Sat, Oct 23, 2021 @ 11:39 GMT
HomeContributorsFundamental AnalysisMajor EU PMI Readings Miss Consensus

Major EU PMI Readings Miss Consensus


  • Major European PMI data for Sept (Beats: none Misses: Germany, France, Euro Zone).
  • No surprises from schedules rate decisions; Norway becomes the 1st in G10 to hike rates; SNB, Philippines, Taiwan all unchanged (as expected).
  • BOE seen holding off on hawkish rhetoric despite higher inflation as growth has softened.
  • Fed signals bond-buying taper coming ‘soon,’ rate hike next year.
  • Evergrande contagion risks concerns ease (Note: still awaiting to see if company made scheduled bond interest payments due on Thursday).


  • Australia Sept Preliminary PMI Manufacturing registered its 16th month of expansion (57.3 v 52.0 prior).
  • RBNZ stated that it would proceed with its proposal to tighten Loan-to-Value Ratio (LVR) restrictions on lending to owner-occupiers to reduce risky mortgage lending.
  • Evergrande Chairman said to have told an internal meeting the firm would do its best to resume work and production, urged company execs to ensure quality delivery of properties, top priority is helping wealth investors redeem their products.
  • Evergrande 2nd largest shareholder (Chinese Estates) sold $32M worth of its stake and plans to exit the holding completely.


  • FDA authorized a 3rd Pfizer vaccine shot to those 65 and over at high risk.


  • FOMC kept policy steady (as expected). Noted that a moderation in the pace of bond buying might soon be warranted.
  • DOT PLOT SUMMARY saw 0-1 hike in 2022, 3-4 hikes in 2023 (prior: 0 hikes in 2022; 2 hikes in 2023) . Noted that 9 of 18 members saw hike in 2022, 17 of 18 members saw hike in 2023 (prior: 7 of 18 in 2022, 13 of 18 in 2023).
  • Fed Chief Powell post rate decision press conference noted that it had discussed pace of tapering and generally agreed that if economy played out as expected then could finish tapering by middle of next year. Inflation still expected to drop back to longer run targets. If sustained higher inflation were to become a concern, then would certainly respond.
  • Treasury Sec Yellen said to call for compromise with UK Fin Min Sunak on digital services tax. Asked Wall Street CEOs to weigh in on the debt ceiling issue. She also spoke to Ireland Fin Min Donohoe on global tax deal and emphasized the goal of stabilizing the international tax system and stopping the race to the bottom through this once in a generation opportunity offered by the OECD Inclusive Framework.
  • Former Treasury Sec Paulson and Mnuchin said to have spoken with both McConnell and Yellen stressing the need to address the debt ceiling. McConnell still wanted the Democrats to approve the debt ceiling hike on their own through the budget reconciliation process.
  • Brazil Central Bank (BCB) raised the Selic Target Rate by 100bps to 6.25% and pledges another 100bps hike at its next meeting.



  • Indices [Stoxx600 +1.11% at 468.32, FTSE +0.51% at 7,119.65, DAX +0.99% at 15,660.55, CAC-40 +1.11% at 6,710.85, IBEX-35 +0.89% at 8,886.50, FTSE MIB +1.11% at 26,003.00, SMI +1.12% at 11,970.68, S&P 500 Futures +0.72%].
  • Market Focal Points/Key Themes: European indices open higher across the board and advanced into the green as the session progressed; sectors tending to the upside include technology and real estate; while laggard sectors include materials and consumer staples; automotive sub sector under pressure following revised sales outlook for market by IHS, Faurecia cutting guidance; oil and gas subsector supported on higher commodity prices; Argo Blockchain prices it’s ADS; focus on BOE policy meeting la; Otis bids for remaining stake from Zardoya; MS and Eleia raise bids for Augean; earnings expected during the US session include Nike, Accenture and Costco.


  • Consumer discretionary: Royal Mail [RMG.UK] +1% (trading update), XLMedia [XLM.UK] -3% (earnings).
  • Financials: Augean [AUG.UK] +2% (discloses raised offers).
  • Healthcare: Valneva [VLA.FR] +11% (vaccine trials), Nicox [COX.FR] -4% (trial results).
  • Industrials: Faurecia [EO.FR] +7% (cuts outlook), Zardoya Otis [ZOT.ES] +33% (stake sale).
  • Technology: Playtech [PTEC.UK] +1% (earnings).


