Notes/Observations

Asia:

  • Chip related names rise after positive Q2 sales numbers from Taiwan Semi

Europe/Mideast:

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  • Germany and France final CPI come in line with views, while German Harmonized CPI came in ahead of expectations.
  • Germany official Peter Beyer said Europe should brace for US tariffs on ‘several’ fronts in the months ahead; Germany Economy Minister Altmaier is expected to meet with US Trade Representative (USTR) Lighthizer and US Commerce Sec Ross on Thursday
  • France’s Le Maire tells the US to not resolve digital tax through threats, rather with constructive dialogue; Digital tax aims for fair tax of data

Americas:

  • FED’s Powell testimony yesterday pointed a rate cut into the upcoming meeting as he referred to risks of weak inflation being more persistent than anticipated, with uncertainties since June FOMC meeting continuing to dim the outlook.
  • FOMC minutes also showed many participants saw rate cut as warranted in the near term if recent global trade and other risks continued to weigh on outlook Energy -Iran Revolutionary Guard rejects claim made by US that Iran tried to stop UK oil tanker, warns it could act to seize ships if given order

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 +0.21% at 387.98, FTSE +0.21% at 7,546.12, DAX +0.04% at 12,378.12, CAC-40 +0.20% at 5,578.87, IBEX-35 +0.22% at 9,273.45, FTSE MIB +0.59% at 22,174.50, SMI -0.14% at 9,923.50, S&P 500 Futures +0.17%]
  • Market Focal Points/Key Themes: Equities European Indices trade slightly higher across the board amid CPI data from France, Germany, Sweden came in-line with expectations and strong session in Asia. S&P futures currently trade up 0.2%, back above 3,000 mark. In corporate news, healthcare firm Indivior in the U.K. trades sharply higher after it raised FY19 guidance significantly citing better-than-expected H1. Shares of Reckitt Benckiser up almost 3% on agreement with US DoJ and US FTC and obligation to pay up to $1.4B. Fresenius Medical Care also trades higher in Frankfurt after welcoming U.S. plans for changes to kidney disease care. In other news, shares of Krones and Suedzucker both trade lower on issuing profit warning and reporting earnings, respectively, while Gerresheimer trades higher 8% following increase in revenue and earnings. Looking ahead, notable earners this morning include Fastenal and Delta Air Lines.
  • Consumer staples: Suedzucker [SZU.DE] -2.5% (earnings)
  • Consumer discretionary: McBride [MCB.UK] -9% (trading update; CEO stepping down)
  • Healthcare: Indivior [INDV.UK] +34% (raises outlook), Reckitt Benckiser [RB.UK] +2.5% (agreement with US DoJ and US FTC), Fresenius Medical Care [FME.DE] +2.5% (partnership)
  • Industrials: Krones [KRN.DE] -17% (profit warning), Deutsche Beteiligungs [DBAN.DE] -6% (profit warning), Gerresheimer [GXI.DE] +8% (earnings), Victoria [VCP.UK] -3% (earnings)

Speakers

  • (CN) China Commerce Ministry (MOFCOM) spokesman Gao Feng: nothing more to say on call with U.S. trade team; both teams implementing President Trump-Xi consensus and in contact for next step of talks
  • (CN) China Foreign Ministry spokesperson Wang Yi: asked about Hong Kong issues, China to stick to one country, two systems’
  • (FR) France FinMin Le Maire: DIgital tax targeted by US probe re-establishes fiscal justice

Currencies/Fixed Income

  • USD: The USD Index Futures traded lower yesterday following Powell’s dovish statement during the before the House Financial Services Committee. We could see more volatility in the USD index futures as we get the results of CPI and more Powell comments.
  • EUR: The Euro traded higher yesterday as the weaker USD pushed the pair higher.
  • GBP: The cable traded higher after an inline GDP figure and returning back to a positive figure. Volatility could increase to day further as Carney is due to speak later in the session. Levels to the downside are in the 1.245 region and 1.26 to the upside.

