Awaiting Fed Chair Powell Speech And Any Clues On Taper Timing

Notes/Observations

• Focus on Jackson Hole and Powell’s speech as several Fed hawks urge early taper.
• Various EU confidence falls short of expectations (France, Italy and Finland miss).

Asia

• China July Industrial Profits Y/Y: 16.4% v 20.0% prior.
• Australia July Preliminary Retail Sales M/M: -2.7% v -2.5%e.
• Japan Aug Tokyo CPI Y/Y: -0.4% v -0.3%e; CPI (ex-fresh food) Y/Y: 0.0% v -0.1%e (First non-negative in 13 months).
• China Sec Journal Front Page Commentary stated that PBOC would likely to cut RRR and step up credit supply ‘soon’.

Coronavirus

• New Zealand PM Ardern confirmed the national lockdown was extended until midnight Aug 31st. Auckland would likely to remain in Level 4 lockdown for a further 2 weeks; Could be seeing start of plateau in virus cases.
• New Zealand Health Chief Bloomfield noted that it would not need 0 cases in Auckland to lower coronavirus alert level.

Europe

• Ex-EU Brexit negotiator Barnier to run for the French presidency centre-right primary.

Americas

• President Biden said to make announcements on the US Fed later in the Fall; To reappoint Powell as Fed Chair and Brainard as Vice chair in effort to appease liberal democrats.
• US Supreme Court vacated the pandemic residential eviction moratorium.

Energy

• Hurricane watch has been issued because of tropical storm Ida which was currently on track to reach hurricane strength and travel through the gulf of Mexico to the Louisiana coast on Sunday evening.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 0.00% at 470.32, FTSE +0.02% at 7,126.25, DAX -0.06% at 15,784.70, CAC-40 -0.06% at 6,661.77, IBEX-35 -0.32% at 8,865.00, FTSE MIB +0.20% at 25,913.50, SMI +0.11% at 12,422.55, S&P 500 Futures +0.26%].
• Market Focal Points/Key Themes: European indices open modestly lower across the board but later recovered slightly to trade mixed; better performing sectors include technology and energy; sectors trending lower include consumer discretionary and financials; oil and gas subsector boosted on higher crude prices ahead of Tropical Storm Ida; focus on Jackson Hole Symposiom through the day; earnings expected during the US session include Big Lots and Hibbett.

Equities

• Consumer discretionary: TER Beke [TERB.BE] -2% (earnings).
• Healthcare: AlzeCure Pharma [ALZCUR.SE] +6% (trial results).
• Industrials: AF Gruppen [AFG.NO] +2% (earnings).
• Materials: Recticel [REC.BE] -2% (earnings).

Speakers

• China said to consider proposing rules in Q4 that bans certain foreign company listings if they have large amounts of sensitive consumer data. Rules would target companies seeking foreign listing via units incorporated outside the country. To set up Cross Ministry Committee that would grant approval to companies to list.

Currencies/Fixed income

• Focus on Jackson Hole where Powell could offer insights into when policy makers would start paring bond purchases. Dealers note that dovish tone from the Fed’s chief could counter worries about economic damage from the Delta coronavirus variant.

