Notes/Observations
- Most Major July Final PMI Readings revised higher (Germany, France. Euro Zone, Italy all beat expectations nto expansion territory; UK missed but remains in expansion territory
- Fitch fired a warning shot regarding US sovereign rating
Asia:
- China July Caixin Manufacturing PMI registered its 3rd straight expansion and highest since Jan 2011 (52.8 v 51.1e)
- Japan July Final PMI Manufacturing revised higher but still confirmed its 15 months of contraction (45.2 v 42.6 prelim
- Japanese Q1 Final GDP unrevised and slightly better than expectations (QoQ: -0.6% v -0.7%e; YoY: -2.2% v -2.8%e)
- Australia July Final PMI Manufacturing was revised higher and confirmed its 2nd month of expansion (54.0 v 53.4 prelim)
Coronavirus:
- Total global cases 18,019,472 (+4.5% from Fri); death toll 688.4K (+2.4% from Fri)
- Victoria state (Australia) to close retail stores from midnight Wed (Aug 6th) and would make more announcements over the next few days; Would not close supermarkets, banks and post offices. State reported new coronavirus cases of 429 v 671 prior:
- White HouseMedical Advisor Brix: Disease was “extraordinarily widespread” across the country and a greater threat than when the outbreak first began
Europe:
- Italy govt said to pass €2.0-3.0B in measures to increase consumption. Measures would include discounts on clothes and domestic appliances’ purchases made via electronic payments by Dec 31st. Govt may approve decree on the measures at a cabinet meeting this week
- Trade Sec Truss said to meet the USTR in Washington for 3rd round of talks on Mon, Aug 3rd and Tues, Aug 4th –
Americas:
- Fitch revised Unites States sovereign rating outlook from stable to negative; affirms AAA rating
- Fed’s Kashkari (dove, FOMC voter) US economy could benefit if the country were to ‘lock down really hard’ for 4-6 weeks, noted economy would only be allowed to have robust recovery if the coronavirus were brought under control
- White House Chief of Staff Meadows: US to hold election on Nov. 3rd
- White House stated that remained at an impasse over coronavirus bill
- President Trump to take action in coming days over Chinese software firms that are deemed national security threats
Energy:
- Easing of the OPEC+ production cuts begin in August
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.37% at 357.64, FTSE -0.12% at 5,890.75, DAX +1.13% at 12,452.95, CAC-40 +0.30% at 4,797.92, IBEX-35 -0.69% at 6,830.00, FTSE MIB -0.11% at 19,071.50, SMI +0.79% at 10,084.74, S&P 500 Futures -0.20%]
- Market Focal Points/Key Themes: European indices open mixed and failed to gain direction as the session progressed; materials and energy among best performing sectors; underperforming sectors lead by financials and consumer discretionary; GlaxoSmithKline and Sanofi awared contract for 300M vaccines from EU; Siemens Healthineers to merge with Varian Medical; Nordex enters agreement to sell European development portfolio to RWE; reportedly tiktok owners to relocate to London; Hammerson confirms is considering disposal of stake in VIA; earnings expected in the upcoming US session include Hochtief, Loews and Noble Energy
Equities
- Consumer discretionary: PostNL [PNL.NL] +9% (earnings), Carnival plc [CCL.UK] -4% (cruises update), Heineken [HEIA.NL] -2% (earnings)
- Financials: HSBC [HSBA.UK] -4% (earnings), Senior plc [SNR.UK] -10% (earnings)
- Healthcare: GlaxoSmithKline [GSK.UK] +1%, Sanofi [SAN.FR] +1% (vaccine deal with EU), Siemens Healthineers [SHL.DE] -5% (merger)
- Industrials: Nordex [NDX1.DE] +15% (potential divestment), MTU Aero Engines [MTX.DE] -8% (earnings) Speakers
- German Fin Min Scholz said to opposes extension of VAT reduction
- Japan Econ Min Nishimura stated that GDP would return to pre-covid levels in FY21/22 (next fiscal year)
Currencies/Fixed Income
- USD was retracing from recent losses that were endured due to anxiety about pandemic toll on US economy. The greenback manage to firm in the session despite Fitch’s warning shot across the bow on the US deficit front. Fitch Ratings revised its outlook on the United States’ triple-A rating to negative from stable. Dealers noted that USD was undergoing some profit-taking aided by a recovery in the 10-year Treasury yield.
- EUR/USD moved off its recent 2-year highs after testing above 1.19 on Friday. Dealers viewed the retracement as profit taking after the July surge in the pair. Cross at 1.1775 area just ahead of mid-session trading.
