Uptick In Inflation Data Continues To Be Played Down By Central Bankers

• UK Q2 Final GDP revised higher but concerns on growth front as furlough scheme ends today (Sept 30th). EU region inflation continued its update as central bankers reiterate view move was transitory (session saw German States, France and Italian CPI readings).
• Focus on US infrastructure vote in House.

Asia

• Japan Aug Preliminary Industrial Production M/M: -3.2% v -0.5%e; Y/Y: 9.3% v 12.1%e.
• Japan Aug Retail Sales M/M: -4.1% v -1.7%e ; Y/Y: -3.2% v -1.0%e.
• China Sept Manufacturing PMI (Govt Official) registered it 1st contraction in 18 months (49.6 v 50.0e).
• China Sept Caixin PMI Manufacturing moved out of contraction (50.0 v 49.5e).
• China PBoC again injects liquidity into system via 14-day Reverse Repo (**Note: 10th straight session of PBoC net liquidity injection).

Europe

• BOE Gov Bailey stated that the rate of recovery had slowed over recent months, and that slowing was continuing. GDP would not recover to pre-pandemic levels until early next year.
• UK’s furlough scheme to finish on Sept 30th (today). Some badly hit sectors seek continued support.
• G7 finance ministers said to reach a common understanding on some important remaining issues before OECD and G20 tax meetings during week of Oct 4th.

Americas

• Sen Maj Leader Schumer (D-NY) says he has agreement with Republicans for stopgap funding bill vote on Thursday (Sept 30th). Senate to hold several amendment votes before they vote on the continuing resolution.
• House Speaker Pelosi stated that it planned to have a vote on Thursday for Infrastructure Bill.
• Congressional Budget Office (CBO) stated that Treasury to run out of cash along with special measures to avoid a federal payments default by late October or early November.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.71% at 458.24, FTSE +0.69% at 7,157.05, DAX +0.11% at 15,382.75, CAC-40 +0.61% at 6,600.96, IBEX-35 +0.37% at 8,913.50, FTSE MIB +0.49% at 25,862.00, SMI +0.85% at 11,726.91, S&P 500 Futures +0.71%].
• Market Focal Points/Key Themes: European indices open higher across the board but moderated gains as the session progressed; better performing sectors include technology and materials; while consumer discretionary and industrials sectors among the underperformers; oil and gas subsector under pressure following drop in crude prices; Eutelsat rejects offer from Drahi; Sinch acquires Pathwire; Playtech to sell its financial trading division; earnings expected during the upcoming US session include McCormick, CarMax and Bed Bath and Beyond.

Equities

• Consumer discretionary: H&M [HMB.SE] +1% (earnings), boohoo.com [BOO.UK] -11% (earnings).
• Healthcare: Roche [ROG.CH] +1.5% (trial data).
• Industrials: Diageo [DGE.UK] +3% (trading update), Sulzer [SUN.CH] -34% (spin-off).
• Technology: Sinch [SINCH.SE] +5% (acquisition; share issue).
• Telecom: Eutelsat [ETL.FR] +17% (rejected offer).

Speakers

• ECB’s Centeno (Portugal) stated that inflation to return to level below 2% in 2022.
• Sweden Central Bank (Riksbank) Sept Minutes noted that inflation was unexpectedly high in recent months due to energy prices. Needed to look through transitory inflationary factors. Few members did discuss rate path with a rise at the end of forecast horizon.
• Sweden Central Bank (Riksbank) Gov Ingves noted in the Sept Minutes that the Repo Rate needed to remain at zero for a while; too early to change course. Inflation overshoot of 2% target was not a problem and had effective tools if inflation did not fall back.
• Ireland Fin Min Donohoe (Eurogroup chief) stated that the upcoming OECD meeting on Oct 8th would be critical.
• UK Junior Fin Min Clark stated that was impossible to estimate how many people would lose their jobs after Furlough scheme ended (**Reminder: UK’s furlough scheme to finish on Sept 30th (today).
• Japanese Incoming PM Kishida said to appoint Hagiuda as new Japan Chief Cabinet Secretary.
• BOJ Gov Kuroda: Reiterates overall economic assessment that economy is trending upwards but remains in a severe state. Reiterated view that CPI to gradually rise as economy improved and fading effects from lower mobile phone fees. Reiterated stance that would not hesitate to ease further if needed.
• Philippines Central Bank (BSP) Gov Diokno reiterated that CPI to be at upper end of range in 2021; reiterated stance that could adjust monetary policy tools if needed.
• Thailand Central Bank reiterated view to closely watch the THB currency (Baht) so it did not hamper the economic recovery.
• China Industry Ministry (MIIT) stated that it saw pressure to stabilize industrial economic growth.

