Data barrage floods positivity into a market ripe for correction from the recent sell off

Notes/observations

- Broad risk on flows seen as US dollar falls and equities/futures climb. EU bond yields fell after a collection of European CPI readings came in significantly cooler than expected, particularly with negative MoM readings in Netherlands, France and Poland. Euro Zone flash CPI YoY hit 2-year low. Saw strength in UK economy as final Q2 GDP reading was revised higher with Q1 also revised higher, while German retail sales missed. Bullish sentiment for equities potentially given tailwinds by seasonal factors after historically weak Sept and final day of quarter, including analyst suggestions of profit taking on US dollar.

- Expected that US House will vote on stopgap bill later today to attempt to avert a govt shutdown.

- Reminder than China markets will remain closed all next week.

- Asia closed higher with Hang Seng out-performing at +2.7%. EU indices are +0.8-1.1%. US futures are +0.3-0.5%. Gold +0.4%, DXY -0.5%; Commodity: Brent -0.2%, WTI 0.0%, TTF +7.2%; Crypto: BTC +2.4%, ETH +3.6%.

Asia

- New Zealand opposition National Party releases fiscal plan ahead of Oct 14 election.

- Goldman Sachs (GS) now expects the RBA to start cutting rates in Nov 2024 (prior view was Aug 2024).

- South Korea's Unification Minister: Beijing must push Pyongyang (North Korea) to denuclearise - financial press.

- Indonesia plans incentives to boost 5G development - financial press.

- Thailand PM Srettha: Problems in Thailand cannot be addressed unless economic disparity is addressed - media interview.

- Thailand Central Bank (BOT) Gov Sethaput: Thailand's key policy rate is (now) appropriate, neutral.

- Thailand reportedly has no plans to implement equity capital gains tax - press.

- Malaysia PM Anwar: No urgency to reshuffle cabinet.

- Japan Fin Min Suzuki said there is no specific defending line for FX levels.

- Japan Econ Min Shindo: Measures are needed to respond to inflation hit; China real estate problems pose a risk to our economy.

- Bank of Japan (BOJ) announces Bond purchases for Oct-Dec; Maintains size and frequency for quarter.

- BOJ former Research Chief Toshitaka Sekine: Investors need to prepare for Japan’s benchmark 10-year bond yield rising to around 2% if the BOJ's inflation goal is realized and it ends its negative-rate policy.

- Philippine Pres Marcos: Will continue defending country's maritime territory.

- Philippines Central Bank (BSP): Sept inflation likely within 5.3-6.1% YoY.

Europe

- UK households see relief as banks announce mortgage rate cuts - press.

- UK Treasury Minister Penn: Efficacy of the price cap on Russian oil must be kept under review - financial press.

- UK seeks greater access to AI companies' technology - FT.

- ECB's Kazaks (Latvia, hawk): Likely that rates will stay on hold for a while.

- ECB Chief Lagarde: The green transition poses a uniquely difficult policy challenge.

- German Council of Economic Experts head Schnitzer: Filing a case against the US over its massive green subsidy push in the form of the Inflation Reduction Act (IRA) with WTO could ultimately do more harm than good.

- Turkey said to raise electricity prices for businesses by 20% - press.

- Turkey Fin Min Simsek reportedly to meet investors in London and Paris - press.

- Hungary PM Orban: Planned pension rise will stretch Hungarian budget.

- France Budget Min: France to continue to cut corporate taxes.

- Sweden Central Bank (Riksbank) Dep Gov Floden: Uncertain what we will do at coming meeting and meeting at start of next year.

- Russia Central Bank (CBR) Gov Nabiullina: Corporate lending slows down in Sept.

Americas

- US Senate Republicans in talks to add border security to stopgap bill [short-term funding bill]; the purpose would be to increase support for the bill among House Republicans and avert a government shutdown - US press.

- US House passes Defense Appropriations bill; Fails to pass agriculture appropriations bill; Shutdown likely remains imminent - press.

- US House Republicans release stopgap bill to find US govt in attempt to pass it later today, on Fri Sept 29th.

- US House Republicans' Freedom Caucus reportedly mull replacing Speaker McCarthy (R-CA) with House Majority Whip Emmer - US press.

- US Treasury Sec Yellen: To use improved communications with China to discuss contentious issues, gain new insight into China's economy - Axios.

- No agreement has been reached with the US video game employers and SAG-AFTRA [Screen Actors Guild] - press.

