Notes/Observations
- Week of key meetings and debates
- Brexit negotiations continue from Tues-Fri with a key Oct deadline looming – 1st of the US Presidential election debate set for Tuesday with a month before the election
- EU Council meets later this week to work on its 2021-27 budget and Recovery Fund details
Asia:
- US tightens exports to China’s biggest chip maker SMIC, citing risk of military use
- China Aug Industrial Profits Y/Y: +19.1% v +11.5% prior
Coronavirus:
- Total global cases 33.0M; total deaths: 996.7K
Europe:
- BoE’s Tenreyro stated that saw very weak global outlook and that local Covid outbreaks would interrupt any V-shaped recovery; Have been almost full pass-through of negative rates into lending rates in most countries.
- Ministers in the UK said to be preparing to enforce ‘total’ social lockdown across much of Northern Britain and possibly London
- Business Growth Fund said to seek £15B to save thousands of jobs by Christmas
- Ireland PM Martin: Internal Market Bill was causing Britain towards a no-deal Brexit outcome
- ECB’s Visco (Italy) reiterated Council view on Euro currency strength
- ECB’s De Cos (Spain) reiterated Council that ECB should maintain significant monetary stimulus (Note: reports circulating of differing views on the ECB Board over whether to add more economic support soon or wait for stronger evidence it’s called for)
- Fitch affirmed United Kingdom sovereign rating at AA-; outlook Negative
Americas:
- President Trump has nominated Fed Appeals Court Judge Amy Coney Barrett to succeed Justice Ruther Bader Ginsberg on the Supreme Court (as speculated)
- US federal judge has blocked the admin’s order to ban downloads of TikTok from US mobile app stores
- House Speaker Pelosi stated over the weekend that she believed a relief deal was still possible. Democrats were preparing a new package
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +1.55% at 361.04, FTSE +1.23% at 5,914.45, DAX +2.25% at 12,750.10, CAC-40 +1.61% at 4,806.07, IBEX-35 +1.16% at 6,705.00, FTSE MIB +1.65% at 19,007.50, SMI +0.63% at 10,280.64, S&P 500 Futures +0.83%]
- Market Focal Points/Key Themes: European indices trading sharply higher following mixed Asian session and higher US futures. On corporate earnings front, shares of Diageo rise in London following AGM update. On M&A front, William Hill confirmed Caezars’ offer while ArcelorMittal agreed to divest US unit to Cleveland-Cliffs. Both stocks trading more than 10% higher. Commerzbank rose 5% in Frankfurt on new CEO pick. Notable earners today include Cal-Mine Foods and Thor Industries.
Equities
- Consumer discretionary: Diageo [DGE.UK] +6% (AGM update), William Hill [WMH.UK] -12% (Caezars offer)
- Financials: HSBC [HSBA.UK] +9% (Ping An Insurance raises stake), Commerzbank [CBK.DE] +5% (new CEO pick)
- Materials: ArcelorMittal [MT.NL] +10% (disposal)
Speakers
- ECB amended its monetary policy implementation guidelines; drops certain secured marketable assets as collateral; effective from Jan 1st, 2021. Phasing out secured marketable assets other than asset-backed securities, legislative covered bonds and multi-cedulas as collateral
- EU said to end subsidy probe covering flat-rolled stainless steel for Chinese and Indonesian exporters
- Spain government set to revise 2020 GDP forecast worse from -9.2% to range between -10% to -11%
- US said to be drawing up plans to withdraw from the strategic Incirlik air force base in Turkey. US might relocate American assets away from an airbase in Turkey to Crete to boost its military presence in the eastern Mediterranean
- South Korea President Moon: Military hotlines with North Korea should be restored
- India Central Bank (RBI) rescheduled its planned MPC that was set for Thursday, Oct 1st
- Japan said to be lifting travel warnings from October
Currencies/Fixed Income
- Dealers thought that the session could be turbulent as uncertainty over the impact of a 2nd wave of Covid-19 infections and trade tensions. However, at mid-session the USD Index was steady in a quiet FX session at 94.53
- The USD was fractionally softer as hopes for a US stimulus package remained on the table.
- EUR/USD higher by 0.1% at 1.1640 with focus on the EU Council meeting scheduled for Thursday and Friday. EU looking to formalize its 2021-27 budget process and agree on the Recovery Fund format.
