European stock market, economy and companies update (September 29, 2015)

Notes/Observations
- India cuts main rate by a greater than expected 50bp
- German and Spanish CPI falls to new lows
- UK mortgage lending sees biggest jump since 2008
- Dax futures traded at lowest level in 10 months before rebounding


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 opened down in line with Asian markets, but trimmed losses in later trading; materials stocks lead rebound; healthcare equities slipped; automakers still impacted by VW fallout; Spanish stocks shrugged off poor inflation numbers

Sectors:
- Consumer discretionary [Wolseley WOS.UK -10.9% (outlook update)]
- Healthcare [Shire SHP.UK -3.4% (drug approval)]
- Industrials [Volkswagen VOW3.DE -1.0%]
- Materials [Glencore GLEN.UK 10.8% (broker commentary)]

Speakers
- (SE) IMF spokesman: Riksbank should remain ready to do more; Sweden growth of about 3% expected to continue into 2016

Currencies
- FX markets against the dollar were rather mixed on the morning session with cable and USD/JPY showing some strength, but with the EUR/USD rather weak on the session, following a mixed plethora of macro-economic data
- The EUR/USD looks generally weaker in the late morning session and trades in a range between 1.1281 at the morning highs to lows of 1.1219, after a small rally in the overnight session
- The GBP/USD trades in a range between 1.5204 at the morning highs to lows of 1.5155, after a small rally off the release of better than expected UK macro-economic data being faded in recent trading
- The USD/JPY bounces back some of its losses after yesterday's sell-off going into the early morning session. USD/JPY hit a lows of 119.250 and has rallied to a highs in the late morning session of 119.926

Fixed Income:
Bund futures trade at 155.95, down 9 ticks as equities rebound. 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 156.53 to target 156.68 initially, with a break challenging 156.83 the August high.
UK Gilt futures trades 119.02 up 9 ticks trading off the highs on encouraging mortgage lending data. Analysts look for downside at 118.77, followed by 118.118.49. To the upside, initial resistance lies at 119.35 high with a break seeing continued strength to 119.46 contract highs.
Tuesday's liquidity report showed Monday's excess liquidity rose to €478.5B, a rise of €11.3B from €467.2B prior. This was primarily due to AFs and MonPol portfolios falling to negative €B. AFs are negative when the MonPol portfolios exceeds the liquidity absorbing effect of AFs. Use of the marginal lending facility rose to €68M from €25M.

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)
- 05:30 (ZA) South Africa Q2 Non-Farm Payrolls Q/Q: No est v -0.5% prior; Y/Y: No est v 0.5% prior
- 06:00 (UK) Sept CBI Industrial Reported Sales: No est v 24 prior
- 07:00 (BR) Brazil Sept FGV Inflation IGPM M/M: No est v 0.3% prior; Y/Y: No est v 7.6% prior
- 08:00 (BR) Brazil July National Unemployment Rate: No est v 8.3% prior
- 08:00 (DE) Germany Sept Preliminary CPI M/M: No est v 0.0% prior; Y/Y: No est v 0.2% prior
- 08:00 (DE) Germany Sept Preliminary CPI EU Harmonized M/M: No est v 0.0% prior; Y/Y: No est v 0.1% prior
- 08:15 (US) Baltic Dry Bulk Index
- 08:30 (CA) Canada Aug Industrial Product Price M/M: No est v 0.7% prior; Raw Materials Price Index M/M: No est v -5.9% prior
- 09:00 (US) July S&P/ CaseShiller 20 City M/M: No est v -0.12% prior; Y/Y: No est v 4.97% prior; House Price Index: No est v 180.88 prior
- 09:00 (US) July S&P/ CaseShiller M/M: No est v 0.09% prior; Y/Y: No est v 4.49% prior; House Price Index: No est v 173.84 prior
- 10:00 (MX) Mexico Weekly International Reserves
- 10:00 (US) Sept Consumer Confidence Index: No est v 101.5 prior
- 17:00 (KR) South Korea Oct Business Manufacturing Survey: No est v 71 prior; Non-Manufacturing Survey: No est v 73 prior
- 19:05 (UK) Sept GfK Consumer Confidence: No est v 7 prior
- 19:50 (JP) Japan Aug Preliminary Industrial Production M/M: No est v -0.8% prior; Y/Y: No est v 0.0% prior
- 19:50 (JP) Japan Aug Retail Sales M/M: No est v 1.4% prior (revised from 1.2%); Retail Trade Y/Y: No est v 1.8% prior (revised from 1.6%); Large Retailers' Sales: No est v 2.1% prior