Currencies/Fixed Income

• USD holding onto its recent gains as FED looked poised to begin withdrawal of stimulus soon. Greenback also aided via demand for safe havens as recent Chinese data put more wrinkles into the global recovery.
• GBP managed to recover from session lows after Q2 Final GDP was revised higher. Recent cautious comments from BOE Gov Bailey put some headwinds into the data. Dealers noted that monthly GDP data showed the overall recovery essentially stalled in July, GBP/USD remained below the pivotal 1.36 level.
• EUR/USD hovered around the 1.16 level in the session despite another uptick in European inflation data. ECB speak has been vocal in claiming the recent up-tick in inflation was transitory.
• USD/JPY probing a key resistance level of 112 as higher US bond yield providing the dollar with tailwinds.

Economic data

• (NL) Netherlands Aug Retail Sales Y/Y: 1.9% v 3.9% prior.
• (DE) Germany Sept CPI North Rhine Westphalia M/M: 0.0%t v 0.1% prior; Y/Y: 4.4% v 4.2% prior.
• (UK) Q2 Final GDP Q/Q: 5.5% v 4.8%e; Y/Y: 23.6% v 22.2%e.
• (UK) Q2 Final Private Consumption Q/Q: 7.2% v 7.3%e; Government Spending Q/Q: 8.1% v 6.1%e; Gross Fixed Capital Formation Q/Q: +0.8% v -0.5%e; Exports Q/Q: 6.2% v 3.0%e; Imports Q/Q: 2.4% v 6.5%e.
• (UK) Q2 Final Total Business Investment Q/Q: 4.5% v 2.4%e; Y/Y: 12.9% v 9.7%e.
• (UK) Q2 Current Account Balance: -£8.6B v -£15.7prior.
• (UK) Sept Nationwide House Prices M/M: 0.1% v 0.6%e; Y/Y: 10.0% v 10.7%e.
• (DK) Denmark Q2 Final GDP Q/Q: 2.8% v 2.3% prelim; Y/Y: 9.8% v 8.5% prelim.
• (DK) Denmark Aug Gross Unemployment Rate: 3.6% v 3.7% prior; Unemployment Rate (seasonally adj): 3.1% v 3.3% prior.
• (FI) Finland July Final Trade Balance: -€0.4B v -€0.5B prelim.
• (NO) Norway Aug Credit Indicator Growth Y/Y: 5.3% v 5.3% prior.
• (ZA) South Africa Aug M3 Money Supply Y/Y:2.3% v 2.0%e; Private Sector Credit Y/Y: 1.1% v 1.0%e.
• (FR) France Sept Preliminary CPI M/M: -0.2% v -0.1%e; Y/Y: 2.1% v 2.2%e.
• (FR) France Sept Preliminary CPI EU Harmonized M/M: -0.2% v -0.1%e; Y/Y: 2.7% v 2.8%e.
• (FR) France Aug PPI M/M: 1.0% v 1.5% prior; Y/Y: 10.0% v 9.0% prior.
• (FR) France Aug Consumer Spending M/M: 1.0% v 0.0%e; Y/Y: -5.4% v -5.4%e.
• (ES) Spain Aug Adjusted Retail Sales Y/Y: -0.9% v+ 0.1%e; Retail Sales (unadj) Y/Y: -0.1% v +0.1% prior.
• (CH) Swiss Sept KOF Leading Indicator: 110.6 v 110.0e.
• (CH) Swiss Q2 Foreign exchange transactions (CHF): 5.4B v 0.3B prior.
• (AT) Austria Aug PPI M/M: 0.8% v 1.7% prior; Y/Y: 9.5% v 8.6% prior.
• (CZ) Czech Q2 Final GDP (3rd reading) Q/Q: 1.0% v 1.0%e; Y/Y: 8.1% v 8.2%e.
• (TR) Turkey Aug Trade Balance: -$4.3B v -$4.3Be.
• (HU) Hungary Aug PPI M/M: 0.4% v 3.5% prior; Y/Y: 14.4% v 14.8% prior.
• (TH) Thailand Aug Current Account Balance: -$2.5B v -$1.6Be; Overall Balance of Payments (BOP): +$3.8B v -$0.3B prior; Trade Account Balance: $1.9B v $3.4B prior; Exports Y/Y: 8.2% v 21.7% prior; Imports Y/Y: : 39.6% v 36.6% prior.
• (DE) Germany Sept Net Unemployment Change: -30.0K v -37.0Ke; Unemployment Claims Rate: 5.5% v 5.5%e.
• (IT) Italy Aug Unemployment Rate: 9.3% v 9.2%e.
• (DE) Germany Sept CPI Hesse M/M: 0.1% v 0.0% prior; Y/Y: 4.0% v 3.7% prior.
• (DE) Germany Sept CPI Bavaria M/M: 0.0% v 0.1% prior; Y/Y: 4.2% v 3.9% prior.
• (DE) Germany Sept CPI Baden Wuerttemberg M/M:0.0 % v 0.0% prior; Y/Y: 3.8% v 3.6% prior.
• (NO) Norway Central Bank (Norges) Oct Daily FX Purchases (NOK): -1.7B v -1.7B prior.
• (CZ) Czech Aug M2 Money Supply Y/Y: 9.9% v 10.2% prior.
• (ES) Spain July Current Account Balance: €2.5B v €0.3B prior.
• (PT) Portugal Sept Preliminary CPI M/M: +0.9% v -0.2% prior; Y/Y: 1.5% v 1.5% prior.
• (PT) Portugal Sept Preliminary CPI EU Harmonized M/M: +0.9%v -0.1% prior; Y/Y: 1.3% v 1.3% prior.
• (HK) Hong Kong Aug Retail Sales Value Y/Y: 11.9% v 6.4%e; Retail Sales Volume Y/Y: 10.6% v 6.7%e.
• (CN) China Q2 Final Current Account: $53.3B v $52.8B prelim.
• (EU) Euro Zone Aug Unemployment Rate: 7.5% v 7.5%e.
• (DE) Germany Sept CPI Saxony M/M: 0.0% v 0.1% prior; Y/Y: 4.1% v 4.0% prior.
• (IT) Italy Sept Preliminary CPI M/M: -0.1% v -0.3%e; Y/Y: 2.6% v 2.4%e.
• (IT) Italy Sept Preliminary CPI EU Harmonized M/M: 1.4% v 1.5%e; Y/Y: 3.0% v 3.0%e.
• (BE) Belgium Aug Unemployment Rate: 6.4% v 6.2% prior.
• (GR) Greece July Retail Sales Value Y/Y: 11.6% v 11.3% prior; Retail Sales Volume Y/Y: 13.3% v 12.2% prior.
• (IS) Iceland Aug Final Trade Balance (ISK): -36.3B v -36.2B prelim.

