• Risk appetite finding some leg room on US-China trade optimism
  • Focus on upcoming central bank decisions as geopolitical uncertainties and a worsening in the global economic outlook keeps dove salivating German Think Tanks lower 2019 GDP growth forecasts


  • China Global Times Editor-in-chief Hu Xijin: China will introduce important measures to ease negative impact of trade war, measures will help China and US companies – China expected to agree to buy more US agricultural products in hopes of getting better terms in a trade deal
  • China Foreign Ministry Commissioner in Hong Kong: Official: Extreme forces in Hong Kong escalated violence; China tourists to HK -90%
  • RBA reiterated view that unconventional policy was not likely, would consider if warranted; goal of any unconventional policy to reduce risk free rate
  • South Korea Aug Unemployment Rate: 3.1% v 4.0%e (lowest level since 2013)


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  • Germany Chancellor Merkel: must continue to reduce debt-to-GDP ratio below 60%; govt stands by its goal for a balanced budget
  • Italy PM Conte new govt won its 2nd confidence vote in Parliament (Senate) by 169-133 tally; the new Italian govt could formally take office


  • Northern Irish Democratic Unionist Party (DUP) leader Foster: PM Johnson confirmed his rejection of a Northern Ireland-only backstop in a meeting. Confirmed commitment to securing deal that works for the whole of UK and Ireland
  • PM Johnson said to be considering a plan for regulatory border in the Irish Sea as he looks for a new Brexit deal with the EU. PM wanted an all-Ireland zone for checks on most goods crossing between the north south of the island as part of a deal that would remove the need for a Northern Irish backstop.
  • UK MPs that were looking to stop a no-deal Brexit were said to be looking to bring back a bill of Theresa Mays as long as a second referendum was attached


  • President Trump fired John Bolton as National Security Adviser Energy: Weekly API Oil Inventories: Crude: -7.2M v +0.4M prior



  • Indices [Stoxx600 +0.64% at 388.90, FTSE +0.92% at 7,334.65, DAX +0.86% at 12,374.15, CAC-40 +0.31% at 5,610.69, IBEX-35 -0.01% at 9,077.15, FTSE MIB +0.59% at 21,997.50, SMI +0.33% at 10,054.00, S&P 500 Futures -0.01%]
  • Market Focal Points/Key Themes: European Indices trade higher across the board ahead of tomorrow’s ECB rate meeting, in which the ECB are expected to ease further. Asian Indices were mostly higher, while US Index futures are also firmer. On the corporate front shares of London Stock Exchange trade over 10% higher after receiving a proposal by the Hong Kong Exchange to combine the company; ArcelorMittal shares gain on reports the company is evaluating sale of its construction business, Casino rises on talk of interest from Carrefour, while Peugeot Citroen shares gain on comments from the CEO assuring that there will be no merger with Fiat Chrysler for now. On the earnings front, Capital & Regional gains on earnings and discussions of a stake acquisition by Growthpoint properties; Biffa gains after affirming outlook while Spanish retail giant Inditex declines on a profit miss and Advanced Medical Solutions declines on a fall in profits. In other news Crest Nicholson rises on the stepping down of its Chairman, while STMicroelectronics gains following the new Apple product launch. Looking ahead notable earners include General Finance Corp and Lovesac company among others.


  • Consumer discretionary: Carrefour [CA.FR] -1%, Casino [CO.FR] +1.5% (potential Carrefour’s interest in Casino), Inditex [ITX.ES] -2.5% (earnings), Puma [PUM.DE] -1% (analyst action), Hermes [RMS.FR] -0.5% (earnings)
  • Financials: London Stock Exchange [LSE.UK] +10% (potential combination with HKSE), Galliford Try [GFRD.UK] -0.5% (earnings), Unite Group [UTG.UK] +1% (trading update)
  • Industrials: Schmolz+Bickenbach [STLN.CH] -3.5% (profit warning)
  • Technology: AMS [AMS.CH] +4.5%, STMicroelectronics [STM.FR] +3% (new Apple products launch)


  • ECB’s Rehn (Finland): falling external demand is affecting labor market
  • Scottish Court decision on UK Parliament suspension: UK PM Johnson’s decision on prorogation was unlawful. Prorogation needed Supreme Court resolution. UK Government stated that it would appeal the ruling
  • UK Business Min Leadsom: Looking at ways to ensure there is no Irish backstop
  • German Kieler Institut fuer Weltwirtschaft think tank (IFW), cuts 2019 GDP growth forecast from 0.6% to 0.4%
  • German Institute for Economic Research (DIW) cuts 2019 GDP growth forecast from 0.9% to 0.5%
  • Poland Central Bank Gov Glapinski: Higher minimum wage will not hurt the domestic economy
  • Czech Central Bank Vice Gov Mora: domestic inflationary pressures balanced by weaker environment abroad, expected easing by ECB, Fed
  • China unveiled its list for tariff exemptions for US goods that take effect from Tuesday, Sept 17th. China govt approved tariff exemptions for US lubricant base oil and would consider tariff exemptions for additional products imported from the US (*Note: List did not include corn, soybeans and pork in 1st round of tariff exclusions)
  • Russia Energy Min Novak: Discussed oil price levels and cooperation with new Saudi Energy Min but not about any moves to change oil prices
  • Iraq oil Min Ghadhban: OPEC+ monitoring committee (JMMC) to discuss deeper oil production cuts

