Scottish Court Rejects Bid To Stop Suspension Of Parliament, Euro Zone Core Inflation Remains Stubbornly Low

Notes/Observations

• UK court rejected lawmakers bid to stop PM Johnson suspension of parliament
• Euro Zone inflation remains stubbornly low while unemployment stays at financial crisis lows
• BOJ intensified its efforts to stop benchmark yields from falling to record lows by cutting bond purchases in Sept

Asia:

• (JP) Japan July Jobless Rate: 2.2% v 2.3%e
• Japan Aug Tokyo CPI Y/Y: 0.6% v 0.6%e
• Japan July Retail Sales M/M: -2.3% v -0.9%e; Y/Y: -2.0% v -0.7%e
• Japan July Industrial Production M/M: 1.3% v 0.3%e; Y/Y: +0.7% v -0.6%e
• Bank of Korea (BoK) left the 7-Day Repo Rate unchanged at 1.50% (as expected). To maintain accomodative policy stance but to judge whether to adjust degree of policy accommodation
• BoJ again cut offer to buy 5-10 year JGBs at daily operation
• Australia July Building Approvals M/M: -9.7% v 0.0%e; Y/Y: -28.5% v -22.2%e

Europe/Mideast:

• UK Labour Leader Corbyn (opposition) called for vote on the suspension of Parliament (joint statement with UK opposition parties)
• UK Senior Tory rebels said to be ready to back move against no-deal Brexit
• UK’s Brexit negotiators said to be stepping up its tempo on talks; to now meet their EU counterparts twice a week next month, in the run up to a crucial EU summit on October 17-18th (Reminder: PM’s Europe Adviser Frost said to had brought no new ideas on Irish backstop in visit to Brussels this week)
• Aug GfK Consumer Confidence: -14 v -12e

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.8% at 379.6, FTSE +0.5% at 7220, DAX +1.0% at 11956, CAC-40 +0.8% at 5491, IBEX-35 +0.6% at 8847, FTSE MIB +0.5% at 21500, SMI +0.8% at 9914, S&P 500 Futures +0.5%]
• Market Focal Points/Key Themes: European markets opened higher and continued trend in the green through the session. Consumer discretionary and construction among better performing sectors. Shoe Zone significantly down following profit warning and CEO stepping down. French state shareholding agency chief Vial disclosed discussions with Netherlands regarding Air France-KLM structure. German real estate companies supported after a report in Bild that price controls in Berlin were not as strict as initially thought. Upcoming earnings expected in the US session include Campell Soup and Big Lots

Equities

• Consumer discretionary: Shoe Zone [SHOE.UK] -27.9% (CEO steps down, profit warning), Beter Bed [BBED.NL] -4.5% (results), Beiersdorf [BEI.DE] +3.5% (ULTA sympathy)
• Consumer staples: Safilo [SFL.IT] +5.% (licence renovation from Hugo Boss)
• Energy: BW Offshore [BWO.NO] +17.0% (results)
• Healthcare: Faurecia [EO.FR] +3.2% (analyst action), Ambu [AMBUMB.DK] +8.4% (FDA recommendation)
• Industrials: CNH Industrial [CNHI.IT] +3.9% (considering Iveco spinoff), Daimler [DAI.DE] +1.8% (analyst action)
• Materials: Recticel [REC.BE] +3.9% (results), Ferrexpo [FXPO.UK] +2.0% (conclusion of independent review)
• Technology: CD Proket Red [7CD.DE] +2.7% (results)