  • ECB Economic Bulletin noted that the recovery in global economic activity continued, although persisting supply bottlenecks and the spread of the more contagious Delta variant of the coronavirus (COVID-19) casted a shadow.
  • SNB Policy Statement reiterated language on FX; CHF currency remained highly valued and willing to intervene more strongly in the FX market. Reiterated mortgage and property vulnerabilities increased; Mortgage lending and property prices had risen strongly. Regularly reassessed need for countercyclical buffer.
  • SNB President Jordan post rate decision press conference noted that was watching to see if inflation dynamics were temporary. Reiterated view that CHF currency remained highly valued. Reiterated view that SNB expansionary policy was the right one; saw no reason to change it.
  • Norway Central bank (Norges) Policy Statement noted that it was most likely to raise Deposit Rate further in Dec. Economic upswing to likely continue through autumn.
  • Norway Central Bank (Norges) Gov Olsen post rate decision press conference noted that the domestic economy was quickly on its way to normalization. Not very concerned about inflation challenging target.
  • France Fin Min Le Maire reiterated view that inflation was not a source of concern.
  • Ireland Finance Ministry noted that the recent phone conversation on corporate tax between Donohoe and Yellen was constructive; both sides agreed to keep in touch.
  • Poland Central Bank member Kochalski stated that the moment to raise rates has not yet arrived.
  • Poland Central Bank Dep Gov Kightley stated that a weaker PLN currency (Zloty) helped the economy at this time.
  • Philippines Central Bank (BSP) Policy Statement noted that the prevailing monetary settings were appropriate but prepared to take further action if necessary. Keeping steady hand on policy levers to ensure recovery. CPI to ease back into target range by Nov.
  • (TW) Taiwan Central Bank Policy Statement reiterated its stance to continue accommodative policy. Expected mild inflation and growth in 2021.
  • China’s financial regulators said to have given instructions to Evergrande in order to avoid near-term dollar bond default.

Currencies/Fixed income

  • USD moved off its 1-month highs against major pairs but holding onto gains after the Fed signaled bond-buying taper was coming ‘soon, and possible rate hike beginning next year. Dealers noted that the greenback had advance ahead of the Fed and undergoing some profit-taking.
  • NOK currency was firmer after the Norges became the 1st of the G10 members to hike rates. It indicated that another rate hike could come in December. EUR/NOK hit a 3-month low at 10.08 after the decision.
  • Euro Zone government bond yields were higher in the session following the ‘hawkish’ Fed signals on taper and potential rate hikes. Yields did move off their most elevated level as various EU PMI data missed expectations.

Economic data

  • (NL) Netherlands Q2 Final GDP Q/Q: 3.8% v 3.1%e; Y/Y: 10.4% v 9.7%e.
  • (NO) Norway July AKU Unemployment Rate: 4.2% v 4.8% prior.
  • (FR) France Sept Business Confidence: 111 v 110e; Manufacturing Confidence: 106 v 109e; Production Outlook Indicator: 23 v 12e; Own-Company Production Outlook: 19 v 18e.
  • (ES) Spain Q2 Final GDP Q/Q: 1.1% v 2.8%e; Y/Y:17.5 % v 19.8%e.
  • (MY) Malaysia mid-Sept Foreign Reserves: $116.2B v $116.3B prior.
  • (FR) France Sept Preliminary Manufacturing PMI: 55.2 v 57.0e (10th month of expansion); Services PMI: 56.0 v 56.1e; Composite PMI: 55.1 v 55.7e.
  • (CH) Swiss National Bank (SNB) left Key Policy Rate unchanged at -0.75% (as expected); Both Sight Deposit and Policy Rates kept unchanged at -0.75%.
  • (DE) Germany Sept Preliminary Manufacturing PMI: 58.5 v 61.4e (15th month of expansion); Services PMI: 56.0v 60.3e; Composite PMI: 55.3 v 59.2e.
  • (EU) Euro Zone Sept Preliminary Manufacturing PMI: 58.7 v 60.3e (15th month of expansion); Services PMI: 56.3 v 58.5e; Composite PMI: 56.1 v 58.5e.
  • (NO) Norway Central Bank (Norges) raised the Deposit Rates by 25bps to 0.25% (as expected).
  • (PH) Philippines Central Bank (BSP) left the Overnight Borrowing Rate unchanged at 2.00 (as expected).
  • (PL) Poland Aug Unemployment Rate: 5.8% v 5.8%e.
  • (TW) Taiwan Aug M2 Money Supply Y/Y: 8.4% v 8.7% prior; M1 Money Supply Y/Y: 15.4% v 16.7% prior.
  • (UK) Sept Preliminary Manufacturing PMI: 56.3 v 59.0e (16th straight expansion); Services PMI: 54.6 v 55.0e; Composite PMI: 54.1 v 54.6e.
  • (HK) Hong Kong Q2 Current Account Balance: $68.5B v $60.6B prior; Overall Balance of Payments (BoP): -$37.6B v +$8.2B prior.
  • (TW) Taiwan Central Bank (CBC) left the Benchmark Interest Rate unchanged at 1.125% (as expected).

