All eyes on Jackson Hole after Nvidia lifts global sentiment

EU mid-market update: All eyes on Jackson Hole after Nvidia lifts global sentiment; BRICS invites more members into the group.

Notes/observations

- Global equities receive tailwind from Nvidia earnings, which 'blew out' expectations and said it has visibility into next year for demand, confirming AI/semiconductor momentum. Technology sector outperforms in Europe.

- Overall markets appear to pare bets on further tightening for Fed, ECB and BOE as market awaits commentary from Jackson Hole Symposium for indications on Fed rate path which has pivoted from 'how high' to 'how long' rates will stay at current levels, especially in light of disastrous European flash PMI's from earlier in the week that will give extra thought for ECB and BoE.

- Indonesia Central Bank left rates unchanged, ahead of Turkey Central Bank rate decision at 07:00 ET where consensus is for a 250bps hike to 20.00%.

- Asia closed higher with Hang Seng out-performing at +2.1%. EU indices are +0.4-0.6%. US futures are +0.1-1.2%. Gold +0.3%, DXY +0.1%; Commodity: Brent +0.2%, WTI +0.2%, TTF -13.3%; Crypto: BTC +1.8%, ETH +1.8%.

Asia

- South Korea July PPI Y/Y: -0.2% v -0.2% prior.

- Bank of Korea (BOK) left Repo Rate unchanged at 3.50% (as expected) for its 5th straight pause in the current tightening cycle. Reiterated stance would maintain restrictive policy stance for considerable time. 6 members wanted to keep door open for one more hike.

- BOK updated its Staff Projections which maintained 2023 CPI at 3.5% and maintained 2024 CPI at 2.4%. Projections maintained 2023 GDP growth outlook at 1.4% while cutting 2024 GDP Growth outlook from 2.3% to 2.2%.

- BOK Gov Rhee noted that the decision to keep policy steady was unanimous. Reiterated view that considerable time was needed until CPI was well in target. Reiterated stance that was too early to discuss rate cut. But did not want to rule out possibility of rate cut within 2023.

- North Korea confirmed launch of space rocket early Thursday; Satellite launch failed during third stage. Announced plan for another launch in Oct.

Ukraine conflict

- Wagner mercenary chief Yevgeny Prigozhin killed after private jet crashed in Tver region north of Moscow.

Key corp news

- Nvidia [NVDA] reported Q2 Results abve consensus EPS $2.70 v $2.09e, Rev $13.5B v $11.2Be; Board approved additional $25B share buyback program (2.1% of market cap); Guided Q3 Rev $15.7-16.3B v $12.3Be.

- Woodside Energy [WDS.AU] Offshore Alliance representatives endorsed in-principal agreement with company; union members to vote Thursday night on the agreement.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.58% at 456.10, FTSE +0.39% at 7,348.73, DAX +0.46% at 15,800.05, CAC-40 +0.57% at 7,288.18, IBEX-35 +0.60% at 9,371.04, FTSE MIB +0.63% at 28,412.00, SMI +0.38% at 11,015.30, S&P 500 Futures +0.58%].

Market focal points/Key themes: European indices open higher across the board, but moderated some of the early gains as the session progressed; all sectors start the day in the green; leading sectors to the upside include technology and consumer discretionary; lagging sectors include energy and materials; tech sector supported following better than anticipated earnings from Nvida yesterday; falling crude prices once again weighing on the oil & gas subsector; GAM enters negotiations with Newgame after acknowledging deal with Liontrust might fall through; earnings expected in the upcoming US session include Nordstrom and Gap.

Equities

- Consumer discretionary: Norwegian Air Shuttle [NAS.NO] -6.5% (Q2 results), Hays [HAS.UK] -1.0% (prelim FY23 results, new CEO, special dividend), CTS Eventim [EVD.DE] +1.5% (H1 results).

- Energy: Hunting [HTG.UK] -1.5% (H1 results).

- Financials: Liontrust Asset Management [LIO.UK] +10.0% (GAM Holdings expects Liontrust Asset Management will declare its offer unsuccessful on Aug 29th), Multitude [FRU.DE] +11.0% (H1 results).

- Technology: ASML [ASML.NL] +1.5%, STMIcroelectronics [STM.FR] +1.5%, Infineon [IFX.DE] +1.0% (Nvidia earnings and guidance), SoftwareONE [SWON.CH] -1.5% (H1 results).

Speakers

- Italy govt said to be preparing new rule for non-performing loans (aka bad loans) to help troubled families and firms amid rising interest rates.

- South Africa President Ramaphosa stated that leaders adopted BRICS Summit declaration. Leaders noted the momentum for use of local currencies and payment systems. To invite six countries (Argentina, Egypt, Iran, Ethiopia, Saudi Arabia and the UEA) to become new members of the bloc.

- Saudi Arabia reportedly being considered by BRICS for invitation to the group.

- Indonesia Central Bank Policy Statement noted that current stance was Policy in line to meet inflation targets. To focus on IDR currency (Rupiah) to mitigate uncertainty.