- Blackrock CEO Fink: See US 10-year rates staying at 5% or higher - TV; See US entering a recession by 2025.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.82% at 452.20, FTSE +0.68% at 7,653.38, DAX +0.68% at 15,427.85, CAC-40 +0.74% at 7,168.93, IBEX-35 +0.44% at 9,468.55, FTSE MIB +0.66% at 28,348.00, SMI +0.89% at 11,014.90, S&P 500 Futures +0.40%].

Market focal points/key themes

Equities

European indices open higher across the board and stayed upbeat through the early part of the session; all sectors start the day in the green; sectors leading the way higher include Personal & Household Goods and Real Estate; on the corporate front, shares of Nike rivals in Europe Adidas and Puma trade higher over 5% after Nike earnings and outlook; Commerzbank shares in Frankfurt also trade sharply higher following details on its capital return plan; Healthcare firm Synlab offered to be acquired, its shares currently up over 20%; major earnings expected in the upcoming US session include Carnival.

- Consumer discretionary: Adidas [ADS.DE] +5.5%, Puma [PUM.DE] +5.5%, JD Sports Fashion [JD.UK] +6.0% (Nike earnings and outlook), LVMH [MC.FR] +3.0%, Hermes [RMS.FR] +2.0% (Tier1 analysts raise European Luxury sector to Overweight), Just Eat Takeaway.com [JET.UK] +1.5% (Grubhub said to lose bid to block NYC delivery pay rule), Ascential [ASCL.UK] +7.0% (reportedly in talks to sell the unit).

- Financials: Commerzbank [CBK.DE] +9.0% (capital return plan), Raiffeisen Bank International [RBI.AT] +3.5% (Russia Pres Putin allowed sale of Russia unit of another European bank Intesa).

- Healthcare: Synlab [SYAB.DE] +23.0% (offer to be acquired).

- Industrials: Aston Martin Lagonda Global Holdings [AML.UK] +10.0% (sells additional stake).

- Technology: Ebiquity [EBQ.UK] -4.0% (earnings).

Speakers

-Japan Fin Min Suzuki said there is no specific defending line for FX levels.

-Thailand Central Bank (BOT) Gov Sethaput: Thailand's key policy rate is (now) appropriate, neutral.

-ECB's Kazaks (Latvia, hawk): Likely that rates will stay on hold for a while.

-Sweden Central Bank (Riksbank) Dep Gov Floden: Uncertain what we will do at coming meeting and meeting at start of next year.

-Russia Central Bank (CBR) Gov Nabiullina: Corporate lending slows down in Sept.

-ECB Chief Lagarde: The green transition poses a uniquely difficult policy challenge.

Economic data

-(UK) Sept Lloyds Business Barometer: 36 v 41 prior.

-(JP) Japan Sept Tokyo CPI Y/Y: 2.8% v 2.7%e; CPI (ex-fresh food ) Y/Y: 2.5% v 2.6%e.

-(JP) Japan Aug Jobless Rate: 2.7% v 2.6%e.

-(JP) Japan Aug Preliminary Industrial Production M/M: 0.0% v -0.8%e; Y/Y: -3.8% v -4.6%e.

-(JP) Japan Aug Retail Sales M/M: 0.1% v 0.4%e; Y/Y: 7.0% v 6.6%e.

-(AU) Australia Aug Private Sector Credit M/M: 0.4% v 0.3%e; Y/Y: 5.1% v 5.3% prior.

-(VN) Vietnam Q3 GDP Y/Y: 5.3% v 5.0%e.

-(VN) Vietnam Sept CPI Y/Y: 3.7% v 3.2%e.

-(SG) Singapore Aug M2 Money Supply Y/Y: 4.2% v 3.1% prior; M1 Money Supply Y/Y: -5.6% v -7.9% prior.

-(VN) Vietnam Sept Industrial Production Y/Y: 5.1% v 2.6% prior.

-(VN) Vietnam Sept Trade Balance: $2.3B v $2.0Be.

-(VN) Vietnam Sept Retail Sales Y/Y: 7.5% v 7.6% prior.

-(NL) Netherlands Sept Preliminary CPI Y/Y: 0.2% v 3.0% prior; CPI EU Harmonized M/M: -0.8% v 0.5% prior; Y/Y: -0.3% v +0.3%e.

-(NL) Netherlands Aug Retail Sales Y/Y: 6.8% v 3.4% prior.

-(JP) Japan Aug Annualized Housing Starts: 812K v 815Ke; Y/Y: -9.4% v -8.7%e; Construction Orders Y/Y: -4.3% v +8.7% prior.

-(JP) Japan Sept Consumer Confidence: 35.2 v 36.2e.

-(FI) Finland Aug Preliminary Retail Sales Volume Y/Y: -2.8% v -1.1% prior.

-(UK) Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 0.6% v 0.4%e.

