Awaiting US jobs report

Notes/Observations

- US jobs may get temporary boost from recent Census hiring

- Optimism continues to percolate over upcoming Oct 0.S.-China trade talk

Asia:

- BOJ Gov Kuroda noted that 20-year and 30 year JGB yields had fallen a bit too far. Reiterates rate cuts were one of the four options that the BOJ had presented in the past; considering a variety of policy options including combination and improved versions

- Japan July Household Spending saw its 8th consecutive rise for its longest streak since data became available in 2000 (Y/Y: 0.8% v 0.8%e)

- Fitch downgraded Hong Kong's sovereign rating due to the impact of the recent protests (Note: downgrade by Fitch was before Chinese rule)

- China PBOC could cut its overall cut in the reserve requirement ratio (RRR) by as soon as this weekend (last broad cut was back in Jan)

- German Chancellor Merkel hoped US-China trade dispute would be over soon as it impacted the entire world; Germany was open for Chinese investment

Europe/Mideast:

- Italy Fin Min Gualtieri said to immediately sound out European allies on flexibility for Italy deficit –

- UK Labour Party in talks with SNP and agreed to block a general election until after the PM had secured a Brexit deadline. Oct 29th viewed as a possible election date

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.01% at 385.96, FTSE 0.00% at 7,271.45, DAX +0.16% at 12,145.89, CAC-40 +0.08% at 5,597.93, IBEX-35 -0.22% at 8,973.25, FTSE MIB -0.11% at 21,931.50, SMI +0.43% at 10,026.00, S&P 500 Futures +0.24%]

Market Focal Points/Key Themes: European Indices continue its upward trajectory, ending the week on a firmer tone as positive trade developments during the week has helped underpin gains ahead of today's August Non Farm Payrolls. Asian Indices traded mostly higher, whilst US Index futures continue its positive momentum. On the corporate front Berkeley Group gains after a trading update and positive house price data; Ashmore gains after stronger profits and revenue, while Randall & Quilter gains on earnings. Sig Plc declines over 4% on a falling revenues, while April also declines on earnings and guidance. In other news, Tomtom gains on the announcement of navigation integration with Microsoft Connected Vehicle Platform; Telenor declines as the company ends discussions for the merger of its Asian assets with Axiata, while Motorpoint declines 15% following a placement. Looking ahead notable earners include Genesco and Brady Corp.

 

Equities

- Materials: SIG [SHI.UK] -5% (earnings)

- Financials: Berkeley Group [BKG.UK] +2% (trading update), Ashmore [ASHM.UK] +1.5% (earnings), Deutsche Bank [DBK.DE] -1% (investigation), Randall & Quilter [RQIH.UK] +9% (earnings)

- Industrials: Varta [VAR1.DE] -1% (German Econ Min comments), Weir Group [WEIR.UK] +2% (awarded record order)

- Telecom: Telenor [TEL.NO] -5% (no combination of assets)

 

Speakers

- UK Labour party (opposition) Foreign Affairs Spokeswoman Thornberry: 1st priority was to stop a no-deal Brexit outcome. Labour party was talking to other parties regarding an election data. Would want a general election while membership of EU was still in place

- UK PM Johnson said to won an English court ruling on parliament suspension for 5 weeks. Prorogation ruling appeal to go straight to Supreme Court

- Italy Stats Agency (ISTAT) Monthly Economic Report: Leading indicator points to continued weakness in economy

- Russia Economy Ministry saw Sept CPI YoY at 4.1% and falling to 3.6-3.8% by end-2019

- Vietnam said to pledge to import more US goods (**Reminder: On June 26th, US President Trump said ‘Vietnam is just as bad as China on trade')

 

Currencies/Fixed Income

- Focus turned to the Aug US jobs report

- EUR/USD was slightly lower in the session around 1.1035 area following the unexpected drop in German July industrial production data. Overall the pair seemed steady as the region received some political relief after Italy's new government of the Five Star Movement and Democratic Party began their coalition govt to provide near-term political stability

