Notes/Observations
- German July Factory Orders handily beat consensus aided by foreign demand.
- Main event this week is the ECB policy decision on Thursday with focus on any adjustment to its Pandemic Bond Buying program (PEPP).
Asia
- China Vice Premier Liu He stated that policy to support private companies would not change and promised govt to support the private sector.
- China researcher saw room for cut to RRR or rate in H2.
- China PBOC Deputy Gov Chen Yulu stated that it would close loopholes in its financial technology regulation, and included all types of financial institutions.
- China Securities regulator (CSRC) Vice Chairman Fang Xinghai stated it would improve regulations for companies seeking overseas listings.
Europe
- EU Economic Commissioner Gentiloni (Italy): Watching EU inflation but should monitor it very accurately and avoid making conclusions too early.
- Italy Econ Min Franco stated that saw 2021 GDP growth over 5.8%. Italy to end 2021 with debt-to-GDP ratio better-than-expectations. Govt committed to turning the post-pandemic rebound into higher structural economic growth.
- Brexit Sec Frost: The standoff with the EU over Brexit rules related to Irish border, risk creating a “cold mistrust”. Reiterated demands for major changes on implementation of the controversial Northern Ireland Brexit protocol.
- Germany SPD’s Scholz indicated he could be interested in coalition/governing with Greens.
Americas
- US and Canadian markets closed for holiday.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.57% at 474.62, FTSE +0.56% at 7,178.06, DAX +0.64% at 15,882.55, CAC-40 +0.71% at 6,737.29 , IBEX-35 +0.29% at 8,890.00, FTSE MIB +0.66% at 26,236.50 , SMI +0.58% at 12,423.04, S&P 500 Futures +0.23%].
- Market Focal Points/Key Themes: European indices open generally higher and advanced into the green as the session progressed; light trading in session due to market closures in the Americas; better performing sectors include technology and consumer discretionary; financials and materials sectors among the lagards; Israel, US and Canada closed for holiday; Sulzer confirms to spin off medmix; Veon sells tower assets in Russia; Spie looking to buy Equans from Engie; Castor raised offer for Cerved; no major equities events expected during the US session.
Equities
- Consumer discretionary: MD Medical Group Investments [MDMG.UK] -6% (earnings).
- Energy: EN+ Group [ENPL.UK] +3% (Guinea coup attempt; aluminum concerns).
- Healthcare: Dechra Pharmaceuticals [DPH.UK] -10% (earnings).
- Technology: Cerved Information Solutions [CERV.IT] +2% (raised offer).
- Energy: Spie [SPIE.FR] -4% (offer for Engie’s unit).
Speakers
- Poland Central Bank Gov Glapinski stated that monetary tightening would be risky at this time. PLN currency (Zloty) appreciation did not seen favorable for economy. Saw CPI falling from Q2 2022.
Currencies/Fixed Income
- USD was nursing its recent losses after Friday’s Nonfarm payrolls missed expectations. The data pushed back expectations of any imminent Fed tapering plans.
- EUR/USD was steady in a quiet session at 1.1865 area. Main event this week is the ECB policy decision on Thursday with focus on any adjustment to its Pandemic Bond Buying program (PEPP). Overall ECB was not expected to any major change in its policy stance and dealers believe it should remain dovish despite the recent jump in the Euro Zone’s inflation rate.
Economic data
- (DE) Germany July Factory Orders M/M: +3.4% v -0.7%e; Y/Y: 24.4% v 18.9%e.
- (CZ) Czech July National Trade Balance (CZK): -7.2B v -4.8Be.
- (CZ) Czech July Industrial Output Y/Y: 1.1% v 0.7%e; Construction Output Y/Y: 0.5% v 6.5% prior.
- (DE) Germany Aug Construction PMI: 44.6v 47.1 prior.
- (CZ) Czech Aug Unemployment Rate: 3.6% v 3.7% prior.
- (CH) Swiss weekly Total Sight Deposits (CHF): 714.9B v 715.2B prior; Domestic Sight Deposits: 636.5B v 640.1B prior.
- (UK) Aug New Car Registrations Y/Y: -22.0% v -29.5% prior.
- (ZA) South Africa Q3 BER Consumer Confidence: -10 v -13 prior.
- (TW) Taiwan Aug Foreign Reserves: $543.6B v $543.1B prior.
- (UK) Aug Construction PMI: 55.1 v 56.0e (7th month of expansion).
- (EU) Euro Zone Sept Sentix Investor Confidence: 19.6 v 19.7e.
Fixed income issuance
- None seen.
Looking ahead
- (RU) Russia Aug Light Vehicle Car Sales Y/Y: -2.1%e v -6.5% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell combined €6.0B in 3-month and 9-month BuBills.
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.5-2.5B in 6-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.
- 06:00 (RO) Romania to sell 4.75% 2034 bond.
- 06:00 (TR) Turkey to sell floating Rate Bonds.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (MX) Mexico Jun Gross Fixed Investment: 17.6%e v 46.5% prior.
- 07:00 (MX) Mexico Aug Vehicle Production: No est v 221.8K prior; Vehicle Exports: No est v 202.0K prior.
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 07:30 (TR) Turkey Aug Real Effective Exchange Rate (REER): No est v 61.31 prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 09:00 (FR) France Debt Agency (AFT) to sell €4.3-5.5B in 3-month, 6-month and 12-month bills.
- 09:45 (EU) ECB weekly QE bond buying update.
- 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (3-7 years).
- 19:00 (KR) South Korea July Current Account Balance: No est v $8.9B prior; Balance of Goods (BOP): No est v $7.6B prior.
- 19:01 (UK) Aug BRC Sales Like-For-Like Y/Y: 3.2%e v 4.7% prior.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 101.8 prior.
- 19:30 (JP) Japan July Labor Cash Earnings Y/Y: 0.3%e v 0.1% prior (revised from -0.1%); Real Cash Earnings Y/Y: +0.6%e v -0.1% prior (revised from -0.4%).
- 19:30 (JP) Japan July Household Spending Y/Y: +2.7%e v -5.1% prior.
- 21:00 (PH) Philippines July Unemployment Rate: No est v 7.7% prior.
- 21:00 (PH) Philippines Aug CPI Y/Y: 4.4%e v 4.0% prior.
- 21:30 (KR) South Korea to sell KRW850B in 2-year bonds.
- 23:00 (ID) Indonesia Aug Foreign Reserves: No est v $137.3B prior.
- 23:00 TH) Thailand Central Bank to sell 3-month bills.
- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.
- 22:30 (JP) Japan to sell 30-year JGB bonds.
