still focus on the potential of China's economy given the 200bn plus 50bn almost took most part of China's exporting to US.

NFP wage excitement from 2 weeks ago, couple with voluntarily quitting rate going higher, and we finally get TY above 3% despite 200bn tariffs. Before this statement, markets were getting more focused on a move to higher rates given strong data, hawkish Fed rhetoric and belief that they may need to raise the dots.

Although there is still hope which can save this trade crisis, since our DOC said they "have to retaliate" with the 10% tariffs going into effect 5 days later and they are willing to send shouwen wang to NY for negotiation, hike next week is still a lock deal now. What makes difference, Fed has to take serious consideration of the mid and even long-term impact on US economy now on the contrary to what the market worried before. With TY above 3% , I won't be surprised to see it would challenge 3.125% made in May. And I do know trade tension hurts each other now.

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：

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21日，美日可能举行贸易谈判

9月26日，FOMC

9月27日，意大利提交财政预算案

9月30日，美加贸易谈判截止日

10月14日，IMF峰会

10月16日，EU A50会议

10月25日,ECB议息

10月26日，s&p评判意大利评级

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)

11月13日，美欧特别峰会

11月15日，亚太峰会

11月30，G20峰会

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

0918 2046 “What will be disclosed is that there was no basis for these FISA Warrants, that the important information was kept from the court, there’s going to be a disproportionate influence of the (Fake) Dossier. Basically you have a counter terrorism tool used to spy on a presidential...

....campaign, which is unprecedented in our history.” Congressman Peter King Really bad things were happening, but they are now being exposed. Big stuff!

0918 2055 China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me. What China does not understand is that these people are great patriots and fully understand that.....

.....China has been taking advantage of the United States on Trade for many years. They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!

0918 2130 Happy 71st Birthday to our GREAT United States Air Force! https://t.co/r9Sa7DJQ76

0918 2355 Right now, everybody is saying what a great job we are doing with Hurricane Florence – and they are 100% correct. But don’t be fooled, at some point in the near **re the Democrats will start ranting...

...that FEMA, our Military, and our First Responders, who are all unbelievable, are a disaster and not doing a good job. This will be a total lie, but that’s what they do, and everybody knows it!

0919 0000 Thank you to our great Coast Guard for doing such a tremendous job - thousands of lives being saved! https://t.co/Ud8AT1orf8 https://t.co/YEFnGMmwoV

0919 0230 Today, I took action to strengthen our Nation’s defenses against biological threats. For the first time in history, the Federal Government has a National Biodefense Strategy to address the FULL RANGE of biological threats! https://t.co/kW7Ug1DA6q

0919 0525 Today, it was my great honor to welcome @prezydentpl Andrzej Duda of Poland to the @WhiteHouse! https://t.co/VdsTYdq9MN

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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