toyota

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The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

UK Inflation Is The Highest In Decades!!! China Still Closing Factories, Toyota And Apple Are In Danger?

Saxo Strategy Team Saxo Strategy Team 18.08.2022 09:48
Summary:  U.S. equities took a pause from their week-long advance, with S&P 500 retreating before its 200-day moving average. Target’s Q2 results disappointed as the retailer suffered from high inventories and U.S. consumers shifted from discretionary to grocery items. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S.’s advance higher took a pause yesterday amid higher bond yields and disappointing results from Target (TGT:xnys), -2.7%. Target’s Q2 earnings fell sharply and missed consensus expectations on weaker gross margins due to slower sales in discretionary items and inventory impairments.  Lowe’s (LOW:xnys) reported mixed results, with earnings beating estimates but same-store sales growth weaker than expected. Higher U.S. bond yields triggered by a dramatic rise in U.K. bond yields and reported pension fund rebalancing-related selling added to the equity weakness.  S&P 500 dropped 0.7% and Nasdaq 100 shed 1.2%.  U.S. treasury yields rose from spilling over from a massive rise in U.K. Gilt yields and weak 20-year bond auction U.S. 10-year treasury yields jumped 9bps to 3.05%, taking cues from the sharp move higher in U.K. Gilts and European sovereign bond yields following white-hot UK CPI data. Long-end yields moved further higher on poor results from the 20-year auction.  Short-end yields fell in the late afternoon after the July FOMC minutes signaling that it “would become appropriate at some point to slow the pace of policy rate increases” which reaffirmed the market’s expectation of a 50bps, instead of 75bps on the September FOMC.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng Index bounced modestly by 0.5%; CSI399 gained 9.6%. Meituan (03690:xhkg) rallied 3.3% after a 9% drop yesterday due to a Reuters story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan. Tencent denied such a divesture plan last night.  Power tools and floor care equipment maker and a supplier to Home Depot (HD:xnys) and Wal Mart (WMT:xnys), Techtronic Industries (00669:xhkg) jumped more than 10% after better-than-expected results from the two U.S. retailers. China Resources Power (00836:xhkg) +5.7% after reporting weak 1H22 results but more wind and solar projects on the pipeline. Other Chinese power producers also outperformed amid power shortages. China Power (02380:xhkg) surged more than 8%. On Tuesday, China’s Premier Li Keqiang visited Shenzhen and held a meeting with provincial chiefs from Jiangsu, Zhejiang, Shandong, Henan, and Sichuan to reiterate the central government’s push for full use of policies to stabilize the economy. Hong Kong Exchanges (00388:xhkg) fell 1.6% after reporting lower revenues, higher costs, and a 22% YoY decline in EPS, worse than market expectations. After the market close, Tencent reported weak but in line with expectations revenues and better-than-feared earnings in Q2. Tencent’s ADR climbed 3.5% overnight from the Hong Kong close. AUDUSD eying the labor market report, GBP will see more pain ahead A mixed session again overnight for the US dollar with FOMC minutes and US retail sales failing to provide any fresh impetus to the markets. AUDUSD was the biggest loser on the G10 board, sliding below 0.7000 to lows of 0.6911 after real wage data for Q2 showed a massive slump. Labor market data due this morning could further weigh on RBA expectations, if it comes out softer than expected. The weakness seen in the commodity markets, especially iron ore and copper, weighed on the antipodeans. GBPUSD stays above 1.2000 despite a 40bps gains in UK 2-year yields after the double-digit UK CPI print. USDJPY tested the resistance at 135.50 but was rejected for now. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a slight recovery overnight, with WTI futures getting back to over $87/barrel and Brent futures close to $94 after data showed US inventories fell sharply. Sentiment was also supported by comments from OPEC’s new Secretary-General, Haitham Al Ghais, who said that world oil demand will rise by almost 3mb/d this year. He also said there is a high chance of a supply squeeze this year, in part because fears of slowing usage in China are exaggerated. This helped to take the focus off the prospects of the Iran nuclear deal for now. What to consider? Stale FOMC minutes hint at sustained restrictive policy Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag July US retail sales are a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. UK CPI opens the door for another 50bps rate hike UK headline inflation hits 10.1%, the highest in decades and above the 9.8% expected and for the month-on-month reading of +0.6%, higher than the +0.4% expected. Core inflation hit 6.2% vs. 5.9% expected and 5.8% in Jun. That matched the cycle high from back in April. Retail inflation rose +0.9% MoM and +12.3% YoY vs. +0.6%/+12.0% expected, respectively. The Bank of England has forecast that inflation will peak out this fall at above 13%. While the central bank forecasted a recession lasting for five quarters at the last meeting, it will be hard for them to not press ahead with further tightening at the August meeting, and in fact the scope for another 50bps rate hike is getting bigger. Reserve Bank of New Zealand hikes 50 basis points to 3.00%, forecasts 4% policy rate peak The RBNZ both increased and brought forward its peak rate forecast to 4.00%, a move that was actually interpreted rather neutrally – more hawkish for now, but suggesting that the RBNZ would like to pause after achieving 4.00%. RBNZ Governor warned in a press conference that New Zealand home prices will continue to fall. This is actually a desired outcome after a huge spike in housing speculation and prices due to low rates from the pandemic response and massive pressure from a Labor-led government that had promised lower housing costs were behind the RBNZ’s quick pivot and more aggressive hiking cycle in 2021. Australian wages grew at their quickest pace in eight years, but less than expected Australia’s wage-price index gained 0.7% in the second quarter, just shy of estimates further pressuring the Aussie dollar back toward its 50-day moving average against the US dollar. Annual wage growth came in at 2.6% but real wages - adjusted for headline inflation fell 1% QoQ, and was 3.3% lower than a year earlier, eroding consumer spending power. What’s next. All eyes will be on Australia’s Reserve Bank which might be pressured to hike more than expected at its September meeting. Despite Australian wages growing slower than expected, the RBA estimates retail gas and electric prices to rise 10-15% in the second half of the year, so that will be a focus point when they consider their next move in interest rates. Tencent reported weak but in-line Q2 revenues and better-than-feared earnings Tencent reported a revenue decline of 3% YoY in Q2, weak but in line with market expectations.  Non-GAAP operating profit was down 14% YoY to RMB 36.7 billion and EPS fell 17% YoY to RMB2.90 but they beat analyst estimates.  Revenues from advertising, -18% YoY, were better than expected.  In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Disappointing results from Target and mixed results from Lowe’s Target reported EPS of USD0.39, missing estimates.  The company indicated strength in food and beverage, beauty, and household essentials but weaker in discretionary categories.  Gross margin of 21.5%, down from 30.4% year-ago quarter and below expectations. Lowe’s reported better than expected EPS of USD4.67 (vs consensus USD4.58) but a decline of 0.3% in same-store sales.  Lowe’s inventories grew 11.6% YoY, substantially lower than peer Home Depot.  With a 15% increase in product costs, the inventory volume was in effect down low-single digit. Power crunch in China shut factories Chongqing is limiting power supply to industrial users from yesterday to next Wednesday.  In Sichuan, Foxconn’s Chengdu factory is suspending operations for six days from August 15 to 20 due to a regional power shortage. The suspension is affecting Foxconn’s supply of iPad to Apple.  The company says the impact “has been limited at the moment” but it may affect shipments if the power outage persists.  The Chengdu government is imposing power curbs on industrial users to ensure electricity supply for the city’s residents.  Toyota and CATL are also suspending some operations in Sichuan due to a power shortage. Foxconn has started test production of the Apple watch in Vietnam Foxconn has started test production of the Apple watch in its factories in Vietnam. With the passage of CHIPS and Science Act earlier this month in the U.S., investors are monitoring closely if Taiwanese and Korean chipmakers as well as their customers may be accelerating the building up of production capacity away from China.  World’s biggest Sovereign Wealth fund posts its biggest half-year loss on record   Norway’s oil fund, the world’s biggest owner of public traded companies lost 14.4% in the six months through to June. In currency terms that’s $174 billion. The slump was driven by the fund’s loss in technology stocks with Meta Platforms (owning Facebook and Instagram) and Amazon, leading the decline. However, just like the market, the fund’s energy sector delivered positive share price performance, benefiting from a sharp rise in earnings in the oil, gas, and refined energy product sector. Meanwhile, investments in logistics property helped the fund’s unlisted real estate holdings gain 7.1%, though they account for 3% of its assets. Japan’s inflation will surge further Japan’s nationwide CPI for July is due to be reported at the end of the week. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are waddling high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while any little hope for a Bank of Japan pivot is fading. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 18, 2022
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

