EU mid-market update: Chain of rate decisions fails to reverse sell off triggered by FOMC; Focus on borderline BoE decision later and BoJ overnight.


- Risk off theme triggered by FOMC’s ‘hawkish hold’ continued in Asia and European trading, with an on-slaught of rate decisions that saw pauses in Asia out of Philippines, Indonesia and Taiwan with rates unchanged. However, European Central Banks decisions remain more debatable, after Swiss SNB unexpectedly paused, ahead of tough call for Bank of England at 07:00 ET (11:00 GMT). Spanner in the works for BoE came from the cooler-than-expected CPI yesterday, now putting odds at approx 50/50 for a pause or 25bps hike.

- Elsewhere in Europe, Sweden and Norway both hiked by 25bps, as expected, but Sweden additionally announced a program to sell FX reserves for EUR and USD (up to a quarter) as part of a hedge against risks.

- Key focus on further upcoming rate decisions from BoE and BoJ. Turkey also expected, with a 500bps hike as consensus.

- Asia closed lower with KOSPI under-performing at -1.8%. EU indices are -0.6% to +0.3. US futures are -0.2% to -0.6%. Gold -0.4%, DXY +0.3%; Commodity: Brent -1.0%, WTI -1.0%, TTF -1.0%; Crypto: BTC -1.0%, ETH -1.2%.


- Philippines Central Bank (BSP) left Overnight Borrowing Rate unchanged at 6.25%; as expected.

Indonesia Central Bank (BI) left 7-day Reverse Repo Rate unchanged at 5.75%; as expected.

- Chevron Australia Union Official: discussing with members the recommendations made by Australian Industrial umpire to resolve co. dispute with union.

- China Securities Regulor (CSRC) reportedly probe hedge funds and brokerages on quantitative trading strategies amid market weakness.

China Commerce Ministry (MOFCOM) said some firms have obtained export license for gallium and germanium; Will continue to review other applications.

- China's Beijing Municipal Bureau issues draft rules to promote high level of opening up and foreign investments - press.

- New Reserve Bank of Australia (RBA) Gov Bullock risks losing control of interest rates to outsiders; cites former RBA Gov MacFarlane.

- Singapore Exchange: consults on proposed changes to Futures Trading Rules and other rulebooks.

- Banks in Singapore said to tighten review of Chinese with other passports - press.

- Singapore LTA to extend early adoption incentive for EVs by 2 years - financial press.

- India suspends Visa services for people from Canada - India press.


Taiwan Central Bank (CBC) left Benchmark Interest Rate unchanged at 1.875%; as expected.


- Saudi Arabia Crown Prince MBS said if Iran gets a nuclear weapon, then we have to get one - TV.

- US and Israel said to consider Saudi Arabia nuclear facility which would be run by the US - US financial press.

Ukraine conflict

- Poland PM Morawiecki: Poland will no longer arm Ukraine and will instead focus on its own defense.

- Ukrainian state energy company Ukrenergo; Overnight Russian missile attack was the first attack on Ukraine energy infrastructure in 6 months; Parts of capital Kyiv are without water.


Swiss National Bank (SNB) left Policy Rate unchanged at 1.75%; not expected; Can't exclude more rate hikes in future.

Sweden Central Bank (Riksbank) raised Repo Rate by 25bps to 4.00%; as expected. Announce to hedge FX by selling USD and EUR.

Norway Central Bank (Norges) raised Deposit Rate by 25bps to 4.25%; as expected; Likely one more hike will be needed, most probably in Dec.

- China-EU economic and trade dialogue meeting to take place on Mon, Sept 25th.


- Overnight, Brazil Central Bank (BCB) cut Selic Target Rate by 50bps to 12.75%; as expected.

- Overnight, FOMC left Target Range unchanged between 5.25-5.50%, as expected; Will continue to assess additional information and its implications for policy; Median 2024 Dot rises 50bps to 5.12%.


-  Australia LNG union workers vote 98% in favor of Woodside deal - financial press.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 -0.62% at 11,199.60, FTSE -0.55% at 7,688.96, DAX -0.81% at 15,653.05, CAC-40 -1.14% at 7,246.95, IBEX-35 -0.77% at 9,571.29, FTSE MIB -1.31% at 28,843.00, SMI +0.41% at 11,199.60, S&P 500 Futures -0.43%].

