Traders Await FOMC Minutes

Economic Data

- (UK) Aug CBI Industrial Trends Total Orders: 0 v -8e; Selling Prices: 0 v 3e
- (MY) Malaysia Q2 GDP Y/Y: 4.3% v 4.7%e
- (MY) Malaysia Q2 Current Account Balance (MYR): 2.6B v 0.9Be
- (US) MBA Mortgage Applications w/e Aug 16th: -4.6% v -4.7% prior; 12th decline in 14 weeks
- (BR) Brazil Aug IBGE Inflation IPCA-15 M/M: 0.2% v 0.2%e; Y/Y: 6.2% v 6.1%e
- (MX) Mexico Jun Retail Sales Y/Y: -1.9% v -0.5%e
- (US) July Existing Home Sales: 5.39M v 5.15Me
- (US) Weekly DOE Oil Inventories: Crude: -1.43M v -1.5Me; Gasoline: -4.03M v -1.5Me; Distillate: +870K v +1.0Me; Utilization: 91% v 89%

- US equity markets have slipped a little lower this morning ahead of the FOMC minutes. Trading volumes remain well below average while the VIX is above 16. The DJIA is down 0.34%, the S&P500 is down 0.23% and the Nasdaq is down 0.3%.

- Investors are ready to parse every word in this afternoon's FOMC minutes from the July meeting for any hint of whether or not the taper might begin in September. The chief casualties continue to be emerging market currencies, which slipped further against the greenback. The yield on the US 10-year rose to two-year highs around 2.88% late yesterday, although they are back below 2.5% this morning.

- July existing home sales rose to their highest levels since late 2009. The NAR said that mortgage interest rates at the highest level in two years pulled buyers off the sidelines and provided a strong incentive to close deals.

- German officials followed up on Greece comments made by Finance Minister Schaeuble at a campaign rally yesterday. Chancellor Merkel acknowledged that Greece would likely need another aid package but ruled out another debt haircut and said nothing would happen until mid 2014 or even 2015. The Bundesbank's Assmusen said it would not be known until the spring whether Greece can achieve a primary surplus, which would dictate their potential aid requirements.

- Lowe's strong performance in Q2 matched that of Home Depot. Lowe's topped expectations on very good y/y net income growth and raised its FY expectations. Comps were up 9.6%. Also like HD, the firm warned the second half could see slower business. LOW is up 6% at all-time highs around $47 while HD remains unchanged.

- Target is down 2.5% this morning after earnings and revenue missed expectations. The firm also tempered its very strong guidance range, which is still way above consensus expectations. Comps were up 1.2%, although the firm warned it saw soft sales and plenty of caution among customers. Staples missed second quarter expectations and cut its FY outlook. Comps declined 3% in the quarter and gross margins shrank. SPLS is down 13% and ODP is down 4.3%.

- Homebuilder Toll brothers missed top- and bottom-line consensus estimates by a hair. Analysts highlight the y/y decline in earnings, noting that the firm's $0.26 result came from higher-than-forecast other income and a lower-than-expected tax rate. However the firm's pricing, backlog and net signed contracts metrics all saw impressive y/y growth. TOL is up 2% and competitor MHO is up 1.8% in sympathy, while most of the rest of the sector is in the green.

- Trina Solar's Q2 loss was much narrower than expected, thanks to very good revenue results and a 65% sequential gain in shipments. Shipments guidance for Q3 sees the firm sustaining the elevated trend. Multiple analysts have raised their PTs and ratings on the name. TSL is up 14.5%, while other Chinese solar names are gaining 5-6%.

Looking Ahead

- 12:00 (CA) Canada to sell 2 Year Notes
- 13:00 (BR) Brazil July Total Formal Job Creation: 100.0Ke v 123.8K prior
- 13:00 (DE) Germany Fin Min Schaeuble speaks at CDU Election Event, Gross-Gerau
- 14:00 (US) Fed Minutes from Jul 30-31 FOMC Meeting
- 15:00 (AR) Argentina July Trade Balance: $1.1Be v $1.2B prior
- 21:45 (CN) China Aug HSBC/Markit Flash Manufacturing PMI: 48.1e v 47.7 prior