Sample Category Title

Notes/Observations

• Market participants continue to believe bet the global economic rebound would persist even as central banks prepared to scale back support.
• Major European PMI Manufacturing data continued to show recovery (Beats: UK, France, Italy, Spain; Misses: Euro Zone, Germany).
• Oil higher ahead of OPEC+ meeting in Vienna.

Asia

• South Korea Aug Trade Balance: $1.7B v $1.5Be.
• Australia Q2 GDP Q/Q: 0.7% v 0.4%e; Y/Y: 9.6% v 9.2%e.
• China Aug Caixin PMI Manufacturing registered its 1st contraction since Apr 2020) (49.2 v 50.1e).
• Japan Aug Final PMI Manufacturing confirmed its 7th straight month of expansion (52.7 v 52.4 prelim).
• BOJ Deputy Gov Wakatabe noted that inflation expectations were moving sideways with some signs up it picking up but more improvement needed to reach target. Stressed that even if Fed entered tightening cycle it did not mean BOJ would follow.

Europe

• SNB Vice Chairman Zurbruegg stated that he expected that global low interest rate environment would remain unchanged for some time to come.

Energy

• Weekly API Crude Oil Inventories: -4.0M v -1.6M prior.
• OPEC+ Joint Technical Committee to maintain 2021 oil demand growth steady at 6M bpd; JMMC saw 2022 oil market in 2.5M bpd surplus (Note: OPEC experts said to see oil supply deficit at 1M bpd by Sept and dropping to 0.4M by Dec. JMMC saw OECD oil inventories under 2015-2019 average until Jan 2022 and then saw stocks exceeding the average from Feb-Dec 2022.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.77% at 474.52, FTSE +0.91% at 7,184.55, DAX +0.60% at 15,930.05, CAC-40 +1.31% at 6,768.79 , IBEX-35 +2.17% at 9,039.00, FTSE MIB +1.24% at 26,332.50, SMI +0.33% at 12,452.48, S&P 500 Futures +0.37%].
• Market Focal Points/Key Themes: European indices open higher across the board and remained in the greeen as the session p; better performing sectors include financials and consumer discretionary; materials and industrials sectors among underperformers; travel subsector supported on commentary from airline/hotel outlook including SAS and WH Smith; oil and gas subsector supported by higher crude prices; Fluidra acquires SR Smith; focus on upcoming OPEC meeting later in the day; corporate events in the upcoming US session include Autodesk investor day and earnings from Capbell Soup and Brown-Forman.

Equities

• Consumer discretionary: Pernod-Ricard [RI.FR] +3% (earnings), 888 Holdings [888.UK] +2% (earnings), Carrefour [CA.FR] -4% (placement).
• Financials: Commerzbank [CBK.DE] +3% (analyst action).
• Healthcare: bioMerieux [BIM.FR] +5% (earnings).
• Industrials: Fluidra [FDR.ES] +4% (acquisition; raises outlook).

Speakers:

• ECB’s De Guindos (Spain) noted that future monetary policy decisions to be data dependent. Decision would essentially depend on how economy and inflation developed in the coming months. To have to decided volume of bond purchases for Q4 at Sept meeting. Reiterated Council stance that expects inflation to continue to pick up this year but decline in 2022.
• Spain PM Sanchez stated that govt sought an immediate increase to minimum wage and supported continued stimulus efforts.
• Sweden Fin Min Andersson announced SEK10B in tax cuts and stressed that was important to continue stimulus and not repeat mistakes from the financial crisis from over a decade ago.
• OPEC+ said to still focus on monthly oil production increases of 400K bpd despite upward 2022 demand revision.
• OPEC+ JMMC ministerial committee said to have raised its 2022 oil demand growth from 3.3M bpd to 4.2M bpd (**Reminder: On Aug 31st JMMC was said to have maintained the 2021 oil demand growth at 6.0M bpd).

