Notes/Observations
- UK Q2 GDP rebounds as virus restrictions were lifted; Q3 outlook may not be as rosy.
- IEA cut its 2021 oil demand forecast citing resurgent pandemic hitting major consumers, and predicted a new inventory surplus in 2022.
Asia
- Fitch affirms Japan sovereign rating at A; outlook negative.
- Increased calls by economists in China for the PBoC to loosen monetary policy.
Coronavirus
- UK Dept of Health stated that self-isolation requirement removed for ‘double jabbed close contacts’, effective from Aug 16th,. Fully vaccinated individuals will not longer be legally required to isolate themselves even with a positive Covid contact.
Europe
- Upcoming UK three-year spending review said to have ministers planning to cut thousands of civil service jobs.
Americas
- Fed’s George (non-voter): Time has come to dial back the settings for monetary policy.
- Fed’s Daly (non-voter, dove) reiterated view that Fed could begin asset purchase tapering by end of year.
- Sec of State Deputy Sherman said to meet with the new China Ambassador on Aug 12th
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.08% at 474.68, FTSE -0.10% at 7,212.65, DAX -0.14% at 7,210.35, CAC-40 +0.13% at 6,866.83, IBEX-35 +0.17% at 8,991.00, FTSE MIB +0.25% at 26,522.50, SMI +0.28% at 12,423.02, S&P 500 Futures -0.03%].
- Market Focal Points/Key Themes: European indices open mixed but moved to trade slightly higher later in the session; sectors trending to the upside include consumer discretionary and telecom; sectors trending to the downside include financials and materials; travel and leisure subsector supported following results from Accor, TUI; insurance subsector supported by results from Aegon, Zurich Insurance; Stock Spirits recieves takeover offer from CVC; Norway Royal Salmon receives improved offer; focus on upcoming emerging markets rate decisions, FDA covid vaccine third-dose approval; earnings expected during the upcoming US session include Brookfield Asset Management, Baidu.com and Broadridge Financial.
Equities
- Consumer discretionary: Cineworld [CINE.UK] +7% (earnings; outlook), Stock Spirits [STCK.UK] +42% (offer), TUI [TUI1.DE] +2% (earnings), Delivery Hero [DHER.DE] -3% (earnings; raises guidance)
- Financials: Aviva [AV.UK] +2% (earnings).
- Industrials: Henkel [HEN3.DE] -3% (earnings), Orsted [ORSTED.DK] -2% (earnings), Ceconomy [CEC.DE] -3% (earnings).
- Telecom: Deutsche Telekom [DTE.DE] +2% (earnings).
Speakers
- UK Chancellor of the Exchequer (Fin Min) Sunak stated that the domestic economy was recovering very strongly. Would not return to austerity.
- Norway Central Bank (Norges) 2Q Survey of Bank Lending saw little change in credit demand. Banking sector expected little change ahead in credit demand, credit standards and loan conditions.
- Philippines Central Bank Policy Statement reiterated stance to keep accommodative monetary policy for as long as needed. Policy support to stay in order to support economic recovery. Virus restrictions could pose risk to economic recovery. Staff Forecasts raised its 2021 CPI from 4.0% to slightly above 4.0% and raised 2022 CPI from 3.0% to 3.1%.
- IEA Monthly Oil Report cut its 2021 global oil demand growth from 5.4M bpd to 5.3M bpd citing the due to the spread of the COVID-19 Delta variant while rai sing the 2022 global oil demand growth from 3.0M bpd to 3.2M bpd.
Currencies/Fixed income
- USD was steady and just off its recent four-month highs against major peers. Greenback finding some headwinds after Wed’s US CPI reading tempered bets for an earlier tightening of US monetary policy (dealers noted that inflation isn’t running away).
- EUR/USD steady in quiet trading with pair stuck around 1.1740 in the session.
- GBP/USD was little phased after a strong Q2 GDP reading. Strong growth was expected after the easing of some coronavirus restrictions, but the outlook for Q3might not be so rosy.
Economic data
- (FI) Finland Jun Final Retail Sales Volume Y/Y: 4.3% v 3.6% prelim.
- (FI) Finland Jun Current Account Balance: €0.7B v €0.1B prior.
- (UK) Q2 Preliminary GDP Q/Q: 4.8% v 4.8%e; Y/Y: 22.2% v 22.1%e.
- (UK) Jun Monthly GDP M/M: 1.0% v 0.8%e.
- (UK) Q2 Preliminary Private Consumption Q/Q: 7.3% v 5.5%e; Government Spending Q/Q: 6.1% v 1.8%e; Gross Fixed Capital Formation Q/Q: -0.5% v +2.5%e; Exports Q/Q: 3.0% v 8.3%e; Imports Q/Q: 6.5% v 8.2%e.
