• Less appetite for safe havens in session
  • Sweden’s Riksbank kept its policy steady (as expected) but pushed back its 1st potential rate hike until Dec/Feb period from its prior view of around year-end
  • Swiss Q2 GDP handily beats expectations and has higher back quarter adjustments
  • German July Factory Orders disappoint (MoM data has fallen in 4 of the last 5 months)


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  • Australia July Trade Balance registered its 7th straight surplus (A$1.6B v A$1.9B prior)
  • BOJ Board member Kataoka (dove; dissenter) noted that its forward guidance was no more effective than existing policies. Appropriate to do additional easing. BoJ should expand stimulus to quicken achievement of price target, instead of taking steps to continue easy policy for prolonged period. Seeking to guide super-long bond yields lower would help finance government spending
  • South Korea Official: North and South Korea to hold summit on Sept 18-20 in North Korea


  • President Trump: We should know if Canada will be in trade deal in next two or three days, maybe today. If govt shutdown happens, it happens; reiterates willing to shut down the govt over border security funding
  • Fed’s Bostic (dove, voter): US economy was performing quite well; the economy was at full employment and inflation was at the 2% goal. Reiterated view that the economy was standing on its own, monetary policy should be neutral
  • Fed’s Kashkari (non-voter, dove): Still might be more labor market slack. Trade disputes pose a risk to the economy


  • Weekly API Oil Inventories: Crude: -1.2M v 0M (flat) prior

Economic Data:

  • (NL) Netherlands Aug CPI M/M: 0.3% v 1.1% prior; Y/Y: 2.3% v 2.1% prior
  • (NL) Netherlands Aug CPI EU Harmonized M/M: 0.4% v 0.5%e; Y/Y: 2.1% v 1.9%e
  • (CH) Swiss Q2 GDP Q/Q: 0.7% v 0.5%e; Y/Y: 3.4% v 2.4%e
  • (DE) Germany July Factory Orders M/M: -0.9% v +1.8%e; Y/Y: -0.9% v +1.9%e
  • (CZ) Czech July National Trade Balance (CZK) -4.8B v -5.0Be
  • (CZ) Czech July Industrial Output Y/Y: 10.3% v 8.3%e; Construction Output Y/Y: 15,8% v 5.5% prior
  • (HU) Hungary July Industrial Production M/M: -2.0% v -1.2% prior; Y/Y: 3.9% v 8.0%e
  • (MY) Malaysia Aug Foreign Reserves: $104.4B v $104.2B prior
  • (DE) Germany Aug Construction PMI: 51.5 v 50.0 prior
  • (SE) Sweden Central Bank (Riksbank) left Repo Rate unchanged at -0.50% (as expected); pushed back 1st potential rate hike until Dec or Feb
  • (SE) Sweden Aug Average House Prices (SEK): 2.930M v 2.820M prior
  • (ZA) South Africa Q2 Current Account Balance (ZAR): -164B v -151Be; Current Account to GDP Ratio: -3.3% v -3.3%e
  • (GR) Greece Jun Unemployment Rate: 19.1% v 19.3% prior
  • (IS) Iceland Aug Preliminary Trade Balance (ISK): -14.5B v -13.0B prior

Fixed Income Issuance:

  • (IN) India sold total INR180B vs. INR180B indicated in 3-month, 6-month and 12-month bills
  • (ES) Spain Debt Agency (Tesoro) sold total €4.375B vs. €4.0-5.0B indicated range in 2023, 2028 and 2048 Bonds
  • Sold €1.908B in 0.35% July 2023 SPGB; Avg yield: 0.410% v 0.368% prior; Bid-to-cover: 1.70x v 3.38x prior
  • Sold €1.587B in 1.40% Apr 2028 SPGB; Avg yield: 1.432% v 1.422% prior, Bid-to-cover: 1.41x v 1.50x prior
  • Sold €880M in 2.7% Apr 2048 SPGB; Avg Yield: 2.583% v 2.225% prior; Bid-to-cover: 1.58x v 1.27x prior
  • (ES) Spain Debt Agency (Tesoro) sold €545M vs. €250-750M indicated range in 0.30% Nov 2021 Inflation-Linked bonds (SPGBei); Real Yield: -1.285% v -1.578% prior; Bid-to-cover: 3.1x v 2.67x prior
  • (FR) France Debt Agency (AFT) sold total €8.5BB vs. €7.5-8.5B indicated range in 2028, 2031, 2034 and 2066 bonds
  • Sold €3.36B in 0.75% Nov 2028 Oat; Avg Yield: 0.71% v 0.67% prior; Bid-to-cover: 1.95x v 1.91x prior
  • Sold €2.513B in 1.50% May 2031 Oat; Avg Yield 0.92% v 0.98% prior; Bid-to-cover: 1.38x v 1.70x prior
  • Sold €1.375B in 1.25% May 2034 Oat; Avg Yield: 1.11% v 1.04% prior; Bid-to-cover: 1.60x v 2.23x prior
  • Sold €1.252B in 1.75% May 2066 Oat; Avg Yield: 1.81% v 1.91% prior, Bid-to-cover: 1.69x v 1.24x prior



