Space Summary
The Twitter Space MORNING BLAST WITH @PiQSuite AND @MrMBrown Join Michael and Ryan for an explosive daily market preview. hosted by PiQSuite. Engage in the daily market preview space with @PiQSuite and @MrMBrown, where traders gain valuable insights on a customizable information aggregation platform partnered with @PepperstoneFX. Discover how tailored market data, industry collaborations, and intelligent news platforms enhance trader decision-making and streamline trading strategies. Follow along for expert discussions on optimizing market analysis credibility and elevating the quality of trading insights through valuable partnerships.
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Questions
Q: How can customizable market previews benefit traders?
A: Tailored insights help traders make informed decisions based on personal preferences.
Q: What role do partnerships play in market analysis credibility?
A: Collaborations with reputable brands boost the trustworthiness of market insights.
Q: Why is free access to market information important for traders?
A: Free, tailored market data empowers traders without financial barriers.
Q: How do intelligent market news platforms optimize trading strategies?
A: Integration of smart market tools can enhance efficiency and accuracy in trading.
Q: How does collaboration with PepperstoneFX impact market analysis quality?
A: Partnership with PepperstoneFX signifies high-quality market analysis and insights.
Highlights
Time: 00:15:45
Customizable Daily Market Previews Discussions on the benefits of personalized market insights for traders.
Time: 00:30:22
Partnership with PepperstoneFX Exploring the value of aligning with PepperstoneFX in market analysis.
Time: 00:45:10
Access to Tailored Market Information Importance of free, customizable market data for informed trading decisions.
Key Takeaways
- Customizable daily market previews enhance trader decision-making.
- Partnerships with industry leaders add credibility to market insights.
- Access to free, tailored market information empowers traders.
- Integrating intelligent market news platforms can streamline trading strategies.
- Collaborations with trusted partners like PepperstoneFX elevate market analysis quality.
Behind the Mic
Morning Greetings
Good morning. Good morning. Good morning. It's Wednesday the 11 September. Michael Brown is in. Is he in? Yes, he is. He's been sent an invitation. He's connecting. He's muted. He's unmuted. Good morning.
Call Commentary
Yeah. Do we really need this running commentary on me joining the call, everyone? Yeah, because I like to keep people informed about what's going on. It's just not quiet. Yeah. Oh, I see. Otherwise it's dead sound, man. We don't want dead sound. We had very dead sound yesterday when you decided to hang up on that.
Getting the Legals Done
Let me just get the legals done. I think I know what happened, so let me just get the legals done first. So nothing discussed on this basis. Session constitutes trading or investment advice or infers any kind of endorsement by PIQ Global Limited traders, PIQ or PiQ suite or its affiliates, including the hosts of which is Mister Michael Brown and myself, Mister Ryan Paisley.
On Understanding the Incident
So I think I understand what may have happened and I'm not. I'm not 100% sure and I'm not casting any blame because it would have been an accident if it had happened. But I believe that children are the future and also that we have, obviously, our team of Sherpas and a couple other people that are delegate accounts on this account. So. Which means other people can post via. Via the Piq Twitter account. Now, the fact that someone definitely muted me first and then I think panicked and exited makes me think that someone that maybe doesn't really know how to use spaces or anything like this and they just posting might have thought, oh, what's this weird purple circle around the account?
The Possible Cause of the Mute
And then muted them. Kind of clicked it, then panicked and then turned it off. I believe that's what might have happened. But we've all had a. We've all had a chat. Obviously, I didn't lose my mind. You know me, I kept it cool. I said, look, guys, these things happen. It's free love on a free love highway. I did not go absolutely stop mental. But yeah, anyway, what's happened? What happened yesterday, my friend?
Market Analysis
Well, indeed. Now we've got that out the way. What did happen yesterday? Good morning, everybody. It was a day of relatively little by way of impactful catalysts for financial markets. Although there was plenty of headlines, most of it was more noise than signal, in all honesty. But we did see sentiment steady once more with the S and P 500 up by around half of 1% on the day, the tech sector outperforming with the Nasdaq up by just shy of 1% at the close.
Equity Market Movements
Interestingly, though, some of the moves that we saw in other asset classes didn't necessarily chime with the risk on vibe that we saw in the equity space. The foreign exchange market was very quiet indeed. The dollar stuck between 101.55 and 101.75 for the majority of the day, although the yen was the best performer, up by six tenths of 1% yesterday. With dollar yen this morning trading, well, we've recovered a little bit, but earlier trading to its lowest levels since January.
