Notes/Observations

- USD furthers its steady climb since US CPI last week, oil and metals continue pull back, with Brent Oil Futures now at $91.8, marking lowest levels since early Feb.

- Risk appetite is off as US futures are -0.2% to -0.5% down, following a mixed close yesterday with Nasdaq underperforming.

- Focal data release from UK July CPI as YoY beat high estimates and entered double-figures at 10.1%, marking highest annual pace since Feb 1982. Worth reminding BOE predicts CPI peaking at 13% in Oct. Further CPI predictions from South Africa as the Central Bank stated inflation may be nearing its peak.

- EU Q2 Preliminary GDP read slightly lower than estimates at 0.6% QoQ and 3.9% YoY. Other preliminary Q2 GDP readings for Hungary, Netherlands and Poland all showing growth in the range 5.0-6.5% YoY. Finland's monthly GDP indicator for Jun hung on to growth at 1.0%.

- Asia closed higher with Nikkei225 outperforming at +1.2%. EU indices start mixed with bond yields notably higher. US futures sit in the red. Safe haven: Gold -0.1%, DXY 0.00%; Commodity: Brent +0.2%, WTI +0.3%, UK Nat Gas +5.1%; Crypto: BTC -0.7%, ETH +0.2%; Speculative: MANU +4% (following Elon Musk joke tweet over offer to buy), BBBY +28%.

- Looking ahead, US retail sales at 08:30ET, FOMC Minutes 14:00ET and Fed Speaker Bowman. Premarket earnings expected from Lowes and Target.

Asia

- Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate by 50bps to 3.00% (as expected). Remained appropriate to continue tightening at recent pace until confident of low inflation. Core CPI remained too high, domestic inflation pressures have increased since May.

- RBNZ Gov Orr post rate decision press conference stated that was in a strong position to get on top of inflation. Domestic inflation pressures remained significant. Did not even consider 75bps rate hike at today meeting; believed 50bps pace was orderly and sufficient. Noted that getting OCR to 4.00% was unambiguously above neutral and sufficient to meet inflation mandate (he noted that neutral rate was a great unknown).

- Japan July Trade Balance: -¥1.44T v -¥1.36Te; Exports Y/Y: 19.0% v 17.6%e; Imports Y/Y: 47.2% v 45.5%e.

Americas

- Bank of Canada (BOC) Gov Macklem noted that inflation remained far too high but looked to have peaked.

Energy

- Weekly API Crude Oil Inventories: -0.4M v +2.2M prior.

- German Economy Ministry noted that media reports that Germany had decided to keep nuclear power plants running lacked any factual basis; An electricity stability stress test was still ongoing, and would make a decision on whether to keep the nuclear plants active after the stress test results were concluded.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.14% at 442.48, FTSE -0.14% at 7,525.50, DAX -0.40% at 13,854.43, CAC-40 -0.23% at 6,577.30, IBEX-35 -0.35% at 8,482.12, FTSE MIB +0.36% at 23,081.00, SMI +0.29% at 11,162.61, S&P 500 Futures -0.38%].

Market Focal Points/Key Themes: European indices open modestly higher across the board but later turned around to trade generally lower; better performing sectors include financials and consumer discretionary; sectors trending lower include health care and utilities; energy sector under pressure following results form Uniper; Flughafen Wien calls to reject offer by IFM to increase stake; Elon Musk denies intention to buy Manchester United, saying his tweet was a long-standing twitter joke; focus on release of FOMC minutes later in the day; earnings expected during the upcoming US session include Analog Devices, Target, Lowe’s and Cisco Systems.

Equities

- Consumer discretionary: Cineworld [CINE.UK] -38% (trading and funding update), Persimmon [PSN.UK] -2% (earnings), Marimekko [MMO1V.FI] -5.5% (earnings).

- Consumer staples: Carlsberg [CARLB.DK] +3% (earnings).

- Energy: Uniper [UN01.DE] -10% (earnings).

- Financials: Plus500 [PLUS.UK] -3.5% (earnings).

- Healthcare: Sanofi [SAN.FR] -4% (discontinues study).

- Industrials: Balfour Beatty [BBY.UK] +11% (earnings).

Speakers

- Poland Central Bank's Litwiniuk noted that it still had scope to raise interest rates and issue likely to be discussed at the Sept MPC.

- South Africa Central Bank (SARB) stated that inflation might be nearing a peak but risks were tilted to the upside.

- Thailand Fin Min Arkhom noted that the country was currently normalizing monetary and fiscal policies. Thailand Central bank to curb inflation and fund flows. It rate policy to also help the economy. Added that foreign tourists could hit 10M in 2022.

- Japan METI noted that Japanese companies must reply to Russia by Sept 4th whether they want to maintain ownership in the Sakhalin-2 natural gas export project.

- China Industry Ministry stated that the 2nd batch of 2022 rare earth production quota was at 109.2K tons.

Currencies/fixed income

- USD firmer in the session with focus on the July FOMC minutes, Analysts noted that minutes could push back against market expectations for the Fed to pivot towards interest-rate cuts next year. Fed funds future currently see the policy rate being cut from 3.6% to 3.2% in the second half of 2023. Dealers noted that further rejection of this market pricing should help the dollar.

