Notes/Observations
Bank of Korea leaves 7-day Repo Rate unchanged at 2.50% (as expected)
Bank of Japan (BOJ) maintains monetary base at ¥60-70T pace; Keeps economic assessment unchanged after 7 consecutive increases
(AU) Australia July Employment Change hits 4-month low: -10.2K v +6.0Ke
(CN) China July Trade Balance contains positive surprise: $17.8B v $26.2Be; Exports Y/Y: +5.1% v +0.5%e; Imports Y/Y: +10.9% v -0.1%e ; Imports component particularly impressive ; copper at 7-week high
Fitch affirmed Germany sovereign rating at AAA; outlook stable
Czech interim government loses parliamentary confidence vote
German Trade components register a slight miss while overall surplus improves
Economic Data
(JP) Japan July Eco Watchers Current Survey: 53.5e v 53.0 prior; Outlook Survey: 54.1e v 53.6 prior
(CH) Swiss July Unemployment Rate: 3.0% v 2.9%e; Unemployment Rate Seasonally Adj: 3.2% v 3.2%e
(DE) Germany Jun Current Account Balance: €17.3B v €16.0Be; Trade Balance: €16.9B v €15.0Be; Imports SA M/M: -0.8% v +0.5%e; Exports M/M: 0.6% v +0.9%e
(ES) Spain Jun Industrial Output WDA Y/Y: -1.9% v -1.2%e; Industrial Output NSA Y/Y: -4.6% v -1.6% prior
(CZ) Czech July Unemployment Rate: 7.5% v 7.5%e
(EU) ECB €36M borrowed in overnight loan facility vs. €21M prior; €68.6B parked in deposit facility vs. €84.9B prior - Daily Eurosystem Liquidity Conditions
(SE) Sweden July Average House Prices (SEK) 2.227M v 2.202M prior
(NL) Netherlands July CPI M/M: 0.8% v 0.5%e; Y/Y: 3.1% v 2.5%e
(NO) Norway Jun Credit Indicator Growth Y/Y: 6.3% v 6.3%e
(GR) Greece May Unemployment Rate: 27.6% v 27.0% prior; fresh record high
(ZA) South Africa Jun Mining Production Y/Y: -6.2% v +0.5%e; Gold Production Y/Y: -14.1% v -14.6% prior
Fixed Income:
(UK) DMO sold €1.3B in 0.75% Mar I/L 2034 Gilts; Real Yield: 0.080% v 0.126% prior; Bid-to-cover: 1.85x v 1.55x prior
(HU) Hungary Debt Agency (AKK) sold total HUF35B vs. HUF40B indicated in 2016, 2018 and 2023 Bonds
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
FTSE 100 +0.20% at 6,527, DAX +0.30% at 8,288, CAC-40 +0.30% at 4,053, IBEX-35 +0.90% at 8,650, FTSE MIB +0.80% at 16,978, SMI -0.30% at 7,951, S&P 500 Futures +0.20% at 1,692
Equity markets in Europe are mostly higher, supported by trade data out of China. Additionally, markets have gained aimed the release of better than expected earnings from Aviva, Rio Tinto, Deutsche Telekom, Commerzbank, Henkel and Adecco.
In terms of sectors, banks are mostly higher (KBC and Commerzbank reported better than expected earnings). Basic resources stocks have been supported by earnings from Rio Tinto, China trade data and higher commodity prices (notably copper). Insurers are trading mostly higher, supported by earnings from Swiss Re and Aegon. The telecom sector has been supported by earnings from Deutsche Telekom.
UK movers [Avocet Mining +25% (updated resource est), Aviva +7.5% (H1 profits rose y/y), Rio Tinto +1% (H1 results above ests); Schroders -5% (H1 results), Ladbrokes -3.5% (profits declined y/y)]
Germany movers [Commerzbank +12% (Q2 net profit above ests), Deutsche Telekom +4.5% (Q2 results above ests), Henkel +3% (Q2 profits above ests); Adidas -1% (cautious outlook)]
Switzerland movers [Adecco +4% (Q2 profits above ests); Nestle -2% (cautious outlook)]
Denmark movers [Novo Nordisk +2% (raised outlook)]
Belgium movers [Delhaize +7% (raised outlook), KBC +4% (Q2 results above ests)]
Speakers:
BOJ Gov Kuroda post rate decision press conference noted that positive moves were spreading through domestic economy and could sustain recovery even if exports were not up sharply. He reiterated that it was premature to discuss an exit strategy and that CAPEX and income were key to assess the economy. He added that risk posed by overseas economy had diminished over past month. The planned sales tax hike was consistent with efforts to end inflation. He noted that it was important to have a budget for next year that shows deficit reduction as any loosening of fiscal discipline might diminish the effect of monetary easing. He stressed that BoJ would take appropriate action if tail risk threatens the achievement of price target
BOE's Carney reiterated that inflation was the primary target without question and recent forward guidance was intended to provide the maximum transparency to help secure recovery. He noted that it was unlikely MPC to change views outside the 'knockouts' but added it was not bided to decisions. The UK was early stages of recovery from very weak levels and he did not want to make 'Japanese-style' mistake on recovery. Lastly he stressed that needed to finish the job of repairing bank balance sheets and change in culture of UK banks
ECB Publishes Monthly Report reiterated that recent economic data and confidence indicators had registered improvements from low levels and tentatively confirmed stabilization. ECB Survey of Professional Forecasters (SPF) trimmed 2013 and 2014 CPI view and cut 2013 thru 2015 GDP outlook.