We Know The Successor Of Liz Truss | Asia's Economy Is Plummeting Into Public Debt

Kamila Szypuła Kamila Szypuła 25.10.2022 11:12
UPS reports its positive results. Negative news is pouring in from Asia. And also we met the new UK prime minister. In this article: The next UK prime minister Summary of Q3 Electric-vehicle market Asia’s economic outlook FedEx problems Rishi Sunak to become the next UK prime minister CNBC Now tweets about the new prime minister of UK BREAKING: Rishi Sunak set to be Britain's new prime minister as rival Penny Mordaunt drops out https://t.co/sNXCUoAvtq — CNBC Now (@CNBCnow) October 24, 2022 Rishi Sunak is set to become Britain’s new prime minister, succeeding Liz Truss who resigned Thursday. Liz Truss was the shortest reigning prime minister in the UK, the current situation has surpassed her. After Liz Truss' resignation, there were voices that Boris Johnson would again take over the British government. But as we know, these were only false guesses. Current information that Sunak will take over this position. He will not become prime minister immediately because, according to the ritual, the outgoing prime minister, in this case Truss, must first resign in favor of King Charles. After that, the king will appoint another prime minister, Sunak, in the coming days. The question is whether the new prime minister will cope with the challenges that await him and restore stability to the British economy? UBS results UBS in its tweets shares the results for the third quarter. Particularly noteworthy is the tweet with the statement by CEO Ralph Hamers. Hear from our CEO Ralph Hamers on the progress we made over the third quarter as well as the trends we saw for client activity. pic.twitter.com/OjEAeb5WeV — UBS (@UBS) October 25, 2022 UBS Group AG, as an international investment bank and financial services company, enjoys popularity and high profits. Along with the end of a certain period, in this case of the third quarter, the company summed up its achievements. The situation on the markets is diversified, and the observation of new trends may prove very helpful for the functioning of the instance. In the author's post, you can find out about the situation of UBS, which can affect its prominence and positions in financial services. Toyota and electric-vehicle Reuters Business tweets about electric-vehicle. On @Breakingviews: Toyota is mulling its third electric-vehicle reboot in 13 months. Frequent rejigs can mean bigwigs are flailing for ideas. But its latest overhaul implies boss Akio Toyoda is addressing missteps with more speed, says @AntonyMCurrie https://t.co/ayxtHq1ZAC pic.twitter.com/OuHPhkGTLQ — Reuters Business (@ReutersBiz) October 25, 2022 There is no doubt that electronic vehicles have become something desirable. Many car manufacturing companies try to modernize their products. One of them is Toyota, which is trying to match the giant in the production of electronic cars, Tesla. Some people may take away from trying to look for new ideas, and for some it means growing their business. Public debt in Asia has increased The IMF in its post addresses the topic of economic problems in Asia. Amid Asia’s dimming economic outlook and rising inflation, public debt has risen substantially in Asia over the past 15 years—particularly in the advanced economies and China. https://t.co/gDWrrRU0uD pic.twitter.com/YvJDzyAM7c — IMF (@IMFNews) October 25, 2022 Economies around the world struggle with the problems of rising inflation and its negative impact on the functioning of economies. China as Asia's largest economy is also struggling. Despite yesterday's positive results (Read more : Growth In China's Trade Balance. Significant Declines In Major Sectors Of Europe And Great Britain| FXMAG.COM), there is a bigger problem of public debt. Public debt is growing rapidly, which means that the governments of Asian countries are indebted to power. Despite positive reports, such a situation may have negative consequences for the economy. This may mean that a financial crisis is approaching, and as we know from history, dealing with this problem can be laborious and very expensive. Companies face problems Bloomberg Terminal tweets about the market loses of the FedEx shipping company. FedEx lost $11 billion in market value last month, wiping out two years of stock gains, after it pulled its forecast, feeding into fears of a global demand slowdown.https://t.co/OthLH3tipw — Bloomberg Terminal (@TheTerminal) October 24, 2022 The economic slowdown and rising inflation affect the situation of shipping companies. The prognosis is not very good. FedEx and UPS expect to see dramatic drops in US and global shipments. Which will have a negative impact on the financial result of these companies, and thus may cause a reduction in employment.
Canada's Inflation Expected to Ease in May, Impacting BoC's Rate Decision