Market focal points/Key themes


European indices open lower across the board and drifted further into the red as the session wore on amid various European banks doing their policy rate decisions; SMI performs better than other indices following surprise rate hold by SNB; better performing sectors include Retail; sectors leading to the downside include Travel & Leisure and Oil & Gas; shares of UK retailer JD Sports Fashion trade higher in London over 5% following better than expected results, while Ocado’s shares trade down over 7% following analyst downgrade; Deutsche Post shares in Frankfurt trade slightly lower following FedEx results and comments on gained market share after US close; earnings expected in the upcoming US session include Darden Restaurants and FactSet Research.

- Consumer discretionary: JD Sports Fashion [JD.UK] +7.0% (earnings; outlook), Next plc [NXT.UK] +2.0% (earnings; raises outlook), Ocado [OCDO.UK] -7.5% (analyst action), SSP Group [SSPG.UK] -6.5% (trading update).

- Financials: Deutsche Bank [DBK.DE] -0.5% (CFO comments).

- Healthcare: Merck KGaA [MRK.DE] +1.0% (analyst action), Valneva [VLA.FR] -1.0% (earnings).

- Industrials: Capita [CPI.UK] +2.0% (awarded large contracts), Halma [HLMA.UK] -1.5% (trading update).


- Japan Chief Cabinet Sec Matsuno reiterated it is important that FX moves stably and reflects fundamentals.

- Thailand PM said weak baht driven by funds outflows, interest rate differentials.

- ECB's Wunsch (Netherlands, hawk) said if inflation falls as projected in next months, we probably will not have to do more hikes.

ECB's Nagel (Germany, hawk) said not clear if rates have peaked; Inflation rate is still to high.

ECB's Kazaks (Latvia, hawk) said quite satisfied where rates are now and will take decisions meeting-by-meeting; Rates will need to remain restrictive for quite a while.

-Swiss National Bank (SNB) Pres Jordan said will not hesistate to tighten policy again - post rate decision press conference.

- Hungary Central Bank Gov Matolcsy: Hungary may have single digit inflation in Nov; Hungary inflation rate may drop to 7% in Dec.

- Overnight, Fed Chair Powell said majority of policy makers believe it is more likely than not another rate hike will be appropriate; Stronger economic activity is main reason for needing to do more with rates; Would NOT call soft landing a baseline expectation - Q&A.

Currencies/fixed income

- USD significantly firmed up in wake of hawkish FOMC decision which lifting median dot plot projections, implying another hike in 2023. GBP/USD tests resistance at 1.230 ahead of BOE decision where current consensus is for a pause but tough call. EUR/USD declined overnight but erased some gains as rate decisions for multiple European central banks came in. USD/CHF notably higher in wake of SNB rate decision.

Economic data

- (NL) Netherlands Aug Unemployment Rate: 3.6% v 3.6% prior.

- (NL) Netherlands Sept Consumer Confidence: -39 v -40 prior.

(UK) Aug Public Finances (PSNCR): +£2.5B v -£7.5B prior; PSNB (ex-banking groups): £11.6B v £11.1Be.

- (DK) Denmark Sept Consumer Confidence: -13.0 v -10.9 prior.

(FR) France Sept Business Confidence: 100 v 98e.

- (CH) Swiss Aug M3 Money Supply Y/Y: -2.1% v -1.6% prior.

-(TR) Turkey Sept Consumer Confidence: 71.5 v 68.0 prior.

- (CN) China Aug YTD Non-Financial ODI (CNY terms): 585.6B +18.8% y/y.

- (FR) France Aug Retail Sales Y/Y: -4.0% v -1.8% prior.

- (ES) Spain July Trade Balance: -€4.9B adj v -€2.4B prior.

- (PL) Poland Aug Real Retail Sales M/M: 2.8% v 1.1%e; Y/Y: -2.7% v -4.0%e; Retail Sales (current prices) Y/Y: 3.1% v 1.6%e.

- (PL) Poland Aug Construction Output Y/Y: 3.5% v 1.1%e.

- (TW) Taiwan Aug M2 Money Supply Daily Avg Y/Y: 6.5% v 6.9% prior.

- (HK) Hong Kong Aug CPI Composite Y/Y: 1.8% v 2.0%e.

- (HK) Hong Kong Q2 Current Account: $47.5B v $42.6B prior.

- (BE) Belgium Sept Consumer Confidence: -5 v -7 prior.

Fixed income issuance

- New Zealand sells total NZ$500M vs. NZ$500M indicated in 2028, 2032 and 2051 bonds.