(IT) Bank of Italy (BOI) Jun Private Sector Deposits +6% y/y; Non-Performing Loans (NPL): +22% y/y
Czech Parliament to hold session next week to dissolve itself paving the way for an early election after the PM lost a confidence vote this week
Philippine Central Bank Dep Gov Guinigundo commented that policy remained appropriate with CPI to remain in comfort zone through 2015
Incoming India Central Bank (RBI) gov Rajan reiterated that the economic environment was challenging but confident India could overcome the situation
Currencies/Fixed Income:
The session was relatively quiet with not major data releases. FX price action was more reliant on technical factors rather than fundamental news.
Some analysts noted that the current spat of sterling strength was not sustainable and was susceptible to negative data surprises. GBP/USD was hovering around the 1.55 area ahead of the NY morning.
Dealers also noted that for now they remains tactically JPY bullish and noted that upward correction in equity markets might lift USDJPY back up to 97.30.
AUD was currently holding on to a firmer tone amid much better than expected China trade data. The break of the AUDUSD 0.9010 level seemed to open potential to 0.9150-0.9300 area according to dealers
Political/In the Papers:
(JP) Japan investors bought net ¥689.9B in Foreign Bonds last week (net buyers for 5th consecutive week; highest since Aug 2010) vs bought net ¥233.2B prior week;
(JP) Japan Fin Min Aso: Japan Cabinet has approved medium-term fiscal plan
(JP) Moody's: Higher growth necessary for Japan to reduce govt debt
Looking Ahead
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
(GR)) Greek PM Samaras meets with US President Obama
06:00 (EU) OECD Jun Leading Indicators: No est v 100.6 prior
06:00 (IE) Ireland July CPI M/M: No est v 0.1% prior; Y/Y: No est v 0.7% prior
06:00 (IE) Ireland July CPI EU Harmonised M/M: -0.1%e v 0.1% prior; Y/Y: 0.7%e v 0.7% prior
06:30 (US) Daily Libor Fixing
07:00 (RU) Russia Gold and Forex Reserve w/e Aug 2nd: No est v $505.7B prior
07:00 (ZA) South Africa Jun Manufacturing Production M/M: +0.5%e v -1.7% prior; Y/Y: 4.3%e v 2.2% prior
07:00 (BR) Brazil Aug Preliminary IGP-M Inflation: 0.2%e v 0.3% prior
08:00 (CL) Chile July CPI M/M: 0.3%e v 0.6% prior; Y/Y: 2.2%e v 1.9% prior; CPI Core M/M: 0.1%e v 0.3% prior
08:30 (US) Initial Jobless Claims: 335Ke v 326K prior; Continuing Claims: 2.95Me v 2.951M prior
08:30 (CA) Canada Jun New Housing Price Index M/M: 0.1%e v 0.1% prior; Y/Y: 1.7%e v 1.8% prior
08:30 (US) Weekly USDA Net Export Sales
09:00 (MX) Mexico July CPI M/M: 0.0%e v -0.1% prior; Y/Y: 3.5%e v 4.1% prior; CPI Core M/M: 0.1%e v 0.1% prior
10:30 (US) Weekly EIA Natural Gas Inventories
11:00 (US) Fed to purchase $2.75-3.50B in Notes
11:00 (BR) Brazil to sell 2014, 2015 and 2017 Bills
11:00 (BR) Brazil to sell Fixed-rate 2019 and 2023 bonds
13:00 (BR) Brazil Jun CNI Capacity Utilization: No est v 82.2% prior
13:00 (US) Treasury to sell $16B in 30-Year Bonds
17:00 (CO) Colombia Jun Exports FOB: $4.8Be v $5.3B prior
19:00 (PE) Peru Central Bank Interest Rate Decision: Expected to leave the Reference Rate unchanged at 4.25%
21:30 (CN) China July CPI Y/Y: 2.8%e v 2.7% prior; PPI Y/Y: -2.1%e v -2.7% prior
21:30 (AU) RBA Statement on Monetary Policy
IMOH, Clement I.
+234 802 905 9344
+234 703 569 1707
No comments:
Post a Comment