Gold and Treasury Complex
After some relatively hawkish BoJ commentary, which I'll get into momentarily, I'm sure I'll just leave people on the edge of their seats for that one. Gold was a little bit firmer, up by a third of 1%, finally breaking north of $2,500 an ounce. Once more, in the treasury complex, we saw demand across the curve, with the two year down by six and a half basis points on the day, tens down around five and a half basis points.
Auction Results
Those gains accelerating after a pretty solid three year auction, which stopped through the when issued by one spot, seven basis points, which is just the second stop through in the last 8 September 3 year auctions. We also saw record indirect demand in that auction, without which, without getting into the weeds too much, is probably a sign that folk are trying to lock in the yields ahead of the Fed delivering that first rate cut next week.
Market Highlights
In terms of other bits and bolts, that going on yesterday. Then, just to run through some headlines, very brief. Oh, sorry, before I go into that crude, probably the biggest mover on the day, WTI down over 4% yesterday, its lowest settlement since 2021. And Brent is also trading back under $70 a barrel for the first time since December of 2021.
Hurricane Influence on Oil Prices
This is despite what is now a hurricane in the Gulf of Mexico. The market doesn't seem particularly bothered about what's going on there, and any potential production outages. Focus remains firmly on the demand outlook, which remains rather anemic. Anyway, in terms of some of the headlines from yesterday, the European lawyers and the ECJ went a little bit mental with their crusade against big tech.
EU Regulatory Actions
We know how the EU loves to over regulate things. Firstly, Apple, they lost a very long running court case in the ECJ over their tax treatment in Ireland. Essentially, the EU have ruled that Ireland's beneficial tax positions towards Apple counters illegal state aid. Of course, tons of state aid has been given out in the European Union since its history, and it seems whenever it's politically convenient, it becomes illegal or not.
Apple's Tax Charge
It is politically convenient for this to be illegal. And Apple now expect a $10 billion income tax charge in the fourth quarter as a result of this ruling. So on this, obviously, this is quite the political hot potato. Oh, I just realized the Irish pun there as well.
Irish Economic Dynamics and Taxation
That's pleased me no end. So, yes, so for those of you that don't know, basically, even though it's meant to be like, if you're in the block, it's meant to be the same rules everywhere and all that kind of bollocks. Ireland are very generous in their tech taxation kind of stuff, which is why you've got all these mega hqs for european hqs and are in Dublin. So Microsoft, Oracle and Google and stuff. So. And they make a ton of money out of charging very little tax compared to everyone else. Ireland do. Obviously, the other countries do. Now, this is been determined. Now, I believe this is now the third time that european courts have said this is illegal, but usually nothing comes of it, because in the end it just keeps getting kicked. It's also why. One of the reasons why, if you ever see anyone point to irish GDP as a reason why Ireland are doing well economically, just point and laugh. Because it's basically, it's phantom GDP based on these numbers from tech companies that add nothing to the economy, bar a few jobs, but it's basically purely an accounting hq.
Changing Perspectives on Irish Taxation
Now, the reason why I think it might be different this time, and I think we might see Ireland become a little bit unstuck, is because for the first time in quite some time, both Germany and France are completely fucked in terms of financially. So there's gonna be a lot of pressure from the EU to kind of make everything a bit more of a fair level playing field. Cause at the moment it really isn't. So that's my two cent on that. Indeed. Yes, I think you're absolutely right. The other ECJ court case that was going on yesterday was with Google. This time, Google have lost their court case, which was an effort to overturn a fine of two and a half billion euros. This is all to do with Google allegedly having tinkered with their search engine, basically giving their own product and shopping listings a higher ranking than that of other shopping sites like Amazon or whoever else. The ECJ is saying that's a monopoly and as a result giving Google a big old fine.
Banking News and Regulatory Changes
We will see whether there's any more of those to come over the coming days. But it seems like the EU and the ECJ are in a bit of a feisty mood at the moment, given those rulings elsewhere. Yesterday, we did have plenty of banking news out of the United States. Firstly, the Fed, they announced how they're going to implement Basel III, which is the final round of what's being called Basel III Endgame. Like it's some sort of movie or video game series. At this point, it's basically banks having to hold more capital. And this is all still the fallout from the GFC, which was 14 years ago. At this point, the Fed have slightly watered down some of these proposals. The biggest us banks are now going to need to increase capital by 9%. That was previously 16%. So this is obviously face value better than it could have been for banks. But nonetheless, holding more capital is never a particularly good sign.
