• European stock market, economy and companies update (September 09, 2015)

    Notes/Observations
    - Japan Nikkei surges 7.7% as PM Abe reiterates tax pledge; risk appetite gains global traction
    - UK July industrial production data misses expectations while trade deficit widens in month as exports register its largest decline since July 2006


    SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
    Equities
    Indices [Stoxx50 +1.9%, FTSE +1.7% at 6,247, DAX +1.6% at 10,437, CAC-40 +2.0% at 4,688, IBEX-35 +1.8% at 10,051, FTSE MIB +1.8% at 22,330, SMI +1.6% at 8,901, S&P 500 Futures +1.0% at 1,986]

    - Market Focal Points/Key Themes: European stocks open higher on continued Far-East optimism; again materials and automakers lead across-the-board gains; Glencore to suspend two large copper facilities, supporting copper stocks; risk-on sentiment supports emerging markets

    By Sector:
    - Consumer discretionary [Ryanair RYA.UK +7.4% (raises guidance), Sports Direct SPD.UK +.06% (trading update)]
    - Healthcare [Santhera. SANN.CH +2.7% (marketing approval), GlaxoSmithKline GSK.UK -1.0% (study misses endpoint)]
    - Industrials [Maersk MAERSKB.DK +2.2% (capital markets day), Ballast Nedam BALNE.NL -79% (offer cut), Volvo VOLVA.SE +3.2% (broker move(]
    - Materials [K+S SDF.DE -2.7% (considering acquisition), Anglo American Platinum AMS.ZA +4.9% (asset sale), Glencore GLEN.UK +4.9%]
    - Technology [Osram Licht OSR.DE 4.4% (asset sale), Monitise MONI.UK -25% (results)]

    Speakers
    - EU's Juncker stated that he would work for fair deal for UK within EU that preserves key freedoms of single market - State of the Union Address in EU Parliament. Stated that security of Baltic and other Eastern European EU member States is vital; wants message to be heard in Moscow
    - ECB's Liikanen (Finland): Finnish GDP to grow on average by 1.0% for next 15 years and stressed that Finland must complete health and pension reforms
    - German Chancellor Merkel reiterated view that domestic economy was in good shape and strong; one reason is the govt budget policy. German finances on solid foundation
    - EU Commission spokesperson: Greece making progress on implementation but could not comment on extent of implementation ahead of Greece Sept 20th election. Expected Eurogroup to pave way for Cyprus payment; disbursement could be made in early Oct
    - Italy PM advisor Gutgeld: 2015 GDP growth could be 0.9% with 2016 GDP growth above govt forecast of 1.4%
    - Germany Chemical Industry Group (VCI) raise 2015 chemical sales to +1.0% (prior +0.5%) and maintained 2015 chemical production +1.5%
    - Russia Econ MIn Ulyukayev: reiterates that govt not considering capital controls
    - China Premier LI reiterated that domestic economy was facing downward pressure. H1 job data indicated that economy was within a reasonable range
    - India Central Bank's Mundra reiterated view that rate action to be data dependent
    - India Fin Min Jaitley: Cabinet approves gold monetization plan; RBI to issue gold bond on behalf of govt
    - Vietnam Central Bank's Hong: VND currency (Dong) devaluation will not hurt 2015 inflation target of 3.0%
    - Japan chief govt spokesperson: Reiterates view that domestic economy recovering moderately
    - IEA Chief van der Hoeven: Investment cuts and Mid-East instability could threaten current high supply. China oil import growth likely to slow
    - Iran's supreme leader Ayatollah Ali Khamenei reiterated view that will not negotiate with the US on any other issue after nuclear agreement

    Currencies
    - General atmosphere of risk appetite saw some unwinding of prior long yen and Euro positions. Commodity-related FX pairs were also favorable under the scenario. Gains in European equity markets kept upward pressure on bond yields.
    - The USD/JPY pair was higher by 0.6% around 120.60, but dealers noted the yen underperformed compared to its correlating relationship with the Nikkei equity action (Nikkei 225 closed with impressive 7.7% gain, the biggest one-day rise since October 2008)
    - EUR/USD fractionally lower in quiet trading holding below the 1.12 level.
    - The GBP was softer after disappointing data in session. UK July industrial production data missed expectations while trade deficit widens in month as exports register its largest decline since July 2006. GBP/USD lower by 0.2% at 1.5360 while EUR/GBP rose 0.2% to test 0.7300 level. Focus turns to Thursday's BOE rate decision with eyes on the simultaneous results of the minutes and if the number of dissenters changes

