• Focus turning to upcoming FOMC symposium at Jackson Hole; economic worries grow; markets to look for clues on the future path of interest rates.
  • China said to expect to purchase a record amount of soybeans from US in 2020


  • Japan Govt expected to extend its job subsidy program until end of year
  • Japan PM Abe said to plan to hold news conference on Friday, will likely address questions about his health
  • RBNZ Assistant Gov Hawkesby reiterates stance of a lot of work to do to achieve policy targets; Looking to use balance sheet more
  • US accused Vietnam of undervaluing the VND currency (Dong) Note: US Treasury Dept has yet to issue its semi-annual currency report


- advertisement -
  • Total global cases 23,821,321 (+1.0% d/d); total deaths: 818.2K (+0.8% d/d)


  • Germany ruling coalition agrees to extend coronavirus relief for economy. To extend wage support program through end of 2021 (doubling duration to 24 months) and suspend insolvency through end of 2020


  • White House Adviser Kudlow: there were no plans to cut payroll taxes. China was implementing Phase 1 trade deal and agreement was still going forward
  • Fed Discount Rate Minutes: all 12 regional Fed bank boards support maintaining the discount rate
  • Fed’s Barkin (non-voter, hawk): reiterates path of the economy depends on the virus


  • Weekly API Crude Oil Inventories: -4.5M v -4.3M prior
  • NHC: Hurricane Laura continued to strengthen, expected to be major hurricane at landfall along NW Gulf of Mexico coast



  • Indices [Stoxx600 % at #, FTSE -0.04% at 6,034.72, DAX +0.60% at 13,139.30, CAC-40 +0.37% at 5,026.68, IBEX-35 +0.18% at 7,121.00, FTSE MIB +0.36% at 20,102.50, SMI +0.46% at 10,278.39, S&P 500 Futures +0.05%]
  • Market Focal Points/Key Themes: European indices open lower across the board but quickly turned around to trade mostly higher later in the session; better performing sectors include technology and health care; materials and energy sectors among underperformers; Germany agrees to extend policies to support jobs; Italian regulators allow network sales to KKR; UK CMA says Breedon/Cemex deal raises competition concerns; focus on tomorrow’s Jackson Hole symposium; earnings expected in the upcoming US session include National Bank of Canada and Dicks Sporting Goods


  • Financials: Provident Financial [PFG.UK] +15% (earnings), Aroundtown Property Holdings [AT1.DE] +7% (earnings)
  • Healthcare: Bavarian Nordic [BV3.DE] +3% (earnings), HIQ International [HIQ.SE] +26% (offer). Stada Arzneimittel [SAZ.DE] +1% (earnings), Novartis [NOVN.CH] +1% (trial results), Ambu [AMBUB.DK] -13% (earnings)
  • Technology: SAP [SAP.DE] +1% (Salesforce earnings)


  • ECB Member Kazimir (Slovakia): Environment appears to be under our baseline scenario. Not obliged to use the whole Pandemic Bond Program envelope (**Note: PEPP is €1.35T)
  • Germany Fin Min Scholz commented on extension of coronavirus relief measures. Noted that Wage support extension would cost €10B (in-line with speculation); Reiterated stance that domestic economy was performing better than expected
  • France PM Castex stated that the country’s stimulus plan to be presented on Thursday, Sept 3rd and no plans to increase taxes
  • Germany said to have extended coronavirus travel warnings outside of Europe by two weeks until Sept 14th
  • Iceland Central Bank (Sedibanki) Policy Statement saw 2020 GDP contraction of 7.0% with 10% unemployment rate. Forecasted 2020 CPI at 3.0% and noted that medium and long-term inflation expectations were broadly unchanged
  • Hungary Debt Agency (AKK) announced changes to funding plan; To fund wider deficit with retail and local issuance as the 2020 Cash deficit could reach HUF3.6T
  • Turkey President Erdogan stated that would take what we deserve from Aegean, Black Seas and East Mediterranean
  • France Armed Forces Ministry: To hold joint military exercises in East Mediterranean between Aug 26-28th with France, Italy, Greece and Cyprus
  • China said to expect to purchase a record amount of soybeans from US in 2020
  • China govt could restrict drug exports to the US if the Trump administration was to cut China’s access to semiconductors

Currencies/Fixed Income

  • Quiet EU session as markets appeared to focus turning to upcoming FOMC symposium at Jackson Hole. As economic worries mount traders to look for clues on the future path of interest rates from the various central bank speak at the symposium. .
  • EUR/USD lower by 0.1% and holding above the 1.18 level in dull trade. Dealers noted that mounting Covid-19 infection cases in Europe outing a lid on the upside for the time being.
  • GBP/USD steady at 1.3160 area
  • USD/JPY lower by 0.2% with focus on Japan’s PM Abe planned press conference on Fri, Aug 28th. Abe’s recent trips to the hospital for testing had prompted speculation that PM Abe had a chronic illness and could step down from his position.