Currencies/Fixed income

• USD consolidated near 3-week lows due to the recent Fed inspired losses which pushed back expectations on interest rate hikes. Dealers also were concerned that the Delta coronavirus variant could impact the economy.
• EUR/USD steady near 1-month highs around the 1.18 area. Euro received some momentum after Tuesday’s CPI reading of 3.0% coupled with more hawkish ECB speak.
• GBP/USD faced some headwinds as dealer chatter circulated Brexit tension could resurface in the weeks ahead.

Economic data

• (DE) Germany July Retail Sales M/M: -5.1% v -1.0%e; Y/Y: -0.3% v +3.6%e.
• (UK) Aug Nationwide House Price Index M/M: 2.1% v 0.1%e; Y/Y: 11.0% v 8.6%e.
• (RU) Russia Aug PMI Manufacturing: 46.5 v 49.2e (3rd straight contraction).
• (NO) Norway Jun AKU Unemployment Rate: 4.8%.
• (NO) Norway Q2 Current Account Balance (NOK): 93.2B v 92.1B prior.
• (AU) Australia Aug Commodity Index: 137.9 v 144.5 prior.
• (SE) Sweden Aug PMI Manufacturing: 60.1 v 64.5 prior (15th month of expansion).
• (NL) Netherlands Aug Manufacturing PMI: 65.8 v 67.4 prior (13th straight expansion).
• (HU) Hungary Aug Manufacturing PMI: 55.9 v 55.8 prior (5th straight expansion).
• (PL) Poland Aug PMI Manufacturing: 56.0 v 56.7e (13th straight expansion).
• (TR) Turkey Aug PMI Manufacturing: 54.1 v 54.0 prior (3rd straight expansion).
• (TR) Turkey Q2 GDP Q/Q: 0.9% v 1.0%e; Y/Y: 21.7% v 21.0%e.
• (HU) Hungary Q2 Final GDP Q/Q: 2.7% v 2.7% prelim; Y/Y:17.9 % v 17.9%e.
• (HU) Hungary Jun Final Trade Balance: €0.6B v €0.7B prelim.
• (ES) Spain Aug Manufacturing PMI: 59.5 v 59.0e (7th month of expansion).
• (CH) Swiss Aug PMI Manufacturing: 67.7 v 68.0e (13th straight expansion).
• (CZ) Czech Republic Aug PMI Manufacturing: 61.0 v 60.5e (12th straight expansion).
• (TH) Thailand Aug Business Sentiment Index: 40.0 v 41.4 prior.
• (IT) Italy Aug Manufacturing PMI: 60.9 v 60.1e (14th month of expansion).
• (FR) France Aug Final Manufacturing PMI: 57.5 v 57.3e (confirmed 9th month of expansion but lowest reading since Feb 2021).
• (DE) Germany Aug Final Manufacturing PMI: 62.6 v 62.7e (confirmed 14th month of expansion).
• (EU) Euro Zone Aug Final Manufacturing PMI: 61.4 v 61.5e (confirmed 14th month of expansion but lowest since Feb).
• (GR) Greece Aug Manufacturing PMI: 59.3 v 57.4 prior (6th month of expansion).
• (NO) Norway Aug PMI Manufacturing: 62.2 v 63.2 prior (12thmonth of expansion).
• (IT) Italy July Unemployment Rate: 9.3% v 9.6%e.
• (DE) Germany Aug CPI Brandenburg M/M: 0.2% v 1.0% prior; Y/Y: 5.0% v 4.3% prior.
• (UK) Aug Final Manufacturing PMI: 60.3 v 60.1e (confirmed 15th straight expansion).
• (NG) Nigeria Aug PMI: 52.2 v 55.4 prior.
• (EU) Euro Zone July Unemployment Rate: 7.6% v 7.6%e.
• (BE) Belgium July Unemployment Rate: 5.9% v 6.2% prior.
• (DK) Denmark Aug PMI Survey: 67.3 v 69.7 prior (6th straight expansion).
• (ZA) South Africa Aug Manufacturing PMI: 57.9 v 48.0e (moves back into expansion).

