Nvidia earnings tomorrow seen as 'macro' event given weight on result and sentiment for tech rally
|EU mid-market update: Nvidia earnings tomorrow seen as 'macro' event given weight on result and sentiment for tech rally; Ukraine pushes another front into Russia.
Notes/observations
- Complete focus on Nvidia earnings tomorrow: Despite an eclectic array of smaller themes, market maintains its sights on Nvidia earnings tomorrow, noted as biggest catalyst of the week to drive market direction and risk sentiment, especially for tech/AI. Nvidia has continually beat expectations over approx. last 2 years. Guidance will be key, especially on AI data demand and if there are any signs of exhaustion.
- UK PM ‘State of the Nation’ Style Speech: (Ongoing) and reiterating poor state of govt finances including a £22.0B black hole in the budget; Elsewhere in UK, BRC shop price index fell for first time in 3 years.
- Western de-coupling from China continues: Canada announced 100% tariffs on China EVs during yesterday's session. China’s MOFCOM this morning opposed the move, sees the move as breaking WTO rules.
- Geopolitical togs tighten further: Ukraine pushes second region in Belgorod, following recent move into Kursk. Kursk nuclear power plant remains in focus for risks of ‘Chernobyl’ style disaster given its lack of ‘dome protection’.
- Positive results from Bunzl and BHP help lift FTSE: Bunzl raised margin guidance and announced £250M buyback and £700M capital allocation program, citing improvement in underlying revenue trends, noted volume softness in US. BHP commentary on resources market lifts sector.
- Asia closed mixed with Nikkei225 outperforming +0.7%. EU indices are -0.2% to +0.5%. US futures are +0.1%. Gold -0.2%, DXY 0.0%; Commodity: Brent -0.7%, WTI -0.7%; Crypto: BTC -1.4%, ETH -1.9%.
Asia
- Japan July PPI Services Y/Y: 2.8% v 2.9%e.
- China July Industrial Profits Y/Y: 4.1% v 3.6% prior.
- Japan Fin Min Suzuki reiterated view that FX was determined by various factors including rate differentials and geopolitical risks.
Europe
- UK Aug BRC Shop Price Index registered its 1st annual decline since Oct ’21 (Y/Y: -0.3% v +0.2% prior.
- France Pres Macron said to rule out leftist-led government and would continue on consultations on finding a PM.
Americas
- Fed’s Daly (voter) stated that the time to adjust policy was upon us; Hard to imagine anything could derail September rate cut.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.30% at 519.60, FTSE +0.58% at 8,376.11, DAX +0.37% at 18,691.35, CAC-40 +0.45% at 7,624.32, IBEX-35 +0.62% at 11,335.50, FTSE MIB +0.49% at 33,769.00, SMI -0.07% at 12,350.39, S&P 500 Futures +0.08%].
Market focal points/key themes: European indices open modestly higher across the board and held on to positive bias through the early part of the session; among sectors leading the way higher are energy and materials; sectors still in the red include consumer discretionary and communication services; oil & gas subsector supported after Brent popped above $80/bbl; mining subsector supported following BHP’s earnings overnight; Couche-Tard plans to finance Seven & I acquisition with debt; earnings expected in the upcoming US session include Nordstrom and PVH.
Equities
- Consumer discretionary: Ryanair Holdings [RYA.IE] +1.0% (CEO interview; notes Boeing jets delays), Bunzl [BNZL.UK] +8.5% (H1 results, raises margin guidance, £250M buyback, capital allocation programme) - Consumer staples: Associated British Foods [ABF.UK] -2.5% (analyst downgrade).
- Industrials: Continental [CON.DE] +4.5% (analyst upgrade), Maersk [MAERSKB.DK] -1.0% (market update), Flughafen Zuerich [FHZN.CH] -5.5% (H1 results, misses estimates, slightly raises passenger guidance) - Telecom: Telecom Italia [TIT.IT] +1.0% (speculation Vivendi interested in selling 23.75% stake in Telecom Italia for ~€2.0B).
- Materials: BHP Group [BHP.UK] +1.5% (earnings; market outlook).
Speakers
- UK PM Starmer speech noted that mending public finances meant 'difficult trade-offs'; autumn budget would be painful.
- Ireland Fin Min Chambers said to be planning to extend bank levy in 2025 budget.
- Czech Central Bank (CNB) Gov Michl stated that wanted to avoid rushed, ad-hoc policy steps. Generally, prefered more restrictive monetary policy.
- Russia govt spokesperson stated that inflation was above target; govt and CBR were taking measures to reduce inflationary pressure.
- China Commerce Ministry (MOFCOM) stated that Canada tariff move would disrupt stability of global supply chains.
Currencies/fixed income
- USD continues to consolidate its losses it suffered last week in the aftermath of Fed Chair Powell’s Jackson Holy speech.
