84% probability of June rate hike.
VIX at 9.8.
Bitcoin at US$2,328.
Saudi Reserves Dip Below $500 Billion as BofA Sees Headwinds.
Saudi Arabia’s net foreign assets dropped below $500 billion in April for the first time since 2011 even after the kingdom raised $9 billion from its first international sale of Islamic bonds.
The Saudi Arabian Monetary Authority, as the central bank is known, said on Sunday its net foreign assets fell by $8.5 billion from the previous month to about $493 billion, the lowest level since 2011. That brings the decline this year to $36 billion."
Is China’s economy turning Japanese?
Three decades after Tokyo’s property bubble burst causing severe damage there are fears that Beijing faces a similar fate"
The Daily Shot: 30-May-17.
- The Bureau of Economic Analysis reported an upward revision to the first quarter GDP growth (from 0.7% to 1.2%).
- Business investment and consumer spending saw the largest adjustments from the earlier release.
- The Bloomberg US Financial Conditions Index hit the highest level since 2005.
- Speculative accounts keep increasing their bets against the loonie in response to the diverging monetary policies in Canada and the US.
- The offshore renminbi risk reversals indicate that for the first time in years, currency traders see upside risk to China’s currency (downside risk to the dollar).
- China’s industrial profits declined, but are still 14% above the previous year’s level.
- Beijing has “plugged” the capital outflows, as companies ease the invoicing games used to move dollars abroad.
- Here is an updated total debt-to-GDP ratio for China.
- Brazil’s government debt-to-GDP ratio seems to have peaked.
- Saudi Arabia’s loan growth turns negative for the first time in years.
- UK polls point to a narrowing gap between Labour and Conservatives. This trend has been making some market participants uneasy, sending the pound lower.
- There is a new political risk in Italy – a possibility of early elections. Italian banks dipped on the news.
- Italy has the greatest support for a populist party among the Eurozone nations.
- The euro area loan balances continue to improve (gradually). Here are household and business loan balances on a year-over-year basis (adjusted for sales and securitization).
- This chart shows the central banks’ balance sheet size of the four largest advanced economies.
- Retail bankruptcies have accelerated this year. The second chart shows the default breakdown by sector.
- More Americans are taking cash out of their house by refinancing.
- Implied volatility in the rates markets keeps drifting lower. The MOVE index of Treasury volatility across the curve hit the lowest level since 2014.
- Speculative accounts have reversed their 10yr Treasury futures exposure from a record short after the US elections to holding the longest net position in a decade.
- Silver increased to a 4-week high of 17.447 USD/t. oz.
- Gold increased to a 4-week high of 1270 USD/t oz.
- Retail sales in Japan rose 3.2 percent year-on-year in April of 2017 from a 2.1 percent gain in March and beating market estimates of a 2.3 percent rise. It was the sixth straight month of increase in retail sales and the fastest since April 2015, as sales went up for most categories: petroleum products (11.9 percent from 15.0 percent in a month earlier), motor vehicles (6.0 percent from 8.6 percent), food and beverages (1.5 percent from 0.2 percent), machinery and equipment (4.1 percent from 4.6 percent), pharmaceuticals and cosmetics (5.3 percent from 3.2 percent) and textile, clothing and personal belongings (6.0 percent from -4.3 percent). In contrast, sales for commodities fell 0.2 percent (from -3.1 percent). On a monthly basis, retail sales rose 1.4 percent, following a 0.2 percent gain in the prior month.
- India 10 Year Government Bond Yield increased to 6.67%.
- Italy 10 Year Government Bond Yield increased to 2.182%.
- Canada 10 Year Government Bond Yield decreased to 1.411%.
- Japan 10 Year Government Bond Yield decreased to 0.039%.
- Portugal 10 Year Government Bond Yield increased to 3.153%.
- Netherlands 10 Year Government Bond Yield decreased to 0.517%
- France 10 Year Government Bond Yield decreased to a 4-week low of 0.738%
- Germany 10 Year Government Bond Yield decreased to a 4-week low of 0.309%
- Stocks in Argentina Hit All-time High. Merval increased to an all-time high of 22358.
- Macau's economy advanced 10.3 percent year-on-year in the first quarter of 2017, following a 7 percent expansion in the previous period. It is the strongest growth since the first quarter of 2014."
Random tech news.
"Japan to finalize strategy for drones, self-driving trucks on June 9: government sources.
Japan aims to finalize on June 9 plans to allow package delivery by drone sometime from 2020 and the commercialization of self-driving trucks by 2022, as it scrambles to breathe new life into its corporate sector, sources told Reuters.
