Notes/Observations
- UK CPI near a decade high.
- Chinese IP and Retail Sales data adds to concerns on the global economy.
Asia
- China Aug Retail Sales hit a 1-year low (Y/Y: 2.5% v 7.0%e).
- China Aug Industrial Production registered its slowest growth since July 2020 (Y/Y: 5.3% v 5.8%e).
- China Aug Surveyed Jobless Rate: 5.1% v 5.1%e.
- China National Bureau of Statistics (NBS) Official reiterated stance that major macroeconomic indicators were in reasonable range; foundation for economic recovery needed to be consolidated.
- North Korea fired ballistic missile off its East Coast (Note: Launch comes days after test of ‘strategic’ cruise missile).
Europe
- ECB’s Schnabel (Germany) reiterated view that did not expect inflation to be persistently too high.
Americas
- Senator Schumer asking the business community to weigh in on Republicans to the dangers of not raising the debt ceiling.
Energy
- Weekly API Crude Oil Inventories: -5.4M v -2.9M prior.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 -0.13% at 467.02, FTSE +0.04% at 7,036.95 , DAX -0.02% at 15,719.35, CAC-40 -0.21% at 6,639.22, IBEX-35 -0.48% at 8,737.50, FTSE MIB -0.15% at 25,987.00, SMI -0.43% at 12,044.90, S&P 500 Futures +0.27%].
- Market Focal Points/Key Themes: European indices open modestly lower and generally remained under pressure as the session wore on; sectors leading to the upside include technology and materials; laggard sectors include consumer discretionary and utilities; oil and gas subsector supported by higher crude prices; Swedish match to spin off cigar business; no major earnings expected during the upcoming US session.
Equities
- Consumer discretionary: H&M [HMB.SE] -3% (sales), Inditex [ITX.ES] -1.5% (earnings).
- Energy: Tullow Oil [TLW.UK] +6% (earnings; CFO steps down).
- Technology: Darktrace [DARK.UK] +9% (earnings; raises outlook).
Speakers
- ECB’s de Cos (Spain) reiterated Council stance that current inflation increase in EU was largely temporary. Not seeing any 2nd round effects at this time. To closely monitor inflation performance.
- EU Commission President Von Der Leyen stated that 19 countries to be back at pre-pandemic levels in 2021; relaunch talk on economic governance review. To address structural issues in economy and present new European chips act. She believed that the region should focus on semiconductor and be a world leader.
- Germany CDU leader Laschet pledged no new taxes and tight budget policy.
- Italy Govt official stated that indicators showed that Q3 GDP growth remains strong.
- German IFO Institute stated that it saw 2021 German CPI at 3.0% and easing to 2.0-2.5% in 2022.
- China Foreign Min Wang Yi stated that he met with South Korea President Moon in Seoul; Would keep high-level exchanges with country.
Currencies/Fixed Income
- USD managed to shrug off some softer CPI data on Tuesday as some safe-haven flows over China concerns provided some support. The US inflation data. Overall the greenback holding within its recent ranges.
- EUR/USD holding above the 1.18 level as pair being supported by solid economic fundamentals in EU but hampered by divergence between Fed policy and that of the ECB.
- Hotter UK CPI data help to push the GBP firmer in the session. Dealers said to be wagering that the BOE would raise its key rate 0.10% to 0.50% during 2022. Overall given the recent central bank speak on uptick being transitory BOE likely won’t react to these figures anytime soon. GBP/USD at 1.3830 by mid-session. Some vague rumors resurfacing that PM Johnson could reshuffle his Cabinet soon.
Economic data
- (FI) Finland July GDP Indicator WDA Y/Y: 5.5% v 9.1% prior.
- (NG) Nigeria Aug CPI Y/Y: 17.0% v 17.0%e.
- (UK) Aug CPI M/M: 0.7% v 0.5%e; Y/Y: 3.2% v 2.9%e; CPI Core Y/Y: 3.1% v 2.9%e; CPIH Y/Y: 3.0% v 2.7%e.
- (UK) Aug RPI M/M: 0.6% v 0.5%e; Y/Y: 4.8% v 4.7%e; RPI-X (ex-mortgage Interest Payments Y/Y: 4.9% v 4.7%e; Retail Price Index: 307.4 v 307.1e.
- (UK) Aug PPI Input M/M: 0.4% v 0.2%e; Y/Y: 11.0% v 10.3%e.
- (UK) Aug PPI Output M/M: 0.7% v 0.4%e; Y/Y: 5.9% v 5.4%e.
- (NO) Norway Aug Trade Balance (NOK): 42.6B v 42.2B prior.
- (FR) France Aug Final CPI M/M: 0.6% v 0.6%e; Y/Y: 1.9% v 1.9%e; CPI Ex-Tobacco Index: 106.2 v 106.2e.
- (FR) France Aug Final CPI EU Harmonized M/M: 0.7% v 0.7%e; Y/Y: 2.4% v 2.4%e.
- (IT) Italy Aug Final CPI M/M: 0.4% v 0.5% prelim; Y/Y: 2.0% v 2.1% prelim; CPI FOI Index (ex-tobacco): 104.7 v 104.2 prior.
- (IT) Italy Aug Final CPI EU Harmonized M/M: 0.2% v 0.3% prelim; Y/Y: 2.5% v 2.6%e.