Speakers

• Scottish court ruled on request for interim suspension of PM Johnson’s Parliament plan and saw no need for interim injunction (rejected lawmakers bid to halt the suspension of parliament)
• ECB’s Lautenschlaeger (Germany, SSM member): Rate cut is something to consider before any non-conventional measures
• UK Conservative MP Letwin: Probably have time to stop a no-deal Brexit but not sure if there was a majority to do so in parliament. UK should seek an extension if no deal by the Oct 31st deadline. Added that he would not do anything to compromise PM Johnson’s ability to get a deal
• Ireland Foreign Min Coveney: British government had changed its approach radically, its up to them to provide solutions
• Japan Cabinet Office (Govt) Aug Monthly Economic Report: Maintained its overall assessment that domestic economy recovering at a moderate pace while exports and production remained weak
• Japan Econ Min Motegi: No discussion of currency clause in recent trade talks with US. Had not seen any rush in demand ahead of the planned Oct sale tax increase; no front-loading of demand
• China Commerce Ministry (MOFCOM) spokesperson Gao Feng reiterated that China and US were in effective contact

Currencies/Fixed Income

• EUR/USD was probing 1-month lows as EU inflation data remains stubbornly low. Pair probing the lower the lower end of the 1.10 level as CPI core missed expectations and adding fuel that ECB will take more stimulus measures at its Sept 19th policy meeting.
• GBP/USD was softer after a Scottish court ruled on request for interim suspension of PM Johnson’s Parliament plan and saw no need for interim injunction (rejected lawmakers bid to halt the suspension of parliament)