Fixed income issuance

  • (EG) Egypt to sell USD-denominated 6-year, 12-year and 30-year bonds.

Looking ahead

  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
  • 05:30 (EU) ECB allotment in its quarterly 3-year TLTRO-3 Tender.
  • 06:00 (RO) Romania to sell RON200M in 4.25% 2036 Bonds.
  • 06:15 (NL) ECB’s Elderson (Netherlands, SSM member).
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.10%; Expected to maintain Overall bond purchase at £895B; (Gilt Purchase Target unchanged at £875B ; Corporate Bond Target unchanged at £20B).
  • 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 19.00%.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (US) Aug Chicago Fed National Activity Index: 0.50e v 0.53 prior.
  • 08:30 (US) Initial Jobless Claims: 320Ke v 332K prior; Continuing Claims: 2.60Me v 2.665M prior.
  • 08:30 (CA) Canada July Retail Sales M/M: -1.2%e v +4.2% prior; Retail Sales (ex-auto) M/M: -1.5%e v +4.7% prior.
  • 08:30 (US) Weekly USDA Net Export Sales.
  • 09:00 (RU) Russia Gold and Forex Reserve w/e Sept 17th: No est v $620.1B prior.
  • 09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: expected to leave Interest Rates unchanged at 3.50%.
  • 09:45 (US) Sept Preliminary Markit Manufacturing PMI: 61.0e v 61.1 prior; Services PMI: 54.9e v 55.0 prior; Composite PMI: No est v 54.8 prior.
  • 10:00 (US) Aug Leading Index: 0.7%e v 0.9% prior.
  • 10:30 (US) Weekly EIA Natural Gas Inventories.
  • 11:00 (US) Sept Kansas City Fed Manufacturing Activity Index: 25e v 29 prior.
  • 12:00 (US) Q2 Financial Account Household Change in Net Worth: No est v $4.997T prior.
  • 13:00 (BR) Brazil Aug Tax Collections (BRL): 146.6Be v 171.3B prior.
  • 15:00 (AR) Argentina Q2 Unemployment Rate: No est v 10.2% prior.
  • 17:00 (KR) South Korea Aug PPI Y/Y: No est v 7.1% prior.
  • 18:45 (NZ) New Zealand Aug Trade Balance (NZD): No est v -0.4B prior ; Exports: No est v 5.8B prior; Imports: No est v 6.2B prior.
  • 19:01 (UK) Sept GfK Consumer Confidence: -7e v -8 prior.
  • 19:30 (JP) Japan Aug National CPI Y/Y: -0.3%e v -0.3% prior; CPI Ex-Fresh Food (core) Y/Y: 0.0%e v -0.2% prior; CPI Ex-Fresh Food/Energy (core-core) Y/Y: -0.4%e v -0.6% prior.
  • 20:30 (JP) Japan Sept Preliminary PMI Manufacturing: No est v 52.7 prior; PMI Services: No est v 42.9 prior; PMI Composite: No est v 45.5 prior.
  • 21:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 5~10 Years and 25 Years~ maturities.
  • 23:30 (TH) Thailand Aug Customs Trade Balance: $0.9B v $0.2B prior; Exports Y/Y: 15.1%e v 20.3% prior; Imports Y/Y: 39.6%e v 45.9% prior.
  • 23:30 (JP) Japan to sell 3-Month Bills.


Trade The News
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