Infrastructure Bill Inching Closer To Passage

Notes/Observations

• German exports rise for the 14th straight month.

Asia

• (CN) China July Trade Balance: $56.6B v $52.0Be; Exports Y/Y: 19.3% v 20.0%e; Imports Y/Y: 28.1% v 33.6%e.
• CN) China July CPI Y/Y: 1.0% v 0.8%e; PPI Y/Y: 9.0% v 8.8%e.
• (CN) China July Foreign Reserves: $3.236T v $3.232Te.

Coronavirus

• US cases top 100K per day (6-month high); Asia spread worsens.
• Israel is reinstating restrictions and warning of a fresh lockdown as the number of serious cases has risen to a four month high.

Europe

ECB’s Weidmann (Germany): If inflation outlook rises sustainably, ECB will have to act in line with its price stability objective. Must tighten policy if needed to counter inflation.

Former Italy PM Conte appointed leader of 5-Star party.

Various UK Ministers said to have warned PM Johnson not to remove Chancellor of the Exchequer Sunak even though they have conflicting views on spending and lockdowns.

Americas

• President Biden’s bipartisan infrastructure deal cleared its final serious Senate hurdle over the weekend. Senate voted 69 to 28 [includes 48 Democrats and 19 Republicans] to support the compromise provisions related to the $1.0T infrastructure proposal.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.02% at 470.08, FTSE -0.23% at 7,106.85, DAX -0.14% at 15,738.60, CAC-40 +0.03% at 6,818.67, IBEX-35 -0.11% at 8,869.00, FTSE MIB +0.30% at 26,079.50, SMI +0.63% at 12,253.02, S&P 500 Futures -0.17%].
• Market Focal Points/Key Themes: European indices open mixed with upward bias and failed to gain direction as the session wore on; sectors trending to the upside include consumer discretionary and health care; financials and industrials sectors among the underperformers; McColl’s confirms looking into capital raise; Halma announces series of M&A; Vectura confirms offer from Philip Morris; Odey sells it’s stakes in Ryanair and IAG; Delivery Hero takes stake in Deliveroo; earnings expected in the upcoming US session include Air Products, Dish Network and Barrick.

Equities

• Consumer discretionary: PageGroup [PAGE.UK] -3% (earnings), PostNL [PNL.NL] -2% (earnings), McColl’s Retail [MCLS.UK] -19% (confirms media reports).
• Healthcare: Bavarian Nordic [BAVA.DK] +5% (vaccine study), Roche [ROG.CH] +1.5% (trial results).

Speakers

• Poland Central Bank’s Kropiwnicki: Inflation at 5.0% was alarming and saw the 1st Polish rate hike in November at the earlier and by 15bps maximum.
• Romania Central Bank Gov Isarescu stated that CPI was driven higher by more factors at this time; raised both 2021 and 2022 inflation outlook. Tightening cycle had started without rate hike and saw some price growth easing due to policy tightening. Reiterated plan for hikes taking place at the appropriate time.

Currencies/ Fixed income

• The USD was slightly softer in the session as dealers noted that some profit-taking was encountered following the greenback’s sharp rise last week. EUR/USD tested 1.1742 for 4-month lows during Asia’s session. Friday session saw a stronger USD on expectations the Fed was moving closer to reducing stimulus after a strong jobs report.
• EUR/USD at 1.1750 area in the session. Euro remain vulnerable due to divergence in central bank outlook. Overall markets anticipate on additional monetary policy easing by the ECB while the Fed appears to be inching towards the exit.
• Safe haven flows being eyed as participants are warily eyeing a rise in COVID-19 cases across Asia.