    Fixed Income:
    - Bund futures trade at 154.61, down 15 ticks on the back of continued risk on sentiment seen across the equity space as the Nikkei 225 rose over 7% in Asia. The break below 154.50 now targets 154.20, filling Friday's gap. A move below this would target 153.75. To the upside 155.26 would mark Friday's high with a break of this targeting 155.65. Today we see Germany tap its 10Y Bund for 4.0B the equivalent of 31K Bund futures.
    - UK Gilt futures trades 117.99 down, 17 ticks as risk-on sentiment was countered by a weaker UK industrial and manufacturing output data, which saw Gilts rise over 20 ticks trading near highs of the day. Analysts target continued strength back to 118.63, followed 118.85 then 119.34. Friday's gap was filled with initial support seen at the low at 117.59, followed by 117.27.
    - Wednesday's liquidity report showed Tuesday's excess liquidity rose to 498.4B, an increase of 4.1B from 494.3B prior. AFs and MonPol portfolios rose to negative 83.8B. AFs are negative when the MonPol portfolios exceeds the liquidity absorbing effect of AFs. Use of the marginal lending facility rose to 117M from 101M.
    - Corporate Issuance saw a flurry of deals after a 13 days drought with $13.5B worth of supply said to come to market, with notable deals including $1.25B 5y bond from Goldman Sachs, and $1.5B from Santander in its 10 and 30y bond. denominated supply continues to gather pace, as BMW announced a 3 and 6y offering this morning.
    Analysts calling for over $25B of domestic issuance to come to market this week, as equities settle.

    Political/In the Papers:
    - (JP) Japan PM Abe said to retain Fin Min Aso, Econ Min Amari, and Chief Cabinet Sec Suga in their posts during upcoming cabinet reshuffle
    - Japan PM Abe: to lower corporate tax by at least 3.3% pts in 2016

