- Ahead of a swathe of Central Bank decisions throughout the week, Sweden's Riksbank set a tone of upside surprise and aggressive approach taking to inflation as they hiked more than expected for 100bps, taking their Repo Rate to 1.75%.

- The decision sparked fears of the Fed and others replicating. Risk aversion abruptly entered the market as US futures started selling off to re-price in a higher rate hike by the Fed. US dollar index bolstered, pushing EUR back to parity.

- Asia closed higher with ASX200 outperforming at +1.3%. EU indices are lower by -0.0-0.5%%, with bond yields higher. US futures are lower after erasing gains. Gold -0.1%, DXY +0.1%; Commodity: Brent +0.8%, WTI +0.5%, UK Nat Gas +2.7%; Crypto: BTC +4.6%, ETH +4.8%.


- Japan Aug National CPI Y/Y: 3.0% v 2.9%e; CPI Ex-Fresh Food (Core) Y/Y: 2.8% v 2.7%e (highest rise since Oct 2014); Rise viewed as latest sign of cost-push inflation accelerated by a weak yen currency.

- Japan LDP Sec General Motegi stated that stimulus Package of at minimum ¥15T needed to fill output gap.

- China PBOC Monthly Loan Prime Rate (LPR) Setting leaves both 1-Year and 5-Year rates unchanged at at 3.65% and 4.30% respectively (as expected).

- RBA Sept Minutes note that case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises.


- Energy Dept to sell 10M bbls of oil from Strategic Petroleum Reserve for delivery in Nov (would bring total sale to 165M of 180M previously planned).

- Netherlands govt said to impose a price cap on energy from the start of January 2023 to shield consumers from surging prices.

- German Utilities said to be close to long-term LNG deals with Qatar.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 -0.04% at 407.70, FTSE +0.34% at 7,261.00, DAX -0.18% at 12,779.54, CAC-40 -0.24% at 6,046.82, IBEX-35 -0.22% at 7,975.50, FTSE MIB -0.14% at 22,110.00, SMI -0.02% at 10,615.41, S&P 500 Futures -0.04%].

Market Focal Points/Key Themes: European indices open higher across the board but later turned to trade mixed; sectors among those leading to the upside include financials and materials; laggard sectors include real estate and consumer discretionary; reportedly Unicredit looking to expand in Germany; FirstGroup sells further Greyhound assets; no major earnings expected in the upcoming US session.


- Consumer discretionary: Tui [TUI1.DE] +0.5% (trading update).

- Financials: Commerzbank [CBK.DE] +2.5% (Unicredit CEO interview).

- Healthcare: Haleon [HLN.UK] +1% (earnings).

- Industrials: Henkel [HEN.DE] +1% (raises outlook), Kingfisher [KGF.UK] -5% (earnings), Lenzing [LNZ.AT] -17% (suspends outlook).

- Telecom: Telenor [TEL.NO] +1.5% (CMD).


- ECB's Muller (Estonia, hawk) stated that interest rates were still low in historical context and far from a level that would slow economy.

- UK PM Truss stated that there was currently no negotiations taking place on trade deal with the US. She did not have an expectation that those are going to start in the short to medium term.

- Swiss SECO Sept Economic Forecasts cut the 2022 GDP growth forecast from 2.6% to 2.0% and cut the 2023 GDP growth from 1.9% to 1.1%. It raised the 2022 CPI forecast from 2.5% to 3.0% and raised the 2023 CPI from 1.4% to 2.3%.

- Sweden Central Bank (Riksbank) Policy Statement noted that monetary policy needed to be tightened further in the coming six months to bring inflation back to target. Asset purchases to continue in accordance with decision in June but was expected to cease at end of year.

- Sweden Central Bank (Riksbank) Gov Ingves post rate decision press conference stated that direct support to households and companies for electricity prices would push up inflation.

- Sweden Central Bank Staff Forecasts raised the 2022 CPIF from 6.9% to 7.8% and also raised the 2023 CPIF from 4.2% to 5.1% (both above target level). On growth the Riksbank cut 2022 Avg GDP growth from 1.8% to 2.7% and cut 2023 Avg GDP from +0.7% to -0.7% (contraction).

- Thailand Dep PM said to ask Finance Ministry to closely watch THB currency (Baht) weakness.

Currencies/fixed income

- USD was mixed ahead of the barrage of rate decisions this week but the greenback holding onto the bulk of recent gains. Market have braced for another aggressive rate hike by the Fed and have fully priced another 75 basis point increase with approx. 20% chance of a more aggressive 100bps hike.

- EUR/USD was holding above parity as EU inflation continued to persist. Germany Aug PPI reading hit a fresh 70-year high.

- Sweden's central bank set the tone for a packed week of central bank meetings by raising rates by a full percentage point. SEK currency (Krona) gave back its initial gains after the Riksbank aggressively hiked and reiterated stance of more hikes to come.

Economic data

- (FI) Finland Aug Unemployment Rate: 6.7% v 6.6% prior.