Economic Data

• (FI) Finland Q2 GDP Q/Q: 0.5% v 0.6% prior; Y/Y: 1.2% v 0.9% prior
• (DE) Germany July Retail Sales M/M: -2.2% v -1.3%e; Y/Y: 4.4% v 3.3%e
• (UK) Aug Nationwide House Price Index M/M: 0.0% v 0.1%e; Y/Y: 0.6% v 0.7%e
• (DK) Denmark Q2 Preliminary GDP Q/Q: 0.8% v 0.2% prior; Y/Y: 2.3% v 1.9% prior
• (NO) Norway July Retail Sales (with auto/fuel) M/M: 0.8% v 0.4%e
• (ZA) South Africa July M3 Money Supply Y/Y: 8.3% v 8.8%e; Private Sector Credit Y/Y: 7.2% v 7.3%e
• (FI) Finland Jun Final Trade Balance: €0.2B v €0.2B prelim
• (FR) France Aug Preliminary CPI M/M: 0.5% v 0.4%e; Y/Y: 1.1% v 1.0%e
• (FR) France Aug Preliminary CPI EU Harmonized M/M: 0.5% v 0.5%e; Y/Y: 1.2% v 1.2%e
• (FR) France July PPI M/M: +0.4% v -0.6% prior; Y/Y: 0.0% v 0.2% prior
• (FR) France July YTD Budget Balance: -€109.7B v -€77.3B prior
• (ES) Spain Jun Total Mortgage Lending Y/Y: -11.7% v +18.8% prior; House Mortgage Approvals Y/Y: -2.5% v +11.2% prior
• (ES) Spain July Adjusted Retail Sales Y/Y: 3.2% v 2.5%e; Retail Sales (unadj) Y/Y: 4.7% v 0.4% prior
• (CH) Swiss Aug KOF Leading Indicator: 97.0 v 95.1e
• (CZ) Czech Q2 Preliminary GDP (2nd reading) Q/Q: 0.7% v 0.6%e; Y/Y: 2.7% v 2.7%e
• (HU) Hungary Jun Average Gross Wages Y/Y: 10.6% v 10.6%e
• (HU) Hungary Q2 Final GDP Q/Q: 1.1% v 1.1%e; Y/Y: 4.9% v 4.9%e
• (AT) Austria July PPI M/M: +0.2% v -0.4% prior; Y/Y: -0.2% v -0.2% prior
• (SE) Sweden Jun Non-Manual Workers Wages Y/Y: 2.6% v 2.4% prior (TH) Thailand July Current Account Balance: $1.8B v $2.0Be; Overall Balance of Payments (BOP): $4.5B v $1.9B prior; Trade Account Balance: $1.7B v $4.4B prior; Exports Y/Y: +3.8% v -2.1% prior; Imports Y/Y: +0.9% v -9.6% prior
• (CN) Weekly Shanghai copper inventories (SHFE): 143.9K v 156.6K tons prior
• (IT) Italy July Preliminary Unemployment Rate: 9.9% v 9.6%e
• (ES) Spain Jun Current Account Balance: €2.1Bv €2.7B prior
• (NO) Norway Aug Unemployment Rate: 2.3% v 2.3%e
• (NO) Norway Central Bank (Norges) Sept Daily FX Purchases: -700M v -500M prior
• (RU) Russia Narrow Money Supply w/e Aug 23rd (RUB): 10.58T v 10.64T prior
• (PL) Poland Q2 Final GDP Q/Q: 0.8% v 0.8% prelim; Y/Y: 4.5% v 4.4% prelim
• (PL) Poland Aug Preliminary CPI M/M: 0.0% v -0.1%e; Y/Y: 2.8% v 2.8%e
• (CZ) Czech July M2 Money Supply Y/Y: 7.0% v 7.0% prior
• (UK) July Net Consumer Credit: £0.9B v £1.0Be; Net Lending: £4.6B v £3.7Be
• (UK) July Mortgage Approvals: 67.3K v 66.1Ke
• (UK) July M4 Money Supply M/M: 0.7% v 0.1% prior; Y/Y: 2.7% v 2.3% prior; M4 Ex IOFCs: 4.4% v 2.5% prior
• (PT) Portugal Aug Preliminary CPI M/M: -0.1% v -1.3% prior; Y/Y: -0.1% v +0.3% prior
• (PT) Portugal Aug Preliminary CPI EU Harmonized M/M: -0.1% v -1.7% prior; Y/Y: -0.1% v -0.7% prior
• (HK) Hong Kong July Retail Sales Value Y/Y: -11.4% v -12.5%e; Retail Sales Volume Y/Y: -13.0% v -12.5%e
• (EU) Euro Zone Aug Advance CPI Estimate Y/Y: 1.0% v 1.0%e; CPI Core Y/Y: 0.9% v 1.0%e
• (EU) Euro Zone July Unemployment Rate: 7.5% v 7.5%e
• (IT) Italy Aug Preliminary CPI (including tobacco) M/M: 0.5% v 0.3%e; Y/Y: 0.5% v 0.3%e
• (IT) Italy Aug Preliminary CPI EU Harmonized M/M: 0.0% v 0.0%e; Y/Y: 0.5% v 0.5%e
• (BE) Belgium July Unemployment Rate: 5.7% v 5.6% prior
• (GR) Greece Jun Retail Sales Value +2.3% v -2.2% prior; Retail Sales Volume Y/Y: +2.3% v -2.0% prior
• (IS) Iceland Q2 GDP Q/Q: +2.8% v -2.4% prior; Y/Y: +1.4% v -0.9% prior
• (IS) Iceland July Final Trade Balance (ISK): -19.9B v -18.6B prelim

Fixed Income Issuance

• (DK) Denmark sold total DKK3.74B in 3-month and 6 month bills
• (IN) India sold total INR170B vs. INR170B indicated in 2024, 2033, 2043, and 2049 bonds

