Various Euro Area PMI manufacturing remain in expansion but losing momentum

Notes/Observations

- Euro Area July PMI Manufacturing mixed in session but firmly in expansion territory (Beats: Euro Zone, Germany; Misses: France, Italy, Spain; In-line: UK).

- Germany Jun Retail Sales data beat consensus.

- Focus nonfarm payrolls report on Friday.

Asia

- China July Manufacturing PMI (govt official) registered its 16th month of expansion but lowest since Feb 2020 (50.4 v 50.8e).

- China July Caixin PMI Manufacturing registered its 15th consecutive expansion but lowest since Apr 2020 (50.3 v 51.0e).

- Japan July Final PMI Manufacturing confirmed its 6th month in expansion (53.0 v 52.2 prelim).

- Australia July Final PMI Manufacturing confirmed 14th month of expansion (56.9 v 56.8 prior).

- Japan Government Pension Fund (GPIF) said to have cut its US government bonds and bills from 47% to 35% of its foreign holdings.

Coronavirus

Florida reported 21,683 new coronavirus cases on Friday, the state’s highest one-day total since the start of the pandemic.

Europe

- UK Chancellor of the Exchequer Sunak (Fin Min) said to has written to PM Johnson calling for the urgent easing of travel restrictions to save summer holidays.

- Italian Government said to request a motion of confidence to ratify the judicial reform of Draghi.

- Russia Central Bank (CBR) Gov Nabiullina said to have warned that inflation is here to stay.

Americas

- Fed’s Brainard (FOMC voter, dove) stated that woould be more confident in assessing progress in September; As of today employment goal had some ways to go.

- Senator Schumer (D-NY) stated that Senators had finish the text of their legislation and could wrap up work on the bill in a matter of days.

- The US debt ceiling officially expired on Sunday after a 2 year suspension with pressure now on Congress to find another solution that allows the govt to carry on borrowing.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.65% at 464.72, FTSE +0.93% at 7,097.75, DAX +0.31% at 15,591.90, CAC-40 +0.77% at 6,663.57, IBEX-35 +1.39% at 8,796.00, FTSE MIB +0.92% at 25,595.50, SMI +0.46% at 12,172.02, S&P 500 Futures +0.60%].

Market Focal Points/Key Themes: European indices open broadly higher and continued to advance as the session progressed; M&A major theme of the day; sectors leading to the upside include technology and consumer discretionary; while health care and financials sectors underperforming; financials sector dragged by Allianz being subject to DOJ probe; Kungsleden receives takeover offer from Castellum; Sanne receives potential competing bid from Apax; Meggitt to be acquired by Parker-Hannifin; SSE divests stake in Scotia Gas; Naturgy receives impoved offer from IFM; reportedly Holcim to divest assets in Brazil; earnings expected during the upcoming US session include Loews, Timken, Global Payments and Ferrari.

Equities

- Consumer discretionary: Heineken [HEIA.NL] +1% (earnings; inflation comments).

- Financials: Sanne [SNN.UK] +8% (receives increased offer), HSBC [HSBA.UK] +1% (earnings), Axa [CS.FR] +4% (earnings).

- Industrials: Meggitt [MGGT.UK] +57% (to be acquired by Parker-Hannifin).

- Technology: flatexDEGIRO [FTK.DE] -14% (prelim earnings).

Speakers

- Poland Central Bank's Hardt wrote an op-ed piece that noted the jump in inflation required monetary reaction.

- Hungary Fin Min Varga stated that 2021 GDP growth could be close to 6.5%; faster inflation was a threat and govt to give decisive response to any CPI risk.

Currencies/Fixed Income

- USD at 1-month lows against most major pairs with focus on Friday’s US non-farm payroll report. Dealers believe that the Fed was in no hurry to tighten policy. Dealers await the until the Fed's Jackson hole summit layer in Aug where many believe it may signal the timing to start winding down stimulus.

- Aug usually bring a slowdown in Euro Zone debt issuance due to summer seasonal factors.

Economic data

- (DE) Germany Jun Retail Sales M/M: 4.2% v 2.0%e; Y/Y: 6.2% v 3.0%e.

- (RU) Russia July PMI Manufacturing: 47.5 v 50.4e (2nd straight contraction).

- (SE) Sweden July PMI Manufacturing: 65.3 v 65.4 prior.

- (CH) Swiss July CPI M/M: -0.1% v -0.1%e; Y/Y: 0.7% v 0.7%e; CPI Core Y/Y: 0.2% v 0.3%e.

- (CH) Swiss July CPI EU Harmonized M/M: 0.1% v 0.0% prior; Y/Y: 0.5% v 0.5% prior.

- (CH) Swiss Jun Real Retail Sales Y/Y: 0.1% v 2.8% prior.

- (NL) Netherlands July Manufacturing PMI: 67.4 v 68.8 prior (12th straight expansion).

- (HU) Hungary July Manufacturing PMI: 55.6 v 56.0e (4th straight expansion).

- (PL) Poland July PMI Manufacturing: 57.6 v 59.0e (12th straight expansion).

- (TR) Turkey July PMI Manufacturing: 54.0 v 51.3 prior (2nd straight expansion).

- (HU) Hungary Jun PPI M/M: +1.0% v -0.2% prior; Y/Y: 11.6% v 11.2% prior.

- (ES) Spain July Manufacturing PMI: 59.0 v 59.5e (6th month of expansion).

- (CH) Swiss July PMI Manufacturing: 71.1 v 66.0e (12th straight expansion).

- (CZ) Czech Republic July Manufacturing PMI: 62.0 v 61.6e (11th straight expansion).

