Notes/Observations
- UK Jobs data inline; Sterling rallies as Aug rate hike hopes remain intact
- European Indices drift sideways in lackluster trade
- US Earnings in focus after Netflix guided short of forecasts; JNJ and Goldman Sachs due to report in the morning
Asia:
- China NDRC: Expects prices and economy to remain stable in H2; In H1 approved 102 fixed asset investment projects worth CNY260.3B
- Australia Central Bank minutes reiterate no strong case for near term adjustment in monetary policy, next move likely up rather than down
Europe:
- UK Jobless data comes mostly inline, Average weekly earnings ex bonus rose 2.7% in the 3 months to May, marking the weakest growth since January.
- UK PM May narrowly avoided defeat on its Customs Bill after amending its wording to appease hardline Euroskeptics.
- Defense Minister Guto Bebb resigned so he could vote against the government
Americas:
- Netflix declines over 14% in after hours trading, Q2 subscriber adds and Q3 guidance below ests
Economic Data:
- (UK) JUN JOBLESS CLAIMS CHANGE: +7.8K V -7.7K PRIOR; CLAIMANT COUNT RATE: 2.5% V 2.5% PRIOR
- (UK) MAY ILO UNEMPLOYMENT RATE: 4.2% V 4.2%E
- (UK) MAY AVERAGE WEEKLY EARNINGS 3M/Y: 2.5% V 2.5%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.7% V 2.7%E
- (IT) Italy May Industrial Sales M/M: 1.7% v 0.3% prior; Y/Y: 5.0% v 4.0% prior
- (EU) EU27 Jun New Car Registrations: 5.2% v 0.8% prior
Fixed Income Issuance:
- (ES) Spain Debt Agency (Tesoro) sells total €2.51B vs. €2.0-3.0B indicated range in 3-month and 9-month bills
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx50 -0.2% at 3,446, FTSE +0.1% at 7,608, DAX flat at 12,562, CAC-40 flat at 5,412; IBEX-35 flat at 9,714, FTSE MIB +0.4% at 21,906, SMI -0.4% at 8,812, S&P 500 Futures flat]
- Market Focal Points/Key Themes: European indices opened slightly lower and traded largely sideways as the session progressed; Financial sector best performer in muted volatility; Technology stocks underperforming; Casino reported results above expectations, supporting Carrefour; Ei Towers fails to open after Mediaset and F2i launch takeover bid; earnings expected in the upcoming US session include Johnson & Johnson, UnitedHealth and Omnicom
Equities
- Consumer discretionary: Casino CO.FR +3.8% (results), Finnair FIA1S.FI -16.7% (results), Tomtom TOM2.NL +4.9% (results)
- Energy: Rubis RUI.FR -7.5% (analyst action)
- Financials: SEB SEBA.SE +5.4% (results)
- Healthcare: Getinge GETIB.SE +8.2% (results)
- Industrials: Husqvarna HUSQB.SE -17.5% (results), Michelin ML.FR +0.5% (analyst action), Royal Mail RM.UK +3.5% (results), ThyssenKrupp TKA.DE +7.3% (chairman resigns)
- Materials: Rio Tinto RIO.AU +0.8% (results)
- Telecom: Talktalk TALK.UK +7.1% (results), Telenor TEL.NO -2.4% (results), Telia TLSN.SE -1.8% (acquisition)
Speakers
- (ES) Spanish PM Sanchez: To set minimum tax rate of 15% for large companies in Spain
- (IN) India Steel Minister: No sign of excess imports after U.S. tariffs
- (UK) BOE Gov Carney: Too early to judge Brexit white paper – comments alongside BOE’s Cunliffe
- in the event of no-deal Brexit scenario there would be big economic consequences
Currencies
- Kiwi popped higher, the most in 6-weeks following the RBNZ’s sectoral factor model inflation gauge surging to the highest level since 2011
- GBP/USD rises slightly following in line Jobs data out of the UK, rising 20 pips following the release.
Fixed Income
- Bund Futures trade 5 ticks lower at 162.69 underpinned as stocks wobbl, carry demand supports BTPs. Upside targets 163.25 followed by 163.85, while a return lower targets the 159.75 level.
- Gilt futures trade at 123.35 higher by 27 ticks as Gilt curve is the flattest in two years. Support continues stands at 121.75 then 120.25, with upside resistance at 123.85 then 124.25.
- Tuesday’s liquidity report showed Monday’s excess liquidity fell from €1.867T to €1.850. Use of the marginal lending facility dropped from €134M to €95M.
- Corporate issuance saw 5 issuers raise $15.3B in the primary market
Looking Ahead
- 05.30 (UK) Weekly John Lewis LFL sales data
- 07:45 (US) Weekly Goldman Economist Chain Store Sales
- 08:05 (UK) Baltic Dry Bulk Index
- 08:30 (CA) Canada May Manufacturing Sales M/M: No est v -1.3% prior
- 08:55 (US) Weekly Redbook Sales
- 09:00 (EU) Weekly ECB Forex Reserves: € v € prior
- 09:15 (US) Jun Industrial Production M/M: No est v -0.1% prior; Capacity Utilization: No est v 77.9% prior, Manufacturing (SIC) Production: No est v -0.7% prior
- 09:30 (NZ) Fonterra Global Dairy Trade Auction
- 10:00 (US) July NAHB Housing Market Index: No est v 68 prior
- 15:00 (AR) Argentina National CPI M/M: No est v 2.1% prior; Y/Y: No est v 26.3% prior
- 16:00 (US) May Total Net TIC Flows: No est v $138.7B prior; Net Long-term TIC Flows: No est v $93.9B prior
- 16:30 (US) Weekly API Oil Inventories