- GBP/USD steady around the 1.32 area while 10-year Gilt yields rose by almost 5bps ahead of PM Starmer’s speech which would warn that things in Britain would get worse before they got better. Speech said to hint that not just an economic black hole but a societal black hole was discovered.
- EUR/USD steady at 1.1165 area amid limited economic releases in the session.
- USD/JPY approaching the 145 handle in quiet trade.
Economic data
- (FI) Finland Aug Consumer Confidence: -7.2 v -7.2 prior; Business Confidence: -8 v -11 prior.
- Germany Sept GfK Consumer Confidence: -22.0 v -18.2e.
- (DE) Germany Q2 Final GDP Q/Q: -0.1% v -0.1% prelim; Y/Y: 0.0% v -0.1% prelim; GDP NSA (unadj) Y/Y: 0.3% v 0.3% prelim.
- (DE) Germany Q2 Private Consumption Q/Q: -0.2% v 0.0%e; Government Spending Q/Q: 1.0% v 0.2%e; Capital Investment Q/Q: -2.2% v -1.5%e.
- (SE) Sweden July PPI M/M: -1.4% v -0.4% prior; Y/Y: -0.1% v +0.8% prior.
- (SE) Sweden July Household Lending Y/Y: 0.7% v 0.7% prior.
- (TH) Thailand July Customs Trade Balance: -$1.4B v -$0.1Be; Exports Y/Y: 15.2% v +7.0%e; Imports Y/Y: 13.1% v 1.4%e.
- (TW) Taiwan July Monitoring Leading Indicator: 35 v 38 prior.
- (HK) Hong Kong July Trade Balance (HK$): -21.8B v -28.7Be; Exports Y/Y: 13.1% v 11.0%e; Imports Y/Y: 9.9% v 10.4%e.
Fixed income issuance
- (EU) EFSF opened its book to sell EUR-denominated 2027 and 2031 bonds.
- (ID) Indonesia sold total IDR8.0T vs. IDR8.0T target in Islamic bills and bonds (sukuk).
- (IT) Italy Debt Agency (Tesoro) sold €2.5B vs. €2.0-2.5B indicated range in 3.10% Aug 2026 BTP bonds; Avg Yield: 2.89% v 3.10% prior; bid-to-cover: 1.54x v 1.50x.
- (AT) Austria Debt Agency (AFFA) sold total €2.334B vs. €2.75B indicated in 3-month and 6-month Bills.
Looking ahead
- (CO) Colombia July Retail Confidence: No est v 8.6 prior; Industrial Confidence: No est v -3.1 prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (CH) Switzerland to sell 3-month Bills.
- 05:30 (DE) Germany to sell €4.0B in 2.50% Oct 2029 BOBL.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2035, 2040 and 1044 bonds.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
- 05:30 (EU) ECB allotment in 3-month LTRO tender.
- 06:00 (UK) Aug CBI Retailing Reported Sales: -10e v -43 prior; Total Distribution Reported Sales: No est v -30 prior.
- 06:45 (NL) ECB’s Knot (Netherlands).
- 07:00 (BR) Brazil Aug FGV Construction Costs M/M: 0.5%e v 0.7% prior.
- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to cut Base Rate by 25bps to 6.50%.
- 08:00 (MX) Mexico July Trade Balance: -$1.7Be v -$1.1B prior.
- 08:00 (BR) Brazil mid-Aug IBGE Inflation IPCA-15 M/M: 0.2%e v 0.3% prior; Y/Y: 4.3%e v 4.5% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:00 (US) Jun FHFA House Price Index M/M: 0.1%e v 0.0% prior; Q/Q: No est v 1.1% prior.
- 09:00 (US) Jun S&P CoreLogic House Price Index (20-City) M/M: 0.30%e v 0.34% prior; Y/Y: 6.14%e v 6.81% prior; House Price Index (overall) Y/Y: No est v 5.94% prior.
- 09:00 (HU) Hungary Central Bank (MNB) post rate decision statement.
- 10:00 (US) Aug Consumer Confidence: 100.9e v 100.3 prior.
- 10:00 (US) Aug Richmond Fed Manufacturing Index: No est v -17 prior.
- 10:00 (DE) ECB’s Nagel (Germany).
- 10:30 (US) Aug Dallas Fed Services Activity: No est v -0.1 prior.
- 13:00 (US) Treasury to sell 2-Year Notes.
- 16:30 (US) Weekly API Oil Inventories.
- 18:45 (NZ) New Zealand July Filled Jobs M/M: No est v -0.1% prior.
- 21:30 (AU) Australia July CPI Y/Y: 3.4%e v 3.8% prior.
- 21:30 (AU) Australia Q2 Construction Work Done: +0.7%e v -2.9% prior.
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