Fixed income issuance

• (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills.
• (DE) Germany opened its book to sell EUR-denominated 30-year bond via syndicate; guidance seen +4bps to Bunds.
• (GR) Greece Debt Agency (PDMA) opened its book to sell EUR-denominated 2026 and 2052 bond via syndicate.
• To sell 0% Feb 2026 bond; guidance seen +43bps to mid-swaps.
• To sell 1.875% Jan 2052 bond; guidance seen +145bps to mid-swaps.
• (DK) Denmark sold total DKK5.83B in 2024, 2031 and 2052 DGB bonds.
• (SE) Sweden sells SEK5.0B vs. SEK5.0B indicated in 12-month bills; Avg Yield: -0.1920% v -0.1970% prior; bid-to-cover: 2.51x v 2.45x prior.
• (UK) DMO sold £2.5B in new Jan 2029 Gilts; Avg Yield: 0.% v 0.531% prior; bid-to-cover: x v 2.20x prior; Tail: bps v 0.1bps prior.

Looking ahead

• OPEC+ meeting.
• (ZA) South Africa Aug Naamsa Vehicle Sales Y/Y: No est v 1.7% prior.
• (RO) Romania Aug International Reserves: No est v $44.1B prior.
• (US) Aug Total Vehicle Sales data in session.
• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (DE) Germany to sell €4.0B in 0% Oct 2026 BOBL.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell debt.
• 06:00 (IE) Ireland Aug Unemployment Rate: No est v 7.4% prior.
• 06:00 (RU) Russia to sell 2031 and 2041 OFZ Bonds.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (US) MBA Mortgage Applications w/e Aug 27th: No est v 1.6% prior.
• 08:00 (CZ) Czech Aug Budget Balance (CZK) No est v -279.4B prior.
• 08:00 (BR) Brazil Q2 GDP Q/Q: 0.2%e v 1.2% prior; Y/Y: 12.7%e v 1.0% prior; GDP 4-quarters Accumulated: +1.8%e v -3.8% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (DE) ECB’s Weidmann (Germany) at Bundesbank symposium.
• 08:15 (US) Aug ADP Employment Change: +638Ke v +330K prior.
• 08:30 (CA) Canada July MLI Leading Indicator M/M: No est v 1.6% prior.
• 08:30 (CL) Chile July Economic Activity Index (Monthly GDP) M/M: 1.4%e v 2.1% prior; Y/Y: 17.7%e v 20.1% prior.
• 09:00 (BR) Brazil Aug PMI Manufacturing: No est v 56.7 prior.
• 09:30 (CA) Canada Aug Manufacturing PMI: No est v 56.2 prior.
• 09:45 (US) Aug Final Markit Manufacturing PMI: 61.2e v 61.2 prelim.
• 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (7-20 years).
• 10:00 (US) Aug ISM Manufacturing: 58.5e v 59.5 prior; Prices Paid: 83.8e v 87.5 prior.
• 10:00 (US) July Construction Spending M/M: 0.2%e v 0.1% prior.
• 10:00 (MX) Mexico July Total Remittances: $4.4Be v $4.4B prior.
• 10:00 (MX) Mexico Central Bank Economist Survey.
• 10:30 (US) Weekly DOE Oil Inventories.
• 10:30 (MX) Mexico Aug PMI Manufacturing: No est v 49.6 prior.
• 11:00 (CO) Colombia Aug PMI Manufacturing: No est v 54.2 prior.
• 11:00 (PE) Peru Aug CPI M/M: No est v 1.0% prior; Y/Y: No est v 3.8% prior.
• (IT) Italy Aug Budget Balance: No est v €5.7B prior.
• 12:00 (IT) Italy Aug New Car Registrations Y/Y: No est v -19.4% prior.
• 12:00 (RU) Russia July Unemployment Rate: 4.8%e v 4.8% prior.
• 12:00 (RU) Russia Jun Real Wages Y/Y: 2.9%e v 3.3% prior.
• 12:00 (RU) Russia July Real Retail Sales Y/Y: 5.0%e v 10.9% prior.
• 12:00 (US) Fed’s Bostic.
• 12:00 (CA) Canada to sell 30-year inflation-linked bonds.
• 13:00 (MX) Mexico Aug IMEF Manufacturing Index: No est v 52.2 prior; Non-Manufacturing Index: No est v 52.9 prior.
• 14:00 (BR) Brazil Aug Trade Balance: $7.5Be v $7.4B prior; Total Exports: $27.1Be v $25.5B prior; Total Imports: $19.3Be v $18.1B prior.
• (AR) Argentina Aug Government Tax Revenue (ARS): No est v 933.2B prior.
• 18:45 (NZ) New Zealand Q2 Terms of Trade Index Q/Q: No est v 0.1% prior.
• 19:00 (KR) South Korea Q2 Final GDP Q/Q: 0.7%e v 0.7% prelim; Y/Y: 5.9%e v 5.9% prelim.
• 19:00 (KR) South Korea Aug CPI M/M: 0.4%e v 0.2% prior; Y/Y: 2.4%e v 2.6% prior; CPI Core Y/Y: 1.6%e v 1.7% prior.
• 19:50 (JP) Japan end-Aug Monetary Base: No est v ¥660.9T.
• 21:30 (AU) Australia July Trade Balance: A$10.0Be v A$10.5B prior; Exports M/M: 3%e v 4% prior; Imports Y/Y: 2%e v 1% prior.
• 21:30 (AU) Australia July Home Loans Value M/M: -0.2%e v -1.6% prior.
• 23:35 (JP) Japan to sell 10-Year JGB Bonds.