Economic Data

  • (DE) GERMANY JUN FINAL CPI M/M: 0.3% V 0.3%E;Y/Y: 1.6% V 1.6%E
  • (FR) FRANCE JUN FINAL CPI M/M: 0.2% V 0.2%E; Y/Y: 1.2% V 1.2%E
  • (SE) SWEDEN JUN CPI M/M: -0.1% V -0.1%E; Y/Y: 1.8% V 2.2% PRIOR
  • (CZ) Czech Jun CPI M/M: 0.2% v 0.1%e; Y/Y: 2.7% v 2.7%e
  • (CZ) Czech May Export Price Index Y/Y: 2.0% v 3.1% prior; Import Price Index Y/Y: 2.0% v 3.4% prior
  • (TR) Turkey May Current Account: $0.2B v $0.3Be

Fixed Income Issuance

  • (IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.5B VS. €4.5-5.5B INDICATED RANGE IN 3-YEAR AND 7-YEAR BTP BONDS
  • (IE) IRELAND DEBT AGENCY (NTMA) SELLS €1.0B VS. €1.0B INDICATED IN 2029 AND 2033 IGB BONDS

Looking Ahead

  • 05:30 (ZA) South Africa May Total Mining Production M/M: +0.3%e v -2.3% prior; Y/Y: -2.4%e v -1.5% prior; Gold Production Y/Y: No est v -19.5% prior; Platinum Production Y/Y: No est v 1.7% prior
  • 06:00 (IL) Israel Jun Trade Balance: No est v -$1.8B prior
  • 06:00 (IE) Ireland Q1 GDP Q/Q: No est v 0.1% prior; Y/Y: No est v 3.0% prior
  • 06:00 (IE) Ireland Q1 Current Account Balance: No est v €0.2B prior
  • 07:00 (ZA) South Africa May Manufacturing Production M/M: -0.6%e v +2.8% prior; Y/Y: 1.3%e v 4.6% prior
  • 07:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected t0 leave key rates unchanged. Current Standing Deposit Rate at 7.50%; Current Standing Lending Rate at 8.50% –
  • 08:00 (BR) Brazil May IBGE Services Sector Volume Y/Y: +3.2%e v -0.7% prior
  • 08:00 (RO) Romania Central Bank (NBR) July Minutes
  • 08:00 (BR) Brazil May Retail Sales M/M: +0.1%e v -0.6% prior; Y/Y: 1.3%e v 1.7% prior
  • 08:00 (BR) Brazil May Broad Retail Sales M/M: 0.3%e v 0.0% prior; Y/Y: 6.3%e v 3.1% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Jun CPI M/M: 0.0%e v 0.1% prior; Y/Y: 1.6%e v 1.8% prior
  • 08:30 (US) Jun CPI (ex-food/energy) M/M: 0.2%e v 0.1% prior; Y/Y: 2.0%e v 2.0% prior
  • 08:30 (US) Jun CPI Index NSA: 256.093e v 256.092 prior; CPI Core Index : 262.564e v 262.032 prior
  • 08:30 (US) Initial Jobless Claim: 221Ke v 221K prior; Continuing Claims: 1.68Me v 1.686M prior
  • 08:30 (US) Jun Real Avg Hourly Earning Y/Y: No est v 1.3% prior; Real Avg Weekly Earnings Y/Y: No est v 1.0% prior
  • 08:30 (CA) Canada May New Housing Price Index M/M: 0.1%e v 0.0% prior; Y/Y: 0.2%e v 0.1% prior
  • 09:00 (RU) Russia Gold and Forex Reserve w/e Jult 5th: No est v 517.1B prior
  • 10:00 (MX) Mexico Central Bank (Banxico) Jun Minutes
  • 10:30 (US) Weekly EIA Natural Gas Inventories
  • 14:00 (US) Jun Monthly Budget Statement : -$7.7Be v -$207.8B prior
  • 17:00(KR) South Korea Jun Export Price Index M/M: No est v 2.6% prior; Y/Y: No est v 0.4% prior
  • 17:00(KR) South Korea Jun Import Price Index M/M: No est v 2.2% prior; Y/Y: No est v 4.6% prior
  • 18:30 (NZ) New Zealand Jun Manufacturing PMI: No est v 50.2 prior
  • 19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: expected to leave Reference Rate unchanged at 2.75%
  • 20:00 (SG) Singapore Q2 Advance GDP Q/Q: 0.5%e v 3.8% prior; Y/Y: No est v 3.8% prior
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