Notes/Observations
- Standoff between Democrats and Republicans over another coronavirus-relief bill showed no signs of abating
Asia:
- Australia Aug Consumer Inflation Expectation Survey: 3.3% v 3.2% prior
- Australia July Employment Change: +114.7K v +25.0Ke; Unemployment Rate: 7.5% v 7.8%e
- RBNZ Deputy Gov Bascand noted that a resurgence of Coronavirus in New Zealand was a big risk to outlook; Will probably do combo of Negative OCR and Funding for lending program if additional stimulus was needed
Coronavirus:
- Total global cases 20,550,481 (+1.6% d/d); total deaths: 748.4K (+1.1% d/d)
Europe:
- EU Official: The EU & US should intensify their attempts to negotiate a solution to ongoing trade concerns; the US’ decision to not increase tariffs on EU goods avoid adding to their ongoing disputes
Americas:
- US Treasury Sec Mnuchin noted that stimulus negotiations were going nowhere
- USTR: EU and member states have not taken the actions necessary to come into compliance with the WTO decision in the Airbus/Boeing case. US committed to obtaining long-term resolution to dispute over aircraft subsidies; will begin a new process with the EU. To maintain 15% tariffs on Airbus aircraft and 25% tariffs on other European goods
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -0.26% at 374.02, FTSE -0.93% at 6,221.76, DAX -0.10% at 13,045.65, CAC-40 -0.08% at 5,069.47, IBEX-35 -0.12% at 7,287.00, FTSE MIB -0.13% at 20,411.50, SMI +0.19% at 10,298.00, S&P 500 Futures -0.03%]
- Market Focal Points/Key Themes: European indices open modestly lower across the board and stayed in the red as the session wore on; better performing sectors include telecom and consumer discretionary; materials and financials sectors among underperformers; UK CMA provisionally requiring funeral directors to provide prices; US yesterday left tariffs Spain, raised on Germany and France; Delivery Hero to replace Wirecard on DAX; focus on US initial jobless claims; earnings expected in the upcoming US session include Macy’s, Brookfield Asset Management and Alibaba
Equities
- Consumer discretionary: Dignity [DTY.UK] +7% (response to UK CMA), TUI [TUI1.DE] -6% (earnings)
- Consumer staples: National Express [NEX.UK] -13% (earnings)
- Energy: RWE [RWE.DE] +1.5% (earnings)
- Financials: Swiss Life [SLHN.CH] +3% (earnings), Just Group [JUST.UK] +13% (earnings), Zurich Insurance Group [ZURN.CH] -1.5% (earnings), Aegon [AGN.NL] -13% (earnings)
- Industrials: Thyssenkrupp ]TKA.DE] -14% (earnings), Nordex [NDX1.DE] -7% (earnings)
- Technology: Wirecard [WDI.DE] -13% (to be excluded of DAX)
- Telecom: Deutsche Telecom [DTE.DE] +2% (earnings)
Speakers
- German Health Min Spahn commented that the rise in German coronavirus cases was a concern but remained optimistic of a vaccine in coming months
- EU Commission acknowledged US decision not to exacerbate ongoing Airbus dispute by increasing tariffs on EU products
- Russia Energy Min Novak: Oil market balancing out and gradually stabilizing. OPEC+ JMMC technical committee would not discuss changes to agreement in August
- IEA Monthly Oil Report: Cut its 2020 global oil demand contraction from -7.9M bpd to -8.1M bpd and cut the 2021 global oil demand growth from 5.3M to 5.2M. IEA maintained its 2020 global oil supply at -7.1M bpd and maintained 2021 global oil supply at +1.7M bpd
Currencies/ Fixed Income
- USD remained on softer footing in the session but contained within recent ranges. Dealers did cite the lack of progress in the US Covid-19 stimulus negotiations as a factor. Talks between the Republicans and Democratic officials appeared to have stalled at this point. Dealers noted that Congress must pass legislation by Sept to prevent a government shutdown and saw lawmakers as opting to approve a temporary measure that would fund the government until after the election.
- EUR/USD higher by 0.5% at 1.1835. The 1.1900 area continues to be the key short-term resistance. EU inflation and unemployment data continued to point towards improvement.