Mitsubishi Motors and Nissan Motor decreased by 2.5% and 2% respectively

InstaForex Analysis InstaForex Analysis 23.12.2022 19:24
  Major Asian indices posted losses of up to 1.7% after yesterday's uptrend. The only indexes which closed in positive territory were the Shanghai Composite and Shenzhen Composite, which edged up by 0.01% and 0.07%, respectively. Other indices decreased: the Hang Seng Index fell by 0.61%, the S&P/ASX 200 dropped by 0.77%, and the Nikkei 225 slid down by 0.96%. The KOSPI was the worst performing index, shedding 1.7%. As usual, Asian markets followed US indices, which had declined the day before. The downtrend was triggered by the latest US GDP data for the last quarter. Although GDP increased by 3.2% and exceeded the preliminary estimates of 2.6% and 2.9%, market participants were anxious about the harsh monetary policy measures taken by the Federal Reserve. A stronger economy could lead the Fed to raise its key interest rate even higher. This, in turn, may result in the economic downturn that all investors fear. Meanwhile, Japanese consumer prices rose by 3.8% last month from the same period in 2021 hitting its highest level in 30 years. In October, inflation stood at 3.7%. Core CPI, which excluded food, climbed by 3.7% in November from 3.6% in September, reaching the highest level in four decades. The index exceeded the central regulator's 2% target for the eighth month in a row. Read next: Poor Stock Market Performance Meant That For Many Investors The Dollar Was A Safe Currency This Year| FXMAG.COM Shares of Japan's biggest companies plunged, with Advantest, Corp. down by 4.5%, Tokyo Electron, Ltd. dropping by 3.8% and Sapporo Holdings, Ltd. declining by 3.4%. Mitsubishi Motors and Nissan Motor posted slightly smaller losses of 2.5% and 2%, respectively, while Toyota Motor and Mazda Motor declined by 1.3% and 1.1%, respectively. At the same time other Japanese stocks increased: shares of Kansai Electric Power rose by 5.7%, Tokyo Electric Power gained 4.2%, Mitsubishi UFJ Financial Group and Chiba Bank added 2.8% and 1.8% respectively. On the Hang Seng Index, Alibaba Health Information Technology fell by 5.1%, BYD and Geely lost 4.5% and 3.3% respectively. Netease dropped 3%, while Xiaomi and JD.com lost 2.5% and 2.3% respectively. The KOSPI was dragged down by falling stocks of major companies, with Samsung Electronics down by 1.9% and Hyundai Motor retreating by 0.6%. The largest Australian companies also posted losses. GUD Holdings dropped by 5.6%, Star Entertainment Group slid down by 4.8%, Xero and Seek lost 1.9% and 1.7%, respectively. Computershare and BHP dropped by 0.7% and 0.2%, respectively. Relevance up to 13:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/330680
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Toyota's Transition To Electric Will Come With A Change In CEO

