Notes/Observations
European Indices higher following FOMC rate decision, unwind lifts dollar
Norway keeps rates on hold, reiterates will likely remain on hold til 2019
Overnight
Asia:
BoJ left rates on hold as expected with a vote of 8-1 with newcomer Kataoka dissenting
China PBOC sets yuan reference rate-0.3% at 6.5867, the weakest level since Sept 1st.
New Zealand Q2 GDP comes in line with expectations
Taiwan and Philippines leave rates on hold as expected
HTC Confirms $1.1B cooperation agreement with Google, where Google will acquire part of HTC engineering team related to Pixel phone
Australia’s CBA to sell Life Insurance unit to AIA Group for $3B
Europe:
Norway keeps deposit rates on hold as expected; Notes Capacity Utilization is on the rise, higher than previously assumed, labor mkt improvement has occurred somewhat faster pace than assumed in June
Sweden Central bank (Riksbank) Sept Minutes showed there are some temporary factors behind the most recent upturn in inflation and the krona has strengthened more rapidly than in the forecast in July
ECB SEPT ECONOMIC BULLETIN: Short term indicators confirm the outlook for robust growth momentum in the near term
Americas:
FOMC kept rates on hold as expected, confirms start of balance sheet reduction in Oct; hurricanes could temporarily boost inflation
Economic data
(UK) AUG PUBLIC FINANCES (PSNCR): £0.0B V -£3.9B PRIOR; PUBLIC SECTOR NET BORROWING: +£5.1B V +£6.4BE
(CH) SWISS AUG TRADE BALANCE (CHF): 2.17B V 3.5B PRIOR
(CH) SWISS AUG M3 MONEY SUPPLY Y/Y: 4.0% V 4.0% PRIOR
(NL) Netherlands Aug Unemployment Rate: 4.7% v 4.8%e
(NL) Netherlands Sept Consumer Confidence Index: 23 v 26 prior
Fixed Income Issuance:
(ES) SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €4.68B VS. €4.0-5.0B INDICATED RANGE IN 2021, 2026, 2028 AND 2044 BONDS
(FR) FRANCE DEBT AGENCY (AFT) SELLS TOTAL €6.99B VS. €6.0-7.0B INDICATED RANGE IN 2020, 2023 AND 2024 OATS
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices [Stoxx600 +0.2% at 382.7, FTSE flat 7271.5, DAX +0.2% at 12598, CAC-40 +0.5% at 5267, IBEX-35 +0.2% at 10311, FTSE MIB +0.5% at 22470, SMI +0.4% at 9133, S&P 500 Futures -0.1%]
Market Focal Points/Key Themes:
European Indices trade mostly higher across the board with the weaker Euro helping push Indices higher following the FOMC rate decision yesterday.
Corporate activity was light this morning, with notable movers including Capita trading sharply lower after missing estimates while Kier Group trades higher after Full year results. Else where Ryanair remains on focus after press reports that the Pilots have rejected a cash bonus offer to work overtime, while CRH trades higher after acquiring Ash Grove.
On the US front Calgon Carbon called sharply higher after being acquired.
Equities
Consumer discretionary [ Capita [CPI.UK)] -10% (Earnings), Mitchells & Butlers [MAB.UK] -5.1% (Trading update), Ryanair [RYA.UK] -2.2% (Reprtedly pilots turn down £12K cash bonus offer to work overtime]
Industrials: [Kier [KIE.UK] +8.6% (Earnings)]
Material: [CRH [CRH.UK] +2.8% (To acquire Ash Grove for enterprise value of $3.5B)]
Healthcare:[Nicox [COX.FR] +2.6% (Announces licensing agreement with Eyevance for commercialization of ZERVIATETM in the United States; To receive upfront payment of $6M)]
Speakers
BOJ Gov Kuroda: To adjust policy as appropriate and to maintain momentum towards 2% price target- post rate decision press conference
Currencies
The dollar continues hold ground after gaining sharply yesterday, while the Yen weakens following the BoJ rate decision. Then USD/JPY rallied over 100 pips following the rate decision.
Fixed Income
Thursday’s liquidity report showed Wednesday’s excess liquidity fell to €1.729T from €1.747T and use of the marginal lending facility rose to €137M from €86M.
Corporate issuance saw $0.6B come to market in quieter session, bringing Week to date issuance to just above $13B and Monthly issuance at ~ $102B
Looking Ahead
07:30 (BR) Brazil Central Bank (BCB) Quarterly Inflation Report (QIR)
08:00 (PL) Poland Central Bank (NBP) Sept Minutes
08:00 BR) Brazil Mid-Sept IBGE Inflation M/M: 0.1%e v 0.4% prior; Y/Y: 2.6%e v 2.7% prior
08:05 (UK) Baltic Dry Bulk Index
08:30 (US) Sept Philadelphia Fed Business Outlook: 17.2e v 18.9 prior
08:30 (US) Initial Jobless Claims: 300Ke v 284K prior; Continuing Claims: 1.98Me v 1.944M prior
08:30 (CA) Canada July Wholesale Trade Sales M/M: -0.7%e v -0.5% prior
08:30 (US) Weekly USDA Net Export Sales
09:00 (US) July FHFA House Price Index M/M: 0.4%e v 0.1% prior
09:00 (MX) Mexico July Retail Sales M/M: +0.1%e v -1.1% prior; Y/Y: 1.0%e v 0.4% prior
09:00 (RU) Russia Gold and Forex Reserve w/e Sept 15th: No est v $427.3B prior
09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to cut Interest Rate by 25bps to 6.75%
10:00 (US) Aug Leading Index: No est v 0.3% prior
10:00 (EU) Euro Zone Sept Advance Consumer Confidence: -1.5e v -1.5 prior
10:30 (US) Weekly EIA Natural Gas Inventories
12:00 (US) Fed reports Q2 Financial Accounts: Household Change in Net Worth: No est v $2.347T prior