- The GBP currency was outperformer in the session and aided by cross-border M&A flows. Focus to be on the Brexit negotiations that run from Tuesday thru Friday this week.
Economic Data
- (NL) Netherlands Sept Producer Confidence Index: -4.8 v -5.4 prior
- (FI) Finland Sept Consumer Confidence: -5.9 v -5.1 prior; Business Confidence: -20 v -20 prior
- (ES) Spain July Total Mortgage Lending Y/Y: -7.1% v -6.9% prior; House Mortgage Approvals Y/Y: -23.0% v -12.7% prior
- (SE) Sweden Aug Trade Balance (SEK): -1.6B v +4.0B prior (1st deficit since Dec 2019)
- (SE) Sweden Aug Retail Sales M/: -0.3% v +0.7% prior; Y/Y: 3.0% v 3.7% prior
- (AT) Austria Sept Manufacturing PMI: 51.7 v 51.0 prior (3rd month of expansion)
- (CH) Swiss weekly Total Sight Deposits (CHF): 704.5B v 703.9B prior; Domestic Sight Deposits: 634.2B v 634.7B prior
Fixed Income Issuance
- (ID) Indonesia Finance Ministry sold IDR25.7T in Retail Sukuk
Looking Ahead
- 05:30 (ZA) South Africa Aug PPI M/M: 0.4%e v 1.2% prior; Y/Y: 2.1%e v 1.9% prior
- 05:00 Germany to sell €4.0B in 12-month BuBills
- 05:30 (NL) Netherland Debt Agency (DSTA) to sell €2.0-4.0B in 6-month and 12-month bills
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
- 06:00 (IE) Ireland Aug Retail Sales Volume M/M: No est v 1.5% prior; Y/Y: No est v 6.4% prior
- 06:00 (RO) Romania to sell RON600M in 3.7% 2024 Bonds
- 06:45 (US) Daily Libor Fixing
- 07:00 (MX) Mexico Aug Trade Balance: $5.0Be v $5.8B prior
- 07:00 (MX) Mexico Aug Unemployment Rate (Seasonally Adj): No est v 3.3% prior (last released in Mar); Unemployment Rate (unadj): 5.6%e v 5.4% prior
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announcement of size on upcoming issuance
- 08:30 (BR) Brazil Aug Total Outstanding Loans (BRL): 3.700Te v 3.666T prior; M/M: 1.2%e v 1.0% prior; Personal Loan Default Rate: No est v 5.1% prior
- 09:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 09:00 (FR) France Debt Agency (AFT) to sell €4.
- 09:45 (EU) ECB weekly QE bond buying update
- 09:45 (EU) ECB chief Lagarde in EU Parliament
- 10:30 (US) Sept Dallas Fed Manufacturing Activity Index: 9.5e v 8.0 prior
- 11:30 (US) Treasury to sell 13-week and 26-week bills
- 13:30 (BR) Brazil Aug Total Federal Debt (BRL): No est v 4.345T prior
- 14:00 (CO) Colombia Monetary Policy Sept Minutes
- 15:00 (AR) Argentina July Economic Activity Index (Monthly GDP) M/M: No est v 7.4% prior; Y/Y: No est v -12.3% prior
- 16:00 (US) Weekly Crop Progress Report
- 17:00 (KR) South Korea Oct Business Manufacturing Survey: 0.3%e v 68 prior; Non-Manufacturing Survey: No est v 69 prior
- 19:00 (KR) South Korea Aug Industrial Production M/M: 0.5%e v 1.6% prior; Y/Y: No est v -2.5% prior
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 93.5 prior
- 19:30 (JP) Japan Sept Tokyo CPI Y/Y: 0.1%e v 0.3% prior; Tokyo CPI (ex-fresh food) Y/Y: -0.3%e v -0.3% prior; CPI (ex-fresh food/energy) Y/Y: -0.2%e v -0.1% prior
- 19:50 (JP) BOJ Summary of Opinions
- 22:00 (VN) Vietnam Q3 GDP Y/Y: No est v 0.4% prior
- 22:00 (VN) Vietnam Sept CPI Y/Y: No est v 3.2% prior
- 22:00 (VN) Vietnam Sept Trade Balance:
- 22:00 (VN) Vietnam Sept YTD Retail Sales Y/Y: No est v 0.0% prior
- 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills
- 23:35 (JP) Japan to sell 2-Year JGB Bonds
