Stocks Drift Sideways Ahead Of Trump-Putin Summit In Helsinki

Jul 16 18, 11:29 GMT

Notes/Observations

Asia:

China GDP and Retail Sales comes ahead of forecast, Industrial production misses
New Zealand June Performance of Services index hits lowest level since Dec 2012
Nikkei closed today for Marine Day

Europe:

China and EU leaders have agreed to boost free trade – Joint statement
UK government could accept amendments to customs bill – BBC report
Tory MP Greening said to call for 2nd UK referendum
In interview President Trump spoke of Europe as a Foe saying “I think the European Union is a foe, what they do to us in trade. Now you wouldn’t think of the European Union, but they’re a foe”
PM May reveals Donald Trump suggested the UK sue the EU over Brexit
Deutsche Bank report prelim Q2 above forecasts, shares rise sharply

Energy

US considering tapping strategic Petroleum reserve to curb gasoline prices ahead of fall elections

Economic Data:

(DK) Denmark Jun PPI M/M: 1.5% v 1.2% prior; Y/Y: 6.8% v 3.9% prior
(IN) India Jun Wholesale Prices (WPI) Y/Y: 5.8% v 5.2%e
(TR) Turkey Apr Unemployment Rate: 9.6% v 9.2%e
(CH) SNB Total Sight Deposits for Week Ended July 13th
(CHF): 576.1B v 576.0B prior
(CZ) Czech May Current Account (CZK): -2.2B v -12.0Be
(IT) Italy May Trade Balance: €3.4B v €2.9B prior; Trade Balance EU: €1.0B v €1.1B prior
(TR) Turkey Jun Central Gov’t Budget Balance (TRY): -25.6B v +2.7B prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 +0.1% at 3,457, FTSE +0.8% at 7,648, DAX -0.2% at 12,549, CAC-40 -0.1% at 5,427; IBEX-35 +0.1% at 9,749, FTSE MIB +0.7% at 220.46, SMI flat at8,864 , S&P 500 Futures +0.1%]
Market Focal Points/Key Themes: European indices opened slightly higher and tracked largely sideways as the session wore on; periphery better performers; risk sentiment positive but not voracious; utilities and materials better performers; automotive sector underperforming, dragged by Peugeot; focus on upcoming Trump-Putin meeting later in the day and potential geopolitical concerns; Chile closed for holiday; upcoming earnings expected in the US session include Bank of America, Blackrock and JB Hunt

Equities

Consumer discretionary: Debenhams DEB.UK -5.8% (credit insurers reduce cover for supplies), L’Oreal OR.FR -0.5% (analyst action), Lagardere MMB.FR +2.1% (analyst action)
Consumer staples: Marine Harvest MHG.NO -2.6% (results)
Financials: Deutsche Bank DBK.DE +5.5% (prelim Q2)
Healthcare: Cellectis ALCLS.FR +7.5% (analyst action), Indivior INDV.UK 31.9% (prelim injuction on generic)
Industrials: OCI OCI.NL +4.1% (analyst action), PSA UG.FR -0.7% (German Transport Min hearing on Opel emissions), VTG VT9.DE +14.5% (3rd party stake sale)
Technology: Dialog Semiconductor DLG.DE -2.8% (outlook), Micro Focus MCRO.UK -4.7% (analyst action)
Telecom: Megafon MFON.RU +6.6% (approves tender offer)

Speakers

(IT) Italy EU Affairs Min Savona: proposes EU to be allowed to spend an extra €50B on public investments
(US) President Trump tweets “Received many calls from leaders of NATO countries thanking me for helping to bring them together and to get them focused on financial obligations, both present & future. We had a truly great Summit that was inaccurately covered by much of the media. NATO is now strong & rich!”

Currencies

Markets have been quiet in a subdued session with a lack of macro driving factors. Cable recovers from Friday lows as President Trump denied comments published in the press on Friday regarding trade with the UK, branding it as fake news. Cable trades at $1.3248, 10 pips off the session highs.

Fixed Income

Bund Futures trade 18 ticks lower at 162.77 as the German Bund yield hovers above 0.30%. Upside targets 163.25 followed by 163.85, while a return lower targets the 159.75 level.
Gilt futures trade at 123.35 higher by 27 ticks as Trump’s apologizes to PM May. Support continues stands at 121.75 then 120.25, with upside resistance at 123.85 then 124.25.
Monday’s liquidity report showed Friday’s excess liquidity fell from €1.871T to €1.867. Use of the marginal lending facility dropped from €135M to €134M.
Corporate issuance saw high grade issuers price $13.6B debt last week

Looking Ahead

07:30 (IN) India Weekly Forex Reserves
08:00 (BR) Brazil May IBGE Services Sector Volume Y/Y: -4.0%e v 2.2% prior
08:00 (IS) Iceland Jun Unemployment Rate: No est v 2.2% prior
08:15 (UK) Baltic Dry Bulk Index
08:30 (US) Jun Import Price Index M/M: 0.1%e v 0.6% prior; Y/Y: 4.6%e v 4.3% prior, Export Price Index M/M: 0.2%e v 0.6% prior; Y/Y: No est v 4.9% prior, Import Price Index ex Petroleum M/M: 0.2%e v 0.1% prior
09:00 (CA) Canada Jun Existing Home Sales M/M: 1.5%e v -0.1% prior
10:00 (US) July Preliminary University of Michigan Confidence: 98.0e v 98.2 prior
11:00 (CO) Colombia May Industrial Production Y/Y: 4.9%e v 10.5% prior
11:00 (CO) Colombia May Retail Sales Y/Y: 5.0%e v 6.3% prior
13:00 (US) Weekly Baker Hughes Rig Count data
14:00 (CO) Colombia Central Bank Jun Minutes