    Looking Ahead
    All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
    - (PT) Bank of Portugal Releases Summary on Supervision Activities
    - (FI) Finland Govt begins 2-days of talks on 2016 Budget
    - (EU) ECB holds 3-day event in Luxembourg (closed door)
    - 05:30 (DE) Germany to sell 4.0B in 1.0% Aug 2025 Bunds
    - 06:00 (PT) Portugal July Trade Balance: No est v -0.7B prior
    - 06:00 (ZA) South Africa Q3 BER Consumer Confidence: 42.0e v 43.0 prior
    - 06:45 (US) Daily Libor Fixing
    - 07:00 (RU) Russia to sell OFZ Bonds
    - 07:00 (US) MBA Mortgage Applications w/e Sept 4th: No est v +11.3% prior
    - 07:00 (BR) Brazil Sept IGP-M Inflation (1st Preview): 0.5%e v 0.1% prior
    - 07:00 (UK) PM Cameron weekly question Time in House of Commons
    - 07:00 (CZ) Czech Central Bank comments on Aug CPI data
    - 07:30 (CL) Chile Central Bank's Traders Survey
    - 07:45 (US) Weekly Chain Store Sales
    - 08:00 (HU) Hungary Central Bank Minutes
    - 08:15 (CA) Canada Aug Annualized Housing Starts: 190.5Ke v 193.0K prior
    - 08:15 (US) Baltic Dry Bulk Index
    - 08:30 (CA) Canada July Building Permits M/M: -0.5%e v +14.8% prior
    - 08:55 (US) Weekly Redbook Retail Sales
    - 09:00 (MX) Mexico Aug CPI M/M: 0.2%e v 0.2% prior; Y/Y: 2.6%e v 2.7% prior; CPI Core M/M: 0.2%e v 0.2% prior
    - 09:45 (UK) BOE to buy 1.41B in 7-15-year Gilts (residual)
    - 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.50%
    - 10:00 (US) July JOLTS Job Openings: 5.300Me v 5.249M prior
    - 10:00 (UK) Aug NIESR GDP Estimate: No est v 0.7% prior
    - 10:30 (EU) NATO's Breedlove speaks at Belgian Military Academy
    - 11:30 (BE) ECB's Preat (Belgium) in Luxembourg
    - 11:30 (US) Treasury to sell 4-Week Bills
    - 12:00 (US) DOE Short-Term Crude Outlook
    - 13:00 (US) Treasury to sell $21.0B in 10-Year Notes
    - 15:00 (MX) Mexico Aug ANTAD Same-Store Sales Y/Y: 6.0%e v 6.8% prior
    - 16:30 (US) Weekly API Oil Inventories
    - 17:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: expected to cut Official Cash Rate by 25bps to 2.75%
    - 17:00 (KR) South Korea Aug Import Price Index M/M: No est v -0.1% prior; Y/Y: No est v 13.7% prior
    - 17:00 (KR) South Korea Aug Export Price Index M/M: No est v 0.9% prior; Y/Y: No est v -1.7% prior
    - 17:05 (NZ) RBNZ Gov Wheeler News Conference on OCR
    - 19:50 (JP) Japan July Machine Orders M/M: +3.0%e v -7.9% prior; Y/Y: 10.3%e v 16.6% prior
    - 19:50 (JP) Japan Aug PPI M/M: -0.4%e v -0.2% prior; Y/Y: -3.3%e v -3.0% prior
    - 21:00 (AU) Australia Sept Consumer Inflation Expectation: No est v 3.7% prior
    - 21:00 (PH) Philippines July Exports: No est v $5.3B prior; Y/Y: -3.8%e v -1.8% prior (revised from -3.3%)
    - 21:30 (CN) China Aug CPI Y/Y: 1.8%e v 1.6% prior;
    - 21:30 (CN) China Aug PPI Y/Y: -5.6%e v -5.4% prior
    - 21:30 (AU) Australia Aug Employment Change: +5.0Me v +38.5K prior; Unemployment Rate: 6.2%e v 6.3% prior
    - 23:00 (CN) China to sell 3-Year and 5-year Saving Bonds
    - 23:35 (JP) Japan to sell 3-Month Bills
    - 23:45 (JP) Japan to sell 5-Year Bonds


    Economic data
    - (JP) Japan Aug Consumer Confidence Index: 41.7 v 40.5e
    - (JP) Japan Aug Preliminary Machine Tool Orders Y/Y: -16.5% v +1.7% prior
    - (CZ) Czech Aug CPI M/M: -0.2% v -0.2%e; Y/Y: 0.3% v 0.4%e
    - (UK) July Industrial Production (miss) M/M: -0.4% v +0.1%e; Y/Y: 0.8% v 1.4%e
    - (UK) July Manufacturing Production (miss) M/M: -0.8% v +0.2%e; Y/Y: -0.5% v +0.5%e
    - (UK) July Visible Trade Balance: -11.1B v -9.5Be; Overall Trade Balance: -3.4B v -2.0Be; Trade Balance Non EU: -3.5B v -1.8Be
    - (GR) Greece Aug CPI Y/Y: -1.5% v -1.9%e; CPI EU Harmonized Y/Y: -0.4% v -1.2%e

    Fixed Income Issuance:
    - (BE) Belgium Debt Agency opened book to sell Jun 2038 OLO via syndicate; guidance seen mid-high 30s to mid-swaps (Implies yield seen around 1.95%)
    - (IN) India sold total INR140B indicated in 3-month and 6-month Bills
    - (EU) ECB allotted $141M in 7-day USD Liquidity Tender at fixed 0.66% vs. $132M prior
    - (SE) Sweden sold total SEK17.5B vs. SEK17.5B indicated in 3-month and 6-month Bills
    - (GR) Greece Debt Agency (PDMA) sold 1.3B vs. 1.0B indicatedin 13-week Bills; Avg Yield: 2.70% v 2.70% prior; Bid-to-cover: 1.3x v 1.3x prior
    - (CH) Switzerland sold CHF66.1M in 1.25% 2026 bond; Yield: -0.035% v +0.002% prior

    Contributed by Trade The News
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