Economic data

• (SE) Sweden Aug SEB Housing-Price Indicator: 39 v 62 prior.
• (CH) Swiss Unemployment Rate:2.8 % v 2.8%e; Unemployment Rate (seasonally adj): 3.0% v 3.0%e.
• (DE) Germany Jun Current Account Balance: €22.5B v €18.9Be; Trade Balance: €16.3B v €13.5Be; Exports M/M: 1.3% v 0.3%e; Imports M/M: 0.6% v 0.4%e.
• (NO) Norway Jun Industrial Production M/M: +0.9% v -0.3% prior; Y/Y: 4.3% v 2.1% prior.
• (NO) Norway Jun Manufacturing Production M/M: +0.9% v -0.1% prior; Y/Y:4.3 % v 7.6% prior.
• (DK) Denmark Jun Current Account Balance (DKK): 18.8B v 14.6B prior; Trade Balance: 15.3B v 6.0B prior.
• (AU) Australia July Foreign Reserves: A$64.0B v A$64.7B prior.
• (CZ) Czech July Unemployment Rate: 3.7% v 3.7% prior.
• (CH) Swiss weekly Total Sight Deposits (CHF): 713.2B v 712.0B prior; Domestic Sight Deposits: 635.9B v 636.4B prior.
• (CZ) Czech July International Reserves: $167.5B v $167.1B prior.
• (TW) Taiwan July Trade Balance: $5.9B v $5.4Be; Exports Y/Y: 34.7% v 33.4%e; Imports Y/Y: 41.0% v 39.2%e.
• (FR) Bank of France July Industrial (Business) Sentiment: 105 v 107e.
• (EU) Euro Zone Aug Sentix Investor Confidence: 22.2 v 29.0e.
• (GR) Greece Jun Industrial Production Y/Y: % v 14.1% prior.
• (GR) Greece July CPI Y/Y: % v 1.0% prior; CPI EU Harmonized Y/Y: % v 0.6% prior.
• (HU) Hungary July YTD Budget Balance (HUF): T v -1.705T prior.

Fixed income issuance

• None seen.

Looking ahead

• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 ((DE) Germany to sell €4.0B in 6-month BuBills.
• 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
• 06:00 (IE) Ireland Jun Industrial Production M/M: No est v -4.6% prior; Y/Y: No est v 30.0% prior (revised from 29.9%).
• 06:00 (IE) Ireland July Live Register Monthly Change: No est v -3.5K prior; Live Register Level: No est v 170.9K prior.
• 06:00 (IL) Israel to sell bonds.
• 06:00 (RO) Romania to sell RON400M in 4.75% 2034 Bonds.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (MX) Mexico July CPI M/M: 0.6%e v 0.5% prior; Y/Y: 5.8%e v 5.9% prior; CPI Core M/M: 0.5%e v 0.6% prior.
• 07:00 (BR) Brazil July FGV Inflation IGP-DI M/M: 1.3%e v 0.1% prior; Y/Y: 33.2%e v 34.5% prior.
• 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
• 08:30 (UR) Ukraine July CPI M/M: -0.2%e v +0.2% prior; Y/Y: 9.9%e v 9.5% prior.
• 08:30 (CL) Chile July Trade Balance: No est v $1.1B prior; Total Exports: No est v $7.5B prior; Total Imports: No est v $6.4B prior; Copper Exports: No est v $4.4B prior.
• 08:30 (CL) Chile July International Reserves: No est v$45.0B prior.
• 09:00 (FR) France Debt Agency (AFT) to sell €4.0-5.2B in 3-month, 6-month and 12-month bills.
• 09:45 (EU) ECB weekly QE bond buying update.
• 09:45 (UK) BOE buys £1.147B in APF Gilt purchase operation (3-7 years).
• 10:00 (US) Jun JOLTS Job Openings: 9.270Me v 9.209M prior.
• 10:00 (US) Fed’s Bostic.
• 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
• 12:00 (US) Fed’s Barkin.
• (CO) Colombia July Consumer Confidence Index: -16.5e v -22.3 prior.
• 16:00 (US) Weekly Crop Progress Report.
• 18:00 (NZ) New Zealand July Heavy Truckometer M/M: No est v 1.2% prior.
• 18:45 (NZ) New Zealand July Retail Card Spending M/M: No est v 0.9% ; Total Card Spending M/M: No est v 1.6% prior.
• 19:01 (UK) July BRC Sales Like-For-Like Y/Y: 5.0%e v 6.7% prior.
• 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 101.8 prior.
• 19:50 (JP) Japan July Current Account Balance: ¥846.2Be v ¥1.980T prior; Adjusted Current Account: ¥1.713Te v ¥1.867T prior; Trade Balance (BOP basis): ¥639.0Be v ¥2.0B prior.
• 19:50 (JP) Japan July Bank Lending Y/Y: No est v 1.4% prior; Bank Lending (ex-trusts) Y/Y: No est v 0.8% prior.
• 21:30 (AU) Australia July NAB Business Confidence: No est v 11 prior; Business Conditions: No est v 24 prior.
• 21:30 (KR) South Korea to sell KRW400B in 2-year Bonds.
• 22:00 (PH) Philippines Q2 GDP Q/Q: -1.1%e v +0.3% prior; Y/Y: +10.8%e v -4.2% prior.
• 22:30 (KR) South Korea to sell KRW600B in 2-Year Bonds
• 23:00 (TH) Thailand Govt to sell THB17.0B in 2031 Bonds.
• 23:00 (TH) Thailand Central Bank to sell THB60B in Bills.
• 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.