Kamila Szypuła Kamila Szypuła 30.01.2023 11:13
Electric vehicles are taking up a growing share of European and American markets, and a fifth of the world's largest car market, China, already consists of electric vehicles. Akio Toyoda Longtime CEO Akio Toyoda called himself the spokesperson for the "silent majority" of people in the auto industry who questioned the focus on electric vehicles. In the automotive world, Toyoda is one of those who advocate slower and more prudent movement. He argued that gasoline-electric hybrid vehicles like Toyota's Prius could be just as environmentally friendly, and said other companies were pushing consumers to switch to electric vehicles they might not be ready for without a full charging infrastructure. The CEO has always said that he is not a skeptic about electric vehicles - he is a realist. The desire to change for the better The transition is a watershed moment not only in the automotive industry, but also in the complicated green energy transition across the business world. Some companies, investors and governments are pushing for big leaps towards renewable energy and green technologies, arguing that consumers and infrastructure will keep up with the changes. Government agencies and investors are encouraging companies to switch to electric vehicles with subsidies and tax breaks. New tax credits for electric vehicles in US law, dubbed the Inflation Reduction Act, do not apply to hybrids that are not pluggable. The European Union has mandated the sale of new zero-emission cars by 2035. The state of California will also only allow the sale of new electric vehicles, plug-in hybrids and hydrogen cell vehicles starting in 2035. Read next: Inflation Is Falling, But Does It Mean That The Fed's February Decision Will Be Dovish?| FXMAG.COM New CEO CEO Motor Corp. Akio Toyoda, who has expressed skepticism about the future of all-electric vehicles, said he would hand over the keys to a junior director. The change in management comes as Toyota transitions to electric, autonomous and connected cars. Koji Sato, a 53-year-old engineer who will take over as Toyota's CEO in April, has provided some details on his plans for the world's best-selling automaker. However, his background in launching the first all-electric Lexus and working on hydrogen-powered cars allows him to face the upcoming car transformation. Sato said on Thursday, without giving details, that his plans for Toyota include accelerating the electrification of the automaker's lineup. Still, echoing Toyoda's position, he said that for the world to become carbon neutral by 2050, it would need more than just electric vehicles for transportation. Toyota will be EV? Last month, Toyoda wondered aloud how much longer he could argue for a more gradual and multifaceted approach. Two generations ago, Toyota was transforming the automotive industry with innovations such as just-in-time manufacturing and an obsession with continuous improvement. By the time Toyoda took the top job in 2009, there were signs the company was moving too fast. His quest for global dominance limited profit margins and caused some to wonder if quality was being sacrificed. But as Tesla overtook Toyota to become the world's most valuable automaker by market capitalization, competition intensified. Currently, Toyota has several electric vehicles in showrooms, and more will appear this year. Toyota's current EV platform - the basic architecture on which various car models can be built - has been partially changed from the existing platform for gasoline-powered vehicles. Even before Toyota's first change at the top in 13 years, some changes to its EV strategy were being considered behind the scenes. The company researched rivals. Meanwhile, Toyota remains the leader in sales of hybrids and plug-in hybrids, two model types that accounted for nearly 30% of its global shipments between 2022 and November. But sales of pure electric vehicles - models that run purely on electricity - are still low. The competitive EV business remains for Toyota as part of a larger strategy to promote and invest in a diversified offering that also includes hybrid and hydrogen vehicles. Toyota share price Toyota shares with the new year soared. They started the year at 138.28 and are now much higher at 147.16. Source: wsj.com, finance.yahoo.com
Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Saxo Bank Saxo Bank 09.02.2023 09:06
Summary:  U.S. equities pulled back by over 1%, led by a selloff in the tech space. Google’s parent Alphabet tumbled 7.7% after Google's newly introduced Chatbot Bard’s reportedly underwhelming performance. The decline in bond yields following a strong Treasury auction failed to boost the stock market. Investors are excited about the prospect of AI generative content and bid up shares related to ChatGPT-like products and on the other hand, have concerns about the potential disruption to the mega-cap technology companies.   What’s happening in markets? US equities (US500.I and USNAS100.I) lower, dragged by tech selloff US stocks retreated led by a selloff in the technology space on concerns about the disruption caused by the technological advancements in AI-generated content. Alphabet (GOOGL:xnas) tumbled 7.7% after reports of the underwhelming performance and erroneous responses from the company’s newly introduced Chatbot Bard. Meta (META) dropped 4.3%. Lumen Technologies (LUMN), tumbling 20.8% on well-below-expected earnings guidance for 2023, was the biggest lower within the S&P500. S&P 500 drifted down 1.1% and Nasdaq 100 plunged 1.7%. Despite the retracement, the S&P500 and Nasdaq are still in their technical uptrends for now. All 11 sectors of the S&P 500 declined, led by communication services, utilities, and information services. Hawkish comments from several Fed officials also weighed on the market sentiment. Fortinet (FINT:xnas) jumped 10.9% after the cyber security company beat revenue and earnings estimates. Uber (UBER:xnys) gained 5% continuing its uptrend since January, with Uber reporting stronger-than-expected quarterly results. Disney (DIS:xnys) rose 5.5% in extended-hour trading, after reporting earnings beating estimates and planning to cut 7,000 jobs for cost saving. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) pulled back on a strong 10-year auction The reaction in the Treasury market was muted to the chorus of hawkish comments calling for higher for longer from Fed’s Williams, Waller, Kashkari, and Cook.  The action came in after a strong 10-year auction which awarded the notes 3bps richer than the market level at the time of auction and a strong bid-to-offer-cover at 2.66 times, increasing from 2.53 times in the previous auction. Yields on the 10-year fell 6bps to finish Friday at 3.61%. Australian equites (ASXSP200.I): This quarter, focus will be on energy companies and companies benefiting from Chinese students returning ASX200 futures suggest a 0.4% fall on Thursday. However, focus will be on energy companies again with oil markets moving up. In company news, Nine Entertainment (NEC): won the rights to the 2024-2032 Olympic Games so that will excite some. Fortescue Metals (FMG) is hoping its iron project in Gabon will one day rival the giant mines of Australia’s Pilbara, with the West African nation giving the go-ahead for digging to start this year. Also keep an eye on travel businesses and educational firms in the quarter ahead with at least 50,000 students from China expected to return to Australia before the start of semester  - with Beijing’s government ruling that degrees earned online will no longer be accredited. