• European stock market, economy and companies update (September 15, 2015)

    Notes/Observations
    -RBA Sept. Meeting Minutes had dovish tone as it saw increased downward risks to the outlook from overseas developments
    - BOJ maintained its monetary policy with Annual Rise in Monetary Base at 80T; Kuroda press conference shows little hint of more easing down the road
    - UK inflation data mixed; CPI flat m/m; RPI hotter than expected while PPI softer
    - German Sept ZEW Current Situation Survey registers its 3rd straight month of improvement (67.5 v 64.0e)


    SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
    Equities
    Indices [Stoxx50 -0.1%, FTSE -0.6% at 6,045, DAX -0.3% at 10,107, CAC-40 unchanged at 4,517, IBEX-35 -0.3% at 9,667, FTSE MIB -0.1% at 21,547, SMI _0.3% at 8,707, S&P 500 Futures -0.3% at 1,939]

    - Market Focal Points/Key Themes: European stocks opened lower today on China concern; markets lead down by materials stocks (Rio Tinto RIO.AU -2.8%, Glencore GLEN.UK -5.6%, Anglo American AAL.UK -2.7%); energy stocks initially moved higher with support from oil prices, but later pared gains; risk appetite muted ahead of FOMC meeting
    Sectors:
    - Consumer discretionary [Kingfisher KGF.UK -4.0% (results), Ocado OCDO.UK +1.1% (Q3 sales beat)]
    - Energy [Electricite de France EDF.FR -5.2% (broker move)]
    - Healthcare [Evotec EVT.DE +2.6% (raises guidance)]

    Speakers
    - Sweden Central Bank (Riksbank) Dep Gov Jansson reiterated view that monetary policy was having effect and was important that inflation continued to rise. Riksbank could not permanently keep SEK currency (Krona) weak and would like to see gradual appreciation of currency. He reiterated that SEK currency intervention remained a tool of the central bank and has been discussed in the past
    - Italy Fin Min Padoan stated that the economy had returned to growth aided by both domestic and foreign demand
    - Bank of International Settlements (BIS): Biggest banks meet Basel III capital requirements
    - BOJ Gov Kuroda post rate decision press conference reiterated views that its virtuous cycle for household and companies continued as the domestic recovery remained modest. He reiterated view to take policy action if necessary and that inflation expectations appeared to be rising on the whole from long-term perspective. Prices to move to 2% target as oil price drop effect waned. Industrial output would return to moderate growth as inventory adjustment takes place. He believed Japan Q3 GDP would see growth as Q2 GDP weakness was due to temporary factors (weak exports and spending)
    - Japan Chief Cabinet Sec Suga: Expect BOJ to achieve its 2% inflation target
    - S&P raised South Korea sovereign rating to AA- from A+; Outlook revised to stable from positive
    - Fitch: No sovereign rating impact from Australian PM change

    Currencies
    - The JPY currency was firmer after BOJ maintained its monetary policy with its annual rise in Monetary Base steady at 80T. The Kuroda press conference was not dovish as he showed little hint of more easing down the road. The weaker Shanghai Composite might also put a safe-haven bid into the yen
    - AUD/USD pair moved off 2-week highs of 0.7166 after RBA minutes saw increased downward risks to the outlook from overseas developments

    Fixed Income:
    - Bund futures trade at 155.08 down 20 ticks in quite trade ahead of the FED on Thursday. Support remains at 154.70 followed by 154.47 with analysts still looking for 154.20 filling the gap. A move below this would target 153.75. To the upside a break of the highs would put pressure on 155.45 the 200MA, with 155.72 the next target. Above this sees 156.24 offering resistance.
    - UK Gilt futures trades 118.01 down 16 ticks, after an inline inflation reading out of the UK pushed Gilts lower. Analysts look a break of today's high at 118.20 for continued strength back to 118.63 followed 118.85 then 119.34. Support is seen at 117.84 with the next target 117.59 then 117.27.
    - Tuesday's liquidity report showed Monday's excess liquidity rose to 516.7B a rise of 3.6B from 513.1B prior. This was primarily due to AFs and MonPol portfolios rising to negative 102.8B. AFs are negative when the MonPol portfolios exceeds the liquidity absorbing effect of AFs. Use of the marginal lending facility fell to 44M from 61M.
    - Corporate Issuance saw around $4.5B in USD - denominated issuance, denominated issuance remained active led by 2.0B 3 tranche offering from Sanofi. Analysts estimate $20-25B of $ denominated issuance this week, which will likely be done before the FED rate decision on Thursday.

    Political/In the Papers:
    - (KR) North Korea said to begin operation at Yongbyon nuclear facility and improving nuclear weapons in both quality and quantity. North Korea ready to cope with US hostility with nuclear weapons at any time

