HomeContributorsFundamental AnalysisPoor Chinese Data And COVID-19 Concerns Weigh On Risk Appetite

Poor Chinese Data And COVID-19 Concerns Weigh On Risk Appetite

Notes/Observations

  • China registered disappointing economic figures in July have raised the chance of more fiscal and monetary policy support to help cushion the recovery (Note: both production and retail sales data missed consensus).

Asia

  • China July Retail Sales missed expectations (YoY: 8.5% v 10.9%e.
  • China July Industrial Production missed expectations and registered its slowest growth since Aug 2020 (6.4% v 7.9%e).
  • China PBOC offered more medium-term loans (MLFs) than expected to cushion economic slowdown.
  • China’s Ningbo-Zhoushan remained partially closed.
  • Japan Q2 Preliminary GDP beat expectations and avoids a technical recession (Q0Q: 0.3% v 0.1%e; GDP Annualized QoQ: 1.3% v 0.5%e).
  • Japan govt said to consider expanding and extending State of Emergency for Tokyo and surrounding regions, as well as Osaka and Okinawafor about another two weeks (Note: Emergency was set to set to expire at the end of August).

Europe

  • UK PM Johnson said to be looking to delay his Cabinet reshuffle until the COP26 climate change summit in November.
  • UK Aug Rightmove House Prices registered its first decline of 2021 (M/M: -0.3% v +0.7% prior).
  • Moody’s affirmed Ireland sovereign rating at A2; Outlook revised to Positive from Stable.

Mid-East

  • UN Security Council to meet on Monday, Aug 16th on Afghanistan; Kabul falls to Taliban as president flees country.

Americas

  • Fed’s Kashkari (dove, non-voter): Want a few more strong jobs reports before taper starts; gal is to let labor market back to at least pre-COVID levels.
  • 9 Democrats in the House of Representatives have said no to Speaker Pelosi’s procedural compromise.
  • Canada Governor General dissolves parliament, triggering an election for Sept 20th (as speculated).

Speakers/Fixed income/FX/Commodities/Erratum

Equities

  • Indices [Stoxx600 -0.50% at 473.42, FTSE -0.90% at 7,153.85, DAX -0.49% at 15,900.25, CAC-40 -0.75% at 6,844.57, IBEX-35 -0.54% at 8,951.00, FTSE MIB -0.40% at 26,545.50, SMI -0.52% at 12,399.37, S&P 500 Futures -0.19%].
  • Market Focal Points/Key Themes: European indices open lower across the board but moderated some of the losses as the session progressed; geopolitical concerns blamed for loss of risk appetite; better performing sectors include real estate; while sectors leading to the downside include consumer discretionary and energy; Bechtle share split became effective; Ultra Electronics confirms takeover offer from Cobham; Faurecia launches bid for Hella; reportedly German government to sell up to 5% stake in Lufthansa; no major US earnings scheduled for later in the session.

Equities

  • Consumer discretionary: Lufthansa [LHA.DE] -4% (govt stake sale).
  • Energy: TGS [TGS.NO] -2% (CFO resigns).
  • Industrials: Faurecia [EO.FR] +6%, Hella [HLE.DE] -3% (Faurecia to acquire Hella).
  • Technology: Ultra Electronics [ULE.UK] +5% (agrees conditions of offer), Future plc [FUTR.UK] +5% (acquisition).

Speakers

  • Thailand Central Bank Gov Sethaput stated that the country’s economic recovery to take a long time and be slower compared to peers. Household income affected from virus; outbreak situation is more serious than thought.
  • China Foreign Ministry Spokesperson Hua Chunying stated that China to play a constructive role in rebuilding Afghanistan.

Currencies/Fixed Income

  • USD was steady near.
  • 1-week lows after Friday’s selloff. After key Chinese data came in weaker than expected. Continued concerns over the COVID-19 outbreak also weighed upon risk sentiment further aid USD and JPY-denominated pairs on safe-haven flows. Focus will be on the Feb Aug minutes when released mid-week. Markets will continue to look toward the Fed’s central banking conference in Jackson Hole, Wyoming later in Aug for clues to the Fed’s next move.
  • EUR/USD steady at 1.1790 area during a quiet session.
  • GBP/USD at 1.3865 with focus on key data during the week (claimant and wage data Tuesday and inflation data on Wed).

