Looming weekend for event risk with ECB stress test results

Looming weekend for event risk with ECB stress test results; also elections in Brazil and Ukraine

Notes/Observations

- Risk appetite infected by NYC Ebola scare

- Looming weekend for event risk with ECB stress test results; also elections in Brazil and Ukraine

- China released another troubling report on the housing sector, with property prices rising y/y in just 10 out of 70 cities vs 48 in the prior month

- UK Q3 Advance GDP in line with consensus but below BOE's forecast

Key Economic Data in session

- (SG) Singapore Sept Industrial Production M/M: -3.3% v -1.5%e; Y/Y: -1.2% v -0.4%e

- (DE) Germany Nov GfK Consumer Confidence: 8.5 v 8.0e

- (IT) Italy Aug Retail Sales M/M: -0.1 v -0.1% prior; Y/Y: -1.5% v -1.7% prior

- (UK) Q3 Advance GDP Q/Q: 0.7% v 0.7%e; Y/Y: 3.0% v 3.0%e

- (UK) Aug Index of Services M/M: 0.0% v 0.3%e; 3M/3M: 0.8% v 0.9%e

Fixed Income:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities***

Indices [Stoxx50 -0.2%, FTSE 100 -0.3% at 6,402, DAX -0.2% at 9,028, CAC-40 -0.3% at 4,145, IBEX-35 flat at 10,333, FTSE MIB +0.2% at 19,473, SMI -0.3% at 8,522, S&P 500 Futures -0.2% at 1,941]

- Market Focal Points/Key Themes: Equity markets open lower amid cautious outlook from BASF and Ebola concerns in New York City; Earnings recap (BASF cuts 2015 outlook, Volvo above ests amid positive fx impact, Belgacom above ests, Air Liquide sales below ests, Ericsson margins below ests, Pearson reaffirms, Spain's Bankia above ests, Spain's CaixaBank below ests); Banking sector in focus as ECB stress test results due to be published on Sunday Oct 26th; US morning earnings (Ford, Procter & Gamble, State Street, UPS, Shire)

By Sector

- Basic Materials/Resources [Air Liquide AI.FR -1% (Q3 sales below ests)]

- Telecom [Belgacom BELG.BE +6% (Q3 results above ests); Ericsson ERICB.SE flat (mixed Q3 results)]

- Industrials [Morgan Sindall MGNS.UK -10% (profit warning), BASF BAS.DE -2% (cut 2015 outlook); Volvo VOLVB.SE +10% (Q3 results above ests)]

- Financials [CaixaBank CABK.ES -2% (9-month results below ests); Bankia BKIA.ES +1% (9-month results above ests)]

- Consumer Discretionary [Kering KER.FR (Q3 Gucci sales -1.9%)]

- Healthcare [AstraZeneca AZN.UK -1% (Pfizer buyback announcement)]

- Stoxx50 sectors [Basic Materials -1.5%, Energy -0.7%, Industrials -0.6%, Consumer Non-Cyclical -0.2%, Utilities -0.3%, Technology -0.2%, Financials -0.2%; Consumer Cyclical +0.4%, Telecom +0.1%]

Speakers

- Spain Fin Min de Guindos stated that still work needed to be done regarding bring down unemployment in Spain; hoped Europe will not enter new recession, sees 'light' recovery in early 2015

- Chancellor Osborne: UK economy broadly based but not immune to weakness from the Euro Zone

- BOJ said to see a much bigger possibility of inflation slipping below 1%, pushed down by falling crude oil prices

- Poland Central Bank gov Belka: Poland has an undervalued currency

- Poland Dep Fin Min Kotecki: PLN currency (Zloty) rate is determined by market

- Russia Fin Min Siluanov: Russia has resources to fulfill its 2015 budget

Currencies/Fixed Income:

- The GBP currency was a tad firmer as Q3 advance GDP came in line with expectation. The GBP/USD moved 40 pips higher towards 1.6070 area in the aftermath of the data release and poised to snap a 3-day losing streak.

- The USD/JPY pair was back above the 108 level aided by reports that BOJ saw a much bigger possibility of inflation slipping below 1%, pushed down by falling crude oil prices then opening the door for more potential QE

- Russia's RUB currency (Ruble) continues to test record lows against USD and Euro; concerns that S&P might cut its sovereign rating to 'junk status'

Political/In the Papers:

- (CN) China 4th Plenum communique: China to comprehensively advance ruling the country according to the law

- (EU) EU's Van Rompuy: To increase renewable energy use to at least 27%; To cut 40% of CO2 emissions by 2030

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

- (CY) Cyprus Sovereign Debt Rating published by S&P and Fitch

- (AT) Austria Sovereign Debt Rating might be published by Moody's

- (DE) Germany Sovereign Debt Rating might be published by Moody's

- (LX) Luxembourg Sovereign Debt Rating might be published by Moody's

- (IT) Italy Sovereign Debt Rating published by Fitch

- (ES) Spain Sovereign Debt Rating published by Fitch

- (RU) Russia sovereign rating by S&P

- (EU) EU Leaders Summit concludes in Brussels

- 05:30 (ZA) South Africa to sell I/L 2022, 2025 and 2038 Bonds

- 06:00 (IT) Italy Oct Consumer Confidence Index: 101.0e v 102.0 prior

- 06:00 (BR) Brazil Oct FGV Consumer Confidence: No est v 103 prior

- 06:00 (EU) ECB announces 3-Year LTRO Repayment vs. €4.5Be

- 06:05 (UK) DMO to sell combined £ in 1-month, 3-month and 6-month Bills

- 06:15 (EU) ECB's Draghi speaks at EU Leader Summit in Brussels

- 06:45 (US) Daily Libor Fixing

- 07:00 (EU) EMA releases Drug Approvals & Safety Decisions

- 07:30 (IN) India Forex Reserves w/e Oct 17th: No est v $312.7B prior

- 08:00 (CL) Chile Sept PPI M/M: No est v -0.1% prior

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (BR) Brazil Sept Current Account Balance (BRL): -$7.0Be v -$5.5B prior; Foreign Direct Investment (FDI): $3.8Be v $6.8B prior

- 09:00 (BE) Belgium Oct Business Confidence: -7.9e v -7.2 prior

- 09:00 (MX) Mexico Aug Economic Activity Index Y/Y: 2.3%e v 2.5% prior

- 10:00 (US) Sept New Home Sales: 470Ke v 504K prior

- 12:00 (FR) France Sept Net Change in Jobseekers: +5.9Ke v -11.1K prior; Total Jobseekers: 3.419Me v 3.413M prior

- (PT) Portugal Year-to-Date Budget Report

Weekend:

Sun Oct 26th

- (EU) ECB stress test details on 130 banks to be published

- (BR) Brazil 2nd round of Presidential election

- (UR) Ukraine holds early elections after PM dissolved Parliament