- Japan sells ¥5.6T v ¥5.6T indicated in 3-Month Bills; Avg Yield: -0.1507% v -0.1406% prior; bid-to-cover: 3.25x v 3.24x prior.

- Malaysia sells MYR3.5B in 2053 (30-year) bonds: Avg Yield: 4.454%; bid-to-cover: 1.90x.

- Spain Debt Agency (TESORO) sold €6.304B vs €5.5-6.5B indicated in 2026, 2028 and 2031 bonds.

France Debt Agency (AFT) sold €10.971B vs €10.0-11.0B indicated in 2026, 2028 and 2029 bonds.

- Sweden sells total SEK500M vs. SEK500M indicated in 2027 and 2032 I/L bonds.

Looking ahead

- 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds (3 tranches).

- 05:50 (FR) France Debt Agency (AFT) to sell €1.25-1.75B in inflation-linked 2029, 2032 and 2038 bonds (Oatei).

- 06:00 (IL) Israel July Manufacturing Production M/M: No est v -1.0% prior.

- 06:00 (RO) Romania to sell combined RON1.2B in 2031 and 2036 bonds.

- 07:00 (UK) Bank of England (BoE) Interest Rate Decision: Expected to raise Bank Rate by 25bps to 5.50%.

- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to raise One-Week Repo Rate by 500bps to 30.00% (**Note: current level 25.00%).

- 08:00 (MX) Mexico July Retail Sales M/M: 0.1%e v 2.3% prior; Y/Y: 4.9%e v 5.9% prior.

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

- 08:30 (US) Initial Jobless Claims: 225Ke v 220K prior; Continuing Claims: 1.70Me v 1.688M prior.

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

- 08:30 (US) Q2 Current Account Balance: -$221.3Be v -$219.3B prior.

- 08:30 (US) Sept Philadelphia Fed Business Outlook: -1.0e v +12.0 prior.

- 09:00 (RU) Russia Gold and Forex Reserve w/e Sept 15th: No est v $576.6B prior.

- 09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to leave Interest Rates unchanged at 8.25%.

- 10:00 (US) Aug Existing Home Sales: 4.10Me v 4.07M prior.

- 10:00 (US) Aug Leading Index: -0.5%e v -0.4% prior.

- 10:00 (EU) Euro Zone Sept Advance Consumer Confidence: -16.5e v -16.0 prior.

- 10:00 (EU) ECB chief Lagarde.

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

- 10:40 (DE) ECB’s Schnabel (Germany).

- 11:00 (EG) Egypt Central Bank Interest Rate Decision.

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

- 12:00 (CA) Canada to sell 30-year Bonds.

- 13:00 (US) Treasury to sell 10-Year TIPS Reopening.

- 15:00 (AR) Argentina Aug Trade Balance: -$0.4Be v -$0.6B prior.

- 17:00 (NZ) New Zealand Q3 Consumer Confidence: No est v 83.1 prior.

- 18:00 (NL) Netherlands Aug House Price Index M/M: No est v 0.5% prior; Y/Y: No est v -5.5% prior.

- 18:45 (NZ) New Zealand Aug Trade Balance (NZD): No est v -1.1B prior; Exports: No est v 5.5B prior; Imports: No est v 6.6B prior.

- 18:45 (IE) ECB’s Lane (Ireland, chief economist).

- 19:00 (AU) Australia Sept Preliminary PMI Manufacturing: No est v 49.6 prior; PMI Services: No est v 47.8 prior; PMI Composite: No est v 48 prior.

- 19:01 (UK) Sept GfK Consumer Confidence: No est v -25 prior.

- 19:30 (JP) Japan Aug National CPI Y/Y: 3.0%e v 3.3% prior; CPI Ex Fresh Food (core) Y/Y: 3.0%e v 3.1% prior; CPI Ex Fresh Food, Energy (core-core) Y/Y: 4.3%e v 4.3% prior.

- 20:30 (JP) Japan Sept Preliminary PMI Manufacturing: No est v 49.6 prior; PMI Services: No est v 54.3 prior; PMI Composite: No est v 52.6 prior.

- 23:30 (JP) Japan to sell 3-Month Bills; Avg Yield: % v -0.1406% prior; bid-to-cover: x v 3.24x prior.

- (JP) Bank of Japan (BoJ) Interest Rate Decision: Expected to leave Interest Rate on Excess Reserves (IOER) unchanged at -0.1%.

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