• Expectations for a Brexit breakthrough remain low but reports surface that EU might make a major concession on the Irish backstop in an 11th hour attempt to get a deal
  • US-China high-level trade talks to take place on Thursday, Oct 10th in Washington; optimism for perhaps a partial deal


  • Australia Oct Westpac Consumer Confidence Index: 92.8 v 98.2 prior (lowest since July 2015)


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  • IMF chief Georgieva: IMF to cut global growth forecasts for 2019, 2020; there was ‘serious risk’ the global weakness will spread


  • PM Johnson said to be facing cabinet rebellion over no-deal Brexit, ‘many’ of his parties MPs might quit in the event of a no-deal Brexit
  • Ireland PM Varadkar: it’s going to be very hard to reach a Brexit deal next week as there were still two big gaps in the UK proposal, quite a wide difference on customs
  • PM Johnson reportedly had a ‘constructive’ call with Ireland PM Varadkar; both planned to meet in Dublin on Thurs or Fri. Both sides strongly reiterated their desire to reach a Brexit deal
  • Upcoming EU Leader Summit might offer to extend Brexit deadline until June. A “range of dates” will now be in play at the meeting of European leaders next week but sources suggested the natural cut-off date would be June


  • Fed Chair Powell: Fed will act as appropriate to support continued growth, a strong job market, and a return to 2% inflation; will carefully monitor incoming data; Fed will soon announce steps to add reserves over time. Growth is clearly slowing but there’s no reason the expansion would end
  • US imposed visa bans on Chinese persons linked to abuses against the Uighurs in Xinjiang province


  • Weekly API Oil Inventories: Crude: +4.1M v -5.9M prior



  • Indices [Stoxx600 +0.28% at 379.76, FTSE +0.06% at 7,146.82, DAX +0.76% at 12,061.28, CAC-40 +0.54% at 5,486.23, IBEX-35 +0.52% at 8,987.00, FTSE MIB +0.39% at 21,488.50, SMI +0.32% at 9,832.00, S&P 500 Futures +0.48%]

Market Focal Points/Key Themes:


  • European Indices trade higher across the board, after a weaker session in Asia and a rebound in US Index futures as positive trade talk rhetoric out of China has helped lift indices. On the corporate front shares of Cropenergies trade higher after a rise in profits and Revenue; also gains on positive orders, while GVC also gains as the company raised their outlook. PGS declines on a Revenue miss, Plastic Omnium also declines following a profit warning. In other news the LSE gains on further bid talk; Gam Holdings falls as the company confirmed there are no discussions with Generali, while Gensight Biologics gains as evidence of GS010 DNA transfer to contralateral eye of primates unilaterally injected with GS010 Gene Therapy.
  • Consumer discretionary: Takeaway [TKWY.NL] +3% (orders), GVC [GVC.UK] +4% (raises outlook), Plastic Omnium [POM.FR] -6% (profit warning)
  • Healthcare: GenSight Biologics [SIGHT.FR] +14% (study update)
  • Industrials: Kingfisher [KGF.UK] +0.5% (new CFO), Vertu Motors [VTU.UK] +1% (earnings), Volution Group [FAN.UK] +4% (earnings)


  • ECB’s De Guindos (Spain): Baseline Staff projections did not included the possibility of no-deal Brexit or even an escalation of trade tensions. Regional growth would deteriorate if trade risks and no-deal Brexit outcome intensified. Not expecting any policy U-turn under incoming Chief Lagarde
  • BOE stated that the UK faced huge risks if no-deal Brexit scenario unfolded but did reiterate its view that banking sector was prepared for any outcome
  • Ireland Fin Min Donohoe: Unwilling to trap Northern Ireland in EU and was against of having customs check anywhere in Ireland. Stressed that must continue to engage with UK
  • UK Parliament to sit on Oct 19th to discuss Brexit (date set after EU Leader Summit)
  • EU said to be ready to make a major concession on consent by allowing a double majority in the Northern Irish assembly to leave new Irish backstop after (as yet) unspecified number of years
  • Spain Acting PM Sanchez: To propose forming a govt in December. Reiterates view that domestic economic fundamentals was solid
  • China Foreign Ministry Spokesman Geng Shuang reiterated no human rights issue in Xinjiang. US deliberately making up excuses to interfere.
  • China reportedly planning tighter visa restrictions for US nationals with ties to anti-China groups
  • China said to be open to a partial US trade deal despite recent tech blacklist as long as no more tariffs were imposed