    Looking Ahead
    All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
    - 05:30 (DE) German Chancellor Merkel with Estonia PM Roivas in Berlin
    - 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-month Bills
    - 05:30 (BE) Belgium Debt Agency to sell 1.9-2.3B in 3-month and 12-month Bills
    - 06:00 (TR) Turkey to sell 2020 and 2022 bonds
    - 06:45 (US) Daily Libor Fixing
    - 07:00 (RU) Russia announces weekly OFZ bond auction
    - 07:00 (BR) Brazil Sept FGV Inflation IGP-10 M/M: 0.6%e v 0.3% prior
    - 07:15 (AT) Austria Fin Min Schelling in Vienna
    - 07:45 (US) Chain Store Sales
    - 08:00 (PL) Poland Aug CPI M/M: -0.4%e v -0.1% prior; Y/Y: -0.7%e v -0.7% prior
    - 08:00 (IS) Iceland Aug Unemployment Rate: No est v 2.6% prior
    - 08:15 (US) Baltic Dry Bulk Index
    - 08:30 (US) Aug Advance Retail Sales M/M: 0.3%e v 0.6% prior; Retail Sales Ex Auto M/M: 0.2%e v 0.4% prior; Retail Sales Ex Auto and Gas: 0.4%e v 0.4% prior; Retail Sales Control Group: 0.3%e v 0.3% prior
    - 08:30 (US) Sept Empire Manufacturing: -0.15e v -14.92 prior
    - 08:55 (US) Weekly Redbook Sales
    - 09:00 (PL) Poland Aug YTD Budget Balance Level (PLN): No est v -26.6B prior; Budget Balance Performance: No est v 57.7% prior
    - 09:00 (BE) Belgium July Trade Balance: No est v 1.9B prior
    - 09:00 (CA) Canada Aug Existing Home Sales M/M: No est v -0.4% prior
    - 09:00 (EU) Weekly ECB Forex Reserves
    09/15/2015 09/16 (RU) Russia Aug Industrial Production Y/Y: -4.5%e v -4.7% prior
    - 09:00 (FR) France Econ Min Macron in Parliament
    - 09:15 (US) Aug Industrial Production M/M: -0.2%e v +0.6%prior; Capacity Utilization: 77.8%e v 78.0% prior; Manufacturing Production: -0.3%e v +0.8% prior
    - 09:30 (NZ) Fonterra Dairy Auction
    -09:45 (UK) BOE buys 1.41B in +15-years Gilts (residual)
    - 10:00 (US) July Business Inventories: 0.1%e v 0.8% prior
    - 10:00 (MX) Mexico Weekly International Reserves
    - 11:30 (US) Treasury to sell 4-Week and 52-Week in Bills
    - 16:30 (US) Weekly API Oil Inventories
    - 17:00 (CO) Colombia July Retail Sales Y/Y: 3.0%e v 5.1% prior
    - 17:00 (CO) Colombia July Industrial Production Y/Y: -0.4%e v 1.5% prior
    - 17:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 3.00%
    - 18:45 (NZ) New Zealand Q2 Current Account Balance: -1.5Be v +0.7B prior; Current Account to GDP Ratio: -3.7%e v -3.6% prior
    - 19:30 (AU) RBA's Debelle speech in Sydney
    - 23:00 (CN) China to sell 7-Year Bonds
    - 23:35 (JP) Japan to sell 12-month Bills
    - 23:45 (JP) Japan to sell in 20-Year Bonds
    - (RU) Russia Aug YTD Budget Balance (RUB): -1.120Te v -1.122T prior
    - (PE) Peru Aug Unemployment Rate: No est v 6.4% prior
    - (PE) Peru July Economic Activity Index (Monthly GDP) Y/Y: No est v 3.9% prior
    - (CO) Colombia Aug Consumer Confidence Index: No est v 2.6 prior


    Economic data
    - (SG) Singapore July Retail Sales M/M: -2.2% v -1.0%e; Y/Y: 5.2% v 5.9%e; Retail Sales Ex Auto Y/Y: 0.8% v -2.9% prior
    - (FR) France Aug CPI M/M: 0.3% v 0.3%e; Y/Y: 0.0% v 0.1%e; CPI Ex-Tobacco Index: 126.43 v 126.4e
    - (FR) France Aug CPI EU Harmonized M/M: 0.4% v 0.3%e; Y/Y: 0.1% v 0.2%e
    - (ZA) South Africa Q2 Current Account Balance (ZAR): -124.0B v -146.0Be (lowest deficit in 4 years); Current Account to GDP Ratio: -3.1% v -3.7%e
    - (UK) Aug CPI (in-line) M/M: 0.2% v 0.2%e; Y/Y: 0.0% v 0.0%e; CPI Core Y/Y: 1.0% v 1.0%e
    - (UK) Aug RPI (beat) M/M: 0.5% v 0.3%e; Y/Y: 1.1%% v 0.9%e; RPI-X (Ex Mortgage Interest Payments) Y/Y: 1.2% v 0.9%e; Retail Price Index: 259.8 v 259.3e
    - (UK) Aug PPI Input M/M: -2.4% v -2.4%e; Y/Y: -13.8% v -13.6%e
    - (UK) Aug PPI Output M/M: -0.4% V -0.2%e; Y/Y: -1.8% V -1.7%e
    - (UK) Aug PPI Output Core M/M: 0.0% v 0.0%e ; Y/Y: 0.1% V 0.2%e
    - (UK) July ONS House Price Y/Y: 5.2% v 5.7% prior (smallest annual rise since Sept 2013)
    - (EU) Euro Zone July Trade Balance (Seasonally Adj): 22.4B v 21.4Be; Trade Balance NSA (unadj): 31.4B v 28.0Be
    - (EU) Euro Zone Q2 Employment Q/Q: 0.3% v 0.2% prior; Y/Y: 0.8% v 0.8% prior
    - (DE) Germany Sept ZEW Current Situation Survey: 67.5 v 64.0e (3rd straight MoM improvement); Expectations Survey: 12.1 v 18.3e
    - (EU) Euro Zone Sept ZEW Expectations Survey: 33.3 v 47.6 prior

    Fixed Income Issuance:
    - (ES) Spain Debt Agency (Tesoro) sold total 4.933B vs. 4.5-5.5B indicated range in 6-month and 12-month Bills
    - Sold 473M in 6-month Bills; Avg Yield: 0.000% v -0.014% prior; Bid-to-cover: 6.47x v 5.58x prior
    - Sold 4.46B in 12-month Bills; Avg Yield: 0.048% v 0.024% prior; Bid-to-cover: 1.52x v 1.71x prior

    Contributed by Trade The News
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