-(UK) Q2 Current Account: -£25.3B v -£14.3Be.

-(DE) Germany Aug Retail Sales M/M: -1.2% v+0.5%e; Y/Y: -1.9% v -0.7%e.

-(DE) Germany Aug Import Price Index M/M: 0.4% v 0.6%e; Y/Y: -16.4% v -16.2%e.

-(SE) Sweden July Non-Manual Workers Wages Y/Y: 4.1% v 3.5% prior.

-(SE) Sweden Aug Retail Sales M/M: 0.2% v 0.7% prior; Y/Y: -1.7% v -2.6% prior.

-(DK) Denmark Aug Unemployment Rate: 2.5% v 2.5% prior.

-(DK) Denmark Q2 Final GDP Q/Q: -0.3% v 0.3% prelim; Y/Y: 0.9% v 1.5% prelim.

-(ZA) South Africa Aug M3 Money Supply Y/Y: 8.5% v 9.1%e; Private Sector Credit Y/Y: 4.4% v 5.0%e.

-(HU) Hungary Aug Unemployment Rate: 4.0% v 3.9%e.

-(FR) France Sept Preliminary CPI M/M: -0.5% v -0.3%e; Y/Y: 4.9% v 5.1%e v 4.9% prior.

-(FR) France Aug Consumer Spending M/M: -0.5% v -0.5%e; Y/Y: -1.9% v -1.9%e.

-(FR) France Aug PPI M/M: +0.6% v -0.3% prior; Y/Y: -1.4% v +0.9% prior.

-(CH) Swiss Sept KOF Leading Indicator: 95.9 v 90.5e.

-(CZ) Czech Q2 Final GDP Q/Q: 0.0% v 0.1%e; Y/Y: -0.6% v -0.4%e.

-(TR) Turkey Aug Final Trade Balance: -$8.7B v -$8.9Be.

-(CH) Swiss Q2 Foreign Exchange Transactions (CHF): -40.3B v -32.3B prior.

-(TH) Thailand Aug Current Account: $0.4B v $0.7Be.

-(AT) Austria Sept Preliminary CPI M/M: 0.5% v 0.3% prior; Y/Y: 6.1% v 7.4% prior.

-(AT) Austria Aug PPI M/M: +0.3% v -0.7% prior; Y/Y: -2.4% v +1.3% prior.

-(DE) Germany Sept Net Unemployment Change: +10.0K v +15.0Ke; Unemployment Claims Rate: 5.7% v 5.7%e.

-(PL) Poland Sept Preliminary CPI M/M: -0.4% v 0.1%e; Y/Y: 8.2% v 8.5%e.

-(NO) Norway Central Bank (Norges) Oct Daily FX Purchases (NOK): 1.2B v 1.1B prior.

-(CZ) Czech Aug M2 Money Supply Y/Y: 8.5% v 9.3% prior.

-(RU) Russia Narrow Money Supply w/e Sept 22nd (RUB): 18.67T v 18.74T prior.

-(NO) Norway Sept Unemployment Rate: 1.8% v 1.9%e.

-(ES) Spain July Current Account: €4.3B v €3.0B prior (revised from €2.8B).

-(PT) Portugal Sept Preliminary CPI M/M: 1.1% v 0.3% prior; Y/Y: 3.6% v 3.7% prior; CPI EU Harmonized M/M: 0.8% v 0.8% prior; Y/Y: 4.9% v 5.3% prior.

-(UK) Aug Net Consumer Credit : £1.6B v £1.3Be; Net Lending: £1.2B v £0.2Be.

-(UK) Aug Mortgage Approvals: 45.4K v 47.7Ke.

-(UK) Aug M4 Money Supply M/M: +0.2% v -0.6% prior; Y/Y: -0.8% v -1.0% prior; M4 (ex-IOFCs) 3-month Annualized: -2.1% v -1.5% prior.

-(HK) Hong Kong Aug Retail Sales Value Y/Y: 13.7% v 15.8%e; Retail Sales Volume Y/Y: 11.0% v 13.7%e.

-(HK) Hong Kong Aug Budget Balance (HKD): -39.1B v -41.8B prior.

-(HK) Hong Kong Aug M3 Money Supply Y/Y: 1.4% v 0.3% prior.

-(EU) Euro Zone Sept Advance CPI Estimate Y/Y: 4.3% v 4.5%e; CPI Core Y/Y: 4.5% v 4.8%e; CPI M/M: 0.3% v 0.5%e.

- (IT) Italy Sept Preliminary CPI M/M: +0.2% v -0.1%e; Y/Y: 5.3% v 5.3%e.

