Quiet session with focus on data barrage later this week

Notes/observations

- European majors rise as FTSE returns from UK bank holiday. Relatively quiet session for news with market still digesting Jackson Hole comments. The lack of fireworks turning eyes to data instead with upcoming US JOLTS job openings and US consumer confidence. In general, volume likely to be light this week with Aug still to finish and upcoming US Labor Day holiday on Mon, Sept 4th.

- For economic data, France and Germany consumer confidence mostly in line with consensus.

- Asia closed higher with Hang Seng out-performing at +1.9%. EU indices are +0.2-1.3%. US futures are -0.1%. Gold +0.1%, DXY 0.0%; Commodity: Brent +0.5%, WTI +0.5%, TTF -4.0%; Crypto: BTC 0.0%, ETH +0.3%.

Asia- Japan July jobless rate: 2.7% v 2.5%e

- Japan government annual economic white paper: At ‘inflection point’ in battle with deflation.

- Japan Fin Min Suzuki not was considering extending fuel subsidies to offset inflation. Not yet at stage of needing extra budget.

- Japan 2-year JGB yield turns positive for the 1st time this year.

- Fitch affirmed New Zealand's long-term Foreign-Currency Issuer Default Rating at 'AA+'; Outlook Stable.

- China Securities Journal article noted that analysts believed that China might cut RRR to boost market liquidity (renewed speculation on cuts).

Ukraine conflict

- EU Council Pres Michel: EU must be ready to accept new members by 2030 with Ukraine and the Western Balkans becoming full members by then.

Europe

- UK Aug BRC Shop Price Index Y/Y: 6.9% v 7.6% prior [slowest annual pace since Oct 2022].

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.39% at 457.20, FTSE +1.23% at 7,428.50, DAX +0.20% at 15,824.75, CAC-40 +0.06% at 7,329.38, IBEX-35 +0.37% at 9,524.87, FTSE MIB +0.31% at 28,634.00, SMI +0.09% at 11,043.20, S&P 500 Futures -0.08%].

Market focal points/Key themes: European indices open higher across the board and stayed upbeat through the early part of the session; Slovakia closed for holiday; all sectors start the day in the green; sectors leading the way higher include real estate and materials; lagging sectors include health care and consumer discretionary; reportedly Italy approves KKR deal for Telecom Italia gride stake; GAM reaches deal with Rock Investment on financing as Liontrust deal falls through; Bunzl announces two acquisitions; focus on US JOLTS repot later in the day; earnings expected in the upcoming US session include Best Buy, JM Smucker and Brunello Cucinelli.

Equities

- Consumer discretionary: Bunzl [BNZL.UK] +3.5% (H1 results, raises FY23 guidance), Dalata Hotel Group [DHG.IE] +2.0% (H1 results; outlook), Pierer Mobility [PMAG.AT] -2.0% (H1 results).

- Energy: Pantheon Resources [PANR.UK] +16.0% (estimates for the field), 88 Energy [88E.AU] -1.5% (Places 1.5M shares to raise £4.5M).

- Financials: NN Group [2NN.DE] +10.5% (H1 results, raises FY23 guidance), Castellum [CAST.SE] -1.0% (divests 8 properties for SEK430M).

- Healthcare: Faron Pharmaceuticals [FARN.UK] +7.0% (earnings), Valneva [VLA.FR] +1.5% (Health Canada accepts Chikungunya vaccine license application for review).

- Telecom: Telecom Italia [TIT.IT] +1.0% (Italy reportedly approves KKR-Italy govt deal to acquire 20% stake in Telecom Italia's grid).

Speakers

- Sweden Central Bank (Riksbank) Bunge stressed that prices were rising way too fast; fight against inflation was not over yet. SEK currency (Krona) was undervalued, and impacted our view on inflation and rates.

- Bank of Finland's Valimaki noted that ECB's Sept decision was data dependent.

- RBA Dep Gov Bullock spoke about climate change and noted extreme weather could lower supply in economy and raise inflation. Reiterated stance that RBA might have to raise rates again, as inflation was too high. Decision to be data-dependent.

- China mega banks said to consider further deposit rate cuts to help boost growth (**Note: would be the 3rd cut in 2023).

Currencies/fixed income

- USD was steady in a quiet session with focus on the barrage of month-end data later in the week. Greenback benefited from Fed Chair Powell's hawkish comments at Jackson Hole last week where he suggested the risks are skewed to more tightening and a later start to the easing cycle.