  • Indices [Stoxx600 +0.2% at 376.2, FTSE +0.1% 7393, DAX +0.4% at 12084, CAC-40 +0.4% at 5279, IBEX-35 -0.5% at 9253, FTSE MIB +0.7% at 20721, SMI +0.2% at 8886, S&P 500 Futures +0.1%]
  • Market Focal Points/Key Themes: European Indices trade mostly higher across the board, reversing earlier losses tracking US futures. Upbeat earnings from Safran lifts the French CAC with strong earnings and guidance raise lifting the stock over 5%. Bovis Home, Dixons Carphone, Go-Ahead are among other notable names trading higher following results. Meanwhile Sodexo trades lower on its longer term outlook, with Uponor another notable decliner after cutting its Op profit outlook. Looking ahead notable earners include GIII apparel, Dell Technologies and Lands End.


  • Consumer Discretionary Dixons Carphone [DC.UK] +1.7% (Trading update), Go Ahead [GOG.UK] +14% (Earnings), McCarthy & Stone [MCS.UK] +2.8% (Earnings), Sodexo [SW.FR] -4.5% (Outlook)
  • Industrials Safran [SAF.FR] +5.9% (Earnings)
  • Financials Commerzbank [CBK.DE] -1.1% (Removed from DAX 30 Index), Just Group [JUST.UK] +0.5% (Earnings)
  • Real Estate Bovis [BVS.UK] +4.6% (Earnings)
  • Energy Centrica [CNA.UK] +4% (Ofgem price cap announcement)


  • Sweden Central Bank (Riksbank) Policy Statement noted that if the economy developed as expected, there would soon be scope to slowly reduce the support from monetary policy.. It saw Repo Rate holding steady in October then raised by 25bps at either in December or February meeting. Policy to be expansionary for a long period of time and if conditions for inflation changed then Board was prepared to adjust monetary policy. Important for SEK currency (Krona) development to be compatible with inflation target . Dep Gov Ohlsson entered reservation on Repo Rate and the rate path while Dep Gov Floden entered reservation on rate path
  • Sweden Central Bank (Riksbank) Gov Ingves post rate decision press conference: There would soon be room to reduce monetary stimulus; rates to be raised in either Dec or Feb
  • France Fin Min Le Maire: Domestic growth seen around 1.7%
  • Italy govt said to be heading towards €30B budget adjustment with budget deficit between 2.0-2.5% (**Note: would stay within EU rules)
  • German IFO Institute raised its 2018 GDP growth from 1.8% to 1.9%. Forecasted 2019 GDP at 1.9%and 2020 GDP at 1.7%
  • Germany said to prepare help for companies impacted by the Brexi. T o change reorganization act so that companies founded as English Limited firms could be changed into domestic companies
  • South Africa Cabinet Statement reaffirmed its commitment to fiscal sustainability
  • Russia Econ Min Oreshkin stated that sanctions would not cause a recession. Economy would be stable in case of any external volatility . Saw CPI between 4.5-5.0% area in Q1 2019 due to VAT hike. Weaker RUB currency (Ruble) to stimulate export activity
  • Russia Central Bank Zabotkin (Monetary Policy Chief): To keep monetary policy stance tight at least to 2019. Neutral nominal rate seen between 6.00-7.00%. Current conditions seen as almost neutral
  • Philippines Central Bank Dep Gov Guinigundo reiterated view that the domestic economy couldn withstand effects from rate hikes so far and was not ruling out more rate adjustments
  • China Commerce Ministry (MOFCOM) spokesperson: China and US have maintained contact on working level. To take necessary retaliatory measures based on US actions
  • **Reminder: The public comment period related to the US’ proposed tariffs on $200B in China goods due to end on Sept 6th (Thursday).


