Market Movers Today
Today, focus will be on global PMI figures for July. In the euro area, we look for a slight ly weaker manufacturing PMI although it should stay at a high level, signalling continued robust GDP growth. The service PMI should also be a bit weaker but still point s to ongoing solid demand from consumers.
In the US, we estimate PMI manufacturing rose slightly as it has been much weaker than ISM and regional PMIs recent ly. Still, the level is likely to stay lower than the peak earlier this year.
OPEC is due to meet today to discuss the oil output cut deal amid higher production in Nigeria and Libya.
Jared Kushner, Senior Adviser to President Trump and married to Ivanka Turmp is due to appear before the Senate Intelligence Commit tee in connect ion with the Russian probe today. However, the hearing will not be public, so there will be no headlines.
The main event this week is the FOMC meeting on Wednesday. We do not expect any policy changes (and no announcement on quantitative tightening yet ) at this meeting, although risks are skewed towards a slightly more dovish statement given inflation continues to disappoint .
Focus will also be on German Ifo expectations, Q2 GDP growth figures in the UK, US and France as well as German HICP inflation. In Scandi markets, the key data releases will be Norwegian unemployment and Swedish GDP growth in Q2.
Selected Market News
On Friday, Der Spiegel wrote that German car companies have run a secret cartel since the1990s. The EU Commission is looking into the claim, which could lead potentially to high fines to the companies (10% of global turnover).
In France, Emmanuel Macron’s approval rating has fallen 10 percent age point s t o 54%, the second biggest fall so soon after an elect ion on record, underlying that it may not be so easy for him to win popular support for his plans to reform France.
On Saturday, Poland’s upper house passed the controversial law, which put s t he juridical syst em under polit ical cont rol, with 55 votes out of 100. The EU is threatening Poland with Article 7 (losing voting rights) and demonstrations in Poland in front of the Polish parliament continue.
Ahead of European and US PMIs later today, Japanese PMI manufacturing fell to 52.2 in July from 52.4, the lowest since November 2016.
The ‘summer mode’ in the primary market means lower-than-normal activity; however, today, Belgium will be in the market with a tap in the 23s, the 27s and the 47s. On Friday , Italy will be coming to the market with its usual month-end tap in 5Y and 10Y.
