• 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

    Contributed by Trade The News
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