The British Pound started a recovery wave above the 1.3750 resistance against the US Dollar. The GBP/USD pair made an attempt to clear the 1.3800 resistance zone, but it struggled.

A high was formed near 1.3807 and it started a fresh decline. There was a break below a key bullish trend line with support near 1.3770 on the hourly chart. It even broke the 1.3750 level and the 50 hourly simple moving average.

It is now consolidating near 1.3740 and it is facing resistance near 1.3750 on FXOpen. The next key resistance is near the 1.3760 level and the 50 hourly simple moving average. If there is a clear break above the 1.3750 and 1.3760 resistance levels, the pair could revisit 1.3800.

On the downside, an initial support is near the 1.3720 level. A break below the 1.3730 and 1.3720 support levels could lead the pair back towards 1.3680.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1796
Prev Close: 1.1808
% chg. over the last day: +0.10%

The inflation rate in Europe increased to 3% on a year-on-year basis, which is much higher than the target indicator of the European Central Bank of 2%. The new ECB program implies some deviation from the target, but what kind of deviation is acceptable and what is not – it’s all up to the officials. Therefore, a 50% jump in prices might cause some concern for investors as the central bank might start taking action to suppress inflation.

Trading recommendations

Support levels: 1.1799, 1.1759, 1.1704, 1.1620
Resistance levels: 1.1817, 1.1854, 1.1894, 1.1934, 1.1969

From a technical point of view, the general trend of the EUR/USD currency pair is bearish. But the price is trading above the moving average and tried to break through the priority change level, but failed to consolidate higher. The MACD is signaling a divergence in the opposite direction. Under such market conditions, it is best to look for sell trades from the resistance levels, where sellers show initiative. Buy trades can be considered only after a pullback or after a breakthrough of the priority change level.

Alternative scenario: if the price breaks through the 1.1817 resistance level and fixes above, the mid-term uptrend will likely resume.

News feed for 2021.09.01:

• Germany Manufacturing PMI (m/m) at 10:55 (GMT+3);
• Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+3);
• US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3759
Prev Close: 1.3755
% chg. over the last day: -0.03%

In July, The UK consumer credit did not increase for the first time since February, indicating a slowing recovery from the crisis. Business confidence reached a four-year high, but companies expressed concerns about staff shortages, which could eventually lead to wage increases in the coming months.