Market Reactions and Presidential Debate Insights
We also had a whole host of bank CEO's yesterday warning about the potential for a drag on earnings and falling net interest margins. So the banks took a bit of a battering yesterday. JP Morgan at one point was down about 7% in its biggest decline since June of 2020. And other majority street banks falling in sympathy with that. The other big story from yesterday was a Bloomberg sources report on the bank of Japan. The headline from this is a little bit deceiving because the headline that Bloomberg ran is, and I quote here, BoJ said to see little need to hike rates next week. I mean, they were never going to hike rates next week anyway. Again, this just highlights the importance of actually reading into the articles and reading into the story behind the headlines because it is actually quite interesting, this sources report. And what it's saying is that according to officials and people familiar with the matter, of course, the recent volatility that we've seen in financial markets has had, quote, no impact on the views that the BOJ outlined in their quarterly forecasts back in July.
Japanese Monetary Policy Dynamics
And that the officials within the BOJ believe that the bank should indeed deliver another hike if the economy and inflation continue to evolve in line with expectations. So the headline, a little bit deceiving, the sources report itself was actually a little bit more hawkish. And we heard overnight from someone at the BOJ, this is going to be fun, Nakagawa, something like that. And he was making some comments. I think the most impactful comment he made is, firstly, that even with another hike, financial conditions would still be easy. So not even just neutral, we're still talking about very loose conditions. And perhaps even more so than that. He reiterated what those sources reports were saying in that there's been no big change to fundamentals after recent market moves. And that is why we've seen the yen firm around 1% overnight, testing that 141 figure.
Political Commentary and Public Influences
To the downside, the market over the last couple of weeks, had priced out a decent chance of BOJ hikes and is now going to price those back in again. As a result of this guidance that we've got from policymakers over in Japan. We've also. I was going to cover this in a second. I might as well just cover it now. We've obviously had the presidential debate overnight. A whole load of noise. I mean, it's just a sort of political pantomime, a lot of hullabaloo that I don't think the market cares about particularly much. There was a CNN poll out after the debate saying that 63% of viewers thought that Harris won and the Trump lost. Obviously, there was very little in terms of policy, and certainly nothing by way of new policy proposals during that debate. I think the biggest headlines in the aftermath of it are, one, Trump saying that people have been eating pet cats and dogs in Ohio, and two, that Taylor Swift has endorsed Kamala Harris for president.
Cultural Influence on Voting Behavior
And if, I think if those two are the biggest storylines after what is likely to be the only presidential debate of this electoral cycle, it kind of tells you everything you need to know about political stuff. But the bonkers thing is that. The bonkers thing is that the pool that Taylor Swift has by publicly saying that means there's going to be a lot of people out there. We're talking like, considerable number of people will just vote because that's how Taylor Swift votes, which is unfortunate, but that's the world we live in. Yeah. Can I just place on record now? I'll give this back to you in a second. But just to place on record now, if anyone is voting or deciding who to vote for based solely on how Taylor Swift is voting, just take away their right to vote.
Reflections on American Political Discourse
To be honest, they're probably nowhere near the bottom of the barrel. Well, not over there. We love our american listeners. Do we?
Concerns Over Viewer Dropoff
Oh crap. That's three quarters of the viewers gone. Or listen. That'S pretty much it from me. Unless anyone cares about that plane crash in Atlanta where a tail got ripped off an airplane, but not really. I think that's just drunk drivers. But anyway, I joke. I thank you for that, Mister Brown.
Bankruptcy and Economic Stimulus Insights
Just quickly, a couple of things from our friend Andrew Hart puts out a lovely little morning note. So on us bankruptcies, a number of bankruptcy filings hit. A hit, sorry. 452 year to date, second largest in 13 years. In August alone, 63 companies went under, the fourth largest since the COVID crisis. Most of bankruptcies have been in the consumer discretionary sector. And on China stimulus, the investment bank economists have said that China needs to spend up to 1.4 trillion, that's with a t dollars over the next two years in stimulus funds to reflate the economy and return it to a sustainable growth. That's a lot of money to find behind the sofa.
Middle East Conflicts and US Reactions
A few things from our friends at new squawk. You've covered the election, so I'm scurrying past that. Okay, we'll start in that place. That's a barrel aft. Middle east, as always. The israeli army radio said the israeli army attacked Hezbollah positions in southern Lebanon. So that's still going on, pushing in the north. US Defense Secretary Austin spoke with israeli counterpart to express grave concern for the IDF's responsibility for what he called a unprovoked and unjustified justified death of an American in West bank. If you remember as well we've heard of, Biden said, oh, it was an accident. The bullet ricocheted off the floor, which, even if it was true, the optics of how he said it weren't great.