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) lacked of direction Hang Seng Index was nearly flat in directionless trading as investors were waiting for more evidence of recovery in China after the initial month-long rally that had repriced equities higher to reflect the radical change in policy directions in China. The benchmark Hang Seng Index was dragged by Meituan (03690:xhkg) which tumbled 6.5% on reports that Douyin was launching a food delivery service in March. Tech stocks overall were laggards. Hang Seng TECH Index dropped 1.9%. Kuaishou (01024:xhkg) plunged 6.2% following the content-sharing and social platform company banned 500,000 accounts for breaching the company’s policies. SenseTime (00020:xhkg) dropped 6.6% as Softbank trimmed its stake in the AI and vision software maker. Baidu (09888:xhkg) retraced 3.1% to pare some recent strong gains despite southbound flow registering a net buying of HKD 671 million on Wednesday. Online knowledge-sharing platform, Zhihu (02390:xhkg) soared 39.6% on the potential of being benefited by ChatGPT application. NetEase (09999:xhkg) climbed 1.1% as the company is planning to roll out a demo online educational product similar to Chat GPT. Ganfeng Lithium (01772:xhkg) gained 5% following the EV battery maker making breakthrough in manufacturing solid-state power batteries. An EV SUV using Ganfeng’s solid-liquid hybrid lithium-ion batter is expected to come to the market in 2023.  In A-shares, northbound flows registered net selling for the fourth day in a row. CSI300 drifted 0.4%. Media, communication, and defense stocks led the decline. Real estate, transportation, and pharmaceutical names outperformed. FX: Aussie gains stall; sterling outperforms After a strong run higher post-RBA, AUDUSD turned lower overnight on hawkish Fed speak. Pair reversed from 0.6996 highs to 0.6920 and will need either a turn in sentiment or another leg higher in commodity prices to sustain this week’s rally. USDCAD also returned back above 1.3400 despite the surge in oil prices. Sterling bounced off 1.2000 support and bounced back to 1.2100 but still staying below the 38.2% Fibo retracement at 1.2120. UK GDP for Q4 will be released tomorrow. Crude oil (CLH3 & LCOJ3) jumps again despite hawkish Fed and inventory build Oil prices rose 1.7% with WTI to $78.50 and Brent above $85 despite a hawkish rhetoric from Fed members as well as higher inventory levels as demand outlook remains upbeat. The EIA reported US crude stocks building 2.4mln bbls in the latest week, contrasting the private data that indicated a draw of a similar magnitude. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the IEA’s messaging. The International Energy Agency expects oil processing will rise to a record 14.4mb/d over the course of the year. That compares with 13.6mb/d in 2022.  Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM What to consider? Fed speakers call for higher rates A slew of Fed speakers were on the wires yesterday. While a broad chorus on higher rates was maintained, much of which has been the Fed’s message throughout, markets perceived the messages as hawkish primarily as the January jobs report is still keeping investors concerned. Importantly, all the four speakers last night are voting this year. Christopher Waller said rates may have to stay higher for longer. John Williams called the December dot plot a good guide, adding that rates are "barely into restrictive" territory. He also hinted at a slightly higher terminal rate of 5.0-5.5%. Lisa Cook said "we are not done yet." Neel Kashkari expects the peak to rise above 5% this year as services side of the economy is still hot. Market pricing of the Fed path still pretty much unchanged, with terminal rate priced in at just over 5.1%. European companies outperformed in earnings growth Saxo’s Head of Equity, Peter Garnry, mentioned in his latest notes that European companies are the big winner in the Q4 earnings season with 4.8% earnings growth Q/Q and the highest growth rate in revenue Q/Q compared to US and Chinese companies. European earnings are actually ahead of S&P 500 earnings since Q3 2019. As Peter writes in Saxo’s Q1 Outlook, the comeback to the physical world is also a comeback to European equities. The Q4 earnings season also show that earnings are holding up better than we expected despite margin pressures are still an ongoing theme and could intensify during the year. Maersk guided a downbeat 2023 outlook A.P. Moller-Maersk (MAERSKb:xcse) reported lower than estimated Q4 revenue and in-line EBITDA, but the FY23 outlook on EBITDA of $8-11bn vs est. $13.5bn is a big miss and maybe a bit too conservative if the cyclical upturn gathers steam. Maersk’s guidance for global container trade in 2023 at -2.5% to +0.5% again is at odds with the market’s cyclical growth bet. Maersk’s CEO says that a significant inventory adjustment is taking place and that the world is generally moving to a more normal world. Vestas signals weakness in the wind turbine business Vestas Wind System (VWS:xcse) reported a FY23 outlook that signaled further challenges and weakness in the wind turbine business with FY23 revenue outlook at €14-15.5bn vs est. €14.8bn and adjusted EBIT margin of –2% to +3%. If the cyclical upturn continues, it will most likely put more pressure on industrial metals making it difficult for Vestas to expand its operating margin in 2023. The outlook is at odds with the narrative that Europe is undergoing a boom in green energy as the revenue in 2023 is expected to be the same as in 2020. Judging from analyst estimates, it seems that growth is expected to pick up in 2024 with revenue growing to €17.9bn. One thing is for sure, the lack of great headlines coming out of wind turbine makers will add steam to the movement and support for nuclear power which seems inevitable as part of the solution toward net zero carbon in 2050. Cybersecurity company Fortinet beat estimates Fortinet (FINT:xnas), one of the largest cyber security companies on revenue, reported Q4 revenue and EPS that beat estimates and the FY23 outlook on operating margins and revenue were in line with analyst estimates. It was clear that investors had lowered their expectations below that of analysts as the FY23 outlook hitting estimates led to a rally in extended trading. The outlook on operating margin also confirms that cyber security companies are experiencing little margin pressure. Auto companies Toyota, Honda and Volvo report earnings A bevy of EV and motor companies report today including Toyota Motor, Honda Motor and Volvo Car. We think there could be a risk they report weaker than expected results, similar to Ford; which sent Ford shares 8% lower on Friday. Ford is struggling to make money on its EV business and blamed supply shortages. Metal commodities are a large contributor to car manufacturers costs. And we’ve seen components of EVs rise significantly in price, amid limited supply vs the expectation China will increase demand.  For example consider the average EV needs about 83 kilos of copper- and its price is up 26%, 250 kilos of aluminium are needed - and its price is up 20% from its low. These are some headwinds EV makers are facing, in a market where consumer demand is restricted amid rising interest rates.   Adani prepays bridge loans, earnings support sentiment The Adani Group plans to prepay a $500mn bridge loan due next month, in order to avoid a refinancing at higher rate after the recent sell-off. The effort to deleverage also appears to be a response to banks that had started to step away from lending against Adani debt or a measure to avoid a potential rating downgrade. Recent earnings from Adani companies have also hinted at slower inorganic growth to avoid the need for fresh borrowing, and this is helping to rebuild investor confidence. Markets will wait to see some more such confidence-boosting measures from Adani before we can comfortably put a floor to the allegation-driven declines. MSCI’s quarterly review today will be key for any risks of exclusion.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Alphabet tumbled on underwhelming Chatbot performance – 9 February 2023 | Saxo Group (home.saxo)
Sweden And Finland Are Getting Closer To Becoming NATO Members