Trading recommendations

Support levels: 1.3741, 1.3692, 1.3632, 1.3614, 1.3525
Resistance levels: 1.3793, 1.3772, 1.3886, 1.3935, 1.4002

On the hourly time frame, the GBP/USD trend is bearish. The MACD indicator became negative. Under such market conditions, it is better to look for sell trades from the resistance level, where sellers show initiative. Buy positions can be considered only with short targets throughout the day.

Alternative scenario: if the price breaks through the 1.3885 resistance level and consolidates above, the bullish scenario will likely resume.

News feed for 2021.09.01:

• UK Manufacturing PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 109.92
Prev Close: 109.98
% chg. over the last day: +0.05%

Japan is still struggling with an outbreak of infection. Many regions have suspended vaccination because of the problems with the Moderna vaccine. Moreover, a group of Japanese researchers have discovered a new mutation of the Delta strain. Japan’s economic situation is complicated before the election of a new prime minister.

Trading recommendations

Support levels: 110.11, 109.43, 109.19, 108.65
Resistance levels: 110.34, 110.66, 110.95, 111.48

The main trend of the USD/JPY currency pair is bullish. Due to the strengthening of the dollar index, the price managed to break above the flat structures yesterday. The MACD indicator has become positive. Under such market conditions, traders should look for buy trades from the support level, where the buyers show initiative. Sell positions should be considered only on the lower time frames from the resistance levels with short targets.

Alternative scenario: if the price falls below 109.18, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2601
Prev Close: 1.2612
% chg. over the last day: +0.09%

Canada's growth indicators data turned out to be disappointing: GDP unexpectedly decreased by 0.3% in the last quarter. The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Yesterday, the dollar index slightly strengthened, while oil remained at the same level. As a result, the USD/CAD currency pair restored it’s position.

Trading recommendations

Support levels: 1.2602, 1.2554
Resistance levels: 1.2656, 1.2713, 1.2812, 1.2891, 1.2951

In terms of technical analysis, the USD/CAD trend is still bullish. The price was testing the priority change level yesterday. But it couldn't break through the level, and failed to consolidate below. A false breakdown zone was formed. It is better to look for buy positions from the priority change level where buyers show initiative. Sell positions can be considered from the resistance levels, or after the breakthrough of the 1.2602 support level.

Alternative scenario: if the price breaks through the 1.2602 support level and fixes below, the uptrend will likely be broken.

Eurozone unemployment rate dropped to 7.6% in July, down from 7.8%, matched expectations. EU unemployment rate dropped to 6.9%, down from 7.1%.

Compared with June 2021, the number of persons unemployed decreased by 430 000 in the EU and by 350 000 in the euro area.

Full release here.

UK PMI Manufacturing was finalized at 60.3 in August, a tick down from July's 60.4. Market said output growth slowdown exacerbated by input supply issues. Input cost and selling price inflation remained close to survey records.

Rob Dobson, Director at IHS Markit, said: "Severe disruptions to supply chains and raw material shortages eroded the growth momentum of UK manufacturing in August.... With all of these factors likely to persist for the foreseeable future, manufacturing could well see a further growth slowdown in the coming months.... The impact of supply issues is also feeding through to rapid price inflation... Business confidence remained elevated despite the widespread shortages as firms focused on the longer-term outlook and brought back furloughed workers."

Full release here.

• US stocks set to kick off new month with gains.
• OPEC+ to increase output by 400k bbls/d as previously agreed.
• Upcoming US nonfarm payrolls an important barometer in Fed policy outlook.
• Risk assets to stay bid as long as policy normalisation remains distant.

Oil prices could be in for some volatility should there be any surprises out of today’s OPEC+ meeting, the EIA data or the assessment of Hurricane Ida’s impact on US output.

Although OPEC+ is widely expected to press ahead with its intended output increase of 400k barrels per day, it remains to be seen how the alliance would address the downside demand risks stemming from the Delta variant. An OPEC+ supply hike should also help keep key members of the alliance onside, placing a lid on the political dramas that have plagued key meetings in the recent past.

Oil prices should find enough support from continuously tightening global market conditions through year-end. However, any upside in prices may be limited, barring a halt to OPEC+ output hikes, with the group’s own projections reportedly pointing to a return to surplus in 2022. From a technical perspective, the 50-day simple moving average remains the immediate resistance level for WTI futures, while offering immediate support for Brent.