Tensions in Iraq and Iran's Influence
Local iraqi sources noted that a us forces site near the Baghdad airport was targeted with missiles. This coincides with. This isn't violent news court. This is just something that I picked up this morning and last night. This coincides with quite a very high ranking in terms including, I believe Iran's leader is visiting Iraq today, or might be yesterday or might be tomorrow, but over the next 72 hours or whatever, moving over to Russia, Ukraine. Foreign ministry spokesman said Kyiv would consider its options and could even cut ties with Tehran. Russia uses iranian missiles. Obviously this is not being completely confirmed, but US issued fresh Iran and US related sanctions which target iranian air and russian vessels.
Air Travel and Recent Delays
I believe, if I remember rightly, I saw something pass on the wires about commercial flights from Iran air or iranian air are no longer going to be able to land in quite well most european cities, including London. Yeah, I must admit quite glad about that because when I flew out to Spain recently, I was delayed for 2 hours because an iranian airplane had been badly maintained and brought Heathrow to complete bloody halt. So good riddance. There you go then. There you go.
Upcoming East and Gulf Coast Port Strikes
What else we got? Just quickly, a couple of things have picked up on overnight on headlines I saw on our own piq suite terminal. Check it out, use the code, blast from years free or blah yada. So one thing that's kind of, I believe is flying under the radar, if you ask me, is that come October 1, we have the potential for the largest ports on the east coast and Gulf coast of the US. Could be going on strike. The longshore workers could be bringing those strikes to a standstill. Now, even if they go on strike for a week, that will have delays going through into November.
Supply Chain Implications of Port Strikes
And obviously we've got the elections coming up and if we're seeing this is quite. The supply chains are kind of quite a, a key topic, a hot topic, especially for when it comes to politicians and kind of inflation and all that luck. So something to definitely watch out for. Just to give you a guide. Like at the moment it's still unsure exactly what the longshore union is looking for in terms of a pay bump, but we're seeing reports of anything between 32% and a whopping 77% pay rise is what they're looking for.
Japan's Economic Sentiments
Now, obviously that's huge. It means that if they are looking for this much, perhaps it increases the chance that we will see strike action. So that's definitely one to keep an eye on. Obviously there's a huge amount of container traffic that goes through these ports and any snarl or any snag up on there will definitely impact inflation going forward and just general supply chain woe. So definitely keep an eye on that. We've got. The mood in Japan for non manufacturers fell for a third consecutive month to a one year low, suggesting a gloomy sentiment after the bank of Japan raised rates in July.
Volkswagen and Labor Agreements in Germany
So again, keep an eye on that. And finally, I'm going to leave you with just obviously we got the news recently of Volkswagen and Renault and BMW, put it politely, getting fucked in Germany. I'm in Europe just to give you a bit of little anecdote of how bad these german security packs are. Job security packs are, we know Germany have some really tighten employment laws if VW latest news is they want to scrap the decades old security pack with its union.
Potential Financial Impacts on Volkswagen
Now, if they can't scrap it, and they also can't reach an agreement with the union and the works Council by next June, an agreement from 1994 automatically comes in, which means that all remaining staff at its 6th largest plants in Germany get an instant pay rise. Now that would. Sorry, what? Yeah, that would completely fuck VW. That's obviously a technical term. Yeah. So basically these like, their employment laws are so bizarre and so kind of, well, just obscene that.
Implications of Employment Law
Yeah, I'll say it again. If VW can't scrap the current german security job security pact by next June and can't come to an agreement with the union Works council, an agreement from 1994, so 30 years ago comes into place and all workers get a pay rise, and then that will send VW under. So that's definitely one to keep an eye on. But, yeah, that's what I got over to you.
Future Expectations for VW Stock
That's quite mad. Well, my read on that is short the out of VW. Well, basically the union folk have got no incentive to negotiate on that at all.
Discussion on German Car Manufacturers
Well, this is where. Yeah, I would like to argue with you, but, yeah, there's basically the union works council said, well, you know, you can't scrap. That's not a trade recommendation. No, no. Just in case anyone was curious. But it just. I think it just shows you what a difficult place these German car manufacturers are now in. You know, it's brilliant when they were like striving like new highs all the time in terms of output and stuff, but now there's a bit of a wobble. Yeah, it could all come crumbling down. So it just depends if on, you know, are the works council and the unions. Same thing, I guess. But if they've got any sense, they'll kind of, you know, small pain for, you know, a lot of people keeping their jobs. Or we try and go at VW, it could end up that VW go under and that's it. But, yeah, it's definitely one to watch. It's. I think it's quite crazy, to be honest.