The government also plans to encourage more usage of Big Data and artificial intelligence to help diagnose medical conditions, said several government sources, who declined to be identified because the plans have not yet been finalised.
“The priorities are improving life expectancy, revolutionizing transport, modernizing supply chains, improving infrastructure and using financial technology,” said one of the sources...
The move to drones and autonomous vehicles is urgent for Japan, because its workforce has shrunk dramatically enough to force companies to start scaling back operations.
In April, Japan’s biggest parcel shipper, Yamato Holdings Co, which handles delivery of one in every two packages, stunned consumers by saying it would cut delivery volumes and hike prices because it did not have enough workers."
'Just-In-Time' for the Tokyo Olympics!
"Tech giants acquired 34 AI startups in Q1 2017.
A total of 34 artificial intelligence startups were acquired in the first quarter of this year, more than twice the amount of activity in the year-ago quarter, according to the research firm CB Insights.
Tech giants seeking to reinforce their leads in artificial intelligence or make up for lost ground have been the most aggressive buyers. Google has acquired 11 AI startups since 2012, the most of any firm, followed by Apple, Facebook and Intel, respectively, according to CB Insights.
The first quarter also saw one of the largest deals to date as Ford Motor Company invested $1 billion in Argo AI, founded by former executives on self-driving teams at Google and Uber."
"ARM wants to boost AI performance by 50X over 5 years.
ARM is unveiling its first Dynamiq processor designs today, and the company said that the family will boost artificial intelligence performance by more than 50 times over the next three to five years."
"21 Industries Other Than Auto That Driverless Cars Could Turn Upside Down.
It’s all but a certainty that autonomous or driverless vehicles will be widely used in the United States at some point over the next two decades...
Clearly tech and auto companies stand to gain, but many other industries could face serious upheavals unless they are able to adapt to the many changes self-driving cars will bring to the market."
"One-third of unicorns minted this year are Asian, China leads the region.
This year 21 new firms have entered the unicorn club — venture-backed firms valued at over $1 billion — and one-third of these freshly minted firms hail from Asia.
Among the Asian firms that came to be valued at $1 billion or more are — India’s ReNew Power Ventures and the Chinese companies: NetEase Cloud, Toutiao, NIO, Ofo, URWork, and Zhihu."
"ADB Sells $46 Million Green Bonds To Fund Renewable Energy Projects In India.
According to media reports, the ADB raised $46.19 million to meet its funding commitments to India’s ReNew Power Ventures Limited. The Bank had committed debt funding to the independent power producer earlier this year for its 709-megawatt solar and wind energy capacity.
The Bank, along with JICA LEAP Fund, pledged $390 million for ReNew’s projects in the Indian states of Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh and Telangana.
The bonds were offered at a very attractive rate of 6% with maturity of 3.75 years. Interestingly, 70% of the subscribers to the bond issue were from Europe, and 21% of the buyers were from the Americas, while only 9% were from Asia."
"IFC to extend $60m in loan to India-based vaccine maker Biological E
International Finance Corp, the private investment arm of World Bank, has agreed to extend $60 million as loan to vaccine manufacturer Biological E Ltd.
“The proposed investment by IFC involves an “A” loan to, and subscribing to Non-Convertible Debentures of, BioE, aggregating $60 million to part-finance the Project,” the investor said in a disclosure.
Biological E develops and manufactures vaccines which are supplied within India and to other developing and middle-income countries either directly or through supplies to United Nations Children’s Fund (UNICEF) and the Global Alliance for Vaccines and Immunizations (GAVI). In pharmaceuticals, the company manufactures generic formulations for the Indian market.
The Hyderabad-based company has five manufacturing facilities in India, and research and development facilities in India and France."
SIGGRAPH 2017 (7/30 to 8/3) technical papers preview.
Many cool applications of neural style transfers.
'Random Place' today - Dancing Forest.
Events on 5/30 (ET).
France GDP, 2:45 AM ET (0.3% Q/Q, 0.8% Y/Y consensus)
Italy PPI, 4:00 AM ET
Germany CPI, 8:00 AM ET (-0.1% M/M, 1.6% Y/Y consensus)
US Case-Schiller HPI, 9:00 AM ET (0.4% NSA M/M, 5.8% NSA Y/Y consensus)
US Consumer Confidence, 10:00 AM ET (119 consensus)
Japan Industrial Production, 7:50 PM ET (4.5% M/M consensus)
China Manufacturing PMI, 9:00 PM ET