- (UK) Q2 Preliminary Total Business Investment Q/Q: 2.4% v 6.0%e; Y/Y: 9.7% v 20.4%e.
- (UK) Jun Industrial Production M/M: -0.7% v +0.3%e; Y/Y: 8.3% v 9.4%e.
- (UK) Jun Manufacturing Production M/M: 0.2% v 0.4%e; Y/Y: 13.9% v 13.4%e.
- (UK) Jun Construction Output M/M: -1.3% v +1.0%e; Y/Y: 30.0% v 56.5% prior.
- (UK) Jun Visible Trade Balance: -£12.0B v -£9.2Be; Overall Trade Balance: -£2.5B v +£0.4Be; Trade Balance Non EU: -£7.1B v -£4.2B prior.
- (UK) Jun Index of Services M/M: 1.5% v 0.9%e; 3M/3M: 5.7% v 5.7%e.
- (TR) Turkey Jun Industrial Production M/M: 2.3% v 2.1%e; Y/Y: 23.9% v 21.7%e.
- (IT) Italy Jun Total Trade Balance: €5.7B v €5.6B prior; Trade Balance EU: €0.9B v €0.9B prior.
- (PH) Philippines Central Bank (BSP) left the Overnight Borrowing Rate unchanged at 2.00% (as expected).
- (EU) Euro Zone Jun Industrial Production M/M: -0.3% v -0.2%e; Y/Y: 9.7% v 10.4%e.
- (IS) Iceland Q2 Unemployment Rate: 7.9% v 7.7% prior.
- (GR) Greece Jun Unemployment Rate: 15.0% v 15.8% prior.
Fixed income issuance
- None seen.
Looking ahead
- OPEC Monthly Oil Report.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 06:00 (IE) Ireland July CPI M/M: No est v 0.2% prior; Y/Y: No est v 1.6% prior.
- 06:00 (IE) Ireland July CPI EU Harmonized M/M: No est v 0.1% prior; Y/Y: No est v 1.6% prior.
- 06:00 (IE) Ireland Jun Property Prices M/M: No est v 0.9% prior; Y/Y: No est v 5.5% prior.
- 06:00 (IL) Israel July Trade Balance: No est v -$3.4B prior.
- 06:00 (RO) Romania to sell ROM300M in 3.7% 2024 Bonds.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 19.00%.
- 08:00 (IN) India Jun Industrial Production Y/Y: 14.2%e v 29.3% prior.
- 08:00 (IN) India July CPI Y/Y: 5.7%e v 6.3% prior.
- 08:00 (BR) Brazil Jun IBGE Services Sector Volume Y/Y: 18.2%e v 23.0% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) July PPI Final Demand M/M: 0.6%e v 1.0% prior; Y/Y: 7.2%e v 7.3% prior.
- 08:30 (US) July PPI (ex-food/energy) M/M: 0.5%e v 1.0% prior; Y/Y: 5.6%e v 5.6% prior.
- 08:30 (US) July PPI (ex-food/energy/trade) M/M: 0.5%e v 0.5% prior; Y/Y: 5.7%e v 5.5% prior.
- 08:30 (US) Initial Jobless Claims: 375Ke v 385K prior; Continuing Claims: 2.90Me v 2.930M prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 6th: No est v $599.6B prior.
- 10:30 (US) Weekly EIA Natural Gas Inventories.
- 11:00 (CO) Colombia Jun Manufacturing Production Y/Y: 16.5%e v 8.6% prior.
- 11:00 (CO) Colombia Jun Retail Sales Y/Y: 20.6%e v 22.8% prior.
- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.
- 13:00 (MX) Mexico July Total Formal Job Creation: No est v +65.9K prior.
- 13:00 (US) Treasury to sell 30-Year Notes.
- 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to raise Overnight Rate by 25bps to 4.50%.
- 15:00 (AR) Argentina July National CPI M/M: 3.0%e v 3.2% prior; Y/Y: 51.7%e v 50.2% prior.
- 15:00 (CO) Colombia Jun Industrial Production Y/Y: No est v 6.4% prior.
- 17:00 (KR) South Korea July Import Price Index M/M: No est v 2.3% prior; Y/Y: No est v 14.0% prior.
- 17:00 (KR) South Korea July Export Price Index M/M: No est v 0.7% prior; Y/Y: No est v 12.7% prior.
- 18:30 (NZ) New Zealand July Manufacturing PMI: No est v 60.7 prior.
- 18:45 (NZ) New Zealand Jun Net Migration: No est v 1.2K prior.
- 19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to leave Reference Rate unchanged at 0.25%.
- 22:30 (KR) South Korea to sell KRW400B in 50-year Bonds.
- 23:00 (CN) China to sell 30-year Upsize Bond.
- 22:30 (JP) Japan to sell 3-Month Bills.
