Market Movers

  • Today’s calendar is dominated by PMI releases. In the euro area we expect both the manufacturing and the service PMI to have fallen slightly from elevated levels. The oil price collapse was a significant tailwind for the eurozone at the end of 2014 and the beginning of 2015 and with the Q2 rebound in the oil price it is natural with a slowdown. We do, however, expect the slowdown in the manufacturing and service sector to prove temporary as we expect a rise in exports and investment to drive the eurozone recovery in H2.

  • In the US we get new home sales and July manufacturing PMI. After a series of better-than-expected data out of the US – illustrated yesterday by the lowest jobless claims figure since 1973 (albeit volatile this time of year) – the releases today will likely show a solid US recovery with housing picking up, consumption growing decently and capex rebounding in Q2.


Selected Market News

  • Equity markets have lost their solid footing in recent days as investors digest the heavy corporate earnings season. Post a few large earnings disappointments in an otherwise thin calendar for economic data releases the major European and US indices ended yesterday’s trading session in red.

  • In addition, sentiment in Asia this morning suffers from a significantly weaker-thanexpected Chinese Caixin-PMI that dropped from 49.4 to 48.2 (consensus 49.7) with weak details. This has sparked worries that the H1 equity boom covered for more weakness in the Chinese economy than initially expected.

  • Japanese manufacturing PMI surprised to the upside overnight completing a third consecutive month of expansion, thereby reaching the highest level since February.

  • In FX markets, the EUR/USD dropped on the back of yesterday’s better-thanexpected US jobless claims figures. The gain, however, proved temporary as the cross rebounded and currently hovers just below the 1.10 level. While we expect a lower EUR/USD in the coming months on not least a re-pricing of Fed monetary policy, the cross is likely to remain range bound near term in the current environment.

  • Yesterday, Japan’s largest media company Nikkei bought the Financial Times Group in an eleventh hour bid for GBP844m.

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