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Fri, 23rd June 2017

Anirudh Sethi Report

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Archives of “June 12, 2017” Day

European Indices closed at session lower

Close near low levels

The European stocks are ending the day with decent declines
  • German Dax down -0.9%
  • UK FTSE down -0.2%
  • France CAC -1.1%
  • Spain down -1.8%
  • Italy FTSE MIB down -1.0%
  • Portugal PS120 down -0.77%
In the 10 year notes today:
  • German 0.250%, down -1.4 bp
  • France 0.598%, down -4.8 bp
  • UK 0.971%, down -3.3 bp
  • Italy 2.018%, down -6.8 bp
  • Spain 1.444%, unchanged
  • Portugal 2.983%, -3.3 bp

Qatar Airways enjoys 22% jump in net profit in FY17

Qatar Airways said net profits rose almost 22 per cent last year before last week’s economic blockade imposed by the gas-rich state’s Gulf neighbours.

The financial results, released late on Sunday, reported net profits rising to 1.97bn Qatari riyals ($541m) for the 2017 financial year through end-March. Revenues rose 10 per cent to Qr38.9bn in 2017.

Qatar Airways has outperformed some if Gulf peers, such as Emirates, which saw profits tumble in the same period as the airline struggled to deal with a slump in travel demand and the weakening of major currencies against the US dollar, to which its currency is pegged.

Its FOMC week – preview from Goldman Sachs (spoiler, expect a hike!)

The Federal Reserve Federal Open Market Committee meet June 13 and 14, a rate hike is widely expected:

  • Fed Funds target to be boosted by 0.25%
  • Also to issue projections on GDP, employment, inflation and the path for rates (in the Summary of Economic Projections)
  • And likely commentary on balance sheet reductions
  • Also a following press conference by the Chair Janet Yellen
What do Goldman Sachs expect (this is in brief from their note issued late last week):
  • Rate increase is now extremely likely
  • The statement will likely characterize economic activity as picking up but recognize that inflation slowed since earlier this year
  • (The unemployment rate has fallen 0.4pp since the March meeting and our current activity indicator and real GDP estimates signal that above-trend output growth will produce further labor market improvement. But the year-over-year core PCE inflation is now 0.2pp lower than at the March meeting.)
  • The press conference should provide some clarity on whether the next tightening step after June will be balance sheet normalization or a third funds rate hike

 

Bitcoin Surges Above $3000 As Asian Premium Collapses

Bitcoin prices (in dollars) have surged above $3000 for the first time in history this morning as CoinTelegraph reports that South Korea and Japan, the third and fourth largest Bitcoin exchange markets, are no longer showing Bitcoin price premiums.

Source: BitcoinWisdom.com

Having reached over KRW4 million in late May (well north of $3600 when Bitcoin in dollars was trading at around $2400), the premium for Bitcoin in Korea (via Korbit) has collapsed to zero

North Korea warns long-range missile test ‘not too far away’

North Korea warned Saturday that it was “not too far away” from testing a long-range missile capable of hitting the continental U.S. amid an unprecedented pace of weapons tests by the nuclear-armed nation.

“The series of recent strategic weapons tests show that we are not too far away from test-firing an intercontinental ballistic missile,” the state-run Rodong Sinmun said in an editorial.

Pyongyang has unleashed a string of missile launches and tests of other advanced weaponry in recent weeks as it seeks to highlight its progress toward mastering the technology needed to mount a nuclear warhead on an intercontinental ballistic missile.

In a New Year’s Day address, North Korean leader Kim Jong Un claimed that the North was in the “final stages” of developing an ICBM.

U.S. President Donald Trump has vowed that a launch of a long-range missile by Pyongyang “won’t happen” on his watch.