- (DE) Germany Aug PPI M/M: 7.9% v 2.4%e; Y/Y: 45.8% v 36.8%e (highest annual pace in 70-years and biggest monthly increase on record).

- (CH) Swiss Aug Trade Balance (CHF): 3.4B v 3.5B prior; Real Exports M/M: +2.1% v -3.6% prior; Real Imports M/M: +1.3% v -3.3% prior; Watch Exports Y/Y: 14.7% v 8.4% prior.

- (ZA) South Africa July Leading Indicator: 126.2 v 127.5 prior.

- (SE) Sweden Central Bank (Riksbank) raised Repo Rate by 1005bps to 1.75% (more-than-expected).

- (TW) Taiwan Aug Export Orders Y/Y: 2.0% v 1.1%e.

- (EU) Euro Zone July Current Account: -€19.9B v +€4.2B prior.

- (ES) Spain July Trade Balance: -€6.6B v -€5.4B prior.

- (PL) Poland Aug Sold Industrial Output M/M: +0.7% v -0.4%e; Y/Y: 10.9% v 10.0%e.

- (PL) Poland Aug Employment M/M: -0.1% v -0.1%e; Y/Y: 2.4% v 2.4%e.

- (PL) Poland Aug Average Gross Wages M/M: -2.9% v -2.2%e; Y/Y: 12.7% v 13.6%e.

- (PL) Poland Aug PPI M/M: 0.8% v 0.4%e; Y/Y: 25.5% v 24.4%e.

- (IT) Italy July Current Account: +€1.6B v -€1.1B prior.

- (GR) Greece July Current Account: +€1.1B v -€0.7B prior.

- (PT) Portugal July Current Account: €0.4B v €0.2B prior.

Fixed income issuance

- (ID) Indonesia sold total IDR6.27T vs. IDR9.0T target in Islamic bills and bonds (sukuk).

- (ES) Spain Debt Agency (Tesoro) opened its book to sell EUR-denominated 20-year SPGB bond via syndicate; guidance seen +9bps to 2040 SPGB.

- (SI) Slovenia opened its book to sell EUR-denominated 2.25% 2032 bond; guidance seen +45bps to mid-swaps.

- (RO) Romania to sell EUR-denominated 4-year and 7-year bonds.

- (EU) ESM opened ist book to sell EUR-denominated 1.00% Sept 2025 bonds; guidance seen -30bps to mid-swaps.

- (AT) Austria Debt Agency (AFFA) sold total €2.0B vs. €2.0B indicated in 3-month and 9-month Bills.

- (DE) Germany State owned KfW bank to sell EUR-denominated 1.125% Sept 2032 bonds; guidance seen -19bps to mid-swaps.

- (FR) French social security debt agency CADES to sell EUR-denominated Nov 2032 social bonds; guidance seen +36bps to Oats.

Looking ahead

- 05:15 (CH) Switzerland to sell 3-month Bills.

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

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

- 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2032, 2037 and 2040 bonds.

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

- 06:00 (FI) Finland to sell €1.5B in 1.5% Sept 2032 RFGB bonds.

- 06:30 (EU) ESM to sell €1.1B in 6-Month Bills.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

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

- 08:30 (US) Aug Housing Starts: 1.450Me v 1.446M prior; Building Permits: 1.609Me v 1.685M prior (revised from 1.674M).

- 08:30 (CA) Canada Aug CPI M/M: -0.1%e v 0.1% prior; Y/Y: 7.3%e v 7.6% prior; CPI Core- Common Y/Y: 5.6%e v 5.5% prior; CPI Core- Median Y/Y: 5.1%e v 5.0% prior; CPI Core- Trim Y/Y: 5.5%e v 5.4% prior; Consumer Price Index: 153.0e v 153.1 prior.

- 08:30 (CA) Canada Aug Teranet House Price Index M/M: No est v -0.2% prior; Y/Y: No est v 14.2% prior.

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

- 09:00 (EU) Weekly ECB Forex Reserves.

- 09:00 (EU) ECB weekly QE bond buying update.

- 13:00 (EU) ECB chief Lagarde at lecture.

- 13:00 (US) Treasury to sell 20-Year Bonds Reopening.

- 15:00 (AR) Argentina Q2 GDP Q/Q: No est v 0.9% prior; Y/Y: No est v 6.0% prior.

- (MX) Mexico Banamex Survey of Economists.

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

- 20:00 (KR) South Korea Sept 1-20 Exports Y/Y: No est v 3.9% prior; Imports Y/Y: No est v 22.1% prior.

- 20:30 (AU) Australia Aug Leading Index M/M: No est v -0.2% prior.

- 22:00 (AU) RBA’s Bullock.

- 22:35 (CN) China to sell 3-year Upsized Bond.

- 23:00 (NZ) New Zealand Aug Credit Card Spending M/M: No est v 3.2% prior; Y/Y: No est v 4.9% prior.

- 23:30 (JP) Japan to sell 3-Month Bills.

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