***Notes/Observations***
- Fed Sept rate hike remains somewhat on the table; Jackson Hole policymakers have maintained the view of improving US economy and jobs; Fed's Fischer's more hawkish comments trumped dovish comments from Bullard and Kocherlakota.
- China govt has said to abandoned measures to boost the stock market after spending as much as $200B over the past two months. Instead, the report said regulators will focus on investigating institutions that obstructed govt measures
- EU Aug flash CPI comes in a bit hotter than expected (YoY: 0.2% v 0.1%e); dampens expectation of any surprise move from ECB on QE this week
- UK markets closed for banking holiday
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
**Equities**
Indices [Stoxx50 -1.2%, FTSE closed for bank holiday, DAX -1.3% at 10,221, CAC-40 -1.2% at 4,620, IBEX-35 -1.3% at 10,221, FTSE MIB -0.8% at 21,826, SMI -0.1% at 8,780, S&P 500 Futures -1.1% at 1,967
- Market Focal Points/Key Themes: European stocks open on the downside following China and Fed comments; DAX largest loser; London closed for bank holiday
By Sector:
- Energy [ENI ENI.IT +2.1% (discovery in Egypt), RWE RWE.DE -3.4% (potential div cut)]
- Telecom [Iliad ILD.FR -4.8% (earnings, exec comments)]
**Speakers**
- ECB publishes Guideline amending the General Documentation on monetary policy implementation. Counterparty eligibility assessment to take into account information on capital, leverage and liquidity ratios. New category of assets added as eligible collateral
- ECB's Nowotny (Austria): Glad to see the Greek situation is stabilizing
- France President Hollande said to plan tax cuts of €2.0B
- Thailand Central Bank: Inflation to remain negative in 2015
- India Finance Sec: Govt plans to change RBI act before end of current fiscal year (**Reminder: The central bank and finance ministry have been trying to resolve differences over the panel's composition)
- PBoC: Central bank conducted short-term liquidity operation (SLO) on Monday with CNY140B
- China International Capital Corp (CICC): Unregulated and rapid growth of China local govt debt might be a thing of the past now that National People Congress Standing Committee has identified the issue
- Iran Oil Min: Expect to finalize wording of new oil contract within several weeks
**Currencies**
- EUR/USD was trying for its first gain in 5 days after falling almost 2% last week. The Pair was holding just above the 1.12 level. Thin month end conditions, summer trading and a UK holiday kept participants on the sidelines. Markets were looking towards key events at the end of the week. ECB rate decision was due on Thursday with Draghi likely to sound dovish despite trying to look through short term volatility in inflation. Aug Advance CPI beat expectations but did little to push the Euro higher ahead of the NY morning.
- The CHF currency was mixed in the session after Jackson Hole comments from SNB chief Jordan. He noted that interest rates would stay negative for some time" as the CHF currency (franc) remained clearly overvalued.
- China CNY currency (Yuan) ended Aug weaker by 2.7% vs. rise 0.1% in July with USD/CNY at 6.3763
**Fixed Income:
- Bund futures recovered opening losses and were slightly little changed ahead of the NY morning. Front month contract at 153.85 mid-day
- Gilt Futures were closed for banking holiday
**Political/In the Papers:
- (CN) China govt abandons measures to boost stock market after spending as much as $200B. Leaders said to believe they mishandled the rescue program, as too much information became public. Intervention was said to provide a "positive market environment" on 70th anniversary of victory against Japan aggression.
- (UR) Leaders of France, Germany and Russia held phone conference to discuss renewed escalation of tensions in east Ukraine; Agree to hold another summit in the next few weeks
**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- (DE) Germany Chancellor Merkel to meet Spain PM Rajoy for bilateral talks
- (ES) Spain July YTD Budget Balance: No est v -€23.5B prior
- 06:00 (PT) Portugal Q2 Final GDP Q/Q: 0.4%e v 0.4% prelim; Y/Y: 1.5%e v 1.5% prelim