Going forward, the trajectory for oil benchmarks will be mostly dictated by pandemic-related developments and their impact on the recovery in global demand.

Global stocks still on course for new highs

Asian stocks are mostly in the green while US and European futures point to a positive start to September. Global stocks are set to continue churning out near-term gains given the longer runway for equity bulls accorded by a dovish Fed Chair who’s in no rush to raise US interest rates.

Risk assets are operating on the idea that, despite the stubborn nature of the pandemic and the enduring concerns over the Delta variant, such developments will not warrant a return to the total lockdowns across broad swathes of the developed world. As such, the global economic recovery should continue chugging along with major central banks wanting to make sure it isn’t derailed by ill-timed policy adjustments.

However, the recent deterioration in US consumer confidence as well as China’s official non-manufacturing and Caixin manufacturing PMIs show that a healthy dose of caution is still warranted in the markets. Risk appetite should be able to move past signals of a decelerating global economic recovery as long as calls to wind down pandemic-era stimulus aren’t ramped up, despite some ECB officials now apparently joining the hawkish fray.

US Nonfarm Payrolls report key to Fed mandate

This Friday’s US jobs report will serve as the next important marker on how soon the Fed will tighten monetary policy. A headline payrolls print that’s significantly higher than the Wall Street forecast of 748k, and one that restores more of the six million jobs lost since the pandemic, will force dollar bulls to defy Fed Chair Jerome Powell’s patient stance. On the other hand, risk assets are likely to revel in signs of a cooling US jobs market which would push back the thought of a sooner-than-expected US rate hike.

Ultimately, as long as market sentiment can move past concerns stemming from downside risks, abundant central bank liquidity should still translate into fresh record highs for global stocks over the near-term.

Eurozone PMI Manufacturing was finalized at 61.4 in August, down from July's 62.8. Markit said output and new orders sub-indices fell further from survey highs in March. Inflationary pressures eased, but remained substantial.

Looking at the member states, readings remained generally strong: Netherlands (65.8), Ireland (62.8), Germany (62.6), Austria (61.8), Italy (60.9), Spain (59.5), Greece (59.3), France (57.5).

Chris Williamson, Chief Business Economist at IHS Markit said: "Eurozone manufacturers reported another month of buoyant production in August, continuing the growth spurt into its fourteenth successive month. The overriding issue was again a lack of components, however, with suppliers either unable to produce enough parts or are facing a lack of shipping capacity to meet logistics demand.

"These supply issues were the primary cause of a shortfall of manufacturing production relative to orders of a magnitude not previously recorded by the survey, surpassing the 24-year record deficit seen in July."

Full release here.

Amid a temporary strengthening of the dollar index, major US stock indices declined yesterday. The Dow Jones index decreased by 0.11%, the S&P 500 index decreased by 0.13%, and the NASDAQ index lost 0.04% at the close of trading. 7 of the 11 sectors closed in the red zone. The technology and energy sectors declined most. But despite that, the S&P 500 index added almost 3% at the end of the month. It is the seventh month of growth in a row. And while the Fed is in no hurry to tighten its monetary policy, the rally is likely to continue. Investors' attention is now focused on labor market data, which will be released later this week. The Federal Reserve relies on employment reports, so very good figures may provoke investors to start selling.

Amid the return of millions of employees from remote work to offices, shares of video conferencing service Zoom fell by more than 15% after the company signaled an earlier-than-expected decline in demand. Investors now expect the Q3 report period will not be so profitable as the previous ones.