Sweden And Finland Are Getting Closer To Becoming NATO Members

Kamila Szypuła Kamila Szypuła 22.02.2023 12:24
Over the centuries, countries have made alliances with each other, and in difficult situations they turned out to be crucial. Therefore, NATO membership may be crucial for many countries. In this article: Sweden and Finland are on track for NATO membership Increase in salaries in the automotive industry Difficult challenge Sweden and Finland are on track for NATO membership Sweden and Finland are on track for NATO membership this year, despite tense negotiations with Turkey over their admission. Currently, NATO consists of 30 countries - 28 European and two North American. Turkey's reasons for opposing Sweden and Finland's admission to NATO are complex, emotional, and steeped in decades. Turkey's opposition to Sweden's and Finland's membership in NATO focuses on their harboring fighters from the Kurdistan Workers' Party (PKK). Opposition to Finland's membership is of a slightly different nature. The country has a much smaller Kurdish population than the neighboring country, but the foreign policies of both are similar. Both Sweden and Finland blocked arms sales to Turkey in 2019 during its military clash with Kurdish groups in Syria. Turkish President Recep Tayyip Erdogan announced this week that the country was ready to resume negotiations after suspending them indefinitely at the end of January. Hungary is the second opponent of the ratification, although local media reported on Tuesday that its parliament could ratify Finland and Sweden's NATO membership early next month. These are signals that the membership of both countries is getting closer. Sweden and Finland's NATO membership just a 'matter of time,' Swedish foreign minister says https://t.co/lg4hrBPjSU — CNBC (@CNBC) February 22, 2023 Read next: Consumers Are Spending More On Food, So Walmart And Home Depot Are Making Cautious Predictions| FXMAG.COM Increase in salaries in the automotive industry As one of the largest employers in Japan, Toyota has long been a leader in spring employee talks, which are in full swing at large companies. Toyota will accept trade unions' demand for the biggest increase in basic wages and bonuses in 20 years. The automaker's future chief executive Koji Sato said the decision to fully accept the union's demands during the first round of talks was not just for Toyota, but for industries as a whole. Honda Motor said it had agreed to union demands for a 5% pay rise. Honda's average monthly base salary increase of 12,500 yen ($92.70) is the largest jump since at least 1990. Toyota, the world's biggest automaker, said it would accept a union demand for the biggest base salary increase in 20 years and a rise in bonus payments, as Japan steps up calls for businesses to hike pay. More here: https://t.co/8wSnCZe8Os — Reuters Business (@ReutersBiz) February 22, 2023 Difficult challenge It will be another challenging year. In times of heightened uncertainty for the global economy, India's strong performance remains a bright spot. The reality is that growth is still below normal and price pressure is still too high. And after three years of upheaval, too many economies and people are still suffering badly. Around the world, many households are struggling to make ends meet due to the high cost of living. Millions cannot afford fuel for heating or cooking. Subsequent upheavals increased poverty, threatening decades of progress. Supporting the weak is crucial in all countries. It all makes that the politicians of the G20 economies face a difficult challenge. This year could be a turning point for the global economy, but growth is still low, price pressures remain, and too many economies are still hurting badly after 3 years of shocks. Read more in a new #IMFBlog by @KGeorgieva ahead of the G20. https://t.co/LqPHQXSDmO pic.twitter.com/JP56Q1AQ9e — IMF (@IMFNews) February 22, 2023
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

