Home > Sept 2017 > Sept 22, 2017 Now, Hong Kong is Downgraded..Japan Snap Election could be coming

Sept 22, 2017 Now, Hong Kong is Downgraded..Japan Snap Election could be coming

September 22nd, 2017

Over the Japanese Democratic Party objections it looks like Abe will be calling for SNAP elections set for Oct 22 per rumors. Tonight Futures dropped after the comments from North Korea, but the bulls of course bought the dip and Futures are only down .20% in the first hour of the European Session. Shanghai Futures have the metals down hard again. Tonight, following the Downgrade of Mainland China, S and P downgrades Hong Kong from AAA to AA plus. WITH all of this EU FLASH PMI data came in GREAT, this should take a lot wind out of Draghi needing to do Everything, or maybe anything at all.

Sept 2017

  • Trading_Nymph
  • Trading_Nymph

    From Bloomberg…S&P Strips Hong Kong of AAA Rating After China Downgrade
    By Enda Curran
    September 21, 2017, 7:12 PM PDT September 21, 2017, 8:58 PM PDT
    Ratings firm says cut highlights very strong China linkages
    Second Hong Kong downgrade this year triggered by China
    S&P Global Ratings cut Hong Kong’s credit rating a day after it downgraded China for the first time since 1999, a move that reflects the “strong institutional and political linkages” between the special administrative region and the mainland, the ratings firm said.

    The financial hub’s long-term issuer credit rating was lowered to AA+ from AAA, S&P said in a statement Friday. The agency lowered China’s sovereign rating Thursday to A+ from AA-, citing the risks from soaring debt, and revised its outlook to stable from negative.

    “We are lowering the rating on Hong Kong to reflect potential spillover risks to the SAR should deleveraging in China prove to be more disruptive than we currently expect,” S&P said in a statement, referring to the Hong Kong special administrative region.

    It’s the second time this year Hong Kong’s rating has been cut in response to a China downgrade. Moody’s Investors Service in May lowered the finance hub’s rating and changed the outlook to stable from negative after it cut China for the first time since 1989.

    Read more: China’s Credit Rating Cut as S&P Cites Risk From Debt Growth

    “Downgrading Hong Kong after China is a natural step,” said Mark McFarland, chief Asia economist at Union Bancaire Privee. “It has been widely anticipated that S&P would eventually follow the others and that Hong Kong would be dropped a notch too.”

    While S&P said Hong Kong’s credit metrics remain “very strong” based on the strength of the central government in Beijing, it faces a slew of challenges from surging property prices to the Federal Reserve’s plans to raise interest rates. Because the former British colony’s currency is pegged to the dollar, it effectively imports U.S. monetary policy.

    Analysts remain concerned with China’s swelling debt. Total borrowing climbed to about 260 percent of the economy’s size by the end of 2016, up from 162 percent in 2008, according to Bloomberg Intelligence estimates.

    S&P’s China downgrade represents waning confidence that Beijing can strike a balance between maintaining economic growth and cleaning up its financial sector. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.

