• Geopolitical risks heightened after drone attack on Saudi oil facilities; OPEC and Russia energy officials play down need for any extraordinary OPEC+ meeting at this time (appear to play-down damage)
  • Lower-level China/US officials are expected to meet this week in Washington D.C.


  • China Aug Retail Sales misses expectations (YoY7.5% v 7.9%e)
  • China Aug Industrial Production missed expectations (YoY: 4.4% v 5.2%e)
  • China Premier Li: Maintaining economic growth at 6% or more is ‘very difficult;’ economy faces certain downward pressure due to slowing global


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  • Italy Econ Min Gualtieri reiterated stance that EU should adopt expansionary fiscal policy. Privatization should proceed with caution, they are not to be used for meeting immediate financial needs
  • France Finance Ministry said to see 2020 budget deficit around 2.2% compared to 2.0% forecast made back in April (Note 2019 seen at 2.1%). Maintained 2019 GDP growth forecast of 1.4% cuts 2020 growth forecast from 1.4% to 1.3%
  • S&P affirmed Portugal sovereign rating at BBB; outlook revised to Positive from Stable


  • PM Johnson to have his first meeting with EU’s Juncker related to trying to get a new Brexit deal Monday, Sept 16th. reiterated stance that he believed he could strike an EU deal. Reiterated stance that UK will leave EU on Oct 31st with either a deal or no-deal. If we could make enough progress in the next few days, I indeed to go to the summit on Oct 17th and finalist an agreement
  • EU officials deny UK PM Johnson’s claim that there has been “real signs of movement” and “a huge amount of progress is being made”on getting rid of the backstop
  • British Chamber of Commerce cuts both 2019 and 2020 GDP growth forecast. Cuts 2019 GDP outlook from 1.3% to 1.2% and 2020 GDP outlook from 1.0% to 0.8% (*Note: outlook assumes UK avoids a no deal Brexit

Americas: –

  • President Trump: We are “locked and loaded” for a response on Saudi oil attack; want to hear from Saudi Arabia before any attack response; incorrect to say that he would meet with Iran with no conditions


  • Saudi Arabia shut down about half of its oil production after drone attacks on two refineries; shuts 5M bpd of production (5% of total global output)
  • Brent crude futures rose 18% to trade above $71.60/bbl, after Saturday attack on Saudi Arabia oil facilities
  • President Trump said he has authorized the release of oil from the Strategic Petroleum Reserve (SPR), if needed. Any oil that may be released from the SPR will be in a ‘to-be-determined’ amount that is sufficient to keep the markets well-supplied



  • Indices [Stoxx600 -0.55% at 389.64, FTSE -0.13% at 7,357.73, DAX -0.77% at 12,372.08, CAC-40 -0.59% at 5,621.91, IBEX-35 -0.84% at 9,061.00, FTSE MIB -1.16% at 21,923.50, SMI -0.53% at 9,994.50, S&P 500 Futures -0.45%]
  • Market Focal Points/Key Themes: European Indices trade lower across the board, but up sharply off the lows on heightened geopolitical tensions, following an attack Saudi Oil facilities. The FTSE outperforms following a pullback in Cable following a strong run up over the past couple of days and strength in Oil related names. On the corporate front many of the major Oil names trade higher following the rise in Crude prices, with Akerbp, Premier Oil, Gulf Keystone Petroleum, Equinor, BP and Royal Dutch Shell and Eni among the names trading higher. Total and Tullow Oil trades higher following Joe-1 exploration well successfully opening a new Upper Tertiary oil play in the Guyana basin Finsbury Foods trade sharply higher on earnings, with gains also seen in Croperngies on a sharp rise in profits and Revenue on higher ethanol prices. Alfa Financial services declines on a profit warning, with Petra Diamonds , MP Evans and CompuGroup Medical among other names declining on earnings and guidance. Elsewhere H&M declines on preliminary Q3 sales numbers, Air France continues to declines following a reported combined offer for Aigle Azur, while Man Group declines on a new Chairman.


  • Consumer discretionary: Lufthansa [LHA.DE] -3%, Air France-KLM [AF.FR] -3% (oil prices spike), Finsbury Food Group [FIF.UK] +9% (earnings)
  • Energy: BP [BP.UK] +3% (oil prices spike), Tullow Oil [TLW.UK] +9% (exploration), Seabird Exploration [SBX.NO] +7% (awarded contract)
  • Financials: Alfa Financial Software [ALFA.UK] -18% (profit warning)
  • Healthcare: Lundbeck [LUN.DK] +1.5% (acquisition)
  • Technology: CompuGroup [COP.DE] -4% (outlook cut), AMS [AMS.CH] -3% (lowers minimum acceptance threshold of the offer for Osram)


