Economic Data

- (US) MBA Mortgage Applications w/e Aug 3rd: -1.8% v +0.2% prior

- (ZA) South Africa Jun Manufacturing Production M/M: -2.4% v +0.4%e; Y/Y: 0.8% v 3.0%e

- (BR) Brazil July IBGE Inflation IPCA M/M: 0.4% v 0.4%e; Y/Y: 5.2% v 5.1%e

- (CL) Chile July CPI M/M: 0.0% v -0.1%e; Y/Y: 2.5% v 2.5%e; CPI Ex Perishables & Fuel M/M: 0.1% v 0.1%e

- (US) Q2 Preliminary Nonfarm Productivity: 1.6% v 1.4%e; Unit Labor Costs: 1/7% v 0.5%e

- (MX) Mexico May Gross Fixed Investment: 7.4% v 7.1%e

- (US) Weekly DOE Crude Oil Inventories: CRUDE: -3.73M v -1Me; Gasoline: -1.8M v -1.5Me; Distillate: -725K v +500Ke; Utilization: 92.6% v 91.7%e

- US equity markets have popped into positive territory after spending most of the morning in the red. Equities were more subdued earlier in the morning on weakness in Europe, where peripheral yields were widening out again. Overnight, Spain said it would not ask for more financial help beyond its current banking sector deal if assistance came with more conditions. Recall that according to ECB Chief Draghi, the ECB will only act to cap bond yields after a nation requests help with its debt from the EFSF/ESM. Crude is sustaining its recent gains, with the front-month WTI contract nearly topping $95 earlier this morning for its highest levels since mid May. Note that weekly crude inventory draw-downs were much larger than expected.

- Express Scripts topped expectations and raised its FY12 outlook in its Q2 report yesterday. Note that the quarter was the company's first after acquiring Medco, which made it the leading pharmacy benefits manager in the US. Executives said that costs savings from the merger were accruing even more rapidly than expected from the deal. ESRX is up 8%.

- Hewlett-Packard boosted its Q3 outlook slightly ahead of its earnings report later this month and also disclosed that it would take a big $8B charge for the impairment of goodwill in the services unit due to ongoing restructuring. Wafer manufacturer MEMC Electronic Materials had a solid quarter, with both top- and bottom-line results slightly better than expected. Executives said that solar demand has kept up well, also in Europe. Shares of WFR rose to +39% by the first minute of cash trading, before dropping to a mere +15% mid morning.

- Disney reported an excellent Q2 report, with income up nearly 25% y/y, lifted by solid growth in parks revenue and very strong gain in studio earnings thanks to a few good blockbusters, helping to wash away the memory of the John Carter debacle. DIS is up 1%. Satellite cable firm DISH Network fell more than 4% in the premarket after disclosing a big earnings miss, although the firm's net adds continue to recover somewhat. Competitor Echostar is up more than 4% thanks to a crushing beat on the bottom line.

- Macy's slightly topped expectations in its Q2 and raised its FY guidance, on solid y/y earnings and revenue growth. Comps were a bit soft, following the rough patch in June driven by the overall economic slowdown.

- EUR/USD continued to consolidate recent gains and traded below the 1.2340 level. The next session should see a pickup in volatility as traders digest key Chinese data over the next 48 hours. The yen was firmer ahead of the BOJ rate decision on Thursday. The chances of intervention to cap the yen appeared to be rising as analyst speculated that both the BOJ and the government seem to be ready to take the plunge. USD/JPY hovered around the 78.30 area. Dealers were speculating that fund repatriation by Japanese institutional investors might also weigh on the USD the near term. Dealers noted that August typically saw large bond redemptions in US. Treasuries as well as coupon payments ahead of the fiscal half-year end in Sept for Japan.


Looking Ahead

- 11:00 (US) Fed to buy $1.50-2.00B in bonds

- 11:30 (BR) Brazil Central Bank weekly currency flow

- 11:30 (BR) Brazil Jun Commodity Price Index M/M: No est v -1.4% prior; Y/Y: No est v 2.6% prior

- 13:00 (US) Treasury to sell $24.0B in 10-Year Notes

- 17:00 (CO) Colombia Jun Exports: No est v $5.2B prior

- 20:30 (CN) China July CPI Y/Y: 1.7%e v 2.2% prior

- 20:30 (AU) Australia July Employment Change: +10.0Ke v -27.0K prior; Unemployment Rate: 5.3%e v 5.2% prior

Other notable data to be released in next Asian/European session

- (JP) Bank of Japan Interest Rate Decision: Expected to leave the Target Rate Range unchanged between 0.00-0.10%

- (IN) India Jun Industrial Production Y/Y: 0.3%e v 2.4% prior (Thurs 01:30 ET)

- (CN) China July Industrial Production Y/Y: 9.7%e v 9.5% prior; Industrial Production YTD: 10.4%e v 10.5% prior (Thurs 01:30 ET)

- (CN) China July Retail Sales Y/Y: 13.5%e v 13.7% prior; Retail Sales YTD: 14.3%e v 14.4% prior (Thurs 01:30 ET)