July 4th, 2017


Daily Market Commentary



Canadian Headlines

  • Transport Minister Marc Garneau is opening the door for new infrastructure proposals as part of a $2-billion plan to reduce bottlenecks at major ports of entry and modernize the country’s transportation network. Mr. Garneau will announce Tuesday the first call for submissions for projects to build a national trade corridor aimed at helping Canadian exporters get their goods to the United States and other international markets. (Globe and Mail)
  • McDelivery with UberEATS has arrived in Canada and people in select cities can now order McDonald’s menu items right to them, when they want it, where they want it from the UberEATS app, thanks to a partnership between McDonald’s and UberEATS.

World Headlines

  • While activists are poking at Europe’s sleepiest companies with demands for short-term shareholder payoffs, the region’s business leaders are looking further into the future. This year, Stoxx Europe 600 Index members are set to spend about 19.5 million euros ($22 million) per index share on average to renew old equipment and build factories, a sum not seen since the global financial crisis. It’s also the biggest year-on-year increase in such spending in more than a decade.
  • Asian stocks retreated as Hong Kong equities plunged the most in eight months and technology companies continued a global sell off. The MSCI AC Asia Pacific Index fall 0.4 percent as of 5:10 p.m. Hong Kong time. The Hang Seng Index dropped 1.5 percent as profit taking in some of the city’s top performing shares sparked a wider selloff. Japan shares closed lower after North Korea test-fired a ballistic missile, sending the yen higher.
  • Oil snapped its longest run of gains this year as OPEC output rose amid a boost from members exempt from supply cuts. Futures slid 0.5 percent in New York after advancing almost 11 percent the previous eight sessions. OPEC production in June climbed to the highest level this year because of increases from Libya and Nigeria, which aren’t bound by the group’s accord to cut, according to data compiled by Bloomberg.
  • Gold for immediate delivery advances as North Korea says it test-fired newly developed intercontinental ballistic missile, buttressing demand for haven.
  • India’s $750 billion sovereign-debt market is caught in a tug of war between foreign investors and state-run banks, the biggest holders of the securities. As lenders sold 952 billion rupees ($14.7 billion) of sovereign bonds last quarter, overseas funds added more than 422 billion rupees to their holdings of the debt. The dichotomy is stemming from the potential for future gains that the two investor classes see in what has been emerging Asia’s best-performing market in the last three months.
  • Rupert Murdoch faces a tough choice over the next two weeks: Offering more concessions that will make his $15.2 billion bid for U.K. pay-TV broadcaster Sky Plc slightly less attractive, or gambling that he can get it through a perilous six-month regulatory review.
  • Clariant AG’s planned $6.4 billion takeover of Huntsman Corp. came under attack by two U.S. investors who are pushing the Swiss chemicals maker to explore alternatives to the six-week-old transatlantic deal.
  • HSBC Holdings Plc has approached Peter Hancock, the former boss of American International Group Inc., to be its next chief executive officer as incoming Chairman Mark Tucker considers internal and external candidates to lead Europe’s largest bank, a person familiar with the matter said.
  • South Korea’s bond market Monday saw its biggest single-day outflow since at least 2011, with analysts saying that Franklin Templeton Investments was among the sellers. Global funds sold 2.7 trillion won ($2.3 billion) of the debt on a settlement basis on July 3, the most according to data from the Financial Supervisory Service compiled by Bloomberg going back to 2011.
  • Qatar Petroleum is taking “legal actions” after Abu Dhabi National Oil Co. declared force majeure to halt shipments of condensate, a light oil liquid, from Qatar, according to QP Chief Executive Officer Saad Sherida Al Kaabi.
  • OPEC’s crude production rose to the highest this year in June as member nations exempt from output curbs pumped more. Members of the Organization of Petroleum Exporting Countries boosted their output by 260,000 barrels a day compared with May, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data.
  • The state-backed rescue of Banca Monte dei Paschi di Siena SpA may be approved by the European Commission as soon as today, completing a six-month review of the restructuring of the world’s oldest bank, according to people familiar with the matter.
  • Sweden’s Riksbank has become the latest central bank to prepare for higher interest rates, removing the potential for a near-term easing as inflation gains a foothold in Scandinavia’s largest economy. The move signals that the bank is nearing the end of a three-year, all-out effort to spark inflation in the $500 billion economy.
  • Stada Arzneimittel AG’s chief executive officer and finance director stepped down as Bain Capital and Cinven consider a fresh takeover offer for the German generic-drug maker after a 5.3 billion-euro ($6 billion) bid failed last week.
  • The widening gap between spot onshore yuan and its daily reference rate has spurred speculation authorities may intervene again to narrow the difference. The currency closed 0.18 percent weaker than its fixing Monday, the widest discount since June 26. Back then, at least two big Chinese banks were subsequently seen dumping dollars against the yuan, stoking speculation the People’s Bank of China ordered intervention to drive the exchange rate higher.
  • Vincent Tchenguiz’s Consensus Business Group is seeking offers of more than 600 million pounds ($777 million) for 10 Hilton hotels in the U.K., according to three people with knowledge of the planned disposal.
  • Lotte Chemical Titan Holding Bhd., a Malaysian plastics maker, raised 3.77 billion ringgit ($877 million) after pricing its Kuala Lumpur initial public offering at the bottom of a marketed range.
  • Japan’s Idemitsu Kosan Co. tumbled the most in almost nine years after announcing plans to raise as much as 138.5 billion yen ($1.2 billion) from a public share sale amid opposition by its founding family to a merger with rival Showa Shell Sekiyu K.K.
  • President Xi Jinping’s complaint about a “negative” turn in China’s relationship with the U.S. showed the challenge facing Donald Trump when the two leaders meet in Germany this week. Xi’s comment during a phone call with Trump on Monday followed several assertive U.S. moves in Asia, including a naval patrol past a Chinese-controlled islet a day earlier. The American president called in part to advance talks on curbing North Korea’s nuclear weapons program, which have progressed little since Xi’s sunny April visit to Trump’s Florida resort.


*All sources from Bloomberg unless otherwise specified