  • ECB’s Stournaras (Greece): ECB stimulus was necessary and saw benefits exceeding costs. Saw a strong case for incoming ECB President Lagarde to keep up stimulus
  • UK Foreign Min Raab reiterated govt stance that had to remove the Irish backstop removed; UK would leave EU on Oct 31st come what may
  • Poland Central Bank’s Ancyparowicz: 2020 CPI will not exceed 3.5%; reiterates MPC that base rate to remain stable during period
  • South Korea President Moon: Working level talks between US-North Korea to resume soon
  • North Korea said that denuclearization talks are possible only if threats are clearly removed
  • Japan Trade & Industry Min Sugawara: Country has a 9-months of oil reserves and would release reserves if necessary to secure supply of oil
  • Russia Energy Min Novak stated that had enough reserves in the world to cover oil shortage and saw no need for any extraordinary OPEC/OPEC+ meeting. No need to make any force majeure decisions. Current oil production cuts and deal terms remained intact. Planned to speak with Saudi Energy min on Monday
  • OPEC Sec Gen Barkindo and IEA chief Birol said to express satisfaction that Saudi situation has been brought under control. No extraordinary meeting for OPEC+ needed at this time
  • Saudi Aramco full return to normal Oil production volumes ‘may take months’
  • UK-flagged tanker held by Iran said to be released in coming days
  • Iran said to see no development in nuclear talks with Europe

Currencies/Fixed Income

  • Safe-haven plays moved back to the front-burner following the weekend attack on Saudi oil facilities which heightened geopolitical risks. The risk aversion flows abated somewhat as both OPEC and non-Opec officials played down the need for any extra-ordinary meeting and stressed that Saudi Arabia seemed to have the situation under control. Various countries made mention of respective strategic oil reserves to alleviate any short-term supply disruptions. US 10-year yield were lower by over 4bps to test 1.85% while spot gold was hovering around the $1,500/oz level (up less than 1%).
  • GBP/USD was lower by 0.5% at 1.2450 area with focus turning to PM Johnson-Juncker meeting later today.J ohnson reiterated stance over the weekend that he believed he could strike an EU deal and reiterated stance that UK would leave EU on Oct 31st with either a deal or no-deal

Economic Data

  • (DK) Denmark Aug PPI M/M: -0.3% v +0.5% prior; Y/Y: -3.1% v -2.2% prior
  • (NO) Norway Aug Trade Balance (NOK): 6.7 v 6.0B prior
  • (IN) India Wholesale Prices (WPI) Y/Y: 1.1% v 1.0%e
  • (CZ) Czech Aug PPI Industrial M/M: 0.1% v 0.0% prior; Y/Y: 2.1% v 2.1% prior
  • (TR)) Turkey Jun Unemployment Rate: 13.0% v 12.8% -prior
  • (CH) Swiss Total Sight Deposits (CHF): 592.4B v 591.6B prior; Domestic Sight Deposits: 478.4B v 477.0B prior
  • (TR) Turkey Aug Central Gov’t Budget Balance (TRY): B v 9.9B prior
  • (IT) Italy Aug Final CPI M/M: 0.4% v 0.5% prelim; Y/Y: 0.4% v 0.5% prelim; CPI Index (ex-tobacco): 103.2 v 102.7 prior
  • (IT) Italy Aug Final CPI EU Harmonized M/M: 0.0% v 0.0% prelim; Y/Y: 0.5% v 0.5%e
  • (IT) Italy July General Government Debt: €2.410T (record high)

Fixed Income Issuance

  • (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in 12-month Bills; Avg Yield: 1.25% vs 1.20% prior; Bid-to-cover: 2.39x v 2.01x prior
  • (SK) Slovakia Debt Agency (Ardal) sold total €186.1M in 2030 and 2047 bonds

Looking Ahead

  • (UK) PM Johnson to meet EU’s Juncker in Luxembourg
  • 04:00 (HU) EU Discusses Article 7 Rule-of-Law Procedure against Hungary
  • (BE) Belgium Debt Agency (BDA) announcement on upcoming issuance for Monday, Sept 23rd
  • 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
  • 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 3-month and 6-month bills
  • 06:00 (IL) Israel Q2 Preliminary (2nd reading) GDP Annualized: No est v 1.0% prior
  • 06:00 (IE) Ireland July Trade Balance: No est v €4.2B prior
  • 06:00 (RO) Romania to sell RON500 Mln 4.4% 2023 Bonds
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (BZ) Brazil Sept FGV Inflation IGP-10 M/M: No est v -0.5% prior
  • 07:25 (BR) Brazil Central Bank Weekly Economists Survey
  • 08:00 (PL) Poland Aug CPI Core M/M: 0.1%e v 0.1% prior; Y/Y: 2.1%e v 2.2% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:00 (ES) Spain Debt Agency (Tesoro ) announces size on upcoming auctions
  • 08:30 (US) Sept Empire Manufacturing: 4.0e v 4.8 prior
  • 08:30 (CA) Canada July Int’l Securities Transactions (CAD): No est v -4.0B prior
  • 09:00 (RU) Russia Aug Industrial Production Y/Y: 2.2%e v 2.8% prior
  • 09:00 (BE) Belgium July Trade Balance: No est v -€1.1B prior
  • 09:00 (CA) Canada Aug Existing Home Sales M/M: 1.3%e v 3.5% prior
  • 09:00 (FR) France Debt Agency (AFT) to sell combined €3.3-4.5B in 3-month, 6-month and 12-month Bills
  • 11:30 (US) Treasury to sell 3-Month
  • 16:00 (US) Crop Report
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