Red across the globe ahead of Nonfarm Payrolls, which is expected to guide Fed's Sept meeting
|Notes/Observations
- Risk-off ahead of US Nonfarm Payrolls: Earlier in the week, saw weakness from Jolts job openings and ADP employment change as prints missed estimates. Fed Watcher Timiraos in an overnight piece, said outcome of today’s jobs report will likely dictate the size of Fed’s rate cut in Sept, with 25bps and 50bps the options.
- Crude oil firms up after OPEC+ confirmed 2-month extension for output cuts, with 8 countries voluntarily participating (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman)
- French bond yields move in steady fashion after PM announcement.
- In the chip space, US targets China with new quantum and chip-related export curbs, which later on matched by Taiwan on China. More developments for Intel, as Qualcomm reportedly explored acquiring pieces of Intel chip design business. Broadcom down ~10% in premarket after earnings.
- Asia closed lower with Nifty50 underperforming -1.2%. EU indices are -0.4% to -0.8%. US futures are -0.4% to -1.3%. Gold +0.1%, DXY -0.2%; Commodity: Brent -0.1%, WTI -0.2%; Crypto: BTC -2.2%, ETH -2.3%.
Asia
- South Korea July Current Account: $9.1B v $12.3B prior.
- Japan July Household Spending Y/Y: 0.1% v 1.2%e.
- Australia July Home Loans Value M/M: 3.9% v 1.0%e.
Americas
- Fed's Goolsbee (non-voter for 2024) noted that economic data justified multiple rate cuts.
- Treasury Sec Yellen stated that have a good, healthy job market; Growth continued at a rapid pace.
- Goldman Sachs analyst noted that if the US unemployment rate was 4.3% or higher or if it was between 4.2-4.3% coupled with a NFP reading under +150K then would expect the Fed to enact a 50bps cut in Sept.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 -0.6% at 509, FTSE -0.5% at 8201, DAX -0.8% at 18441, CAC-40 -0.5% at 7393, IBEX-35 -0.5% at 11221, FTSE MIB -0.8% at 3272, SMI -0.7% at 11960, S&P 500 Futures -0.7%].
Market focal points/key themes: European indices opened lower across the board, with the downward bias remaining in place through early trading; among sectors managing some gains are real estate and health care; sectors leading the way lower include financials and energy; banking subsector weighed by Raiffeisen shares; Nationwide receives regulatory approval to acquire Virgin Money; focus on US NFP later in the day; no major corporate earnings expected in the upcoming Americas session.
Equities
- Consumer discretionary: Dalata Hotel Group [DHG.IE] -2.0% (analyst downgrade).
- Energy: Rubis [RUI.FR] -8.5% (results).
- Financials: Viel & Cie [VIL.FR] +7.5% (results).
- Healthcare: Carmat [ALCAR.FR] -3.3% (results).
- Utilities: Elis [ELIS.FR] -15.0% (takeover offer).
- Technology: LEM Holding [LEHN.SE] +2.0% (analyst upgrade); PSI Software [PSAN.DE] +1.5% (results); ATOSS Software [AOF.DE] -9.0% (major shareholders AOB Invest and General Atlantic place 1.08M shares at €120.00 each).
-Real Estate: Inmobiliaria Colonial [COL.ES] +2.0% (analyst upgrade).
Speakers
- Poland Central Bank (NBP) Litwiniuk commented that 2nd half of 2025 could be right time to cut rates.
Currencies/fixed income
- USD consolidated its losses following the ADP Employment release on Thurs. Upcoming jobs report to influence Fed's decision on size of Sept rate cut with dealers now preparing for a weak Non-Farm print. Goldman Sachs analyst noted that if the US unemployment rate was 4.3% or higher or if it was between 4.2-4.3% coupled with a NFP reading under +150K then would expect the Fed to enact a 50bps cut in Sept. Greenback finding headwinds on policy divergence among the G7 currencies.
- EUR/USD at 1.1115 area ahead of mid-session.
