EU Morning Call - 02/01/18

roche futures

Asian stocks began the year in positive territory, supported by strong Chinese data
•    FX trade relatively sideways overnight with AUD the outperformer following Chinese manufacturing PMI
•    Looking ahead, highlights include Eurozone, UK and US manufacturing PMIs

ASIA

Asian stocks began the year in positive territory, supported by strong Chinese data. The Caixin Manufacturing PMI, released overnight, came in at 51.5, beating estimates of 50.6. This helped the Chinese bourses outperform with the Hang Seng (+1.8%) and Shanghai Composite (+1.0%) outperforming other indices. South Korean markets edged slightly higher (+0.4%), despite the recent geopolitical developments in the North with Kim Jong Un claiming he has a “nuclear button” on his desk. Korean automakers underperformed as both Hyundai and Kia Motors warned of only modest sales growth this year. Japanese markets were closed for a public holiday.

China Manufacturing PMI (Dec) 51.6 vs. Exp. 51.6 (Prev. 51.8)
China Caixin Manufacturing PMI (Dec) 51.5 vs. Exp. 50.6 (Prev. 50.8)
China Non-Manufacturing PMI (Dec) 55.0 vs. Prev. 54.8

UK/EU

ECB's Mersch has warned against too slow an exit from expansionary monetary policy, stating that current policy risks undermining the Euro Area's 'culture of saving'. (Newswires)

ECB's Coeure says that he sees “a reasonable chance” the ECB's PSPP will not be extended again when it expires in September. (Newswires)

UK Ministers have warned Whitehall that there can be no more "excuses" for going slow on Brexit preparations, including readying the UK for the prospect of leaving the EU without a deal. (Telegraph)

UK Brexit Secretary Davis's allies fear that he risks being "marginalised" if Boris Johnson is handed a new "super-charged" Brexit role in a forthcoming Cabinet reshuffle with the Times reporting that May could sack as many as 5 ministers. (Telegraph/Times)

COMMODITIES

Iraqi Southern oil exports rose to a record 3.535mln bpd in December, according to officials. (Newswires)

The Forties Pipeline system is now fully operational, according to Ineos. (Newswires)

Pumping of flows to the Libyan Es Sider terminal have resumed, after damage on December 26th. (Newswires)

GEOPOLITICAL

North Korea's leader Kim Jong Un warned the United States that he has a "nuclear launch button" on his desk ready for use if North Korea is threatened, but offered an olive branch to South Korea, saying he was "open to dialogue" with Seoul raising the possibility of easing tensions on the Korean peninsula. (ZeroHedge)


Iran's elite Revolutionary Guard Corps (IRGC) has announced it is taking charge of security in Tehran after nationwide protests entered their fifth day, and as new reports of gunmen amidst the crowds of demonstrators have emerged. (Zerohedge)

North Korean media report that China has begun to deploy military units along border. (Forex Live)