Economic Data
- (FI Finland Jun Final Retail Sales Volume Y/Y: 7.1% v 4.5% prelim
- (FI) Finland Jun Current Account Balance: -€0.4B v -€0.4B prior
- (FR) France Q2 ILO Unemployment Rate: 7.1% v 8.3%e; Mainland Unemployment Rate: % v 8.3%e
- (DE) Germany July Final CPI M/M: -0.5%e v -0.5% prelim; Y/Y: -0.1%e v -0.1% prelim
- (DE) Germany July Final CPI EU Harmonized M/M: -0.5% v -0.5%e; Y/Y: 0.0% v 0.0%e
- (DE) Germany July Wholesale Price Index M/M: 0.5% v 0.6% prior; Y/Y: -2.6% v -3.3% prior
- (NO) Norway Q3 Consumer Confidence: -6.6 v -3.4 prior
- (ES) Spain July Final CPI M/M: -0.9% v -0.9%e; Y/Y: -0.6% v -0.6%e
- (ES) Spain July Final CPI EU Harmonized M/M: -1.6% v -1.6%e; Y/Y: -0.7% v -0.7%e
- (ES) Spain July CPI Core M/M: -1.2% v +0.1% prior; Y/Y: 0.6% v 1.0% prior
- (CZ) Czech July CPI M/M: 0.4% v 0.2%e; Y/Y: 3.4% v 3.1%e
- (CZ) Czech Jun Export Price Index Y/Y: 2.0% v 2.8% prior;
Import Price Index Y/Y: -1.5% v -0.7% prior - (CZ) Czech Jun Current Account (CZK): 1.8B v 8.0Be
- (IS) Iceland July International Reserves (ISK): T v 1.009T prior
Fixed Income Issuance
- (IT) Italy Debt Agency (Tesoro) sold total €B6.75 vs. €5.25-6.75B indicated range in 3-year, 7-year and 30-year BTP Bonds
- Sold €2.75B vs. €2.25-2.75B indicated range in 0.30% Aug 2023 BTP bonds; Avg Yield: 0.08% v 0.30% prior; Bid-to-cover: 1.63x v 1.57x prior (July 14th 2020)
- Sold €2.75B vs. €2.25-2.75B indicated range in 0.95% Sept 2027 BTP; Avg Yield: 0.72% v 0.95% prior; Bid-to-cover: 1.43x v 1.38x prior (July 14th 2020)
- Sold €1.25B vs. €0.75-1.25B in 2.45% Sept 2050 BTP bond; Avg Yield: 1.91%; bid-to-cover: 1.39x
Looking Ahead
- (EG) Egypt Central Bank Interest Rate Decision: Current Lending Rate at 10.25%; Current Deposit Rate at 9.25%
- 05:30 (ZA) South Africa Jun Total Mining Production M/M: -1.0%e v 44.0% prior; Y/Y: -20.0%e v -29.8% prior; Gold Production Y/Y: No est v -20.3% prior; Platinum Production Y/Y: No est v -27.3% prior
- 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds
- 06:00 (IE) Ireland July CPI M/M: No est v 0.3% prior; Y/Y: No est v -0.4% prior
- 06:00 (IE) Ireland July CPI EU Harmonized M/M: No est v -0.6% prior; Y/Y: No est v 0.4% prior
- 06:00 (PT) Portugal Q2 Labour Costs Y/Y: No est v 6.5% prior
- 06:00 (RO) Romania to sell RON400M in 4% 2023 Bonds; Avg Yield: % v 3.46% prior; Bid-to-cover: x v 1.81x prior
- 06:45 (US) Daily Libor Fixing
- 07:00 (CZ) Czech Central Bank to comment on CPI data
- 08:00 (PL) Poland Jun Current Account Balance: €2.2Be v €2.5B prior; Trade Balance: €1.1Be v €1.3B prior; Exports: €18.2Be v €15.7B prior; Imports: €16.6Be v €14.5B prior
- 08:00 (BR) Brazil Jun IBGE Services Sector Volume Y/Y: -12.7%e v -19.5% prior
- 08:00 (IN) India July CPI Y/Y: 6.3%e v 6.1% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:30 (US) July Import Price Index M/M: 0.6%e v 1.4% prior; Y/Y: -3.1%e v -3.8% prior; Import Price Index (ex-petroleum) M/M: 0.1%e v 0.3% prior
- 08:30 (US) July Export Price Index M/M: 0.4%e v 1.4% prior; Y/Y: No est v -4.4% prior
- 08:30 (US) Initial Jobless Claims: 1.10Me v 1.186M prior; Continuing Claims: 15.80Me v 16.107M prior
- 08:30 (US) Weekly USDA Net Export Sales
- 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 7th: No est v $591.8B prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (CO) Colombia Jun Manufacturing Production Y/Y: -15.0%e v -26.2% prior
- 11:00 (CO) Colombia Jun Retail Sales Y/Y: -13.1%e v -26.8% prior
- 11:00 (CO) Colombia Jun Trade Balance: -$0.4Be v -$0.5B prior; Total Imports: $2.8Be v $2.9B prior
- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
- 12:00 (CA) Canada to sell 3-Year Bonds
- 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to cut Overnight Rate by 50bps to 4.50%
- 15:00 (AR) Argentina July National CPI M/M: 2.2%e v 2.2% prior; Y/Y: 42.8%e v 42.8% prior
- 15:00 (CO) Colombia Jun Industrial Production Y/Y: No est v -22.80% prior
- 17:00 (KR) South Korea July Export Price Index M/M: No est v 0.3% prior; Y/Y: No est v -6.0% prior
- 17:00 (KR) South Korea July Import Price Index M/M: No est v 2.5% prior; Y/Y: No est v -7.3% prior
- 18:30 (NZ) New Zealand July Business Manufacturing PMI: No est v 56.3 prior
- 19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to leave Reference Rate unchanged at 0.25%
- 19:30 (AU) RBA’s Lowe in Parliament Economic Committee
- 21:30 (CN) China July New Home Prices M/M: No est v 0.6% prior
- 22:00 (CN) China July Industrial Production Y/Y: 5.1%e v 4.8% prior; Industrial Production YTD Y/Y: -0.4%e v -1.3% prior
- 22:00 (CN) China July Retail Sales Y/Y: +0.1%e v -1.8% prior; Retail Sales YTD Y/Y: -9.0%e v -11.4% prior
- 22:00 (CN) China July YTD Fixed Urban Assets Y/Y: -1.6%e v -3.1% prior
- 22:00 (CN) China July YTD Property Investment Y/Y: 2.5%e v 1.9% prior
- 22:00 (CN) China July Surveyed Jobless Rate: 5.6%e v 5.7% prior
- 22:30 (KR) South Korea to sell KRW 750 Bln 50-Year Bond
- 23:00 (CN) China to sell 3-month and 6-month bills
- 23:30 (JP) Japan to sell 3-Month Bills