- USD/JPY moved lower to test 142.06 during Asia as speculation circulated that BOJ rates hikes could be faster than expected.
Economic data
- (SE) Sweden Aug Maklarstatistik Housing Prices Y/Y: 0.5% v 1.2% prior.
- (UK) Aug Halifax House Price Index M/M: 0.3% v 0.8% prior; Y/Y: 4.3% v 2.3% prior (highest since Nov 2022).
- (DE) Germany July Industrial Production M/M: -2.4% v -0.5%e; Y/Y: -5.3% v -3.5%e.
- (DE) Germany July Trade Balance: €16.8B v €20.9Be; Exports M/M: 1.7% v +1.1%e; Imports M/M: 5.4% v 0.7%e.
- (SE) Sweden Aug Budget Balance (SEK): -0.3B v +6.4B prior.
- (NO) Norway July Industrial Production M/M: -3.8% v +7.7% prior; Y/Y: 10.1% v 14.9% prior.
- (NO) Norway July Manufacturing Production M/M: 2.0% v 2.0% prior; Y/Y: 6.6% v 2.1% prior.
- (FI) Finland July Preliminary Trade Balance: €0.1B v €1.0B prior.
- (DK) Denmark July Industrial Production M/M: 7.3% v 0.1% prior.
- (RO) Romania Q2 Preliminary GDP (2nd of 3 readings) Q/Q: 0.1% v 0.1% advance; Y/Y: 0.8% v 0.8% advance.
- (ZA) South Africa Aug Gross Reserves: $63.2B v $62.3B prior; Net Reserves: $60.1B v $59.2B prior.
- (HU) Hungary July Industrial Production M/M: 0.0% v 0.2%e; Y/Y: -6.4% v -5.9%e.
- (AU) Australia Aug Foreign Reserves (A$): 96.2B v 94.4B prior.
- (FR) France July Industrial Production M/M: -0.5% v -0.3%e; Y/Y: -2.2% v -0.9%e.
- (FR) France July Manufacturing Production M/M: -0.9% v +0.9% prior; Y/Y: -3.0% v -2.0% prior.
- (FR) France July Trade Balance: -€5.9B v -€6.0B prior; Current Account Balance: -€1.2B v -€2.5B prior.
- (CH) Swiss Aug SECO Consumer Confidence: 34.6 v -32.5e.
- (CH) Swiss Aug Foreign Currency Reserves (CHF): 693.8B v 703.7B prior.
- (AT) Austria Aug Wholesale Price Index M/M: -0.9% v +0.5% prior; Y/Y: -1.2% v +1.4% prior.
- (CZ) Czech July Industrial Output Y/Y: 7.2% v 7.3%e; Construction Output Y/Y: +2.0% v -9.4% prior.
- (CZ) Czech July Trade Balance (CZK): -4.1B v +10.2Be.
- (MY) Malaysia end-Aug Foreign Reserves: $116.8B v $115.9B prior.
- (CN) China Aug Foreign Reserves: $B v $3.294Te.
- (TH) Thailand Aug Foreign Reserves w/e Aug 30th: $235.7B v $237.0B prior.
- (CN) Weekly Shanghai Copper Inventories (SHFE): 215.4K v 241.8K prior.
- (IT) Italy July Retail Sales M/M: +0.5% v -0.2% prior; Y/Y: +1.0% v -1.0% prior.
- (UN) FAO Aug World Food Price Index: 120.7 v 121.0 prior.
- (RU) Russia Narrow Money Supply w/e Aug 30th (RUB): 18.30T v 18.33T prior.
- (HK) Hong Kong Aug Foreign Reserves: $423.4B v $419.3B prior.
- (EU) Euro Zone Q2 Final GDP Q/Q: 0.2% v 0.3% prelim; Y/Y: 0.6% v 0.6% prelim.
- (EU) Euro Zone Q2 Household Consumption Q/Q: -0.1% v +0.3%e; Govt Expenditures Q/Q: 0.6% v 0.3%e; Gross Fixed Capital Q/Q: -2.2% v -0.3%e; Compensation per Employee Y/Y: % v 5.1% prior.