Other events
06:30 (EU)ECB Speaker: Coene (Dove), Dublin
07:00 (EU)ECB Speaker: Makuch (Leaning Hawk) presents Slovak macro forecasts
09:15 (UK)Labour Leader Corbyn Speaks at Party Conference in Brighton
10:00 (JP)PM Abe speaks at Bloomberg's NY Office
15:40 (UK)BoE Speaker: Gov Carney, London


Economic data
- (IN) INDIA CENTRAL BANK (RBI) CUTS REPURCHASE RATE BY 50BPS TO 6.75% FROM 7.25%; UNEXPECTED
- (DE) GERMANY AUG IMPORT PRICE INDEX M/M: -1.5% V -1.5%E; Y/Y: -3.1% V -3.1%E
- (DE) GERMANY SEPT CPI SAXONY M/M: -0.1% V -0.1% PRIOR; Y/Y: 0.0% V 0.2% PRIOR
- (ES) SPAIN SEPT PRELIMINARY CPI M/M: -0.3% V -0.3% PRIOR; Y/Y: -0.9% V -0.6%E
- (ES) Spain Aug Adjusted Retail Sales Y/Y: 3.1% v 3.3%e ; Retail Sales Y/Y: 3.2% v 4.2% prior
- (HU) Hungary Aug Unemployment Rate: 6.7% v 6.6%e
- (DE) GERMANY SEPT CPI BAVARIA M/M: -0.2% V 0.1% PRIOR; Y/Y: 0.0% V 0.3% PRIOR
- (DE) GERMANY SEPT CPI HESSE M/M: -0.3% V 0.0% PRIOR; Y/Y: 0.0% V 0.4% PRIOR
- (DE) GERMANY SEPT CPI BRANDENBURG M/M: -0.2% V -0.2% PRIOR; Y/Y: -0.3% V -0.1% PRIOR
- (NO) Norway Aug Retail Sales W/Auto Fuel M/M: -0.4% v 0.3%e
- (AT) Austria Sept Manufacturing PMI: 52.5 v 50.5 prior
- (DE) GERMANY SEPT CPI NORTH RHINE WESTPHALIA M/M: -0.2% V 0.1% PRIOR; Y/Y: 0.0% V 0.2% PRIOR
- (UK) AUG MORTGAGE APPROVALS: 71.0K V 70.0KE (Highest since Jan 2014)
- (UK) AUG NET CONSUMER CREDIT: £0.86B V £1.2BE; NET LENDING: £3.4B V £2.8BE
- (UK) Aug Money Supply M4 M/M: -0.4% v 1.0% prior; Y/Y: -0.1% v 0.6% prior
-(PT) PORTUGAL SEPT CONSUMER CONFIDENCE INDEX: -17.2 V -18.1 PRIOR; ECONOMIC CLIMATE INDICATOR: 1.4 V 1.4 PRIOR
- (EU) EURO ZONE SEPT BUSINESS CLIMATE INDICATOR: 0.34 V 0.20E; CONSUMER CONFIDENCE (FINAL): -7.1 V -7.1E
- (DE) GERMANY SEPT CPI BADEN-WUERTTEMBERG M/M: -0.2% V 0.0% PRIOR; Y/Y: 0.0% V 0.2% PRIOR

Fixed Income Issuance:
(IT) Italy Debt Agency sells €8B in 5-year and 10-year BTP
- Sells €2B v €1.5-2.0B indicated range in 0.7% 2020 BTP Bond; Avg Yield: 0.71% v 0.84% prior; Bid-to-cover: 1.56x v 1.53x prior
- Sells €3B v €2.5-3.0B indicated range in floating rate 2022 BTP Bonds; avg yield 0.76% v 0.65% prior; Bid-to-cover: 1.39x v 1.62x prior
- Sells €3B v €2.5-3.0B indicated range in 2.00% 2025 BTP Bonds; avg yield 1.82% v 1.95% prior; bid-to-cover: 1.32x v 1.38x prior

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