Fixed income issuance

• (SE) Sweden sold total SEK1.185B vs.SEK1.25B in 2030 and 2038 inflation–linked bonds.

Looking ahead

• (IL) Israel Sept 12-month CPI Forecast: No est v 1.3% prior.
• (MX) Mexico Aug YTD Budget Balance (MXN): No est v -242.7B prior.
• (EG) Egypt Q2 GDP Current Prices Q/Q: No est v -8.4% prior.
• (AR) Argentina Sept Consumer Confidence Index: No est v 39.8 prior.
• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (ZA) South Africa PPI M/M: 0.9%e v 0.7% prior; Y/Y: 7.1%e v 7.1% prior.
• 05:30 (SL) Sri Lanka Sept CPI Y/Y: 6.4%e v 6.0% prior.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.
• 06:00 (IL) Israel Aug Trade Balance: No est v -$2.9B prior (revised from -$3.0B).
• 06:00 (IL) Israel Aug Unemployment Rate: No est v 5.0% prior; Unemployment Rate (including covid effect): No est v 8.4% prior.
• 06:00 (CA) Canada Sept CFIB Business Barometer : No est v 67.1 prior.
• 06:00 (PT) Portugal Aug Industrial Production M/M: No est v 3.4% prior; Y/Y: No est v 0.5% prior.
• 06:30 (IN) India Aug Fiscal Deficit (INR): No est v 469.0B prior.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (BR) Brazil Central Bank Quarterly inflation Report (QIR).
• 07:30 (IN) India Aug Eight Infrastructure (key) Industries: No est v 9.4% prior.
• 08:00 (DE) Germany Sept Preliminary CPI M/M: 0.1%e v 0.0% prior; Y/Y: 4.2%e v 3.9% prior.
• 08:00 (DE) Germany Sept Preliminary CPI EU Harmonized M/M: 0.2%e v 0.1% prior; Y/Y: 4.0%e v 3.4% prior.
• 08:00 (ZA) South Africa Aug Trade Balance (ZAR): 35.0Be v 37.0B prior.
• 08:00 (ZA) South Africa Aug Monthly Budget Balance (ZAR): -40.5Be v -133.2B prior.
• 08:00 (BR) Brazil July National Unemployment Rate: 13.9%e v 14.1% prior.
• 08:00 (CL) Chile Aug Unemployment Rate: 8.4%e v 8.9% prior.
• 08:00 (CL) Chile Aug Retail Sales Y/Y: 30.0%e v 62.2% prior; Commercial Activity Y/Y: No est v 39.6% prior.
• 08:00 (CL) Chile Aug Manufacturing Production Y/Y: 12.2%e v 11.0% prior; Industrial Production Y/Y: 5.9%e v 4.8% prior; Total Copper Production: No est v 470.3K tons.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:30 (US) Q2 Final GDP Annualized (3rd reading) Q/Q: 6.6%e v 6.6% prelim; Personal Consumption: 11.9%e v 11.9% prelim.
• 08:30 (US) Q2 GDP Price Index: 6.1%e v 6.1% prelim; Core PCE Q/Q: 6.1%e v 6.1% prelim.
• 08:30 (US) Initial Jobless Claims: 330Ke v 351K prior; Continuing Claims: 2.80Me v 2.845M prior.
• 08:30 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to raise 2-Week Repurchase Rate by 50bps to 1.25%.
• 08:30 (US) Weekly USDA Net Export Sales.
• 09:00 (RU) Russia Gold and Forex Reserve w/e Sept 24th: No est v $619.8B prior.