- (PL) Poland Aug Final CPI M/M: 0.3% v 0.2% prelim; Y/Y: 5.5% v 5.4% prelim (5th month above target and highest since 2001).
- (TR) Turkey Aug Central Gov’t Budget Balance (HUF): +40.8B v -45.8B prior- (UK) July ONS House Price Index Y/Y: 8.0% v 12.5%e.
- (IT) Italy July General Government Debt: €2.726T v €2.696T prior (record high).
- (EU) Euro Zone July Industrial Production M/M: 1.5% v 0.6%e; Y/Y: 7.7% v 6.0%e.
- (EU) Euro Zone Labour Costs Y/Y: -0.1% v +1.3% prior.
- (GR) Greece July Unemployment Rate: 14.2% v 15.0% prior.
Fixed income Issuance
- (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills.
- (HU) Hungary Debt Agency (AKK) opened its book to sell EUR-denominated 7-year notes via syndicate; guidance seen +75bps to mid-swaps.
- (DK) Denmark sold total DKK5.7B in 2024 and 2031 DGB bonds.
- (UK) DMO sold £2.5B in 0.25% July 2031 Gilts; Avg Yield: 0.740% v 0.664% prior; bid-to-cover: 2.52x v 2.72x prior; Tail: 0.2bps v 0.1bps prior.
- (SE) Sweden sold SEK5.0B vs. SEK5.0B indicated in 6-month Bills; Avg Yield: -0.2566% v -0.1911% prior; bid-to-cover: 2.99x v 1.95x prior.
Looking Ahead
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (PT) Portugal Debt Agency (IGCP) to sell 6-month and 12-month bills.
- 05:30 (HU) Hungary Debt Agency (AKK) auction.
- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).
- 06:00 (IE) Ireland July Property Prices M/M: No est v 1.4% prior; Y/Y: No est v 6.9% prior.
- 06:30 (EU) EU to sell 3-month and 6-month bills.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (RU) Russia OFZ Bond auction (if any).
- 07:00 (US) MBA Mortgage Applications w/e Sept 10th: No est v -1.9% prior.
- 07:00 (ZA) South Africa July Retail Sales M/M: -2.7%e v +0.6% prior; Y/Y: 3.3%e v 10.4% prior.
- 07:00 (UK) Weekly PM Question time in House.
- 08:00 (BR) Brazil July Economic Activity Index (Monthly GDP) M/M: 0.4%e v 1.1% prior; Y/Y: 5.0%e v 9.1% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Sept Empire Manufacturing: 18.0e v 18.3 prior.
- 08:30 (US) Aug Import Price Index M/M: 0.2%e v 0.3% prior; Y/Y: 9.4%e v 10.2% prior; Import Price Index (ex-petroleum) M/M: 0.2%e v 0.1% prior.
- 08:30 (US) Aug Export Price Index M/M: 0.4%e v 1.3% prior; Y/Y: No est v 17.2% prior.
- 08:30 (CA) Canada Aug CPI M/M: 0.1%e v 0.6% prior; Y/Y: 3.9%e v 3.7% prior; Consumer Price Index: 142.3e v 142.3 prior.
- 08:30 (DE)ECB’s Schabel (Germany).
- 09:00 (CA) Canada Aug Existing Home Sales M/M: No est v -3.5% prior.
- 09:15 (US) Aug Industrial Production M/M: 0.5%e v 0.9% prior; Capacity Utilization: 76.4%e v 76.1% prior; Manufacturing Production: 0.4%e v 1.4% prior.
- 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (7-20 years).
- 10:30 (US) Weekly DOE Oil Inventories.
- 11:00 (CO) Colombia July Manufacturing Production Y/Y: 15.8%e v 20.8% prior.
- 11:00 (PE) Peru Aug Lima Unemployment Rate: No est v 9.4% prior.
- 11:00 (CO) Colombia July Retail Sales Y/Y: 22.8%e v 24.7% prior.
- 11:00 (IE) ECB’s Lane (Ireland, chief economist).
- 12:00 (CA) Canada to sell 2-year notes.
- 15:00 (CO) Colombia July Industrial Production Y/Y: No est v 13.8% prior.
- 15:00 (AR) Argentina July Capacity Utilization: No est v 64.9% prior.
- 18:45 (NZ) New Zealand Q2 GDP Q/Q: 1.1%e v 1.6% prior; Y/Y: 16.1%e v 2.4% prior.
- 19:50 (JP) Japan Aug Trade Balance: ¥6.5Be v ¥439.4B prior (revised from ¥441.0B); Adjusted Trade Balance: ¥96.5Be v ¥52.7B prior; Exports Y/Y: 34.1%e v 37.0% prior; Imports Y/Y: 40.0%e v 28.5% prior.
- 21:00 (AU) Australia Sept Consumer Inflation Expectation Survey: No est v 3.3% prior.
- 21:30 (AU) Australia Aug Employment Change: -80.0Ke v +2.2K prior; Unemployment Rate: 5.0%e v 4.6% prior.
- 21:30 (AU) Reserve Bank of Australia (RBA) Quarterly Bulletin.
- 23:00 (NZ) New Zealand Aug Non Resident Bond Holdings: No est v 53.0% prior.
- 23:30 (JP) Japan to sell 12-Month Bills.
- 23:35 (JP) Japan to sell 20-Year JGB Bonds.