Economic Data
- (RU) Russia July PMI Manufacturing: 48.4 v 50.2e (15th straight contraction)
- (SE) Sweden July PMI Manufacturing: 51.0 v 50.5e (1st expansion in 5 months)
- (CH) Swiss July CPI M/M: -0.2% v -0.4%e; Y/Y: -0.9% v -1.2%e; CPI Core Y/Y: -0.4% v -0.7%e
- (CH) Swiss July CPI EU Harmonized M/M: +0.1% v -0.1% prior; Y/Y: -1.2% v -1.3% prior
- (NL) Netherlands July Manufacturing PMI: 47.9 v 45.2 prior (4th straight contraction)
- (HU) Hungary July Manufacturing PMI: 50.8 v 50.5e (1st expansion in 5 months)
- (PL) Poland July PMI Manufacturing: 52.8 v 50.0e (1st expansion in 21 months and highest since July 2018)
- (ES) Spain July Manufacturing PMI: 53.5 v 52.3e (1st expansion in 5 months)
- (CH) Swiss July PMI Manufacturing: 49.2 v 50.0e (17th month of contraction)
- (CZ) Czech Republic July PMI Manufacturing: 47.0 v 49.8e (20th month of contraction)
- (TH) Thailand July Business Sentiment Index: 42.9 v 38.5 prior
- (IT) Italy July Manufacturing PMI: 51.9 v 51.2e (1st expansion in 21 months)
- (FR) France July Final Manufacturing PMI: 52.4 v 52.0e (confirmed 2nd straight expansion)
- (DE) Germany July Final Manufacturing PMI: # v 50.0e (confirmed 1st expansion in 19 months)
- (EU) Euro Zone July Final Manufacturing PMI:51.8# v 51.1e (confirmed 1st expansion in 18 months)
- (GR) Greece July Manufacturing PMI: 48.6 v 49.4 prior
- (NO) Norway July PMI Manufacturing: 43.3 v 48.8 prior
- (CH) Swiss weekly Total Sight Deposits (CHF): 693.7B v 692.6B prior; Domestic Sight Deposits: 625.5B v 622.5B prior
- (UK) July Final Manufacturing PMI: 53.3 v 53.6e (confirms 2nd month of expansion)
- (ZA) South Africa July Manufacturing PMI: 51.2 v 52.8e (3rd month of expansion)
- (DE) Denmark July PMI Survey: 57.4 v 53.1 prior
Fixed Income Issuance
- None seen
Looking Ahead
- (ZA) South Africa July Naamsa Vehicle Sales Y/Y: No est v -30.7% prior
- (UR) Ukraine Central Bank July Minutes
- (RO) Romania July International Reserves: No est v 40.3B prior
- (IT) Italy July Budget Balance: No est v -€21.0B prior
- (RU) Russia Central Bank quarterly monetary report
- 05:30 (DE) Germany to sell €4.0B in 6-month Bubills
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell 3-month and 9-month bills
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
- 06:00 (IL) Israel to sell bonds
- 06:45 (US) Daily Libor Fixing
- 07:00 (IN) India announces deta
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (CZ) Czech July Budget Balance (CZK): No est v -195.2B prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announcement of size on upcoming issuance
- 08:30 (CL) Chile Jun Economic Activity Index (Monthly GDP) M/M: No est v -3.4% prior Y/Y: -16.1%e v -15.3% prior; Economic Activity (ex-morning) Y/Y: No est v -17.0% prior
- 08:50 (FR) France Debt Agency (AFT) to sell €5.8-7.0B in 3-month, 6-month and 12-month bills (3 tranches)
- 09:00 (BR) Brazil July PMI Manufacturing: No est v 51.6 prior
- 09:00 (SG) Singapore July Purchasing Managers Index: 49.0ee v 48.0 prior; Electronics Sector Index: No est v 47.6 prior
- 09:45 (US July Final Markit Manufacturing PMI: 51.3e v 51.3 prelim
- 09:45 (EU) ECB weekly QE bond buying update
- 10:00 (US) July ISM Manufacturing: 53.5e v 52.6 prior; ISM Prices Paid: 52.0e v 51.3 prior
- 10:00 (US) Jun Construction Spending M/M: +1.0%e v -2.1% prior
- 10:00 (MX) Mexico Jun Total Remittances: $3.2Be v $3.4B prior
- 10:00 (MX) Mexico Central Bank Economist Survey
- 10:30 (MX) Mexico July PMI Manufacturing: No est v 38.6 prior
- 11:00 (CO) Colombia July PMI Manufacturing: No est v 54.7 prior
- 11:30 (US) Treasury to sell 13-week and 26-week bills
- 12:00 (IT) Italy New Car Registrations Y/Y: No est v -23.1% prior
- 12:30 (US) Fed’s Bullard
- 13:00 (US) Fed’s Barkin
- 13:00 (MX) Mexico July IMEF Manufacturing Index: 44.0e v 42.0 prior; Non-Manufacturing Index: 45.1e v 42.5 prior
- 14:00 (CO) Colombia Central Bank July Minutes
- 14:00 (BR) Brazil July Trade Balance: No est v $7.5B prior; Total Exports: No est v $17.9B prior; Total Imports: No est v 10.5B prior
- 14:00 (US) Fed’s Evans holds roundtable on the Economic outlook
- 16:00 (US) Weekly Crop Progress Report
- 19:00 (KR) South Korea CPI M/M: 0.1%e v 0.2% prior; Y/Y: 0.4%e v 0.0% prior; CPI Core Y/Y: 0.7%e v 0.6% prior
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 89.0 prior
- 19:30 (JP) Japan July Tokyo CPI Y/Y: 0.3%e v 0.3% prior; CPI (ex-fresh food) Y/Y: 0.2%e v 0.2% prior; CPI (ex-fresh food/energy) Y/Y: 0.35e v 0.4% prior
- 19:50 (JP) Japan end-July Monetary Base: No est v ¥565.2T prior
- 20:00 (AU) Australia July CoreLogic House Price Index M/M: No est v -0.8% prior
- 20:01 (IE) Ireland July PMI Manufacturing: No est v 51.0 prior
- 21:30 (AU) Australia Jun Trade Balance: A$8.8Be v A$8.0B prior; Exports M/M: +4%e v -4%; Imports M/M: +3%e v -6% prior
- 21:30 (AU) Australia Jun Retail Sales M/M: 2.4%e v 2.4% prelim; Q/Q: -3.2%e v +0.7% prior
- 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills
- 23:35 (JP) Japan to sell 10-Year JGB Bonds