- USD/JPY at the mid-146 neighborhood as market participants look out for any signs of intervention from the Japanese authorities as the pair makes it way towards the 150 level.

Economic data

- (DE) Germany Sept GfK Consumer Confidence: -25.5 v -24.5e.

- (FI) Finland Jun Final Trade Balance: -€0.2B v -€0.2B prelim.

- (SE) Sweden Q2 GDP Q/Q: -0.8% v -1.3%e; Y/Y: -1.0% v -1.1%e.

- (SE) Sweden July Trade Balance (SEK): 4.6B v 2.2B prior.

- (SE) Sweden July Retail Sales M/M: +1.0% v -0.2%e; Y/Y: -2.1% v -4.4% prior.

- (FR) France Aug Consumer Confidence: 85 v 85e.

- (ES) Spain July Adjusted Retail Sales Y/Y: 7.3% v 6.7%e; Retail Sales (unadj) Y/Y: 6.7% v 6.8% prior.

- (CZ) Czech Q2 Preliminary GDP (2nd of 3 readings) Q/Q: 0.1% v 0.1% advance; Y/Y: -0.4% v -0.6% advance.

- (TR) Turkey Aug Economic Confidence: 94.1 v 99.3 prior.

- (TR) Turkey July Final Trade Balance: -$12.2B v -$12.4B prelim.

- (AT) Austria Aug Manufacturing PMI: 40.6 v 38.8 prior (13th straight contraction).

Fixed income issuance

- (DE) Germany opened its book to sell €3.0B in Aug 2053 Bund via syndicate; guidance seen +8.5bps to Aug 2052 Bund.

- (IT) Italy Debt Agency (Tesoro) sold total €5.5B vs. €5.5B indicated in 6-month and 12-month bills.

- (CH) Switzerland sold CHF834.6M in 3-month Bills; Avg Yield: 1.728% v 1.692% prior; bid-to-cover: 3.26x v 5.62x pri.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €4.0B in 2.4% Oct 2028 BOBL.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:30 (ZA) South Africa to sell combined ZAR3.9B in bonds.

- 06:00 (PT) Portugal July Retail Sales M/M: No est v -1.6% prior; Y/Y: No est v 4.0% prior.

- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to leave Base Rate unchanged at 13.00%.

- 08:00 (MX) Mexico Q2 Final GDP QoQ: 1.0%e v 0.9% prelim; Y/Y: 3.8%e v 3.7% prelim; Nominal GDP Y/Y: No est v 8.2% prior.

- 08:00 (MX) Mexico Jun IGAE Economic Activity Index (Monthly GDP) M/M: 0.5%e v 0.0% prior; Y/Y: 4.2%e v 4.3% prior.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

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

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (US) Jun FHFA House Price Index M/M: 0.6%e v 0.7% prior; Q/Q: No est v 0.5% prior.

- 09:00 (US) Jun S&P/CoreLogic House Price Index (20-city) M/M: 0.80%e v 0.99% prior; Y/Y: -1.60%e v -1.70% prior; House Price Index (Overall) Y/Y: No est v -0.46% prior.

- 09:00 (HU) Hungary Central Bank post rate statement.

- 10:00 (US) July JOLTS Job Openings: 9.50Me v 9.582M prior.

- 10:00 (US) Aug Consumer Confidence: 116.0e v 117.0 prior.

- 10:30 (US) Aug Dallas Fed Services Activity: No est v -4.2 prior.

- 10:30 (UK) DMO Gilt consultation on issuance.

- 13:00 (US) Treasury to sell 7-Year Notes.

- 13:30 (BR) Brazil July Total Federal Debt (BRL): No est v 6.191T prior.

- (CO) Colombia July Retail Confidence: No est v 17.8 prior; Industrial Confidence: No est v -2.2 prior.

- 15:00 (US) Fed’s Barr.

- 16:30 (US) Weekly API Oil Inventories.

- 18:45 (NZ) New Zealand July Building Permits M/M: No est v 3.5% prior.

- 21:10 (JP) BOJ bond purchase operation.

- 21:30 (AU) Australia Q2 Construction Work Done: 0.9%e v 1.8% prior.

- 21:30 (AU) Australia July Building Approvals M/M: -0.5%e v -7.7% prior; Private Sector Houses M/M: No est v -1.3% prior.

- 21:30 (AU) Australia July CPI Y/Y: 5.2%e v 5.4% prior.

- 21:30 (JP) BOJ’s Tamura.