- 06:30 (IN) India July Fiscal Deficit (INR): No est v 7.8B prior
- 06:45 (US) Daily Libor Fixing
- 07:30 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (IN) India Q2 GDP Y/Y: 7.4%e v 7.5% prior; GVA Y/Y: 6.9%e v 6.1% prior
- 08:00 (PL) Poland Central Bank (NBP) Aug Inflation Expectations Survey: 0.2%e v 0.2% prior
- 08:00 (ZA) South Africa July Trade Balance (ZAR): -1.6Be v 5.8B prior
- 08:00 (CL) Chile July Unemployment Rate: 6.6%e v 6.5% prior
- 08:00 (CL) Chile July Industrial Production Y/Y: 1.3%e v 1.6% prior; Manufacturing Production Y/Y: 1.3%e v 1.7% prior
- 08:00 (CL) Chile July Retail Sales Y/Y: 3.4%e v 4.1% prior
- 08:00 (CL) Chile July Total Copper Production: No est v 513.8K tons prior
- 08:00 (IN) India announces details of upcoming bond auction
- 08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming auctions
- 08:10 (US) Baltic Dry Bulk Index
- 08:30 (CA) Canada Q2 Current Account Balance: -$16.9Be v -$1.8B prior
- 08:50 (FR) France Debt Agency (AFT) to sell combined €5.7-6.9B in 3-month, 6-month and 12-month bills
- 09:00 (BE) Belgium Q2 Final GDP Q/Q: No est v 0.4% prelim; Y/Y: No est v 1.3% prelim
- 09:00 (US) Aug ISM Milwaukee: 50.00e v 47.12 prior
- 09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 09:45 (EU) ECB announces Covered-Bond Purchases
- 09:45 (US) Aug Chicago Purchasing Manager: 54.5e v 54.7 prior
- 10:00 (MX) Mexico July Net Outstanding Loans (MXN): No est v 2.83T prior
- 10:30 (US) Aug Dallas Fed Manufacturing Activity: -3.8e v -4.6 prior
- 11:00 (CO) Colombia July Urban Unemployment Rate: 9.6%e v 9.7% prior; National Unemployment Rate No est v 8.2% prior
- 11:30 (US) Treasuries to sell $48B in 3-Month and 6-Month Bills
- 12:00 (EU) EU Foreign Min Mogherini in Brussels
- 15:00 (AR) Argentina July Construction Activity M/M: No est v % prior; Y/Y: No est v % prior
- 16:00 (US) Crop Condition Report
- 19:00 (KR) South Korea Aug CPI M/M: 0.2%e v 0.2% prior; Y/Y: 0.7%e v 0.7% prior; CPI Core Y/Y: 2.1%e v 2.0% prior
- 20:00 (KR) South Korea Aug Trade Balance: $6.1Be v $7.8B prior; Exports Y/Y: -5.9%e v -3.3% prior; Imports Y/Y: -15.0%e v -15.3% prior;
- 21:00 (CN) China Aug Manufacturing PMI (official): 49.7e v 50.0 prior; Non-manufacturing PMI: No est v 53.9 prior
- 21:30 (JP) Japan July Labor Cash Earnings Y/Y: No est v -2.4% prior; Real Cash Earnings (ex-inflation) Y/Y: No est v -2.9% prior
- 21:30 (AU) Australia Q2 Current Account Balance: no est v -10.7B prior
- 21:35 (JP) Japan Aug Final Manufacturing PMI: No est v 51.9 prelim
- 21:40 (KR) South Korea Manufacturing PMI: No est v 47.6 prior
- 21:45 (CN) China Aug Final Caixin Manufacturing PMI: 47.2e v 47.1 prior
- 21:50 (TW) Taiwan Manufacturing PMI: No est v 47.1 prior
- 22:00 (VN) Vietnam Manufacturing PMI: No est v 52.6 prior
- 22:15 (MY) Malaysia Manufacturing PMI: No est v 47.7 prior
- 23:00 (ID) Indonesia Manufacturing PMI: No est v 47.3 prior
- 23:30 (HK) Hong Kong to sell 3-month, 6-Month Bills
- 23:30 (HK) Hong Kong to sell 3-month, 6-Month Bills
- 23:45 (JP) Japan to sell 10-Year JGB Bonds
**Economic data***
- (JP) Japan July Annualized Housing Starts: 914K v 938Ke; Y/Y: 7.4% v 11.0%e; Construction Orders Y/Y: -4.0% v +15.4% prior
- (DE) Germany July Retail Sales (beat) M/M: 1.4% v 1.1%e; Y/Y: 3.3% v 1.7%e
- (CH) Swiss Aug KOF Leading Indicator (beat): 100.7 v 100.3e
- (DK) Denmark July Gross Unemployment Rate: 4.6% v 4.7%e
- (DK) Denmark Q2 Preliminary GDP Q/Q: 0.2% v 0.0%e; Y/Y: 2.0% v 1.4%e
- (TR) Turkey July Trade Balance: -$7.0B v -$7.0Be
- (TH) Thailand July Current Account: $2.1B v $1.2Be; Overall Balance of payments (BOP): -$1.8B v +$1.4B prior; Trade Account Balance: $2.7B v $2.0B prior; Exports Y/Y: -3.1% v -8.9% prior; Imports Y/Y: -10.6% v +0.3% prior
- (NO) Norway July Credit Indicator Growth Y/Y:5.7 % v 5.8%e
- (EU) Euro Zone Aug Advance CPI Estimate (beat) Y/Y: 0.2% v 0.1%e; CPI Core Y/Y: 1.0% v 0.9%e
- (IT) Italy Aug Preliminary CPI NIC incl. tobacco M/M: 0.2% v +0.1%e; Y/Y: 0.2% v 0.1%e
- (IT) Italy Aug Preliminary CPI EU Harmonized M/M: 0.0% v -0.2%e; Y/Y: 0.5% v 0.2%e
Fixed Income Issuance:
- None-seen
Contributed by Trade The News