-(GR) Greece July Retail Sales Value Y/Y: -3.4% v -7.9% prior; Retail Sales Volume Y/Y: +3.1% v -1.0% prior.

-(IS) Iceland Aug Final Trade Balance (ISK): -39.6B v -39.3B prelim.

Fixed income issuance

-Australia sells A$800M vs. A$800M indicated in 2.25% May 2028 bonds; Avg Yield: 4.1126% v 4.0711% prior; bid-to-cover: 3.46x v 3.61x prior.

-Japan sells ¥5.6T v ¥5.6T indicated in 3-Month Bills; Avg Yield: -0.2685% v -0.1507% prior; bid-to-cover: 3.24x v 3.25x prior.

-France Debt Agency (AFT) announces upcoming issuance; To sell €5.2-6.8B in 3-month, 6-month and 12-month bills on Mon, Oct 2nd.

- France Debt Agency (AFT) announces upcoming issuance; To sell €9.0-10.5B in bonds on Thurs, Oct 5th.

Looking ahead

- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L 2029, 2043 and 2050 Bonds.

- 06:00 (UK) DMO to sell £4.5B in 1-month, 3-month and 6-month bills.

- 06:00 (IT) Italy July Industrial Sales M/M: No est v 0.4% prior; Y/Y: No est v 1.3% prior.

- 06:00 (PT) Portugal Aug Retail Sales M/M: No est v 1.1% prior; Y/Y: No est v 3.6% prior.

- 06:30 (IN) India Aug Fiscal Deficit (INR): No est v 1.542T prior.

- 07:30 (IN) India Aug Eight Infrastructure (Key) Industries: No est v 8.0% prior.

- 07:30 (BR) Brazil Aug Nominal Budget Balance (BRL): -68.9Be v -81.9B prior; Primary Budget Balance: -25.1Be v -35.8B prior; Net Debt to GDP Ratio: 59.9%e v 59.6% prior.

- 07:30 (IN) India Weekly Forex Reserve w/e Sept 22nd: No est v $593.0B prior.

- 08:00 (ZA) South Africa Aug Trade Balance (ZAR): 8.0Be v 16.0B prior.

- 08:00 (BR) Brazil Aug National Unemployment Rate: 7.8%e v 7.9% prior.

- 08:00 (CL) Chile Aug Manufacturing Production Y/Y: -4.0%e v -3.9% prior; Industrial Production Y/Y: -0.4%e v -1.7% prior; Total Copper Production: No est v 434.1K tons prior.

- 08:00 (CL) Chile Aug Unemployment Rate: 8.9%e v 8.8% prior.

- 08:00 (CL) Chile Aug Retail Sales Y/Y: -8.8%e v -10.1% prior; Commercial Activity Y/Y: No est v -4.5% prior.

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

- 08:30 (US) Fed's O'Neill.

- 08:30 (US) Aug Advance Goods Trade Balance: -$91.4Be v -$90.9B prior (revised from -$91.2B).

- 08:30 (US) Aug Preliminary Wholesale Inventories M/M: -0.2%e v -0.2% prior; Retail Inventories M/M: 0.5%e v 0.3% prior.

- 08:30 (US) Aug Personal Income: 0.4%e v 0.2% prior; Personal Spending: 0.5%e v 0.8% prior; Personal Spending (PCE): 0.0%e v 0.6% prior.

- 08:30 (US) Aug PCE Deflator M/M: 0.5%e v 0.2% prior; Y/Y: 3.5%e v 3.3% prior.

- 08:30 (US) Aug PCE Core M/M: 0.2%e v 0.2% prior; Y/Y: 3.9%e v 4.2% prior.

- 08:30 (CA) Canada July GDP M/M: 0.1%e v -0.2% prior; Y/Y: 1.1%e v 1.1% prior.

- 09:00 (RU) Russia Q2 Final Current Account: No est v $8.6B prelim.

- 09:45 (US) Sept Chicago Purchase Manager’s Index (PMI): 47.6e v 48.7 prior.

- 10:00 (US) Sept Final University of Michigan Confidence: 67.7e v 67.7 prelim.

- 11:00 (US) Sept Kansas City Fed Services Activity: No est v -1 prior.

- 11:00 (MX) Mexico Aug Net Outstanding Loans (MXN): No est v 5.726T prior.

- 11:00 (CO) Colombia Aug National Unemployment Rate: No est v 9.6% prior; Urban Unemployment Rate: No est v 9.8% prior.

- 12:00 (US) USDA Quarterly Crop Report.

- 12:45 (US) Fed’s Williams.

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

- 14:00 (CO) Colombia Central Bank Interest Rate Decision: Expected to leave rates unchanged at 13.25%.