Economic data

• (FI) Finland Aug Consumer Confidence: 4.0 v 4.4 prior; Business Confidence: 22 v 19 prior.
• (DE) Germany July Import Price Index M/M: 2.2% v 1.2%e; Y/Y: 15.0% v 13.8%e.
• (NO) Norway July Retail Sales (including fuel) M/M: -3.1% v -0.4%e.
• (FR) France Aug Consumer Confidence: 99 v 100e.
• (ES) Spain Jun Total Mortgage Lending Y/Y: 29.9% v 39.5% prior; House Mortgage Approvals Y/Y: 41.2% v 37.4% prior.
• (SE) Sweden Aug Consumer Confidence: 108.6 v 106.2 prior; Manufacturing Confidence: 129.2 v 128.6prior; Economic Tendency Survey: 121.1v 121.9 prior.
• (TR) Turkey Aug Economic Confidence: 100.8 v 100.1 prior.
• (HU) Hungary July Unemployment Rate: 3.9% v 4.0%e.
• (SE) Sweden Q2 GDP Q/Q: 0.9% v 0.9%e; Y/Y: 9.7% v 9.6%e.
• (SE) Sweden July Retail Sales M/M: -1.2% v +0.5%e; Y/Y: 5.4% v 8.5% prior.
• (SE) Sweden July Trade Balance (SEK): 7.1B v 9.5B prior.
• (CN) Weekly Shanghai copper inventories (SHFE): 82.4K v 85.6K tons prior.
• (AT) Austria Aug Manufacturing PMI: 61.8 v 63.9 prior (14th straight expansion).
• (IT) Italy Aug Consumer Confidence Index: # v 116.3e; Manufacturing Confidence: # v 115.0e; Economic Sentiment: # v 116.3 prior.
• (RU) Russia Narrow Money Supply w/e Aug20th (RUB): 14.34T v 14.33T prior.
• (TW) Taiwan July Monitoring Indicator: 38 v 40 prior.

Fixed income issuance

• (IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 6-month Bills; Avg Yield: -0.519% v -0.524% prior; Bid-to-cover: 1.28x v 1.29x prior.
• (IN) India sold total INR340.1B vs. INR310B indicated in 2026, 2034, 2035 and 2050 bonds.

Looking ahead

• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2025, 2038 and 2050 Bonds.
• 06:00 (IE) Ireland July Retail Sales Volume M/M: No est v 3.3% prior; Y/Y: No est v 10.6% prior.
• 06:00 (UK) DMO to sell £3.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £1.5B respectively).
• 06:45 (US) Daily Libor Fixing.
• 07:00 (MX) Mexico July Trade Balance: $0.0Be v $0.8B prior.
• 07:00 (IN) India announces upcoming bill issuance (held on Wed).
• 07:30 (IN) India Weekly Forex Reserve w/e Aug 20th: No est v $619.4B prior.
• 08:00 (BR) Brazil July PPI Manufacturing M/M: No est v 0.8% prior; Y/Y: No est v 32.9% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming bond issuance.
• 08:30 (US) July Advance Goods Trade Balance: -$90.9Be v -$91.2B prior.
• 08:30 (US) July Personal Income: 0.2%e v 0.1% prior; Personal Spending: 0.4%e v 1.0% prior; Real Personal Spending (PCE) : 0.0%e v 0.5% prior.
• 08:30 (US) July PCE Deflator M/M: 0.4%e v 0.5% prior; Y/Y: 4.1%e v 4.0% prior.
• 08:30 (US) July PCE Core Deflator M/M: 0.3%e v 0.4% prior; Y/Y: 3.6%e v 3.5% prior.
• 08:30 (US) July Preliminary Wholesale Inventories M/M: 1.0%e v 1.1% prior; Retail Inventories M/M: 0.3%e v 0.3% prior.
• 08:30 (CA) Canada July Industrial Product Price Index M/M: No est v 0.0% prior; Raw Materials Price Index M/M: No est v 3.9% prior.
• 08:30 (BR) Brazil July Total Outstanding Loans (BRL): 4.243Te v 4.214T prior; M/M: 0.8%e v 0.9% prior; Personal Loan Default Rate: No est v 4.0% prior.
• 08:30 (US) Fed’s Bostic.
• 09:00 (US) Fed’s Harker.
• 09:00 (US) Fed’s Mester.
• 09:30 (US) Fed’s Bullard.
• 10:00 (US) Aug Final University of Michigan Confidence: 70.8e v 70.2 prelim.
• 10:00 (US) Fed’s Annual Jackson Hole Policy Retreat.
• 11:00 (EU) Potential sovereign ratings after European close (Moody’s on France sovereign rating; S&P on Denmark sovereign rating; Fitch on Poland sovereign rating; Canadian rating agency DBRS on Portugal, Slovakia, Sweden sovereign ratings).
• 13:00 (US) Weekly Baker Hughes Rig Count.