Equities Recover Early Losses

Economic Data

- (CZ) Czech July Budget Balance (CZK): 25.7B v 22.6B prior
- (US) Jun Personal Income: 0.4% v 0.3%e; Personal Spending: 0.2% v 0.2%e; Real Personal Spending: 0.0% v 0.0%e
- (US) Jun PCE Deflator M/M: 0.2% v 0.2%e; Y/Y: 0.3% v 0.2%e
- (US) Jun PCE Core M/M: 0.1% v 0.1%e; Y/Y: 1.3% v 1.2%e
- (BR) Brazil July PMI Manufacturing: 47.2 v 46.5 prior (6th month of contraction)
- (MX) Mexico Jun Leading Indicators M/M: -0.05 v -0.06 prior
- (SG) Singapore July Purchasing Managers Index: 49.7 v 50.1e; Electronics Sector Index: 49.5 v 50.0e
- (ZA) South Africa July Naamsa Vehicle Sales Y/Y: -6.1% v -4.8% prior
- (US) July Final Markit Manufacturing PMI: 53.8 v 53.8e
- (US) June Construction Spending M/M: 0.1% v 0.6%e
- (US) July ISM Manufacturing: 52.7 v 53.5e; Prices Paid: 44.0 v 49.3e
- (MX) Mexico Jun Total Remittances: $2.17B v $2.1Be
- (MX) Mexico Markit PMI Manufacturing: 52.9 v 52.0 prior

The S&P500 is back to unchanged this morning although the DJIA remains in negative territory after some uninspiring US economic data. The 10-year UST yield is down another two basis points, trading around 2.160%. The DJIA is down 0.33%, the S&P500 is flat and the Nasdaq is up 0.10%.

Personal spending and core PCE growth held steady at low levels in July, although the y/y figure was a hair higher. The July ISM manufacturing index fell to 52.7 from 53.5 the month before, however the new orders component rose to 56.5 from 56.0 in June, marking the highest reading since December. The prices paid index fell to 44.0 from 49.5. Construction spending barely rose in June as private outlays posted their biggest drop in a year, but the May figures were revised up to +1.8% from +0.8% prior.

Later today, the Obama Administration and the EPA will unveil their final revisions to landmark proposals to limit carbon emissions from power plants, the so-called "America's Clean Power Plan." The final rules would maintain or slightly exceed EPA's proposed target of cutting 2005 power-plant carbon emissions 30% by 2030, possibly raising the target to 32%. The proposals would also adjust goals set for each state to take into account emissions cuts individual states have already made since 2005 and resources available, and would include new regulations to encourage nuclear power generation. The major utility names have been gaining ground over recent sessions heading into the announcement, thanks to press reports that suggest the revisions will push back thresholds for meeting certain emissions reductions targets.

Crude prices are falling further in the early going today, with WTI down about 1.7% to $46.35 and Brent down 1.5%. Earlier Brent came within a few cents of breaking below $50. Metal prices also fell lower, with copper and aluminum at six-year lows after China's July manufacturing PMI data hit multi-month lows. EUR/USD is mostly unchanged around 1.0970, while commodity-related pairs fall further.

The July auto sales reports were solid, with General Motors, Ford and Fiat-Chrysler each reporting 5-6% y/y sales growth that beat expectations, while Honda and Nissan saw around 8% y/y growth, crushing expectations. Toyota also topped consensus views, but only saw 0.6% growth. Analysts cited low fuel prices, big summer discounts and surging SUV demand for the excellent reports. Shares of FCAU are up 3% on the session, while the others are seeing much more modest gains.

Looking Ahead

- 12:00 (IT) Italy July New Car Registrations Y/Y: No est v 14.4% prior
- 12:00 (IT) Italy July Budget Balance: No est v €12.3B prior
- 13:00 (MX) Mexico July IMEF Manufacturing Index: 52.8e v 53.1 prior; Non-Manufacturing Index: 51.6e v 51.3 prior
- 13:00 (CO) Colombia Central Bank Quarterly Inflation Report
- 14:00 (BR) Brazil July Trade Balance: $2.3Be v $4.5B prior; Total Exports: $18.8Be v $19.6B prior; Total Imports: $16.3Be v $15.1B prior
- 16:00 (US) Crop Condition Report
- 17:00 (CO) Colombia May Economic Activity Index (Monthly GDP) Y/Y: 3.2%e v 3.6% prior
- 19:00 (KR) South Korea July CPI M/M: 0.2%e v 0.0% prior; Y/Y: 0.7%e v 0.7% prior
- 19:50 (JP) Japan July Monetary Base Y/Y: No est v 34.2% prior
- 21:30 (AU) Australia Jun Trade Balance: -A$3.0Be v -A$2.8B prior
- 21:30 (AU) Australia Jun Retail Sales M/M: 0.4%e v 0.3% prior
- 21:30 (JP) Japan Jun Labor Cash Earnings Y/Y: 0.9%e v 0.7% prior (revised from 0.6%); Real Cash Earnings Y/Y: No est v 0.0% prior (revised from -0.1%)