- (TH) Thailand July Business Sentiment Index: 41.4 v 46.5 prior.

- (IT) Italy July Manufacturing PMI: 60.3 v 61.5e (13th month of expansion).

- (FR) France July Final Manufacturing PMI: 58.0 v 58.1e (confirmed the 8th straight expansion).

- (DE) Germany July Final Manufacturing PMI: 65.9 v 65.6e (confirmed 13th month of expansion).

- (EU) Euro Zone July Final Manufacturing PMI: 62.8 v 62.6e (confirmed 13th month of expansion).

- (GR) Greece July Manufacturing PMI: 57.4 v 58.6 prior (5th month of expansion).

- (NO) Norway July PMI Manufacturing: 63.3 v 61.3 prior (11th month of expansion).

- (CH) Swiss weekly Total Sight Deposits (CHF): 712.0B v 712.1B prior; Domestic Sight Deposits: 636.4B v 635.5B prior.

- (UK) July Final PMI Manufacturing: 60.4 v 60.4e (confirmed 14th straight expansion).

- (HK) Hong Kong Jun Retail Sales Value Y/Y: 5.8% v 10.4% prior; Retail Sales Volume Y/Y: 2.8% v 7.7% prior.

- (NG) Nigeria July Manufacturing PMI: 55.4 v 53.6 prior.

- (DK) Denmark July Danish PMI Survey: 69.8 v 65.5 prior (5th straight expansion).

- (ZA) South Africa July Manufacturing PMI: 43.5 v 54.0e (1st contraction in 16 months).

Fixed income issuance

- None seen.

Looking ahead

- (ZA) South Africa July Naamsa Vehicle Sales Y/Y: 10.5%e v 20.2% prior.

- (UR) Ukraine Central Bank (NBU) July Minutes.

- (RO) Romania July International Reserves: No est v $41.8B prior.

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

- 05:30 ((DE) Germany to sell combined €6.0B in 3-month and 9-month BuBills.

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €3.0-5.0B in 3-month and 6-month bills.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 06:00 (PT) Portugal Jun Industrial Production M/M: No est v -4.5% prior; Y/Y: No est v 27.1% prior.

- 06:00 (IL) Israel to sell combined ILS1.45B in 2024, 2026, 2030, 2031 and 2051 bonds.

- 06:00 (RO) Romania to sell RON400M in 4.15% 2030 Bonds.

- 06:45 (US) Daily Libor Fixing.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (CZ) Czech July Budget Balance (CZK): No est v -265.1B prior.

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

- 08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming issuance.

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:30 (CL) Chile Jun Economic Activity Index (Monthly GDP) M/M: 0.6%e v 2.6% priorY/Y: 18.0%e v 18.1% prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €4.8-6.0B in 3-month, 6-month and 12-month bills.

- 09:00 (SG) Singapore July Purchasing Managers Index: No est v 50.8 prior; Electronics Sector Index: No est v 50.6 prior.

- 09:00 (BR) Brazil July PMI Manufacturing: No est v 56.4 prior.

- 09:45 (US) July Final Markit Manufacturing PMI: 63.1e v 63.1 prelim.

- 09:45 (EU) ECB weekly QE bond buying update.

- 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (3-7 years).

- 10:00 (US) July ISM Manufacturing: 60.9e v 60.6 prior; Prices Paid: 88.0e v 92.1 prior.

- 10:00 (US) Jun Construction Spending M/M: +0.5%e v -0.3% prior.

- 10:00 (MX) Mexico Jun Total Remittances: $4.4Be v $4.5B prior.

- 10:00 (MX) Mexico Central Bank Economist Survey.

- 10:30 (MX) Mexico July PMI Manufacturing: No est v 48.8 prior.

- 11:00 (CO) Colombia July PMI Manufacturing: No est v 48.3 prior.

- 11:00 (CO) Colombia Jun Exports: $3.2Be v $3.1B prior.

- (IT) Italy July Budget Balance: No est v -€15.8B prior.

- (RU) Russia Central Bank Monetary Policy Report.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 12:00 (IT) Italy July New Car Registrations Y/Y: No est v 12.6% prior.

- 13:00 (MX) Mexico July IMEF Manufacturing Index: No est v 52.4 prior; Non-Manufacturing Index: No est v 53.8 prior.

- 14:00 (BR) Brazil July Trade Balance: $8.9Be v $10.4B prior; Total Exports: $26.5Be v $28.1B prior; Total Imports: $17.5Be v $17.8B prior.

- (AR) Argentina July Government Tax Revenue (ARS): No est v 922.9B prior.

- 16:00 (US) Weekly Crop Progress Report.

- 19:00 (KR) South Korea July CPI M/M: No est v -0.1% prior; Y/Y: 2.4%e v 2.4% prior; CPI Core Y/Y: No est v 1.5% prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 100.7 prior.

- 19:30 (JP) Japan July Tokyo CPI Y/Y: 0.0%e v 0.0% prior; CPI (ex-fresh food) Y/Y: 0.0%e v 0.0% prior; CPI (ex-fresh food/energy) Y/Y: 0.0%e v 0.0% prior.

- 19:50 (JP) Japan End-July Monetary Base: No est v ¥659.5T prior.

- 20:01 (IE) Ireland July PMI Manufacturing: No est v 64.0 prior.

- 21:00 (PH) Philippines Jun Unemployment Rate: No est v 7.7% prior.

- 21:30 (AU) Australia Jun Building Approvals M/M: -4.5%e v -7.1% prior.

-23:00 (TH) Thailand Central Bank to sell combined THD110B in bills (2 tranches).

- 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month Bills.

- 22:35 (JP) Japan to sell 10-year JGB bonds.