Currency markets largely quiet ahead of FOMC statement

EU Market Update: BoE MPC continues to have 2 hawkish dissenters; Currency markets largely quiet ahead of FOMC statement

Notes/Observations

- Euro Zone Final CPI revised slightly higher; EUR has brief rise

- FX markets relatively quiet ahead of FOMC statement; Government bonds generally higher

- Russia to hold fx swap auction amid the recent weakness in the Ruble

- Shanghai Composite moves between gains and losses as PBoC launches another targeted liquidity measure (standing liquidity facility)

- BoE minutes show little discussion about Scotland and noted some downside risks related to growth; Interest rate vote remained 7-2; Gilt yields move slightly lower and GBP pares gains

- UK July wage data remains subdued

- Some Sweden Riksbank officials do not rule out additional easing; SEK weakens

- Recent polls related to Scottish Referendum narrowly favor the "No" vote

- Asia Pacific results weigh on watchmaker Richemont's sales figures

- Commodities trade cautiously ahead of Fed

- China Ministry of Land and Resources: largest oil and gas producers plan to raise annual shale gas production by 40% to meet national target - financial press

- Sony Cuts FY14/15 Net loss ¥230B v loss ¥50B prior, Op loss ¥40B v profit ¥140B prior, affirms Rev ¥7.80T v ¥7.80T prior; no dividend; cutting 15% of mobile division workers

- France Econ Min: No choice but to reform the economy

Key Economic Data in session

- (EU) EURO ZONE AUG CPI M/M: 0.1% V 0.1%E; Y/Y: 0.4% V 0.3%E; CPI CORE Y/Y: 0.9% V 0.9%E

- (UK) BANK OF ENGLAND (BOE) MINUTES: VOTED 7-2 TO LEAVE INTEREST RATES UNCHANGED AT 0.50%; Weale and McCafferty again voted for 25bps rate hike

- (UK) BANK OF ENGLAND (BOE) MINUTES: VOTED 9-0 TO MAINTAIN ASSET PURCHASE TARGET AT £375B

- (UK) JULY AVERAGE WEEKLY EARNINGS 3M/Y: 0.6% V 0.5%E; WEEKLY EARNINGS EX BONUS 3M/Y: 0.7% V 0.7%E

- (UK) AUG JOBLESS CLAIMS CHANGE: -37.2K V -30.0KE; CLAIMANT COUNT RATE: 2.9% V 2.9%E

- (UK) JULY ILO UNEMPLOYMENT RATE 3M/Y: 6.2% V 6.3%E; EMPLOYMENT CHANGE 3M/3M: +74K V +120KE

- (ZA) SOUTH AFRICA AUG CPI M/M: 0.4% V 0.2%E; Y/Y: 6.4% V 6.2%E

- (SE) Sweden Central Bank (Riksbank) Sept Minutes: Reiterates global growth to gradually increase

- (CH) Swiss Sept Credit Suisse ZEW Expectations Survey: -7.7 v 2.5 prior; First negative since January 2013

Fixed Income

- (SE) Sweden sells SEK3.5B in 2020 Bonds; Yield 0.9314%

Equities

Indices [Stoxx50 +0.6%, FTSE 100 +0.2% at 6,803, DAX +0.5% at 9,679, CAC-40 +0.7% at 4,438, IBEX-35 +0.6% at 10,859, FTSE MIB +0.8% at 20,958, SMI +0.1% at 8,816, S&P 500 Futures flat at 1,991]

Market Focal Points/Key Themes: Equity markets open higher following positive leads from the US as FOMC statement is in focus, Richemont declines on sales figures

By Sector

Consumer Discretionary [Richemont CFR.CH -3% (5-month sales below ests)
Industrials [Smiths Group SMIN.UK -4% (FY results declined)] Technology [Imagination
Technologies IMG.UK +3% (Q1 royalty sales in line)]
Financials [IG Group IGG.UK -4% (Q1 sales declined)]
Stoxx50 sectors [Technology +1%, Telecom +0.7%, Energy +0.6%, Financials +0.5%, Industrials +0.5%,
Consumer Non-Cyclical +0.5%, Basic Materials +0.3%; Utilities -0.2%, Consumer Cyclical -0.1%

FIXED INCOME/FX/COMMODITIES

Currencies/Fixed Income:

- SEK - Currency is lower after Riksbank Sept Minutes said the Central Bank will remain easy until inflation rises

- GBP - Began the day trading higher on hope of a 'No' vote in the Scottish referendum. UK employment data was mixed, GBP traded higher then lower as BoE minutes show no change in voting (7-2) in the decision to keep interest rates on hold

Looking Ahead

- 06:00 (PT) Portugal Aug PPI M/M: No est v 0.3% prior; Y/Y: No est v -0.8% prior

- 06:00 (CZ) Czech Republic to sell 2018 and 2027 bonds

- 06:45 (US) Daily Libor Fixing

- 07:00 (US) MBA Mortgage Applications w/e Sept 12th: No est v -7.2% prior

- 07:00 (BR) Brazil Sept FGV Inflation IGP-10 M/M: No est v -0.6% prior

- 07:00 (ZA) South Africa July Retail Sales M/M: 0.0%e v -0.4% prior; Y/Y: 0.3%e v 0.0% prior

- 08:00 (PL) Poland Aug Sold Industrial Output M/M: No est v 2.0% prior; Y/Y: No est v 2.35 prior

- 08:00 (PL) Poland Aug PPI M/M: No est v 0.0% prior; Y/Y: No est v -2.0% prior

- 08:00 (RU) Russia Aug Real Retail Sales M/M: 2.3%e v 2.9% prior; Y/Y: 1.0%e v 1.1% prior

- 08:00 (RU) Russia Aug Unemployment Rate: 4.9%e v 4.9% prior

- 08:00 (RU) Russia Aug Investment in Productive Capacity: -2.0%e v -2.0% prior

- 08:00 (RU) Russia Aug Real Disposable Income: 1.0%e v 2.3% prior

- 08:00 (RU) Russia Aug Real Wages Y/Y: 1.5% v 1.8% prior

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (US) Aug CPI M/M: No est v 0.1% prior; Y/Y: No est v 2.0% prior

- 08:30 (US) Aug CPI Ex Food and Energy M/M: No est v 0.1% prior; Y/Y: No est v 1.9% prior
09/17/2014 08:30 US 2211) CPI Ex Food and Energy YoY Aug -- -- 1.90% --

- 08:30 (US) Aug CPI Index: No est v 238.25 prior; CPI Core Index SA: No est v 238.311 prior

- 08:30 (US) Q2 Current Account Balance: No est v -$111.2B prior

- 09:45 (UK) BOE reverse auction; to purchase £1.6B in 7-15 year Gilts (residual)

- 10:00 (MX) Mexico Weekly International Reserves

- 10:00 (US) Sept NAHB Housing Market Index: No est v 55 prior

- 10:30 (US) Weekly DOE Crude Oil Inventories

- 14:00 (US) FOMC Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.25%; Expected to reduce QE# pace from $25B to 10B (Fed Pace of Treasury Purchases: from $15B to $10Band reduce Fed Pace of MBS Purchases from $10B to $5B