Economic Data

  • (FI) Finland July Preliminary Retail Sales Volume Y/Y: 4.1% v 7.1% prior
  • (DK) Denmark July Retail Sales M/M: -1.0% v +1.5% prior; Y/Y: 6.7% v 6.5% prior
  • (NO) Norway Jun AKU Unemployment Rate: 5.2% v 4.7%e
  • (FR) France Aug Consumer Confidence: 94 v 94e
  • (CH) Swiss Aug Credit Suisse Expectations Survey: 45.6 v 42.4 prior
  • (ZA) South Africa July CPI M/M: 1.3% v 1.2%e; Y/Y: 3.2% v 3.0%e
  • (ZA) South Africa July CPI Core M/M: 0.7% v 0.5%e; Y/Y: 3.2% v 3.0%e
  • (HK) Hong Kong July Trade Balance (HKD): -29.8B v -20.8Be; Exports Y/Y: -3.0% v -3.5%e; Imports Y/Y: -3.4% v -6.1%e
  • (IS) Iceland Central Bank (Sedibanki) left 7-Day Term Deposit Rate unchanged at 1.00%

Fixed Income Issuance

  • (IN) India sold total INR350B vs. INR350B indicated in 3-month, 6-month and 12-month bills
  • (FI) Finland Debt Agency opened book to sell EUR-denominated 10-year RFGB bond via syndicate; guidance seen -4bps to mid-swaps
  • (SE) Sweden sold total SEK5.0B vs. SEK5.0B indicated in 2023 and 2026 Bonds (NO) Norway sold NOK2.0B vs. NOK2.0B target in 2.0% May 2023 Bonds; Avg Yield: 0.27% v 0.00% prior; bid-to-cover: 2.62x v 2.48x prior
  • (IT) Italy Debt Agency (Tesoro) sold €3.0B vs. €2.5-3.0B indicated range in 0.0% May 2022 CTZ; Avg Yield: -0.014% v -0.031% prior; bid-to-cover: 1.56x v 1.66x prior
  • (UK) DMO sold £2.75B in 0.375% Oct 2030 Gilts; Avg Yield: 0.323% v 0.138% prior; Bid-to-cover: 2.68x v 2.41x prior; Tail: 0.2bps v 0.3bps prior

Looking Ahead

  • (BR) Brazil July Total Federal Debt (BRL): No est v 4.390T prior
  • (CO) Colombia July Industrial Confidence: No est v -20.8 prior; Retail Confidence: No est v -3 prior
  • 05:30 (DE) Germany to sell €3.5B in 0.00% May 2035 bunds
  • 05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.0-1.25B in 2027 and 2030 OT bonds
  • 05:30 (EU) ECB allotment in 3-month LTRO tender
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (CZ) Czech Republic to sell Bonds
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (US) MBA Mortgage Applications w/e Aug 21st : No est v -3.3% prior
  • 07:00 (MX) Mexico Q2 Final GDP Q/Q: -17.2%e v -17.3% prelim; Y/Y: -18.8%e v -18.9% prelim; GDP Nominal Y/Y: No est v 1.6% prior
  • 07:00 (MX) Mexico Jun IGAE Economic Activity Index (Monthly GDP) M/M: +9.5%e v -2.6% prior; Y/Y: -13.8%e v -22.7% prior
  • 07:00 (BR) Brazil Aug FGV Construction Costs M/M: No est v 0.8% prior
  • 07:00 (RU) Russia to sell OFZ Bonds
  • 07:30 (DE) ECB’s Schnabel (Germany)
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) July Preliminary Durable Goods Orders: 4.5%e v 7.6% prior; Durables (ex-transportation): 1.9%e v 3.6% prior; Capital Goods Orders (non-defense/ex-aircraft): 1.7%e v 3.4% prior; Capital Goods Shipments (non-defense/ex-aircraft): 1.8%e v 3.3% prior
  • 10:30 (US) Weekly DOE Oil Inventories
  • 11:30 (US) Treasury to sell 2-year FRN
  • 12:00 (UK) BOE’s Haldane (chief economist)
  • 12:00 (CA) Canada to sell 10-year Bonds
  • 13:00 (MX) Mexico Central Bank (Banxico) Quarterly Inflation Report
  • 13:00 (US) Treasury to sell new 5-year note
  • 20:00 (KR) Bank of Korea (BOK) Interest Rate Decision: Expected to leave 7-Day Repo Rate unchanged at 0.50%
  • 21:30 (AU) Australia Q2 Private Capital Expenditure: -8.2%e v -1.6% prior – 21:30 (CN) China July Industrial Profits Y/Y: No est v 11.5% prior
  • 23:35 (JP) Japan to sell 2-Year JGB Bonds


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