• 09:00 (RU) Russia Q2 Final Current Account Balance: No est v $19.9B prelim.
• 09:45 (US) Sept Chicago Purchase Managers Index (PMI): 65.0e v 66.8 prior.
• 10:00 (MX) Mexico Aug Net Outstanding Loans (MXN): No est v 4.633T prior.
• 10:00 (CZ) Czech Central Bank (CNB) Gov Rusnok post rate decision press conference.
• 10:00 (US) Fed’s Williams.
• 10:30 (US) Weekly EIA Natural Gas Inventories.
• 10:30 (ES) ECB’s De Cos (Spain).
• 11:00 (CO) Colombia Aug National Unemployment Rate: No est v 14.3% prior; Urban Unemployment Rate: 14.1%e v 15.0% prior.
• 11:00 (US) Fed’s Bostic.
• 12:30 (US) Fed’s Evans.
• 13:00 (US) Fed’s Bullard.
• 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to raise Overnight Rate by 25bps to 4.75%.
• 14:00 (CO) Colombia Central Bank Interest Rate Decision: Expected to raise Overnight Lending Rate by 25bps to 2.00%.
• 15:00 (AR) Argentina July Wages M/M: No est v 2.3% prior.
• 15:30 (US) Fed’s Harker.
• 17:00 (NZ) New Zealand Sept Consumer Confidence Index: No est v 109.6 prior.
• 19:00 (AU) Australia Sept Final PMI Manufacturing: No est v 57.3 prelim.
• 19:30 (JP) Japan Aug Jobless Rate: 2.9%e v 2.8% prior; Job-To-Applicant Ratio: 1.14e v 1.15 prior.
• 19:50 (JP) Japan Q3 Tankan Large Manufacturing Index: 13e v 14 prior; Outlook Survey: 14e v 13 prior.
• 19:50 (JP) Japan Q3 Tankan Large Non-Manufacturing Index: 0e v 1 prior; Outlook Survey: 5e v 3 prior.
• 19:50 (JP) Japan Q3 Tankan Small Manufacturing Index: -9e v -7 prior; Outlook Survey: -8e v -6 prior.
• 19:50 (JP) Japan Q3 Tankan Small Non-Manufacturing Index: -11e v -9 prior; Outlook Survey: -9e v -12 prior.
• 20:00 (KR) South Korea Sept Trade Balance: $5.1Be v $1.7B prior; Exports Y/Y: 16.0%e v 34.9% prior; Imports Y/Y: 28.0%e v 44.0% prior.
• 20:00 (AU) Australia Sept CoreLogic House Price Index: No est v 1.5% prior.
• 20:01 (IE) Ireland Sept PMI Manufacturing: No est v 62.8 prior.
• 20:30 (JP) Japan Sept Final PMI Manufacturing: No est v 51.2 prelim.
• 20:30 (KR) South Korea Sept PMI Manufacturing: No est v 51.2 prior.
• 20:30 (TW) Taiwan Sept PMI Manufacturing: No est v 58.5 prior.
• 20:30 (ID) Indonesia Sept PMI Manufacturing: No est v 43.7 prior.
• 20:30 (MY) Malaysia Sept PMI Manufacturing: No est v 43.4 prior.
• 20:30 (TH) Thailand Sept PMI Manufacturing: No est v 48.3 prior.
• 20:30 (PH) Philippines Sept PMI Manufacturing: No est v 46.4 prior.
• 20:30 (VN) Vietnam Sept PMI Manufacturing: No est v 40.2 prior.
• 21:30 (AU) Australia Aug Home Loans Value M/M: -0.5%e v +0.2% prior.
• 22:00 (ID) Indonesia Sept CPI M/M: 0.0%e v 0.0% prior; Y/Y: 1.7%e v 1.6% prior; CPI Core Y/Y: 1.3%e v 1.3% prior.