European stock indices also showed negative dynamics on the last day of summer. The British FTSE 100 decreased by 0.4%, German DAX lost 0.3%, French CAC 40 decreased by 0.1%, Italian FTSE MIB and Spanish IBEX 35 decreased by 0.06% and 0.2% respectively. On the other hand, the FTSE 100 index showed its best month since April, while the European Stoxx 600 index grew for the seventh month in a row. The UK energy regulator has established a £450 million fund for innovative projects that will help the country reach its net-zero climate goals. Ryanair plans to transport more passengers this fall than it did in the summer, raising its plan for the next three months after restoring traffic. The inflation rate in Europe increased to 3% year-over-year, which is much higher than the target indicator of the European Central Bank of 2%. The new ECB program implies some deviation from the target, but what kind of deviation is acceptable and what is not is all at the discretion of officials.

It took nearly a month for gold to recover from a sharp drop in prices that had occurred at the beginning of August. At the end of the month, the price closed at +0.3%. And as far as the Fed puts off the cutting of the QE program, growth is likely to continue.

Aluminum reached its highest level in a decade due to high demand and concerns that China may cut production in an effort to reduce energy consumption and emissions.

According to the American Petroleum Institute, oil inventories fell by 4.045 million barrels last week, which was higher than analysts expected. Today, the OPEC+ meeting will be held, and the crude oil reserves data will be released. Volatility in oil prices will jump. Yesterday, Kuwait's oil minister suggested that OPEC+ might decide to postpone plans of increasing production by 400,000 barrels per day. However, most analysts and refiners expect OPEC+ to stick to its plans to increase oil production gradually.

China's recovery has slowed. The corporate growth has almost stopped, and the service sector is contracting. It is negatively affecting the dynamics of major Asian indices. Australia's GDP increased by 0.7%, but economists are confident that we will witness more consequences of COVID-19 restrictions.

Main market quotes:

• S&P 500 (F) 4,522.68 −6.11 (−0.13%)
• Dow Jones 35,360.73 −39.11 (−0.11%)
• DAX 15,835.09 −52.22 (−0.33%)
• FTSE 100 7,119.70 −28.31 (−0.40%)
• USD Index 92.66 +0.11 (+0.12%)

Important events for today:

• Australia GDP (q/q) at 04:30 (GMT+3);
• Germany Manufacturing PMI (m/m) at 10:55 (GMT+3);
• Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+3);
• Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
• US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• OPEC+ Meetings (All day).

Germany PMI Manufacturing was finalized at 62.6 in August, down from July's 65.9. Markit said suvery's output index fell to its lowest level since August 2020. New orders continued to rise sharply, albeit also at a slower pace. Cost pressures remained historically elevated.

Phil Smith, Associate Economics Director at IHS Markit, said:

"While we continue to see strong demand for German goods, with growth in new orders still among the highest on record, production levels are being constrained as manufacturers grapple with supply chain problems. According to August's data, growth in output has now fallen behind that of new orders to an extent previously unseen in over 25 years of data collection.

"Supply-demand imbalances continue to push up costs at a historically elevated rate, and concerns that higher prices could discourage customers is one of the factors that has seen manufacturers' expectations for future output fade to the lowest since last October.

"Still, many goods producers are hopeful that conditions will have improved come next summer, and a further steep rise in employment levels shows that efforts are still being made to expand capacity and prepare for higher output in the future."

Full release here.

France PMI Manufacturing was finalized at 57.5 in August, down slightly from July's 58.0. Markit said growth momentum eased as supply chain issues persisted. New orders rose at softest rate since January. Business confidence slides amid concerns about cost inflation.

Joe Hayes, Senior Economist at IHS Markit, said:

"Economic conditions in France's manufacturing sector remain strong as we head towards the end of the third quarter, although further slowdowns in the rate of output and new order growth suggest we're well past the peak.

"Given the immense supply-side challenges being thrown at goods producers too, we can hardly be surprised to see production growth slowing, although during this time we've also seen backlogs of work accumulate at some pretty hefty rates. It's likely that firms have sufficient work in the wings to keep producing at a decent rate. They're certainly gearing for it, as employment growth is strong and accelerated in August, and purchasing activity continues to rise.

"Fears are however starting to mount as to when the material shortages, delivery delays and intense price pressures will take their toll. Surveyed businesses cited all of these as threats to the outlook and business confidence subsequently slipped to a nine-month low."

Full release here.