European stock market, economy and companies update (October 01, 2015)

Notes/Observations
- PMI data out of Europe generally dissapointing
- Chinese Mfg PMI beats, although remains in contractionary territory
- Glencore shares continue to rise, wiping out weeks losses


SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities
Indices [Stoxx50 +0.7% at 3,120, FTSE +1.7% at 6,160, DAX +0.4% at 9,690, CAC-40 +1.1% at 4,506, IBEX-35 1.4% at 9,676, FTSE MIB 0.7% at 21,390, SMI 0.7% at 8,590, S&P 500 Futures +0.7%]

- Market Focal Points/Key Themes: European stocks start the quarter moving higher; all groups supported; materials equities lead move higher; China official PMI data stabilized, giving new wing to risk sentiment; attention on US manufacturing data later today, ahead of tomorrow's NFP

Sectors:
- Energy [Repsol REP.ES +4.2% (asset sale)]
- Financials [Deutsche Boerse DB1.DE +0.8% (broker move)]
- Industrials [Fiat Chrysler FCA.IT +4.6% (confirms ipo for Ferrari), Volkswagen VOW3.DE +1.8% (cost-cutting measures)]
- Materials [Johnson Matthey JMAT.UK +2.5% (asset sale)]
- Telecom [Altice ATV.NL -4.1% (to sell shares)]

Speakers
(HU) Hungary Econ Min Lazar: Expects public debt falling to 76.1%/GDP by year end
- Needs 'National Investment Fund' for GDP growth
- Hungary needs to post at least 2% GDP growth
- Q4 and 2016 hold surprises for Hungary's economy

Currencies
- FX markets against the dollar were rather mixed on the morning session with USD/JPY very quiet relative to the past few days; the EUR/USD relatively strong on session; with a highly volatile session of trade in cable following a better than expected PMI reading
- The EUR/USD has had a generally volatile morning session, and traded between lows of 1.1135 to the current highs of 1.1167.
- The GBP/USD trades in a range between 1.5107 at the morning lows to highs of 1.5151, with cable trading towards it highs of the session at the time of writing after a slightly better than expected UK manufacturing PMI figure
- The USD/JPY is trading quiet in the morning session andremains range-bound trading between morning lows of 120.034 and to a highs of 120.276

Fixed Income:
Bund futures trade at 156.17, down 2 ticks as generally disappointing Mfg PMI data came out of Europe. Analysts see downside support at 155.68 initially, followed by 155.42, then 155.13. To the upside, analysts eye a break of today's highs at 156.21 to target 156.68 initially, with a break challenging 156.83 the August high.
Today say Spain sell €4B in its 3,5 and 10 year SGBP the equivalent of 20K Bund futures contracts, and France sell ~€8B in its 10 and 16 year Oats the equivalent of 70K Bund futures.
UK Gilt futures trade at 119.04, down 2 ticks as after slightly better then expected Manufacturing PMI data. Analysts look for downside at 118.71, followed by 118.49. To the upside, initial resistance lies at 119.35 high with a break seeing continued strength to 119.46 contract highs.
Today we see the DMO sell £4.0B in 5 year gilts, the equivalent of 22K gilt futures.
Thursday's liquidity report showed Wednesday's excess liquidity rose to €503.4B, a rise of €20B from €483.4B prior. This was primarily due to AFs and MonPol portfolios falling to negative €72.3B. AFs are negative when the MonPol portfolios exceeds the liquidity absorbing effect of AFs. Use of the marginal lending facility rose to €231M from €54M. Todays report reflects last week TLTRO take up of €15.55B and €1.5B from the additional MRO take up.