Currencies/Fixed Income

  • USD generally on softer footing in the session. Dealer attributed the sentiment after Fed Chair Powell noted the Fed would act as appropriate to maintain growth. Focus remained on upcoming US-China trade talks that are set to begin on Thursday in Washington. Any signs of a breakthrough would likely aid risk appetite globally. Levels in the USD are seen in the region of 99.67 region to the upside and 98.00 to the downside.
  • GBP received a pop after reports circulated that the EU was prepared to off the UK a concession on the Irish backstop issue in an 11th hour attempt to salvage a Brexit deal. GBP/USD moved approx. 50 pips higher to test above 1.2290 before consolidating the move. The 10-year Gilt yield was higher by 5bps to test above 0.46%. The UK could see further volatility this week as its due to see UK GDP, M2 and Governor Carney to speak on Thursday. Levels are seen to the upside in the region of 1.241 and 1.22 to the downside.
  • EUR/USD was firmer by 0.3% in quiet trading. The Euro has limited economic data aside from the ECB monetary policy meeting accounts on Thursday. Levels to the upside are 1.10 and 1.094 to the downside.

Economic Data

  • (DE) Denmark Aug Current Account Balance: 18.6B v 21.6B prior; Trade Balance (DKK): 9.8B v 8.2B prior
  • (NO) Norway Aug Overall GDP M/M: -0.6%% v +0.9% prior; Mainland GDP M/M: -0.2% v -0.3%e
  • (FI) Finland Aug Preliminary Trade Balance: -€0.2B v -€0.5B prior
  • (JP) Japan Sept Preliminary Machine Tool Orders Y/Y: -35.5% v -37.0% prior
  • (FR) Bank of France Sept Industrial (Business) Sentiment: 96 v 99e
  • (HU) Hungary Aug Preliminary Trade Balance: €0.0B v -€0.1Be

Fixed Income Issuance

  • (IT) Italy Debt Agency (Tesoro) opened its book to sell USD-denominated 5-year, 10-year and 30-year bonds via syndicate
  • (IN) India sold total INR160B v INR160B indicated in 3-month, 6-month and 12-month bills
  • (SE) Sweden sold total SEK1.5B vs .SEK1.5B indicated in 2029 and 2032 bonds
  • (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3.0% 2024 bonds; Avg Yield: 1.09% v 1.42% prior; Bid-to-cover: 3.54x v 1.53x prior
  • (GR) Greece Debt Agency (PDMA) sold €487.5M vs. €375M indicated in 13-Week Bills; Avg Yield: -0.020% v +0.10% prior; Bid-to-cover: 2.71x v 1.59x prior

Looking Ahead

  • (UR) Ukraine Sept CPI M/M: +0.8%e v -0.3% prior; Y/Y: 7.8%e v 8.8% prior
  • 05:30 (ZA) South Africa Sept SACCI Business Confidence: 89.0e v 89.1 prior
  • 05:30 (PT) Portugal Debt Agency (IGCP) to sell €0.75-1.0B in 2.25% Apr 2034 OT bonds
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays
  • 06:00 (UK) Decision from Scottish Inner House case
  • 06:00 (CZ) Czech Republic to sell 2021, 2027 and 2033 bonds
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (RU) Russia sells OFZ bonds – 06:00 (PT) Portugal Monthly Unemployment data
  • 07:00 (US) MBA Mortgage Applications w/e Oct 4th: No est v 8.1% prior
  • 07:00 (MX) Mexico Sept CPI M/M: 0.3%e v 0.0% prior; Y/Y: 3.0%e v 3.2% prior; CPI Core M/M: 0.3%e v 0.2% prior
  • 07:00 (UK) Weekly PM Question time in House
  • 08:00 (HU) Hungary Central Bank Sept Minutes
  • 08:00 (BR) Brazil Sept IBGE Inflation IPCA M/M: 0.0%e v 0.1% prior; Y/Y: 3.0%e v 3.4% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 09:00 (RU) Russia Q3 Preliminary Current Account Balance: $12.9Be v $10.6B prior
  • 10:00 (US) Aug JOLTS Job Openings: 7.250Me v 7.217M prior
  • 10:00 (US) Aug Final Wholesale Inventories M/M: 0.4%e v 0.4% prelim; Wholesale Trade Sales M/M: No est v 0.3% prior
  • 10:30 (US) Weekly DOE Oil Inventories
  • 12:00 (CA) Canada to sell 5-year bonds
  • 13:00 (US) Treasury to sell 10-Year Notes Reopening
  • 14:00 (US) FOMC Sept Minutes
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