Earnings season: Disney, Toyota and Nintendo publish their results this week

Saxo Bank Saxo Bank 08.05.2023 15:06
Summary:  The FOMC meeting produced a downshift in forward guidance, but avoided pre-committing to a pause in tightening, deferring to incoming data. Alas, the market decided that the backdrop supports the idea of the Fed pausing here cutting rates more than 75 basis points by year-end. Equity markets ended the day lower, perhaps spooked by the ongoing downdraft in bank stocks and concerns for the economic outlook, but rebounded partially in a choppy overnight session. ECB on tap today. What is our trading focus? US equities (US500.I and USNAS100.I): will the market twist Fed’s arm? US equity benchmarks rose on Friday with some stability in the banking sentiment as KRE regional banking ETF rose 6% and PacWest surged 82%. US nonfarm payroll report surprised to the upside for April and added to sentiment. The market’s interpretation of labor data has changed, where last several months of hot data meant Fed could hike further, and that spooked equity markets, but the latest data has been a relief that economic momentum will continue to hold. The market continues to be dovish pricing in 75-100bps of rate cuts by the December FOMC meeting. Nasdaq 100 was up over 2% with Apple (AAPL) surging just shy of 5% after a strong earnings report, particularly driven by iPhone sales, in addition to a fresh $90bn buyback programme. S&P500 was up 1.9% led by gains in led by gains in banks stocks. FX: JPY weakens as Japan returns from Golden Week Dollar’s spike following the hot NFP report on Friday was short-lived as Fed pricing continued to see no hike in June with cuts still priced through year-end amid the short-term banking uncertainty. USDJPY however rose back above 135 briefly in early Asian hours as Japan traders returned from a 5-day Golden Week holiday in which time JPY gained considerable strength on the back of banking sector risks. BOJ meeting minutes from the March meeting, which was Kuroda’s last meeting, continued to signal a dovish bent. NZDUSD supported at 0.63 after last week’s strength driven by the Q1 jobs data, while AUDUSD is also strong at 0.6750 following the surprise RBA rate hike last week and as AUD responded, together with CAD (more below on Macklem speech last Thursday) and the Scandie currencies, to the shift in sentiment and, to a degree, the rally in commodity prices, especially crude. Crude oil: firming up after heavy selling last week Oil has opened the week firmer, extending Friday’s gains after the strong US job report helped ease concerns of an imminent recession, furthermore an oversold market condition combined with Brent and WTI both managing to find support ahead of their March lows forced recently established short sellers to seek cover, potentially highlighting that the recent selloff was overdone. EIA’s Short-term Energy Outlook on Tuesday as well as OPEC’s monthly report on Thursday should shed some further light on the current demand and supply outlook. Earnings from Saudi Aramco will also be on watch. Speculators responded to the recent weakness by cutting their net long in Brent and WTI by one-quarter to 295k lots while the ICE gasoil (diesel) short hit a fresh +7 year high. Gold (XAUUSD) holds above key support with incoming data in focus After hitting a fresh record high last Thursday, gold dropped back to $2k after Friday’s strong jobs report pushed Treasury yields higher, before making a steady recovery towards the current level around $2020. In our latest update we highlighted that gold’s biggest short-term challenge remains elevated rate cut expectations, leaving the market exposed to a correction should incoming data not support these projections. Friday’s strong job report lowered the end of year rate cut expectation by a 25bps to around 75bps. The World Gold Council said bullion demand from central banks slowed purchases sharply in the first quarter. China stood out as an active buyer, adding to its gold reserves for a sixth straight month in April. ETF investors have maintained an unchanged position for the past two weeks around 93.5million ounces while hedge funds have increased length to a fresh one-year high at 14.80 million. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) sell off on strong US data US yields rebounded Friday, especially after the release of a strong April nonfarm payrolls growth (although this was partially spoiled by a significant negative revision of the March data) but also as regional banks recovered sharply Friday. The recovery in yields took the 2-year and 10-year benchmark yields comfortably back into the range, trading this morning at 3.93% and 3.43%, respectively. What is going on? Delayed reaction to Bank of Canada governor Macklem’s speech The Canadian dollar rallied sharply on Friday in what appears a delayed reaction to a speech last Thursday from Bank of Canada Governor Macklem, who admitted that the Bank of Canada may need to tighten policy further and generally indicating more uncertainty on the path to returning inflation to 2%. "If we start to see signs that inflation is likely to get stuck materially above our 2% target, we are prepared to raise rates further”. The same speech also fretted the risk of uncertain financial conditions, so the reaction was limited Thursday, but when financial conditions/risk sentiment cleared dramatically on Friday, CAD was the strongest among G10 currencies Friday, rallying more than 1% against the US dollar as USDCAD returned below its 200-day moving average and below 1.3400. The next level of note is the April pivot low of 1.3302. Warren Buffett cautious of US slowdown and US-China tensions In the annual shareholder meeting over the weekend, Warren Buffett’s Berkshire Hathaway disclosed that it has sold shares worth $13.3bn in the first quarter and bought stocks for a fraction of that figure. The company’s cash pile has risen by $2bn since the start of this year to $130.6bn, its highest level since the end of 2021. Buffet was somewhat cautious about the economic momentum in the US, and said he expected earnings to decline in most of its businesses this year. On Apple, he said it was one of the better businesses they own, and also disclosed that they won’t be making an offer for full control of Occidental Petroleum suggesting potential second thoughts on the oil industry. Meanwhile, Buffett continued to highlight opportunities in Japan, while being cautious of US-China tensions. Berkshire revealed last month it had increased its stakes in Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co and Sumitomo Corp to 7.4%, and Buffett said his company might buy more but the stakes won’t go above 9%. Read next: Expect the ECB to keep increasing rates at the short-term, at least until the summer| FXMAG.COM Hedge funds exodus from commodities gathers momentum For a second consecutive week, money managers were heavy sellers of commodities in the week to May 2. Overall, the net long across the 24 major commodity futures markets we track in our weekly update was cut by one-third to just 700k lots, the lowest since June 2020. The reduction being driven by heavy long liquidation of energy, as the crude oil roller coaster continued to wrongfoot momentum following traders, as well as the grains sector where speculators turned net short the sector for the first time since August 2020. The hardest hit last week was Brent and WTI crude oil and gasoil, as well as soybeans, corn and sugar. The major exceptions being gold and silver, both seeing continued demand. What are we watching next? US April CPI is up Wednesday The next macro calendar event risk of note is this Wednesday’s US April CPI release, with the consensus expectations looking for +0.4%/5.0% for the headline and +0.3%/+5.5% for the core, Ex Food and Energy, reading. The low core YoY reading for the cycle was the 5.4% registered back in February. Earnings to watch The conclusion on the Q1 earnings season continues to be that falling operating margins causing operating profit to slightly decline q/q and y/y with Nasdaq 100 earnings showing the best relative performance. This week the pace of earnings will slow down from the previous three weeks, but there are still plenty of interesting earnings releases to watch. Our focus this week is on earnings KKR (today), Airbnb (Tuesday), Vestas Wind Systems (Wednesday), Disney (Wednesday), Toyota (Wednesday), and Richemont (Friday). Monday: Westpac Banking, PayPal, KKR, Devon Energy, BioNTech, Palantir Technologies Tuesday: Suncor Energy, Daimler Truck, Nintendo, Amadeus IT, Endesa, Alcon, Airbnb, Duke Energy, Occidental Petroleum, Electronic Arts, Coupang, Rivian Automotive Wednesday: Nutrien, Vestas Wind Systems, Genmab, Credit Agricole, Siemens Healthineers, E.ON, Toyota, SoftBank, Panasonic, Compass, Disney, Trade Desk, Li Auto, Roblox Thursday: Verbund, Coloplast, Engie, Deutsche Telekom, Merck, Bayer, Hapag-Lloyd, RWE, Takeda Pharmaceuticals, Honda Motor, 3i Group, Ing Groep, JD.com Friday: Societe Generale, Allianz, Richemont Economic calendar highlights for today (times GMT) 1400 – ECB Chief Economist Philip Lane to speak 1800 – US Fed releases Senior Loan Officer Survey 2000 – US Fed releases May Financial Stability Report 2045 – US Fed’s Kashkari (Voter 2023) to speak 0030 – Australia May Westpac Consumer Confidence Source: Global Market Quick Take: Europe – May 8, 2023 | Saxo Group (home.saxo)
US electric vehicle market set for sustained growth despite stricter subsidy rules

Is automotive branch getting better after months of supply chain issues and chips shortage? HFM Analyst talks Toyota, Volkswagen and BMW earnings