- GBP was softer despite the double-digit inflation reading for the month of July. UK CPI again surprised on the upside increasing bets of another 50bps by the BOE seemed likely. Money markets pricing over 200bps of tightening by May 2023 (would take the Bank Rate from 1.75% to 3.75%). Growth concerns appeared to be the catalyst for the weaker pound currency in the session as UK consumers having less in their wallets and pocketbooks. Analyst had noted that as wage growth lagged inflation then consumers would be hit by the intensifying the cost of living crisis.

Economic data

- (FI) Finland Jun GDP Indicator Y/Y: 1.0% v 2.6% prior.

- (UK) July CPI M/M: 0.6% v 0.4%e; Y/Y: 10.1% v 9.8%e (12th month above target and highest annual pace since Nov 1981); CPI Core Y/Y: 6.2% v 5.9%e; CPIH Y/Y: 8.8% v 8.6%e.

- (UK) July RPI M/M: 0.9% v 0.6%e; Y/Y: 12.3% v 12.0%e; RPI-X (ex-mortgage Interest Payments) Y/Y: 12.3% v 12.1%e; Retail Price Index: 343.2 v 342.2e.

- (UK) July PPI Input M/M: 0.1% v 0.7%e; Y/Y: 22.6% v 23.1%e.

- (UK) July PPI Output M/M: 1.6% v 1.0%e; Y/Y: 17.1% v 16.7%e.

- (RO) Romania Q2 Advance GDP Q/Q: +2.1% v -0.2%e; Y/Y: 5.3% v 2.7%e.

- (NO) Norway Q3 Consumer Confidence: -26.8 v -15.3 prior.

- (HU) Hungary Q2 Preliminary GDP Q/Q: 1.1% v 0.5%e; Y/Y: 6.5% v 6.1%e.

- (NL) Netherlands Q2 Preliminary GDP Q/Q: 2.6% v 0.4%e; Y/Y: 5.3% v 3.0%e.

- (NL) Netherlands Jun Trade Balance: €7.7B v €5.5B prior.

- (NL) Netherlands Jun Consumer Spending Y/Y: 5.2% v 6.9% prior.

- (PL) Poland Q2 Preliminary GDP Q/Q: -2.3% v -0.7%e; Y/Y: 5.3% v 6.3%e.

- (UK) Jun ONS House Price Index Y/Y:7.8 % v 12.8% prior.

- (HK) Hong Kong July Unemployment Rate: 4.3% v 4.5%e.

- (EU) Euro Zone Q2 Preliminary GDP (2nd reading) Q/Q: 0.6% v 0.7% advance; Y/Y: 3.9% v 4.0% advance.

- (EU) Euro Zone Q2 Preliminary Employment Q/Q: 0.3% v 0.6% prior; Y/Y: 2.4% v 2.9% prior.

- (CY) Cyprus Q2 Preliminary GDP Q/Q: 0.6% v 1.0% prior; Y/Y: 5.8% v 5.9% prior.

Fixed income issuance

- (IN) India sold total INR210B vs. INR210B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK4.25B in 2024 and 2052 DGB Bonds.

- (SE) Sweden sold SEK5.0B vs. SEK5.0B indicated in 3-month Bills; Avg Yield: 0.965% v 1.0431% prior; Bid-to-cover: 5.25x v 1.96x prior.

Looking ahead

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

- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).

- 06:00 (PT) Portugal July PPI M/M: No est v 2.5% prior; Y/Y: No est v 25.7% prior.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (US) MBA Mortgage Applications w/e Aug 12th: No est v 0.2% prior.

- 07:00 (ZA) South Africa Jun Retail Sales M/M: -0.2%e v -1.0% prior; Y/Y: +0.1%e v +0.1% prior.

- 07:00 (BR) Brazil Aug FGV Inflation IGP-10 M/M: -0.6%e v +0.6% prior.

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

- 08:30 (US) July Advance Retail Sales M/M: 0.1%e v 1.0% prior; Retail Sales (Ex-Auto) M/M:-0.1%e v +1.0% prior; Retail Sales (ex-auto/gas): 0.4%e v 0.7% prior; Retail Sales (control group): 0.6%e v 0.8% prior.

- 10:00 (US) Jun Business Inventories: 1.4%e v 1.4% prior.

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

- 12:00 (RU) Russia July PPI M/M: -1.0%e v -4.1% prior; Y/Y: 9.4%e v 11.3% prior.

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

- 14:00 (US) FOMC July Meeting Minutes.

- 15:00 (AR) Argentina Jun Capacity Utilization: No est v 68.4% prior.

- 21:00 (CN) China July Swift Global Payments (CNY): No est v 2.17% prior.

- 21:30 (AU) Australia July Employment Change: +25.0Ke v +88.4K prior; Unemployment Rate: 3.5%e v 3.5% prior; Full Time Employment Change: No est v 52.9K prior; Part Time Employment Change: No est v +35.5K prior; Participation Rate: 66.8%e v 66.8% prior.

- 22:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision:

- 23:00 (KR) South Korea Q2 Short Term External Debt: No est v $174.9B prior.

- 23:30 (JP) Japan to sell 12-Month Bills.

- 23:35 (JP) Japan to sell 20-Year JGB Bonds.   

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

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