Currencies/Fixed Income

  • Optimism on US-China trade talks helped to unwind the typical safe-haven flows
  • EUR/USD softer by 0.2% at 1.1025 ahead of Thursday’s ECB rate decision where more stimulative measures are expected to be announced.
  • GBP was little changed and enjoying some calm with the UK parliament suspended. A Scottish Court ruling noted that PM Johnson’s decision to suspend Parliament was unlawful and needed resolution by the Supreme Court. GBP/USD at 1.2355 just ahead of the NY morning
  • USD/JPY was higher by 0.2% and edging towards the 108 neighborhood as optimism continued to bubble over on upcoming US-China trade talks. The 109 level seen as next key area of resistance

Economic Data

  • (RO) Romania Aug CPI M/M: 0.1% v 0.0%e; Y/Y: 3.9% v 3.8%e
  • (ES) Spain July Industrial Output NSA Y/Y: +2.9% v -1.9% prior; Industrial Output SA Y/Y: 0.8% v 1.5%e; Industrial Production M/M: -0.4% v -0.3%e
  • China Aug M2 Money Supply Y/Y: 8.2% v 8.2%e
  • China Aug New Yuan Loans (CNY): 1.210T v 1.200Te
  • China Aug Aggregate Financing (CNY): 1.980T v 1.605Te

Fixed Income Issuance

  • (DK) Denmark sold total DKK3.8B in 3-month and 6 month bills –
  • (IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 12-month Bills; Avg Yield: -0.226% v +0.107% prior; Bid-to-cover: 1.59x v 1.44x prior
  • (SE) Sweden sold total SEK1.5B vs. SEK1.5B in 2028 and 2029 bonds

Looking Ahead

  • OPEC Monthly Oil Report (no set time)
  • 05:30 (ZA) South Africa Aug SACCI Business Confidence: No est v 92 prior
  • 05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.0-1.25B in 2029 and 2034 OT bonds
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (IL) Israel Aug Trade Balance: No est v -$1.7B prior
  • 06:00 (ZA) South Africa Q3 BER Business Confidence: 28e v 28 prior
  • 06:00 (PT) Portugal Aug Final CPI M/M: No est v -0.1% prelim; Y/Y: No est v -0.1% prelim
  • 06:00 (PT) Portugal Aug Final CPI M/M: No est v -0.1% prelim; Y/Y: No est v -0.1% prelim
  • 06:00 (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 1.50%
  • 07:00 (US) MBA Mortgage Applications w/e Sept 6th: No est v -3.1% prior
  • 07:00 (MX) Mexico July Industrial Production M/M: -0.1%e v +1.1% prior; Y/Y: -1.8%e v -2.9% ;prior; Manufacturing Production Y/Y: +0.9%e v -0.8% prior
  • 08:00 (HU) Hungary Central Bank Aug Minutes
  • 08:00 (BR) Brazil July Retail Sales M/M: 0.2%e v +0.1% prior; Y/Y: +1.9%e v -0.3% prior
  • 08:00 (BR) Brazil July Broad Retail Sales M/M: -0.6%e v 0.0% prior; Y/Y: 4.2%e v 1.7% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Aug PPI Final Demand M/M: 0.0%e v 0.2% prior; Y/Y: 1.7%e v 1.7% prior
  • 08:30 (US) Aug PPI Ex Food and Energy M/M: +0.2%e v -0.1% prior; Y/Y: 2.2%e v 2.1% prior
  • 08:30 (US) Aug PPI Ex Food, Energy, Trade M/M: 0.2%e v -0.1% prior; Y/Y: No est v 1.7% prior
  • 08:30 (CA) Canada Q2 Capacity Utilization Rate: 82.0%e v 80.9% prior
  • 09:00 (RU) Russia July Trade Balance: $11.0Be v $12.5B prior; Exports: $31.1Be v $32.5B prior; Imports: $20.0Be v $20.0B prior
  • 09:45 (UK) BOE APF Gilt purchase operation
  • 10:00 (US) July Final Wholesale Inventories M/M: 0.2%e v 0.2% prelim; Wholesale Trade Sales M/M: +0.5%e v -0.3% prior;
  • 10:30 (US) Weekly DOE Oil Inventories
  • (PE) Peru July Trade Balance: No est v $0.8B prior
  • 12:00 (CA) Canada to sell 30 Year Bonds
  • 13:00 (US) Treasury to sell 10-year notes
  • 15:00 (AR) Argentina July Capacity Utilization: No est v 59.1% prior
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