Marco Turatti Marco Turatti 12.05.2023 12:24
For many months now it's been terribly hard for anybody to order a car you really want with every selected features. Supply chain issues and chips shortage made it a big challendge for automotive branch to produce cars effectively and sell them for a reasonable price. That's why we ask HF Markets analyst, Marco Turatti about the industry state and earnings of Toyota, VW and BMW. FXMAG.COM: Is automotive branch getting better after months of supply chain issues and chips shortage? Please comment on Toyota, VW and BMW earnings. Marco Turatti (HF Markets): In 2023, a fairly strong global automotive market is expected, with global production growth of 3% thanks to a more stable supply chain (as well as more stable raw material prices). That is according to JPMorgan, at least. The supply side of semiconductors started to improve in 2022 thanks to an increase in productive capacity at the same time that a decline in sales in the consumer electronics sector allowed resources to be shifted towards the automotive market (as happened in Taiwan), which is in full swing due to the transition to electric. However, the fact that cars are using increasingly powerful and specific chips could give rise to new bottlenecks towards the end of the year that are expected to be fairly minor. Read next: Even though JPMorgan Chase and Wells Fargo, reported solid earnings, their reports showed weakness in deposits and declines in net interest income| FXMAG.COM Marco Turatti (HF Markets): The renewed availability of productive factors will unleash competition worldwide but especially on the Chinese market, the largest in the world (and where 'small' local producers are eating up market shares); at the same time it is expected that demand may slacken mainly in Europe (according to BMW). Toyota plans to multiply its production of purely electric vehicles (non-hybrid) by 5 to 202,000 units before March 2024 Marco Turatti (HF Markets): Looking at TOYOTA, which was the last to present results on 10/05, it plans to multiply its production of purely electric vehicles (non-hybrid) by 5 to 202,000 units before March 2024. VOLKSWAGEN will try to recover the lost market share in the Asian giant (sales -14%, offset by good data in the EU and the US), focusing however on maintaining positive margins as close as possible to 8% as they are for the traditional combustion engine segment: therefore, the focus will not be on volumes or price reductions. This low margin stress situation was more pronounced for European producers, where supply chain problems were felt more than in other areas in 2022: for example, BMW also adopted a pricing strategy opposite to Tesla's, raising prices on average. Revenues increased by 28% ($142.6B) while earnings registered +12%, less than what analysts expected. Marco Turatti (HF Markets): In any case, everything points to a healthy 2023 for the automotive market and a competition that is once again more intense due to the full availability of productive factors.
EXMO.COM analyst: Currently, Tesla is still trying to conquer the market by prioritising revenue over profit

Toyota’s (TM) Q1 profit edged up 3% from the previous year on robust sales. Are automotive companies’ share prices currently undervalued?

David Kindley David Kindley 12.05.2023 12:25
We continue to share analysts thoughts on automotive industry. Earlier today we published a comment of Marco Turatti. This time it's over to Orbex's David Kindley. David Kindley (Orbex): In 2022, automakers worldwide were hit by a shortage of computer chips and other auto parts due to the global supply chain disruptions caused by the pandemic. In 2023, with supply chain bottlenecks finally easing, the world's biggest car makers have reported very strong Q1 earnings despite being faced with slowing global demand, persistent inflation, and higher raw-material costs. Toyota Q1 earnings David Kindley (Orbex): Specifically, Toyota’s (TM) Q1 profit edged up 3% from the previous year on robust sales. The automaker posted a sharp increase in sales for its first annual report offered under new Toyota CEO Koji Sato with $4 billion in quarterly net profit, up from $3.9 billion in the previous quarter. Quarterly sales also soared nearly 20% to $72 billion. The strong earnings came despite Toyota stating that soaring raw material costs also affected its bottom line. Read next: It should be noted that BoJ’s decade-long ultra-loose stimulus program has drawn intense criticism for broadening price pressures in the world's third-largest economy | FXMAG.COM Volkswagen Group in the first quarter of 2023 David Kindley (Orbex): Meanwhile, Volkswagen Group posted a solid start to the 2023 fiscal year, with operating profit before valuation effects from commodity hedging, increasing by 35% to $7.8 billion. VW’s first-quarter sales revenue also rose by 22% to a total of $83 billion, driven by a recovery in sales volumes in Europe and North America. BMW AG Q1 earnings beat expectations David Kindley (Orbex): In the case of BMW AG, the company’s first-quarter earnings also beat expectations, even though the company left its 2023 outlook unchanged due to softening global demand. Specifically, the carmaker reported an automotive earnings margin of 12.1% and pledged to boost earnings per share with a new $2.2 billion share buyback program. David Kindley (Orbex): It’s important to note that as most automotive companies’ share prices are currently undervalued, they could present solid long-term “buy and hold” opportunities for traders and investors.
A Bright Spot Amidst Economic Challenges

A Bright Spot Amidst Economic Challenges

Ipek Ozkardeskaya Ipek Ozkardeskaya 25.09.2023 11:05
A bright spot If there is one bright spot in Britain with all this, it is the FTSE100. First, the rising energy prices are good for the energy-rich FTSE100. Second, softer sterling makes these companies more affordable for international investors, who should of course think of hedging their sterling exposure, and third, more than 80% of the FTSE100 companies' revenues come from oversees, which means that when they convert their shiny dollar revenues back to a morose sterling, well, they can't really complain with a stronger dollar. Consequently, if a more dovish BoE is bad for sterling, the combination of a hawkish Fed and a dovish BoE and a pitiless OPEC is certainly good for the FTSE100. The index has been left behind the S&P500 this year, as the tech rally is what propelled the American index to the skies, but that technology wind is now turning direction. The FTSE 100 broke its February to September downtrending trend to the upside and is fundamentally and technically poised to gain further positive traction, whereas, the S&P500 is heaving a rough month, with technology stocks set for their worse performance this year, under the pressure of rising US yields, which make their valuations look even more expensive.   Interestingly, the US 2-year yield peaked at 5.20% after the Fed's hawkish pause this week and is back headed toward the 5% mark, but the gap between the US 2-year yield and the top range of the Fed funds rate is around 40bp, which is a big gap, and even if the Fed decided not to hike rates, this gap should narrow, in theory. If it does not, it means that bond traders are betting against the Fed's hawkishness and think that the melting savings, the loosening jobs market, tightening bank lending conditions and strikes, and restart of student loan repayments and a potential government shutdown could prevent that last rate hike to happen before this year ends. And indeed, activity on Fed funds futures gives more than 70% chance for a third pause at the FOMC's November meeting, and Goldman Sachs now sees the US expansion slow to 1.3% from 3.1% printed in the Q3. KPMG also warned that a prolonged auto stoppage may precipitate contraction. And if no deal is inked by noon today, the strikes will get worse.   One's bad fortune is another's good fortune  The Japanese auto exports surged big this year, they were 50% higher in yen terms. The yen is certrainly not doing well, but yes, you can't have it all. That cheap yen is one of the reasons why the Japanese export so well outside their country. And in case you missed, the BoJ did nothing today to exit their hyper-ultra-loose monetary policy. They didn't even give a hint of normalization, meaning that the yen will hardly strengthen from the actual levels. In the meantime, Toyota, Mitsubishi and Honda shares are having a stellar year, and the US strikes will only help them do better. 

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