Economic data

  • (DK) Denmark Q2 GDP Indicator Q/Q: +2.2 v -1.5% prior.
  • (DK) Denmark July PPI M/M: 1.6% v 3.6% prior; Y/Y: 11.8% v 10.1% prior.
  • (NO) Norway July Trade Balance (NOK): 42.2B v 24.3B prior.
  • (IN) India July Wholesale Prices (WPI) Y/Y: 11.2% v 11.3%e.
  • (CZ) Czech July PPI Industrial M/M: 1.6% v 0.7%e; Y/Y: 7.8% v 6.7%e.
  • (CH) Swiss weekly Total Sight Deposits (CHF): 714.6B v 713.2B prior; Domestic Sight Deposits: 639.3B v 635.9B prior.
  • (TR) Turkey July Central Gov’t Budget Balance (HUF): -45.8B v -25.0B prior.
  • (IT) Italy Jun General Government Debt: €2.696T v €2.687T prior.
  • (IS) Iceland July International Reserves (ISK): 859B v 856B prior.

Fixed income issuance

  • None seen.

Looking ahead

  • (NG) Nigeria July CPI Y/Y: 17.5%e v 17.8% prior.
  • (PE) Peru Jun Economic Activity Index (Monthly GDP) Y/Y: No est v 47.8% prior.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 ((DE) Germany to sell combined €6.0B in 6-month and 12-month BuBills.
  • 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €3.0-5.0B in 3-month and 6-month bills.
  • 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
  • 06:00 (IE) Ireland Jun Trade Balance: No est v €5.0B prior.
  • 06:00 (IL) Israel Q2 Advance GDP Annualized: +12.6%e v -5.8% prior.
  • 06:00 (RO) Romania to sell RON300M in 5% 2029 Bonds.
  • 06:00 (TR) Turkey to sell 2023 and 2026 bonds.
  • 06:00 (IL) Israel to sell bonds.
  • 06:45 (US) Daily Libor Fixing.
  • 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
  • 08:00 (PL) Poland July CPI Core M/M: 0.3%e v 0.0% prior; Y/Y: 3.6%e v 3.5% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
  • 08:00 (ES) Spain Debt Agency (Tesoro) announcement on size of upcoming issuance.
  • 08:30 (US) Aug Empire Manufacturing: 28.5e v 43.0 prior.
  • 08:30 (CA) Canada Jun Manufacturing Sales M/M: No est v -0.6% prior; Wholesale Trade Sales MM: No est v 0.5% prior.
  • 08:30 (UR) Ukraine Q2 Preliminary GDP Q/Q: No est v -1.2% prior; Y/Y: +7.3%e v -2.2% prior.
  • 09:00 (FR) France Debt Agency (AFT) to sell €3.8-5.0B in 3-month, 6-month and 12-month bills.
  • 09:00 (CA) Canada July Existing Home Sales M/M: No est v -8.4% prior.
  • 09:45 (EU) ECB weekly QE bond buying update.
  • 09:45 (UK) BOE to buy ÂŁ1.147B in APF Gilt purchase operation (3-7 years).
  • 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
  • 11:00 (PE) Peru July Unemployment Rate: No est v 10.3% prior.
  • 16:00 (US) Jun Total Net TIC Flows: No est v $105.3B prior; Net Long-term TIC Flows: No est v -$30.2B prior.
  • 16:00 (US) Weekly Crop Progress Report.
  • 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 98.6 prior.
  • 20:30 (SG) Singapore July Non-oil Domestic Exports M/M: -1.1%e v +6.0% prior; Y/Y: 11.9%e v 15.9% prior; Electronic Exports Y/Y: No est v 25.5% prior.
  • 21:30 (AU) RBA Aug Minutes.
  • 21:30 (KR) Bank of Korea (BOK) to sell KRW300B in 6-month bills.
  • 22:30 (KR) South Korea to sell KRW2.6T in 10-Year Bonds.
  • 23:00 (NZ) New Zealand July Non Resident Bond Holdings: No est v 51.1% prior.
  • 23:00 (TH) Thailand Central Bank to sell THB60B in bills.
  • 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month Bills.
Trade The News
Trade The Newshttp://www.tradethenews.com/
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Featured Analysis

Learn Forex Trading