- GBP/USD saw some retracement of its gains from the past few sessions after any imminent threat of the UK crashing out of the EU without a deal on Oct. 31st dissipated after parliament votes this week. GBP was softer after PM Johnson won another court ruling on his planned 5-week suspension of Parliament

- BOJ Gov Kuroda noted that 20-year and 30 year JGB yields had fallen a bit too far. As a result of his comments the Japanese yield curve steepened — with 30- and 40-year yields rising over 5bps respectively for largest jump in yields since July 2018. USD/JPY was holding above the 107 level amid the recent optimism over the upcoming planned US-China trade talks in Oct

 

Economic Data

- (SE) Sweden Aug Housing Prices Y/Y 2% v 1% prior; Apartment Prices Y/Y: 3% v 3% prior

- (DE) Germany July Industrial Production M/M: -0.6% v +0.4%e; Y/Y: -4.2% v -3.9%e

- (DE) Germany Q2 Labor Costs Q/Q: 0.8% v 1.3% prior; Y/Y: 3.2% v 2.5% prior

- (RO) Romania Q2 Preliminary GDP (2nd reading) Q/Q: 1.0% v 1.0%e; Y/Y: 4.4% v 4.4%e

- (NO) Norway July Industrial Production M/M: +0.5% v -1.3% prior; Y/Y: -5.7% v -8.6% prior

- (NO) Norway July Manufacturing Production M/M: 1.0% v 0.4%e; Y/Y: 3.8% v 3.1% prior

- (DK) Denmark July Industrial Production M/M: +4.1% v -6.8% prior

- (ZA) South Africa Aug Gross Reserves: $50.0B v $49.3B prior; Net Reserves: $44.2B v $44.3Be

- (FI) Finland July Preliminary Trade Balance: -€0.4B v +€0.2B prior

- (AU) Australia Aug Foreign Reserves: $72.2B v $65.3B prior

- (FR) France July Trade Balance: -€4.6B v -€4.5Be

- (FR) France July Current Account Balance: +€0.2B v -€1.1B prior

- (ES) Spain Q2 INE House Price Index Q/Q: 1.2% v 1.5% prior; Y/Y: 5.3% v 6.8% prior

- (CH) Swiss Aug Foreign Currency Reserves (CHF): 767.1B v 767.9B prior

- (CZ) Czech July National Trade Balance (CZK): +0.1B v -0.5Be

- (CZ) Czech July Industrial Output Y/Y: 0.1% v 2.7%e; Construction Output Y/Y: 3.7% v 2.6% prior

- (HU) Hungary July Industrial Production M/M: +1.7% v -1.8% prior; Y/Y: 8.7% v 5.9%e

- (HU) Hungary July Trade Balance: €0.3B v €0.5B

- (AT) Austria Aug Wholesale Price Index M/M: -0.6% v +0.4% prior; Y/Y: -1.2% v -0.3% prior

- (MY) Malaysia End-Aug Foreign Reserves: $103.5B v $103.1B prior

- (UK) Aug Halifax House Prices M/M: 0.3% v 0.2%e; 3M/Y: 1.8% v 3.4%e

- (SE) Sweden Aug Budget Balance (SEK): 30.1 v 28.2B prior

- (CN) Weekly Shanghai copper inventories (SHFE): 162.1K v 143.9K tons prior

- (RU) Russia Narrow Money Supply w/e Aug 30th (RUB): 10.51T v 10.58T prior

- (IT) Italy July Retail Sales M/M: % v 1.9% prior; Y/Y: % v 1.3% prior

- (TW) Taiwan Aug CPI Y/Y: 0.4% v 0.7%e; CPI Core Y/Y: 0.4% v 0.4%e; WPI Y/Y: -3.4% v -3.4% prior

- (UK) BoE/TNS Sept Quarterly Inflation Survey Next 12-month: 3.3% v 3.1% prior

- (EU) Euro Zone Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.1% v 1.1%e

- (EU) Euro Zone Q2 Household Consumption Q/Q: % v 0.2%e; Govt Expenditures Q/Q: % v 0.3%e; Gross Fixed Capital Q/Q: % v 0.2%e