Political/In the Papers:
None seen

Looking Ahead
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- 06:00 (ZA) South Africa Q3 BER Consumer Confidence: No est v -15 prior
- 07:00 (ZA) South Africa Aug Electricity Consumption Y/Y: No est v -2.2% prior; Electricity Production Y/Y: No est v -3.3% prior
- 07:30 (US) Sept Challenger Job Cuts: No est v K prior; Y/Y: No est v 2.9% prior
- 07:30 (CL) Chile Central Bank Meeting Minutes
- 08:00 (CZ) Czech Sept Budget Balance (CZK): No est v 19.0B prior
- 08:00 (RU) Russia Gold and Forex Reserve w/e Sept 25th: No est v $ prior
- 08:15 (US) Baltic Dry Bulk Index
- 08:30 (US) Initial Jobless Claims: 270Ke v 267K prior; Continuing Claims: 2236Ke v 2242K prior
- 08:30 (US) Weekly USDA Net Export Sales
- 09:00 (BR) Brazil Sept PMI Manufacturing: 45.0e v 45.8 prior
- 09:00 (MX) Mexico Aug Leading Indicators M/M: No est v -0.09 prior
- 09:30 (CA) Canada Sept Manufacturing PMI: No est v 49.4 prior
- 09:30 (SG) Singapore Sept Purchasing Managers Index (PMI): 49.9e v 49.3 prior; Electronics Sector Index: No est v 49.0 prior
- 09:45 (US) Sept Final Markit Manufacturing PMI: 53e v 53 prelim
- 10:00 (US) Sept ISM Manufacturing: 50.6e v 51.1 prior; Prices Paid: 39.3e v 39.0 prior
- 10:00 (US) Aug Construction Spending M/M: 0.5%e v 0.7% prior
- 10:00 (MX) Mexico Aug Total Remittances: No est v $2.2B prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 10:30 (MX) Mexico Sept PMI Manufacturing: 52.2e v 52.4 prior
- 12:00 (IT) Italy Sept New Car Registrations Y/Y: No est v 10.7% prior
- 12:00 (IT) Italy Sept Budget Balance: No est v -€7.8B prior
- 13:00 (MX) Mexico Sept IMEF Manufacturing Index: No est v 51.8 prior; Non-Manufacturing Index: No est v 49.5 prior
- 14:00 (BR) Brazil Sept Trade Balance: $2.5Be v $2.7B prior; Total Exports: No est v $15.5B prior; Total Imports: No est v $12.8B prior
- 17:00 (CO) Colombia July Economic Activity Index (Monthly GDP): Y/Y: No est v 3.1% prior
- 19:00 (KR) South Korea Aug Current Account Balance: No est v $10.1B prior; Balance of Goods (BOP): No est v $10.9B prior
- 19:00 (KR) South Korea Sept CPI M/M: 0.2%e v 0.2% prior; Y/Y: 0.9%e v 0.7% prior; CPI Core Y/Y: No est v 2.1% prior
- 19:30 (JP) Japan Aug Jobless Rate: 3.3%e v 3.3% prior; Job-To-Applicant Ratio: No est v 1.21 prior; Overall Household Spending Y/Y: 0.4%e v -0.2% prior
- 21:30 (AU) Australia Aug Retail Sales M/M: 0.4%e v -0.1% prior


Economic data
(IE) IRELAND SEPT MANUFACTURING PMI: 53.8 V 53.6 PRIOR (28th straightmonth of expansion)
(RU) RUSSIA SEPT MANUFACTURING PMI: 49.1 V 47.9 PRIOR (10th month in contraction)
(SE) SWEDEN SEPT PMI MANUFACTURING: 53.3 V 54.3E (25 straight months of expansion)
(NO) NORWAY SEPT PMI MANUFACTURING: 47.3 V 44.0E (fifth month of contraction)
(PL) POLAND SEPT PMI MANUFACTURING: 50.9 V 52.4E (12th month of expansion)
(TR) TURKEY SEPT PMI MANUFACTURING: 48.8 V 49.3 PRIOR (2nd straight month of contraction)
(HU) HUNGARY SEPT MANUFACTURING PMI: 55.8 V 50.7 PRIIOR (second straight month of expansion)
(NL) NETHERLANDS SEPT PMI MANUFACTURING: 53.0 V 53.9 PRIOR (27th month of expansion)
(ES) SPAIN SEPT MANUFACTURING PMI: 51.7 v 52.8E (22 straight month of expansion, but 21-month low)
(CH) Swiss August Retail Sales Y/Y: -0.3% v -0.1% prior
(CH) SWISS SEPT MANUFACTURING PMI: 49.5 V 51.8E (returns to contraction after one month of expansion)
(CZ) CZECH REPUBLIC SEPT MANUFACTURING PMI: 55.5 V 56.6 PRIOR (28th month of expansion)
(IT) ITALY SEPT MANUFACTURING PMI: 52.7 V 53.3E (8 straight months of expansion)
(FR) FRANCE SEPT FINAL MANUFACTURING PMI: 50.6 V 50.4E (confirms second month of expansion)
((DE) GERMANY SEPT FINAL MANUFACTURING PMI: 52.3 V 52.5E (confirms 10th month of expansion)
(EU) EURO ZONE SEPT FINAL MANUFACTURING PMI: 52.0 V 52.0E
(GR) GREECE SEPT MANUFACTURING PMI: 43.3 V 39.1 PRIOR (12th month of contraction)
(UK) SEPT MANUFACTURING PMI: 51.5 V 51.3E

Fixed Income Issuance:
- (ES) SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €4.05B VS. €3.5-4.5B INDICATED RANGE IN 2018, 2020 AND 2025 BONDS
- (FR) FRANCE DEBT AGENCY (AFT) SELLS TOTAL €8.0B VS. €7.0-8.0B INDICATED RANGE IN 2025, AND 2041 OATS

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