- (EU) Euro Zone Q2 Final Employment Q/Q: 0.2% v 0.2% prelim; Y/Y: 0.8% v 0.8% prelim.
- (GR) Greece Q2 GDP Q/Q: % v 0.7% prior; Y/Y: % v 2.1% prior; GDP NSA (unadj) Y/Y: % v 1.9% prior.
Fixed income issuance
- (IN) India sold total INR290B vs. INR290B indicated in 2027, 2039 and 2064 bonds.
Looking ahead
- (UR) Ukraine Aug Official Reserve Assets: No est v $37.2B prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L 2031, 2038 and 2046 Bonds.
- 06:00 (UK) DMO to sell £6.0B in 1-month, 3-month and 6-month bills (£1.0B, £2.0B and £3.0B respectively).
-06:00 (IE) Ireland July Live Register Monthly Change: No est v -0.1K prior; Live Register Level: No est v 171.9K prior.
- 06:00 (BE) Belgium Debt Agency (BDA) to sell Bonds via Ori Auction.
- 07:00 (BR) Brazil Aug FGV Inflation IGP-DI M/M: 0.1%e v 0.8% prior; Y/Y: 4.2%e v 4.2% prior.
- 07:30 (IN) India Forex Reserve w/e Aug 30th: No est v $681.7B prior.
- 07:30 (IN) India announces upcoming bill issuance (held on Wed).
- 07:30 (IS) Iceland to sell 7.0% Feb 2035 RIKB Bonds.
- 08:00 (PL) Poland Aug Official Reserves: No est v $214.3B prior.
- 08:00 (CL) Chile Aug CPI M/M: 0.2%e v 0.7% prior; Y/Y: 4.7%e v 4.6% prior.
- 08:00 (MX) Mexico Aug Vehicle Production: No est v 302.3K prior; Vehicle Exports: No est v 271.5K prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Aug Change in Nonfarm Payrolls: +165Ke v +114K prior; Private Payrolls: +140Ke v +97K prior; Manufacturing Payrolls: -2Ke v +1K prior; Birth-death Adjustment (unadj): No est v +246K prior.
- 08:30 (US) Aug Unemployment Rate: 4.2%e v 4.3% prior; Underemployment Rate: No est v 7.8% prior; Labor Force Participation Rate: 62.7%e v 62.7% prior.
- 08:30 (US) Aug Average Hourly Earnings M/M: 0.3%e v 0.2% prior; Y/Y: 3.7%e v 3.6% prior; Average Weekly Hours All Employees: 34.3e v 34.2 prior.
- 08:30 (CA) Canada Aug Net Change in Employment: +25.0Ke v -2.8K prior; Unemployment Rate: 6.5%e v 6.4% prior; Full Time Employment Change: No est v +61.6K prior; Part Time Employment Change: No est v -64.4K prior; Participation Rate: 65.0%e v 65.0% prior; Hourly Wage Rate Y/Y: 4.8%e v 5.2% prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 08:45 (US) Fed’s Williams.
- 09:00 (RU) Russia Aug Official Reserve Assets: No est v $602.0B prior (revised from $602.1B).
- 10:00 (CA) Canada Aug Ivey Purchasing Managers Index (seasonally adj): No est v 57.6 prior; PMI (unadj): No est v 55.3 prior.
- 10:30 (TR) Turkey Aug Cash Budget Balance (TRY): No est v -136.5B prior.
- 11:00 (US) Fed’s Waller.
- 11:00 (EU) Potential sovereign ratings after European close.
- 13:00 (US) Weekly Baker Hughes Rig Count.
- 19:00 (CO) Colombia Aug CPI M/M: 0.2%e v 0.2% prior; Y/Y: 6.4%e v 6.9% prior.
- 19:00 (CO) Colombia Aug CPI Core M/M: 0.3%e v 0.2% prior; Y/Y: 6.9%e v 7.2% prior.
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