Investors dumped stocks after the NY opening bell and waning risk appetite bid up US Treasury debt. The benchmark 10-year yield declined 5 basis points to 2.22% by mid-morning while indices bounced along session lows. Themes emanating from earnings season continue to effect stock flows. Following yesterday's terrible reception to Disney and Time Warner results, Viacom, CBS and Fox all missed expectations as well sending the whole media sector to its second straight day of outsized declines. Tesla has swooned 10% after Musk lowered the full year production target and results showed a continued burn to their cash pile leading many to speculate a capital raise could very well be in the offing. Keurig Green Mountain plunged 30% after they were forced to slash their outlook on deteriorating fundamentals. Oil names opened lower as both brent and WTI continue to drift back towards the lows of the year, but bargain hunters stepped in bidding up the complex leading to outsized performance in the oil service and major names. Gold and silver mining stocks also outperformed following Q2 results from Barrick Gold and risk off flows generally aiding precious metals prices.
On the FX front all eyes were on the Bank of England. The BOE minutes were not as hawkish as many had expected while the Quarterly Inflation Report maintained its 2-year inflation outlook around 2.0%. The dovish tone of the highly anticipated BOE 'super-Tuesday' event sent the GBP currency from 1.5605 to test 1.5470. The ensuing press conference did help offset some of the initial dovishness. Gov Carney reiterated that the likely timing of 1st hike was drawing closer but would be data-dependent. Additionally he noted that the GBP currency strength had not removed the need for gradual rate hikes.
**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- 21:30 (AU) RBA Statement on Monetary Policy
- 23:00 (JP) BOJ Interest Rate Decision: Expected to maintain Annual Rise in Monetary Base at ¥80T
- 23:00 (CN) China to sell 1-Year Bonds
- (UR) Ukraine July CPI M/M: No est v 0.4% prior; Y/Y: No est v 57.5% prior
**Economic data:
- (UK) BOE left both Interest Rates and Asset Purchase Target unchanged at 0.50% and £375B respectively (as expected)
- (UK) Bank of England (BOE) Quarterly Inflation Report (QIR) maintained its 2-year inflation outlook around 2.0%
- (UK) Bank of England (BOE) Aug Minutes: Vote was 8-1 to keep policy steady
- (CZ) Czech Central Bank left its Repurchase Rate and EUR/CZK floor unchanged at 0.05% and maintained its EUR/CZK'around 27.00' (as expected)
- (ZA) South Africa Jun Electricity Consumption Y/Y: -1.3% v -2.7% prior; Electricity Production Y/Y: -1.7% v -3.5% prior
- (US) July Challenger Job Cuts: 105.7K v 44.8K prior; Y/Y: 125.4% v 42.7% prior
- (RU) Russia Gold and Forex Reserve w/e July 31st: $357.6B v $358.3B prior
- (CL) Chile Jun Nominal Wage M/M: 0.2% v 0.0%e; Y/Y: 6.3% v 6.1%e
- (US) Initial Jobless Claims: 270K v 272Ke; Continuing Claims: 2.255M v 2.25Me
- 09:00 (MX) Mexico July Consumer Confidence Index: 92.2 v 94.8e
- 10:00 (HU) Hungary July YTD Budget Balance (HUF): B v -823.3B prior
- 10:00 (UK) July NIESR GDP Estimate: 0.7% v 0.7% prior
- 10:20 (BR) Brazil July Vehicle Production: 215.1K v 184.0K prior; Vehicle Sales: 227.6K v 212.5K prior; Vehicle Exports: 28.3K v 48.1K prior
- 10:30 (US) Weekly EIA Natural Gas Inventories: +32 bcf vs.+41 to +45 bcf expected range
[I]Contributed by Trade The News[/I]
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