  • Trading_Nymph

    From MARKIT..Eurozone upturn regains momentum in September
    Key findings:
     Flash Eurozone PMI Composite Output Index(1)
    at 56.7 (55.7 in August). 4-month high.
     Flash Eurozone Services PMI Activity Index(2)
    at 55.6 (54.7 in August). 4-month high.
     Flash Eurozone Manufacturing PMI Output
    Index(4) at 59.5 (58.3 in August). 77-month high.
     Flash Eurozone Manufacturing PMI(3) at 58.2
    (57.4 in August). 79-month high.
    Data collected September 12-21
    The eurozone economy ended the third quarter on
    a strong note, with growth of business activity
    picking up to its highest since May to register one of
    the strongest gains seen over the past six years.
    The headline IHS Markit Eurozone PMI rose to 56.7
    in September, according to the preliminary ‘flash’
    estimate (based on approximately 85% of final
    replies), up from 55.7 in August.
    Inflows of new orders showed the largest monthly
    increase since April 2011, representing a renewed
    surge in demand after the pace of new order growth
    had slowed in the prior two months.
    Growth accelerated in both manufacturing and
    services, albeit with the former continuing to lead
    the expansion. While service sector activity showed
    the largest rise since May, the increase in
    manufacturing output was the greatest since April
    2011. The outperformance of manufacturing
    relative to services also increased to the widest
    since January 2014.
    The goods-producing sector was again buoyed by
    rising exports, the rate of growth of which dipped
    slightly – linked to the recent appreciation of the
    euro – though remained slightly above the average
    seen so far this year.
    IHS Markit Eurozone PMI and GDP
    1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
    IHS Markit Eurozone Composite PMI
    Sources: IHS Markit, Eurostat.
    Eurozone GDP, q/q%
    The survey also brought further signs of capacity
    being stretched.
    Backlogs of work rose to the greatest extent since
    February 2011 as companies struggled to cater for
    the higher inflows of new work.
    Suppliers’ delivery times meanwhile signalled the
    highest incidence of manufacturing supply chain
    delays for almost six-and-a-half years.
    The need to boost capacity resulted in the secondlargest
    increase in employment recorded by the
    survey over the past decade, falling just shy of
    March’s post-crisis peak.
    Manufacturing’s superior performance was
    reflected by a record rise in employment. Whereas
    service sector jobs growth improved to close in on
    recent highs seen earlier the year, a far more
    marked rate of net job creation was seen in
    manufacturing, outpacing the prior 20-year record
    seen back in May.
    Increased demand for staff also reflected improved
    optimism about the future, which perked up from an
    eight-month low in August to reach the highest
    since June. Confidence rose to three-month highs
    in both manufacturing and services.
    News Release
    Confidential | Copyright © 2017 IHS Markit Ltd Page 2 of 4
    The faster pace of business activity growth and
    upturn in demand in September was accompanied
    by rising price pressures. Input cost and selling
    price inflation gathered pace for a second
    successive month, with both reaching the highest
    rates since April.
    Prices charged for services rose to the greatest
    extent since May, while the increase in factory gate
    prices was the joint-highest since June 2011.
    Country details
    Looking at the data by country, rates of expansion
    accelerated to the highest seen for over six years in
    both France and Germany, with both also
    registering further improvements on the alreadyimpressive
    employment gains seen in prior months.
    Elsewhere, growth of business activity waned to a
    six-month low, though remained only just shy of the
    average seen in the year to date. Jobs growth
    accelerated slightly amid improved optimism about
    the outlook.
    More detailed releases for France and Germany
    are available on the PMI release webpage.
    Commenting on the flash PMI data, Chris
    Williamson, Chief Business Economist at IHS
    Markit said:
    “The eurozone economy ended the summer with a
    burst of activity, with the PMI signalling renewed
    impetus to already-impressive rates of growth of
    output, order books and employment during
    “The survey data point to 0.7% GDP growth for the
    third quarter, with accelerating momentum boding
    well for a buoyant end to the year.
    “The stronger euro was cited as a concern among
    manufacturers, but as yet appears to have had only
    a modest impact on exports. Manufacturing in fact
    remains a major driver of the current upturn, with
    export sales playing an important role in pushing
    order books higher and encouraging further
    investment in capacity expansion.
    “Across both manufacturing and services, job
    creation was the second-highest seen over the past
    decade, with manufacturing job gains smashing
    through prior survey records to register the largest
    monthly rise in factory headcounts for over two
    “Despite the increase in payroll numbers, capacity
    continues to be stretched, often meaning customers
    have had to pay higher prices to ensure supply of
    both goods and services.
    “The rise in business activity and accompanying
    build-up of price pressures will fuel expectations
    that the ECB is poised to announce its intention to
    rein back some of its stimulus, reducing its asset
    purchases in 2018.”

  • panther341

    garage sale tomorrow. what a mess. Wednesday night husband went to emergency room. About 4 different issues. So this morning (Friday) I call and ask if last night was better. Answer: No. He had doctor’s appointment at 11 AM today. Went from there to ER and is now admitted to hospital on a Friday night. Wife still wants to do garage sale at 7:00 AM. I keep trying to talk her out of it.

    No telling what will actually happen.

  • panther341

    well – we did the garage sale but only until about 10:15 AM. Gave neighbor a break from husband for a few hours and we had fun and sold alot of stuff. Seriously I sold like 97% of what I put out. The stuff that didn’t sell was kitchen stuff like a couple of copper molds, plus a glass vase.

    Neighbor’s oldest son went up to hospital. Issue was some bloodwork numbers were alot changed since the Wednesday night ER visit to the Friday doctor visit so … son was there in case doctor came by while we were garage sale-ing.

  • panther341

    There was another OPEC meeting on Friday – and not much happened. The “big” annual meeting is not until the end of November – but this one was reasonably formal – they had it in Vienna and not someplace like Qatar. http://oilprice.com/Energy/Energy-General/Oil-Prices-Plateau-After-OPEC-Meeting.html

    Some guy at Bloomberg plus Harold Hamm weren’t impressed all that much. https://www.bloomberg.com/gadfly/articles/2017-09-24/when-the-party-stops-opec-will-have-lost-its-crown

  • Trading_Nymph

    Trump and the Iran Deal should be the biggest issue in Oil in the shorterm. I wonder if all this talk about Iran is just to pump up oil prices?

  • Trading_Nymph

    At least it is over!! This weekend I headed up North to the Bay area. Just making it home right now…ahhh 1:30 am…ouch.