- China Commerce Ministry (MOFCOM) spokesperson noted that it would explain stance on trade and investment to US Commerce Sec Raimondo during his visit to Beijing.

Currencies/fixed income

- USD was consolidating after Wed US PMI Manufacturing data stayed in contraction for the 4th straight month. Focus turning toward the Fed’s Jackson Hole symposium.

- Overall markets appear to pared bets on further tightening by major central banks.

- GBP/USD holding above 1.27 as money markets now favoring a 5.75% peak rate for the first time since Aug. 14th for BOE.

- EUR/USD at 1.0860 area by mid-session while USD/JPY pair at 145.30.

Economic data

- (FI) Finland July PPI M/M: -0.9% v -0.3% prior; Y/Y: -10.0% v -9.5% prior.

- (NO) Norway July Trend Unemployment Rate: No est v 3.4% prior.

- (HU) Hungary Jun Average Gross Wages Y/Y: 16.1% v 17.6%e.

- (FR) France Aug Business Confidence: 99 v 100e; Manufacturing Confidence: 96 v 99e; Production Outlook Indicator: -9 v -9 prior; Own-Company Production Outlook: +1 v -5 prior.

- (CZ) Czech Aug Business Confidence: 5.5 v 2.3 prior; Consumer Confidence: -18.0 v -16.5 prior; Composite Confidence (Consumer & Business): +0.8 v -1.4 prior.

- (ID) Indonesia Central Bank (BI) left the 7-Day Reverse Repo Rate unchanged at 5.75% (as expected).

- (PL) Poland July Unemployment Rate: 5.0% v 5.0%e.

- (PL) Poland Q2 Unemployment Rate: 2.6% v 2.6%e.

- (PL) Poland Aug Consumer Confidence: -22.3 v -23.4e.

- (TW) Taiwan July M2 Money Supply Daily Avg Y/Y: 6.9% v 5.9% prior; M1 Money Supply Daily Avg Y/Y: 3.7% v 2.4% prior.

- (HK) Hong Kong July Trade Balance (HKD): -30.0B v -41.3Be; Exports Y/Y: -9.1% v -8.8%e; Imports Y/Y: -7.9% v -5.9%e.

Fixed income issuance

- (SE) Sweden sold total SEK500M vs. SEK500M indicated in I/L 2030 and 2039 Bonds.

Looking ahead

- (US) Jackson Hole Symposium begins.

- (IL) Israel July Leading 'S' Indicator M/M: No est v 0.3% prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds.

- 06:00 (UK) Aug CBI Retailing Reported Sales: No est v -25 prior; Total Distribution Reported Sales: No est v -17 prior.

- 06:00 (CZ) Czech Republic to sell Bills.

- 06:00 (RO) Romania to sell RON500M in 8.25% Sept 2032 Bonds.

- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to raise One-Week Repo Rate by 250bps to 20.00%.

- 07:00 (SE) Sweden Central Bank (Riksbank) Gov Thedeen.

- 07:30 (IN) India Central Bank (RBI) Aug Minutes.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) July Preliminary Durable Goods Orders: -4.0%e v +4.6% prior; Durables (Ex-Transportation): 0.2%e v 0.5% prior; Capital Goods Orders (non-defense/ex-aircraft): 0.1%e v 0.1% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.1%e v 0.1% prior.

- 08:30 (US) Initial Jobless Claims: 240Ke v 239K prior; Continuing Claims: 1.71Me v 1.716M prior.

- 08:30 (US) July Chicago Fed National Activity Index: -0.22e v -0.32 prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 18th No est v $585.8B prior.

- 09:00 (CL) Chile July PPI M/M: No est v 0.6% prior.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (US) Aug Kansas City Fed Manufacturing Activity: -10e v -11 prior.

- 11:00 (MX) Mexico Central Bank (Banxico) Aug Minutes.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:00 (CA) Canada to sell 5 Year Bonds.

- 12:00 (US) Fed’s Harker.

- 13:00 (US) Treasury to sell 30-Year TIPS Reopening.

- 15:00 (AR) Argentina Jun Supermarket Sales Y/Y: No est v 0.2% prior; Shop Center Sales Y/Y: No est v 12.5% prior.

- 19:01 (UK) Aug GfK Consumer Confidence: -29e v -30 prior.

- 19:30 (JP) Japan Aug Tokyo CPI Y/Y: 3.0%e v 3.2% prior; CPI (ex-fresh food) Y/Y: 2.9%e v 3.0% prior; CPI (ex-fresh food/energy) Y/Y: 4.0%e v 4.0% prior.

- 19:50 (JP) Japan July PPI Services Y/Y: 1.3%e v 1.2% prior.

- 23:00 TH) Thailand July Customs Trade Balance: -$1.4Be v $0.1B prior; Exports Y/Y: -2.8%e v -6.4% prior; Imports Y/Y: -8.8%e v -10.3% prior.

- 23:30 (JP) Japan to sell 3-Month Bills.