  • Less appetite for safe havens in session kept the USD steady against the major pairs with EUR/USD at 1.1630 area and USD/JPY at 111.35 just ahead of the NY morning.
  • The EUR/SEK was higher after the Riksbank pushed back its 1st potential rate hike until Dec/Feb period from its prior view of around year-end. Cross holding above 10.56, higher by 0.3% in the session

Fixed Income

  • Bund Futures trades at 160.01 up 3 ticks as European markets trade lower amid emerging markets sell-off. Resistance moves to 161.82 then 163. A downside break of 159.85 sees 158.69 initially.
  • Gilt futures trades at 122.47 up 10 ticks following the move in Treasuries. Continued support at 122.50, with a continued move higher targeting 123.93 then 124.00.
  • Thursday ‘s liquidity report showed Wedneday’s excess liquidity fell from €1.924T to €1.920T. Use of the marginal lending facility fell from €41M to €41M.
  • Corporate issuance saw 13 issuers raise $22.5B in the primary market

Looking Ahead

  • (IL) Israel Aug Foreign Currency Balance: No est v $115.8B prior
  • (RU) Russia Aug Light Vehicle Car Sales Y/Y: 12%e v 11% prior
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-Month bills
  • 05:30 (PL) Poland to sell Bonds
  • 05:30 (UK) DMO to sell £3.0B in 1.00% Apr 2024 Gilts
  • 06:00 (IE) Ireland Aug Live Register Monthly Change: No est v -2.2K prior; Live Register Level: no est v 217.7K prior
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (UR) Ukraine Central Bank Interest Rate Decision: Expected to raise Interest Rates by 25bps to 17.75%
  • 07:00 (ZA) South Africa July Electricity Production Y/Y: No est v 0.3% prior; Electricity Consumption Y/Y: No est v 0.6% prior
  • 07:00 (BR) Brazil Aug FGV Inflation IGP-DI M/M: 0.8%e v 0.4% prior; Y/Y: 9.2%e v 8.6% prior
  • 07:30 (US) Aug Challenger Job Cuts: No est v 22.1K prior; Y/Y: No est v -4.2% prior
  • 07:45 (DE) ECB’s Lautenschlaeger at Eurofi Financial forum in Vienna
  • 08:00 (CL) Chile July Nominal Wage M/M: No est v 0.1% prior; Y/Y: No est v 2.7% prior
  • 08:00 (BR) Brazil Aug IBGE Inflation IPCA M/M: 0.0%e v 0.3% prior; Y/Y: 4.3%e v 4.5% prior
  • 08:05 (UK) Baltic Dry Bulk Index
  • 08:15 (US) Aug ADP Employment Change: +200Ke v +219K prior
  • 08:30 (US) Q2 Final Nonfarm Productivity: 3.0%e v 2.9% prelim; Unit Labor Costs: -0.9%e v -0.9% prior
  • 08:30 (US) Initial Jobless Claims: 213Ke v 213K prior; Continuing Claims: 1.72Me v 1.708M prior
  • 08:30 (CA) Canada July Building Permits M/M: +1.0%e v -2.3% prior – 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 31st: No est v 457.1B prior
  • 09:00 (MX) Mexico Jun Gross Fixed Investment: 2.2%e v 0.9% prior
  • 09:45 (US) Aug Final Markit Services PMI: 55.2e v 55.2 prelim; Composite PMI: No est v 55.0 prelim
  • 10:00 (US) Aug ISM Non-Manufacturing Index: 56.8e v 55.7 prior
  • 10:00 (US) July Factory Orders: -0.6%e v +0.7% prior; Factory Orders (Ex-Transportation: No est v 0.4% prior
  • 10:00 (US) July Final Durable Goods Orders: -1.7%e v -1.7% prelim; Durables Ex Transportation: No est v 0.2% prelim; Capital Goods Orders (Non-defense/ex-aircraft): No sst v 1.4% prelim; Capital Goods Shipments (Non-defense/ex-aircraft): No est v 0.9% prelim
  • 10:00 (US) Fed’s Williams (moderate, voter)
  • 10:20 (BR) Brazil Aug Vehicle Production: No est v 245.8K prior; Vehicle Sales: No est v 217.5K prior; Vehicle Exports: No est v 51.4K prior
  • 11:00 (US) Treasury announcement for upcoming 3-year, 10-year and 30-year bonds
  • 12:30 (CH) SNB’s Zurbruegg – 14:30 (CA) Bank of Canada (BOC) Wilkins
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