Market Perspectives and Economic Indicators
Yeah, it's mental. I mean, it's not one I've been following particularly closely, but I would just say I don't think they're going to go under. I mean, the German government will surely. Oh, yeah. But anyway, we will. My going under is their fuck. But obviously they'll still be live in KP. Yes, indeed. Cool. In terms of today then, a couple of bits and bobs from earlier this morning. We had the July GDP figures out, the UK, the economy stagnating on a month on month basis in July. For the second straight month, actually, which is not particularly great considering we expected GDP to have grown by zero spot 2% in July. I've seen a bit of commentary on the sell side this morning saying that we shouldn't be too worried because services output grew by zero spot 1%. If we're celebrating that, then I think that kind of tells you everything you need to know. Things are not looking particularly rosy and you do just wonder how much of a negative hit there is going to be to business and consumer confidence ahead of the budget on the 30 October.
Potential Economic Impacts
Obviously a lot of uncertainty around the fiscal tightening that we're going to see there and you are likely to see consumers tighten their belts and businesses just put the brakes on investment until we have a little bit more clarity over the economic outlook. Also, some European banking news. This morning we heard from Commerce Bank and UniCredit. UniCredit are apparently mulling whether to they hold a 9% stake in commerce. They are mulling whether to increase that stake north of 9.9%. There's various sort of takeover rules within Europe, which means that once you breach that threshold, you have to start making formal offers and more formal disclosures to the market. Commas bank up about 15%. In reaction to that unicredit trading a touch softer at the open in terms of the day ahead, the calendar is relatively light. Only the US CPI figures at 01:30 London time this afternoon are of note in terms of data releases.
Inflation and Economic Projections
On a month on month basis, both headline and core CPI is expected to have risen by zero spot 2% in August. On annual basis. The headline metric that is expected at two spot 5%, that would be down from a prior two spot nine, and, if in line with expectations, would be the lowest annual headline CPI print since February of 2021. Meanwhile, core inflation, that's expected to remain unchanged at three spot 2%. In terms of some context around the figures, of course, I'm sure everyone's aware by this point that the inflation side of the dual mandate has been somewhat superseded by developments in the labor market in terms of how the Fed are viewing the policy outlook and as a driver of whether the Fed will deliver a 25 or a 50 basis point cut in September, and also the magnitude of easing that will be delivered over the next six to twelve months.
Market Reactions and Future Expectations
As a result of that, you would probably expect, barring a huge deviation from those consensus expectations, you probably expect that the impact of CPI today is a little bit more muted than we've probably seen at any other point during this economic cycle. Although just for good measure, markets do come into the print pricing, the September FOMC meeting at around a 70% chance of a 25 basis point cut and around a 30% chance of a larger 50 basis point cut. As I said, I think you need a big deviation to those consensus expectations in order to get a decent move in market pricing and the curve also prices around 110 basis points worth of easing by the end of the year. In terms of other things that are going on today, there's not particularly much. We have ten year supply due from the United States, a 39,000,000,010 year note auction at 06:00 later on, notable central bank speakers, of course, the ECB, the BoE the Fed all in their pre-meeting, quiet periods.
Earnings and Market Sentiment
And earnings. The earnings docket is pretty light as well. We do though hear from Manchester United before the market opens. So if anyone's in need of a laugh, their earnings may be worth a quick browse. But that is pretty much it for today. Thank you very much, Mister Brown. I'm going to end on a serious and quite sombre note, if that's okay with everyone. Obviously today is the 11 September which marks the anniversary of the terrorist attacks that brought down the twin towers. Now the reason why I'm mentioning this, well, it should be mentioned regardless, but the reason why it's kind of quite poignant to some of us have been in markets a lot longer than most or many people that may be listening, is that we know. I know personally, two people and a lot of my friends that are kind of brokers at the time, lost some dear friends during the towers falling down.
Reflection on September 11
So it's not really much, it doesn't really happen much anymore. But we always used to have two minutes silence. At in London it'd be 146. In the US it's obviously 846 in the morning. But. So if you are minded to do so, please spare fault for those traders that, especially at Cantors etc. That lost their lives on that fateful day. So, not a great way to end the show, but it's something that I definitely wanted to mention because it's still important to many of us. So anyway, on that sombre note, if you are trading today, keep it tight, spare fault for others, and we will see you all tomorrow. Indeed. Very well said. See you later. Bye. See you later.
