Notes/Observations
- Perceived easing in US-China trade tensions helps risk appetite coupled with progress of various potential coronavirus treatments
- The summer lull in bond issuance expected to end this week with numerous sovereign auctions and syndicates expected
- Attention building to the annual Jackson Hole conference, where Fed Chair Powell expected to outline the central bank’s new inflation strategy
Asia:
- China Premier Li Keqiang: Domestic economy can grow in 2020 despite the impact of the COVID-19 if country reached its employment target of 9M jobs
- China PBOC Gov Yi Gang: banking sector must innovate to help small businesses deal with complex and severe environment
- China to allow meat imports from 6 additional US plants starting Monday, August 24th
- Australia Treasurer Frydenberg: Warns Australia economic recovery likely to be delayed until the second wave of coronavirus in Victoria is under control; Victoria State accounts for 25% of Australia GDP
- Japan PM Abe reported to be getting treatment for a chronic illness, not a check up – Bank of Korea (BOK) could cut its 2020 GDP outlook to -1.0% from -0.2%
Coronavirus:
- Total global cases 23,358,598 (+3.0% vs. Fri); total deaths: 807.8K (+1.9% vs. Fri)
- New Zealand PM Ardern: Extends Auckland lockdown until August 30th and lower alert level from 3 to 2 afterwards
Europe:
- PM Johnson stated that failure to reopen schools was not an option
- S&P affirmed Switzerland sovereign rating AAA; outlook stable
- Fitch revised Turkey sovereign outlook to Negative from Stable; affirmed its BB- rating
Americas:
- President Trump said to be considering fast tracking the UK’s Covid-19 vaccine before the Presidential election with the FDA awarding ‘emergency use authorization’. Confirmed convalescent plasma has been approved to treat COVID-19
- Presidential candidate Biden stated that he was willing to ‘shut down’ US to contain Covid-19 If the scientists recommended it
- House voted to provide $25B to the Postal Service and block policy changes that have stirred concerns about mail-in balloting.
- Senior Trump advisor Kellyanne Conway is leaving WH at end of Aug
Energy:
- Hurricane Marco to hit the Louisiana coast on Monday (Aug 24th) followed by Tropical Storm Laura which could strengthen to hurricane before hitting the Gulf Coast by Thursday (Aug 27th).. Oil producers had approx. 55% of the region’s offshore oil production on Saturday, Aug 22nd.
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +1.70% at 371.30, FTSE +1.69% at 6,113.75, DAX +2.10% at 13,053.85, CAC-40 +2.17% at 5,002.61, IBEX-35 +1.64% at 7,083.00, FTSE MIB +1.90% at , SMI +1.10% at 10,353.51, S&P 500 Futures +0.68%]
- Market Focal Points/Key Themes: European indices open broadly higher; better performing sectors include materials; underperforming sectors include telecom; reportedly private equity firms looking into buying BT; no major earnings expected during upcoming US session
Equities
- Consumer discretionary: B&S Group [BSGR.NL] +21% (earnings), Henry Boot [BOOT.UK] +6% (earnings), JD Wetherspoon [JDW.UK] -2% (trading update)
- Healthcare: Astrazeneca [AZN.UK] +2% (US considering fast-tracking vaccine)
- Industrials: Bunzl [BMZN.UK] +3% (earnings; acquisitions)
- Telecom: BT Group [BT.A.UK] +4% (Board was on alert for takeover approaches)
Speakers
- France Fin Min Le Maire reiterated its 2020 GDP forecast at -11.0% but added that global uncertainties could weigh on H2 growth
- China Foreign Ministry spokesperson Zhao Lijoan reiterated stance that some US politicians were trying to bully China economically. The two countries should cooperate rather than decouple
Currencies/Fixed Income
- USD put in a mixed performance in quiet European trading on Monday. Little in terms of data providing little impetus as traders awaited new factors to provide direction. Perceived easing in US-China trade tensions helped risk appetite in the session on reports China to allow meat imports from 6 additional US plants starting Monday
- Attention building to the annual Jackson Hole conference, where Fed Chair Powell expected to outline the central bank’s new inflation strategy
- EUR/USD higher by 0.3% to test 1.1825 but remained contained its recent trading range with 1.20 seen as the key resistance area.
- USD/JPY holding below te 105 level. Markets watching the health of Japan PM Abe who was back in the hospital to review recent tests. Some speculation that PM was getting treatment for a chronic illness and not just having a regular check up. Abe did become the longest serving PM in Japanese history.
- The summer lull in bond issuance expected to end this week with Belgium, Germany, Portugal and Italy line up for government bond auctions. Finland to launch a new 10-year government bond via syndicate this week
Economic Data
- (FI) Finland July PPI M/M: -0.1% v +1.8% prior; Y/Y: -5.0% v -4.4% prior
- (CZ) Czech Aug Business Confidence: -2.8 v -3.7 prior; Consumer Confidence Index: -12.0 v -10.5 prior; Composite Index (Consumer & Business Confidence): -4.7 v -5.1 prior
- (TW) Taiwan July Industrial Production Y/Y: 2.7% v 3.5%e
- (TW) Taiwan July Unemployment Rate: 4.0% v 3.9%e
- (CH) Swiss weekly Total Sight Deposits (CHF): 700.0B v 698.6B prior; Domestic Sight Deposits: 634.2B v 632.4B prior
- (TR) Turkey July Foreign Tourist Arrivals Y/Y: -85.9% v -96.0% prior
- (TW) Taiwan July M2 Money Supply Y/Y: 5.9% v 5.4% prior; M1 Money Supply Y/Y: 10.3% v 9.9% prior
Fixed Income Issuance
- None seen
Looking Ahead
- 05:30 (DE) Germany to sell €4.0B in 12-month Bubills
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 6-month and 12-month bills
- 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.0-1.5B in 0.1% Jun 2030 OLO bonds
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
- 06:00 (IL) Israel July Unemployment Rate: No est v 4.5% prior
- 06:00 (RO) Romania to sell RON300M in 4.75% 2034 Bonds
- 06:00 (IL) Israel to sell bonds
- 06:45 (US) Daily Libor Fixing
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 07:00 (BR) Brazil Aug FGV Consumer Confidence: No est v 78.8 prior
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (PL) Poland July M3 Money Supply M/M: 1.1%e v 1.6% prior; Y/Y: 18.5%e v 18.1% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announcement of size on upcoming issuance
- 08:30 (US) July Chicago Fed National Activity Index: 3.70e v 4.11 prior
- 08:50 (FR) France Debt Agency (AFT) to sell €4.2-5.4B in 3-month, 6-month and 12-month bills (3 tranches)
- 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision: Expected to leave Base Rate unchanged at 0.10%
- 09:45 (EU) ECB weekly QE bond buying update
- 11:30 (US) Treasury to sell 13-week and 26-week bills
- 15:00 (AR) Argentina Jun Supermarket Sales Y/Y: No est v 5.1% prior; Shop Center Sales Y/Y: No est v -95.6% prior
- 16:00 (US) Weekly Crop Progress Report
- 17:00 (KR) South Korea Aug Consumer Confidence Index: No est v 84.2 prior
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 88,6 prior
- 23:00 (TH)Thailand Central Bank to sell combined THB95B in 3-month and 6-month bills (
- 23:30 (HK) Hong Kong to sell 3-month and 6-month bills
- 23:35 (JP) Japan to sell 20-Year JGB Bonds
- (US) Republican National Convention begins (runs thru Thursday) (Jacksonville, FL)
