Economic Data
- (US) Goldman Economist Chain Store Sales w/e Aug 29th w/w: -0.1%; y/y: +1.9%- (CZ) Czech Aug Budget Balance (CZK): 19.0B v 25.7B prior
- (ZA) South Africa Aug Naamsa Vehicle Sales Y/Y: -8.2% v -4.1%e
- (CA) Canada Jun GDP M/M: 0.5% v 0.2%e; Y/Y: 0.6% v 0.4%e; Quarterly GDP Annualized: -0.5% v -1.0%e
- (US) Weekly Redbook Sales w/e Aug 29th: 1.6% y/y, Aug MTD m/m: 0.2%; Aug MTD y/y: 1.6%
- (BR) Brazil Aug Manufacturing PMI: 45.8 v 47.2 prior
- (CA) Canada Aug Manufacturing PMI: 49.4 v 50.8 prior
- (US) Aug Final Markit Manufacturing PMI: 53.0 v 52.9e
- (US) July Construction Spending M/M: 0.7% v 0.6%e
- (US) Sept IBD/TIPP Economic Optimism: 42.0 v 47.1e
- (US) Aug ISM Manufacturing: 51.1 v 52.5e; Prices Paid: 39.0 v 39.0e
- (MX) Mexico July Total Remittances: $2.2B v $2.1Be
- (MX) Mexico Aug Manufacturing PMI: 52.4 v 52.9 prior
Data out during the Asia session was not positive: South Korean exports plunged 14.7% in August, the biggest decline since August 2009, while China's official August manufacturing PMI fell to a three-year low of 49.7 from 50.0 m/m. Losses in Shanghai were very modest, but the Euro Stoxx 50 fell 2.7% and US indices are deep in the red. The 10-year UST is down nearly four basis points to 2.18%, the DJIA is down 1.87%, the S&P500 is off 1.72% and the Nasdaq is down 1.43%.
August US manufacturing data out this morning was pretty soft, reflecting the stronger dollar and heightened uncertainty seen in the month. The final Market manufacturing PMI survey declined to its lowest level in two years, with declines seen in employment and new orders. The ISM manufacturing survey hit its lowest level since May 2013, with the new orders component tumbling lower. New orders were down nearly five points to 51.7, which nearly matches the two-year low reached in March. Markit said that new orders from abroad have now fallen in four of the past five months, which represents the weakest phase of manufacturing export performance since late 2012.
August auto sales figures from the Detroit Big Three were mixed. Ford led the pack with a 5% y/y gain in sales, for its best August in nearly a decade. Fiat-Chrysler saw its 65th straight month of sales gains, with August up 1.7%, fueled again by strong sales in the Jeep division. General Motors sales fell 1.7%, slightly less than expected, and the company claimed the slip was mostly due to double-digit declines in sales to rental and commercial operators, while sales to individual buyers were up 6% y/y. Nissan's sales slipped 1% y/y, while Honda's fell 7%. Analysts caution that a seasonal quirk also impacted sales numbers: for the first time since 2012, Labor Day sales will be entirely included in September results, whereas they usually contribute to August when the holiday falls in early September. This year, Labor Day falls on Sept. 7. GM is -2.5% and FCAU is -3.5%, while share of Ford are managing to stay around unchanged.
The three-day crude oil rally has hit a wall this morning. Between last Thursday and yesterday, WTI rallied $10 from $39 to $49, a six-week high and the biggest winning streak for WTI in nearly 25 years. Various factors drove the gains, including six solid weeks of gains in the Baker Hughes rig count report, slight declines in US production in the EIA's June Petroleum Supply Monthly report and an OPEC Bulletin article that asserted the cartel was willing to talk with non-OPEC producers on "a level playing field" about steps to get "fair prices." Analysts have dismissed or explained away all three factors and warned they do not make for real price support. WTI is down 3.3% today, trading around $46, while Brent is down 6.5% to $50.60.
Looking Ahead
- 12:00 (IT) Italy Aug New Car Registrations Y/Y: No est v 14.5% prior- 12:00 (IT) Italy Aug Budget Balance: No est v -€2.2B prior
- 13:00 (MX) Mexico Aug IMEF Manufacturing Index: 52.9e v 52.7 prior; Non-Manufacturing Index: 51.7e v 51.3 prior
- 14:00 (BR) Brazil Aug Trade Balance: $2.9Be v $2.4B prior; Total Exports: $15.6Be v $18.5B prior; Total Imports: $12.7Be v $16.2B prior
- 16:30 (US) Weekly API Oil Inventories
- 18:10 (US) Fed Rosengren (dovish, FOMC-non voter) in NYC
- 19:00 (KR) South Korea July Current Account Balance: No est v $12.2B prior; Balance of Goods (BOP): No est v $13.2B
- 21:30 (AU) Australia Q2 GDP Q/Q: 0.4%e v 0.9% prior; Y/Y: 2.2%e v 2.3% prior
- (US) Aug Wards Total Vehicle Sales: 17.30Me v 17.46M prior; Domestic Vehicle Sales: 13.70Me v 13.92M prior
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