- (EU) Euro Zone Q2 Final Employment Q/Q: % v 0.2% prelim; Y/Y: % v 1.1% prelim

- (CY) Cyprus Q2 Final GDP Q/Q: % v 0.7% prelim; Y/Y: % v 3.0% prelim

**Fixed Income Issuance**

- (IN) India sold total INR170B vs. INR170B indicated in 2021, 2026, 2029, 2039 and 2059 bonds

 

Looking Ahead

- (PT) Portugal Debt Agency (ICGP) announcement on upcoming auction for Wed, Sept 11th

- (ZA) South Africa to sell ZAR1.04B in 2025, 2033 and 2046 I/L bonds

- 06:00 (UK) DMO to sell €6.5B in 1-month, 3-month and 6-month bills (£2.0B, £2.5B and £2.0B respectively)

- 06:30 (RU) Russia Central Bank (CBR) Interest Rate Decision: Expected to cut Key 1-Week Auction Rate by 25bps to 7.00%

- 06:30 (IS) Iceland to sell 2026 and 2028 Bonds

- 06:45 (US) Daily Libor Fixing

- 07:00 (BR) Brazil Aug FGV Inflation M/M: -0.6%e v 0.0% prior; Y/Y: 4.3%e v 5.6% prior

- 07:00 (MX) Mexico Jun Gross Fixed Investment: -9.5%e v -7.4% prior

- 07:30 (IN) India Weekly Forex Reserve w/e Aug 30th: No est v $429.1B prior

- 08:00 (PL) Poland Aug Official Reserves: No est v $116.5B prior

- 08:00 (CL) Chile Aug CPI M/M: 0.2%e v 0.2% prior; Y/Y: 2.3%e v 2.2% prior

- 08:00 (BR) Brazil Aug IBGE Inflation IPCA M/M: 0.1%e v 0.2% prior; Y/Y: 3.4%e v 3.2% prior

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

- 08:00 (IN) India announces upcoming bill issuance (held on Wed)

- 08:30 (US) Aug Change in Nonfarm Payrolls: +150Ke v 164K prior; Change in Private Payrolls: +160Ke v +148K prior; Change in Manufacturing Payrolls: +5Ke v +16K prior

- 08:30 (US) Aug Unemployment Rate: 3.7%e v 3.7 % prior; Underemployment Rate: No est v 7.0% prior; Labor Force Participation Rate: No est v 63.0% prior

- 08:30 (US) Aug Average Hourly Earnings M/M: 0.3%e v 0.3 % prior; Y/Y: 3.0%e v 3.2% prior; Average Weekly Hours: 34.4e v 34.3 prior

- 08:30 (CA) Canada Aug Net Change in Employment: +20.0Ke v -24.2K prior; Unemployment Rate: 5.7%e v 5.7% prior; Full Time Employment Change: +17.0Ke v -12.6K prior; Part Time Employment Change: +7.0Ke v -11.6K prior; Participation Rate: 65.6%e v 65.6% prior; Hourly Wage Rate Y/Y: 4.5%e v 4.5% prior

- 08:30 (CL) Chile Aug Trade Balance: $0.1Be v $0.0B prior; Total Exports: No est v $5.8B prior; Total Imports: No est v $5.8B prior; Copper Exports: No est v $B prior

- 08:30 (CL) Chile Aug International Reserves: No est v $39.1B prior

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

- 09:00 (RU) Russia Aug Official Reserve Assets: $530Be v $519.8B prior

- 10:00 (CA) Canada Aug Ivey Purchasing Managers Index (Seasonally Adj): No est v 54.2 prior; PMI (unadj): No est v 51.2 prior

- 10:30 (TR) Turkey Aug Cash Budget Balance (TRY): No est v 4.1B prior

- 11:00 (EU) Potential sovereign ratings after European close (Moody's on Italy; S&P on Denmark)

- 12:30 (US) Fed Chair Powell in Zurich on economic outlook

- 13:00 (US) Weekly Baker Hughes Rig Count