Notes/Observations

-European Indices higher following FOMC rate decision, unwind lifts dollar

-Norway keeps rates on hold, reiterates will likely remain on hold til 2019

 

Overnight

Asia:

-BoJ left rates on hold as expected with a vote of 8-1 with newcomer Kataoka dissenting

-China PBOC sets yuan reference rate-0.3% at 6.5867, the weakest level since Sept 1st.

-New Zealand Q2 GDP comes in line with expectations

-Taiwan and Philippines leave rates on hold as expected

-HTC Confirms $1.1B cooperation agreement with Google, where Google will acquire part of HTC engineering team related to Pixel phone

-Australia's CBA to sell Life Insurance unit to AIA Group for $3B

Europe:

-Norway keeps deposit rates on hold as expected; Notes Capacity Utilization is on the rise, higher than previously assumed, labor mkt improvement has occurred somewhat faster pace than assumed in June

- Sweden Central bank (Riksbank) Sept Minutes showed there are some temporary factors behind the most recent upturn in inflation and the krona has strengthened more rapidly than in the forecast in July

-ECB SEPT ECONOMIC BULLETIN: Short term indicators confirm the outlook for robust growth momentum in the near term

Americas:

- FOMC kept rates on hold as expected, confirms start of balance sheet reduction in Oct; hurricanes could temporarily boost inflation

 

Economic data

(UK) AUG PUBLIC FINANCES (PSNCR): £0.0B V -£3.9B PRIOR; PUBLIC SECTOR NET BORROWING: +£5.1B V +£6.4BE

(CH) SWISS AUG TRADE BALANCE (CHF): 2.17B V 3.5B PRIOR

(CH) SWISS AUG M3 MONEY SUPPLY Y/Y: 4.0% V 4.0% PRIOR

(NL) Netherlands Aug Unemployment Rate: 4.7% v 4.8%e

-(NL) Netherlands Sept Consumer Confidence Index: 23 v 26 prior

Fixed Income Issuance:

-(ES) SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €4.68B VS. €4.0-5.0B INDICATED RANGE IN 2021, 2026, 2028 AND 2044 BONDS

-(FR) FRANCE DEBT AGENCY (AFT) SELLS TOTAL €6.99B VS. €6.0-7.0B INDICATED RANGE IN 2020, 2023 AND 2024 OATS

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***

Equities

Indices [Stoxx600 +0.2% at 382.7, FTSE flat 7271.5, DAX +0.2% at 12598, CAC-40 +0.5% at 5267, IBEX-35 +0.2% at 10311, FTSE MIB +0.5% at 22470, SMI +0.4% at 9133, S&P 500 Futures -0.1%]

Market Focal Points/Key Themes:

European Indices trade mostly higher across the board with the weaker Euro helping push Indices higher following the FOMC rate decision yesterday.
Corporate activity was light this morning, with notable movers including Capita trading sharply lower after missing estimates while Kier Group trades higher after Full year results. Else where Ryanair remains on focus after press reports that the Pilots have rejected a cash bonus offer to work overtime, while CRH trades higher after acquiring Ash Grove.
On the US front Calgon Carbon called sharply higher after being acquired.

 

Equities

- Consumer discretionary [ Capita [CPI.UK)] -10% (Earnings), Mitchells & Butlers [MAB.UK] -5.1% (Trading update), Ryanair [RYA.UK] -2.2% (Reprtedly pilots turn down £12K cash bonus offer to work overtime]

- Industrials: [Kier [KIE.UK] +8.6% (Earnings)]

- Material: [CRH [CRH.UK] +2.8% (To acquire Ash Grove for enterprise value of $3.5B)]

- Healthcare:[Nicox [COX.FR] +2.6% (Announces licensing agreement with Eyevance for commercialization of ZERVIATETM in the United States; To receive upfront payment of $6M)]

 

Speakers

-BOJ Gov Kuroda: To adjust policy as appropriate and to maintain momentum towards 2% price target- post rate decision press conference

 

Currencies

The dollar continues hold ground after gaining sharply yesterday, while the Yen weakens following the BoJ rate decision. Then USD/JPY rallied over 100 pips following the rate decision.

 

Fixed Income

- Thursday's liquidity report showed Wednesday's excess liquidity fell to €1.729T from €1.747T and use of the marginal lending facility rose to €137M from €86M.

- Corporate issuance saw $0.6B come to market in quieter session, bringing Week to date issuance to just above $13B and Monthly issuance at ~ $102B

 

Looking Ahead

- 07:30 (BR) Brazil Central Bank (BCB) Quarterly Inflation Report (QIR)

- 08:00 (PL) Poland Central Bank (NBP) Sept Minutes

- 08:00 BR) Brazil Mid-Sept IBGE Inflation M/M: 0.1%e v 0.4% prior; Y/Y: 2.6%e v 2.7% prior

- 08:05 (UK) Baltic Dry Bulk Index

- 08:30 (US) Sept Philadelphia Fed Business Outlook: 17.2e v 18.9 prior

- 08:30 (US) Initial Jobless Claims: 300Ke v 284K prior; Continuing Claims: 1.98Me v 1.944M prior

- 08:30 (CA) Canada July Wholesale Trade Sales M/M: -0.7%e v -0.5% prior

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

- 09:00 (US) July FHFA House Price Index M/M: 0.4%e v 0.1% prior

- 09:00 (MX) Mexico July Retail Sales M/M: +0.1%e v -1.1% prior; Y/Y: 1.0%e v 0.4% prior

- 09:00 (RU) Russia Gold and Forex Reserve w/e Sept 15th: No est v $427.3B prior

- 09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to cut Interest Rate by 25bps to 6.75%

- 10:00 (US) Aug Leading Index: No est v 0.3% prior

- 10:00 (EU) Euro Zone Sept Advance Consumer Confidence: -1.5e v -1.5 prior

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

- 12:00 (US) Fed reports Q2 Financial Accounts: Household Change in Net Worth: No est v $2.347T prior

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