Looking Ahead

• 05:30 (SL) Sri Lanka Aug CPI Y/Y: 3.5%e v 3.3% prior
• 06:00 (IT) Italy Q2 Final GDP Q/Q: 0.0%e v 0.0% prior; Y/Y: 0.0%e v 0.0% prelim
• 06:00 (PT) Portugal July Industrial Production M/M: No est v -4.5% prior; Y/Y: No est v -5.8% prior
• 06:00 (PT) Portugal July Retail Sales M/M: No est v -0.9% prior; Y/Y: No est v 4.5% prior
• 06:00 (PT) Portugal Q2 Final GDP Q/Q: 0.5%e v 0.5% prelim; Y/Y: No est v 1.8% prelim
• 06:00 (UK) DMO to sell €6.5B in 1-month, 3-month and 6-month bills (£2.0B, £2.5B and £2.0B respectively)
• 06:00 (FI) ECB’s Rehn (Finland) on panel
• 06:30 (IS) Iceland to sell 1.5% Feb 2026 inflation-linked (RIKBi) Bonds
• 07:30 (IN) India Weekly Forex Reserve w/e XXX: No est v $430.5B prior
• 08:00 (IN) India Q2 GDP Y/Y: 5.7%e v 5.8% prior; GVA Y/Y: 5.5%e v 5.7% prior
• 08:00 (ZA) South Africa July Budget Balance (ZAR): No est v 23.6B prior
• 08:00 (ZA) South Africa July Trade Balance (ZAR): 2.9Be v 4.4B prior
• 08:00 (BR) Brazil July National Unemployment Rate: 11.9%e v 12.0% prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:00 (IN) India announces upcoming bill issuance (held on Wed); to sell combined INR170B in 3-month, 6-month and 12-month Bills on Sept 4th
• 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance
• 08:30 (US) July Personal Income: 0.3%e v 0.4% prior; Personal Spending: 0.5%e v 0.3% prior; Real Personal Spending (PCE): 0.3%e v 0.2% prior
• 08:30 (US) July PCE Deflator M/M: 0.2%e v 0.1% prior; Y/Y: 1.4%e v 1.4% prior
• 08:30 (US) July PCE Core Deflator M/M: 0.2%e v 0.2% prior; Y/Y: 1.6%e v 1.6% prior
• 08:30 (CA) Canada Jun GDP M/M: 0.1%e v 0.2% prior; Y/Y: 1.4%e v 1.4% prior; Quarterly GDP Annualized: 3.0%e v 0.4% prior
• 08:30 (CA) Canada July Industrial Product Price M/M: +0.3%e v -1.4% prior; Raw Materials Price Index M/M: +1.5%e v -5.9% prior
• 09:00 (BE) Belgium Q2 Final GDP Q/Q: No est v 0.2% prelim; Y/Y: No est v 1.2% prelim
• 09:00 (CL) Chile July Unemployment Rate: 7.2%e v 7.1% prior
• 09:00 (CL) Chile July Manufacturing Production Y/Y: +4.5%e v -5.4% prior; Industrial Production Y/Y: +2.0%e v -2.9% prior; Total Copper Production: No est v 474.7K tons prior
• 09:30 (BR) Brazil July Primary Budget Balance (BRL): -3.8Be v -12.7B prior; Nominal Budget Balance: -36.8Be v -30.1B prior; Net Debt to GDP ratio: 55.4%e v 55.2% prior
• 09:45 (US) Aug Chicago Purchasing Manager Index (PMI): 47.5e v 44.4 prior
• 10:00 (US) Aug Final University of Michigan Confidence: 92.3e v 92.1 prelim
• 10:00 (MX) Mexico July Net Outstanding Loans (MXP): No est v 4.634T prior
• 11:00 (CO) Colombia July National Unemployment Rate: No et v 9.4% prior; Urban Unemployment Rate: 10.9%e v 10.7% prior
• 11:00 (EU) Potential sovereign ratings after European close (Moody’s on Luxembourg; S&P on Romania)
• (MX) Mexico July YTD Budget Balance (MXN): No est v -119.9B prior
• 13:00 (US) Weekly Baker Hughes Rig Count
• 21:00 (CN) China Aug Manufacturing PMI: 49.6e v 49.7 prior; Non-manufacturing PMI: 53.7e v 53.7 prior; Composite PMI: No est v 53.1 prior

Weekend data:

• 20:00 (KR) South Korea Aug Trade Balance: $2.4Be v $2.4B prior; Exports Y/Y: -12.5%e v -11.0% prior; Imports Y/Y: -4.5%e v -2.7% prior