• European stock market, economy and companies update (September 28, 2015)

    Notes/Observations
    - IMF set to cut global growth outlook
    - Catalunya elects pro-independence parliament by small margin
    - Glencore down over 17% on bearish broker note


    SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

    Equities
    Indices [Stoxx50 -1.2% at 3,074, FTSE -1.2% at 6,038, DAX -1.5% at 9,536, CAC-40 -1.5% at 4,411, IBEX-35 0.2% at 9,499, FTSE MIB -1.1% at 21,088, SMI -0.3% at 8,479, S&P 500 Futures -0.3%]

    - Market Focal Points/Key Themes: European stocks slide at the open, following further disappointing data out of China; material stocks lead declines followed by automakers; analysts have commented on cuts to Q3 corporate earnings expectations; Catalunya narrowly rejects independence referendum, with stocks in Madrid rising; traders shift to risk-off sentiment; this week sees major PMI data and NFP on Friday

    Sectors:
    - Consumer discretionary [SABMiller SAB.UK +3.4% (further merger speculation)]
    - Energy [RWE RWE.DE +0.9% (share repurchase), SBM Offshore SBMO.NL 15.8% (Petrobras tenders)]
    - Healthcare [Novo Nordisk NOVOB.DK +2.4% (drug approval), Roche ROG.CH +2.1% (positive study results)]
    - Industrials [Volkswagen VOW3.DE -5.5% (new CEO)]
    - Materials [Salzgitter SZG.DE -2.1% (open to Aurubus acquisition), Glencore GLEN.UK -17.0% (asset sale, broker commentary)]
    - Telecom [Vodafone VOD.UK -3.8% (merger talks with Liberty Global terminated)]

    Speakers
    (EU) ECB's Vasiliauskas (Lithuania): Sees no reason, nor need for ECB to act regarding expansion of QE program
    (JP) BOJ Gov Kuroda: Sees to reach 2% inflation target around H1 FY16; Expects Japan economy to continue moderate recovery
    - Can't conclude yet that Japan will suffer 2 straight quarters of contraction in July-Sept
    (KW) Kuwait Oil Minister Omair: Does not think an oil summit would happen before OPEC's next meeting on Dec 4th
    - Problem is that non-OPEC producers are not committed to price stability
    - Global crude oversupply now at 1.8M bpd

    Currencies
    - FX markets against the dollar were relatively quiet in the early morning session with most pairings remaining range-bound due to a lack of high importance macro-economic data, until the late morning session where slight dollar weakness seemed to have dominated the overall sentiment against the major pairings
    - The EUR/USD trades in a range between 1.1199 at the morning highs to lows of 1.1165
    - The GBP/USD trades in a range between 1.5241 at the morning highs to lows of 1.5179, with sterling strength leading the other FX markets against the dollar
    - The USD/JPY trades quiet in the morning session within a range between highs of 120.444 and lows of 120.165, consolidating near the 50% fib retracement from highs of September 25th and lows of September 24th

    Fixed Income:
    Bund futures trade at 155.54, up 11 ticks in quiet trade as the IMF indicated they are set to cut its global growth forecast according to press. Analysts see downside targeting 155.04, followed by 154.83 initially, then 154.23. To the upside, analysts eye 156.06 initially, with a break seeing a likely retest of 156.45 before challenging 156.83 the August high.
    UK Gilt futures trades 118.61, up 26 ticks on the day in quiet morning trade. Analysts still look for downside to 118.14, followed by 1h17.76. To the upside, initial resistance lies at 118.81, with 119.26 filling the gap with a break seeing continued strength to 119.46 contract highs.
    Monday's liquidity report showed Friday's excess liquidity fell to 467.2B, a drop of 3.7B from 470.9B prior. This was primarily due to AFs and MonPol portfolios falling to negative 53.1B. AFs are negative when the MonPol portfolios exceeds the liquidity absorbing effect of AFs. Use of the marginal lending facility rose to 25M from 32M.

    Weekly Supply
    EGB Supply is expected to amount to around 22.0B, with Italy set to sell its 5 and 10 year BTP for 3.5-5.0B on Tuesday, followed by a 1.0B issuance from Finland via its 16 and 27 year RFGB on Wednesday. On Thursday sees Spain tap its 3, 5 and 10 year SPGB for around 6.0B combined, as well as France tapping its 10and 16 year OATs for 7.0-8.0B . The net cash flow for the week is negative 5.7B with Beglium to repay 14.3B in C&R to be repaid Monday.
    Gilt Supply: The DMO will tap a 5 year Gilt for 4.0B this week
    The net cash flow for this week is positive at 0.20B with no C&R to be repaid and 4.23B in BoE buybacks.
    US Supply: No issuance this week.
    Net cash flow is negative $27.44B given the settlement of $103B worth of supply on Monday and $75.56B in C&R to be repaid.

    Political/In the Papers:
    - Catalan regional elections showed pro-independence parties wining majority of seats but falls short of wining absolute majority, with conflicts still remaining.

    Looking Ahead
    All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
    - 07:25 (BR) Brazil Central Bank Weekly Economists Survey - 07:30 (TR) Turkey Sept Real Sector Confidence (Seasonally Adj): No est v 103.0 prior; Real Sector Confidence NSA: No est v 103.7 prior
    - 07:30 (TR) Turkey Sept Capacity Utilization: No est v 74.8% prior
    - 08:15 (US) Baltic Dry Bulk Index
    - 08:30 (US) Aug Personal Income: 0.4%e v 0.4% prior; Personal Spending: 0.3%e v 0.3% prior; Real Personal Spending: No est v 0.2% prior
    - 08:30 (US) Aug PCE Deflator M/M: 0.0%e v 0.1% prior; Y/Y: No est v 0.3% prior
    - 08:30 (US) Aug PCE Core M/M: 0.1%e v 0.1% prior; Y/Y: 1.3%e v 1.2% prior
    - 09:00 (MX) Mexico Aug Unemployment Rate: No est v 4.7% prior; Unemployment Rate (Seasonally Adj): No est v 4.3% prior
    - 10:00 (US) Aug Pending Home Sales M/M: 0.4%e v 0.5% prior; Y/Y: No est v 7.2% prior
    - 10:30 (US) Sept Dallas Fed Manufacturing Activity: -9.5e v -15.8 prior
    - 16:00 (US) Weekly Crop Progress Report

    Other Events
    -08:30 ( US)Fed Speaker: Dudley (Voter, Dove) on Monetary Policy, New York
    -(EU) EU's Moscovici speaking at Bruegel Conference, Berlin


    Economic data
    (FI) Finland Sept Consumer Confidence Index: 4.2 v 8.3 prior; Business Confidence: -10 v -13 prior
    (FI) Finland Aug House Price Index M/M: 0.5% v -0.2% prior; Y/Y: -0.4% v -0.1% prior
    (CH) Swiss Total Sight Deposits w/e Sept 25th (CHF): 465.61B v 465.0B prior
    (SE) SWEDEN AUGUST RETAIL SALES M/M: -1.7% V 0.1%E; Y/Y: 1.0% V 3.3%E (misses)
    (SE) SWEDEN AUG TRADE BALANCE (AUG): -3.6B V -0.3B PRIOR
    (IT) ITALY SEPT CONSUMER CONFIDENCE INDEX: 112.7 V 108.7E; BUSINESS CONFIDENCE: 104.2 V 102.7E (beats)

    Fixed Income Issuance:
    None seen

    Contributed by Trade The News
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