Trump accepted GOP nomination for the third time

EU mid-market update: Crowdstrike update said to be causing wide-spread IT outages in so many industries and govt organisations globally; Trump accepted GOP Nomination for the 3rd time; More reports that upcoming weekend will be crucial for Biden to decide whether he is staying in the race.

Notes/observations

-Amid global wide-spread tech outages reportedly being related to Crowdstrike’s most recent update and affecting computers and IT systems in almost all parts of the world, major US airlines grounded all flights, some US banks’ employees can’t log on, UK's LSE and major oil/gas trading platforms had tech issues, EU/Asian airports reported system incidents with some flights not landing, while UK supermarkets, key Australian banks, energy firms, media and govt offices were also experiencing outages with Australia National Emergency to hold meeting; The update is reportedly now being globally rolled back by Crowdstrike, it is currently unclear if Sky News channel getting back on air and American Airlines cancelling ground stop are related to successful troubleshooting. Amazon's AWS made a statement that AWS Services and network connectivity are Not affected by connectivity issue.

-Microsoft in a statement expects resolution is 'forthcoming'; U.S. issued National Emergency Alert over outage affecting 911 lines in multiple states.

-Trump confirmed to accept the GOP Presidential Nomination for the 3rd time and gave his Keynote Address to conclude the 4-day RNC; Trump commented on many issues including China, Ukraine, immigration, taxes, US economic and EV policy; Reportedly GOP Presidential candidate Trump and Ukraine Pres Zelenskiy now plan phone call, which could occur as soon as on Friday.

-According to Reuters sources on Biden candidacy as of yesterday’ night, one press outlet’s source said: "Yes, it's over. Just a matter of time"; Another RT source claimed that "Biden's soul searching is actually happening, I know that for a fact... He's thinking about this very seriously." In another WaPo report, it was stated that former House of Representatives speaker Pelosi reportedly believes Pres Biden can be convinced 'fairly soon' to drop out; Meanwhile, "Biden for President" campaign reportedly calling all-staff-meeting for Friday.

-Electrolux, world's second-biggest appliances maker, reported results and noted that market conditions in Q2 remained similar to the most recent quarters; Demand in North America has been stable year to date, supported by the aggressive pricing environment.

-First ECB speakers following yesterday’s decision appear to be cautious regarding any Sept’s cut, although some mention a cut will be discussed in Sept; Saxo Bank analysts see ECB unlikely to cut interest rates in September, while moves in October and December are possible.

-Weak UK June retail sales data appear to keep a rate cut on BOE’s table during its August's rate decision.

- Asia closed lower with Hang Seng underperforming at -2.0%. EU indices are -0.8% to -0.3%. US futures are -0.3% to -0.1%. Gold -1.4%, DXY +0.4%; Commodity: Brent +0.1%, WTI -0.1%; Crypto: BTC -0.4%, ETH -1.4%.

Global IT outage

- Reportedly 'many' windows users face massive outage and experience blue screen of death (BSOD) errors due to new crowd strike update - press.

- US national emergency alert: outage affecting 911 lines in multiple states.

- Delta Airlines, United Air and American Airlines issued ground stop for all its flights early on Friday.

- Zurich Airport: No flights landing due to IT outage.

- Microsoft: "Many customers" in the Central U.S. region "experienced issues" with its Azure cloud computing platform services, "including failures with service management operations and connectivity or availability of services".

- (UK) UK govt sources say currently Not treating global IT outage as a cyber security issue - press.

Asia

- (JP) Japan Jun national CPI Y/Y: 2.8% V 2.9%E; CPI ex-fresh food (core) Y/Y: 2.6% V 2.7%E.

- (JP) Bank of Japan (BOJ) publishes minutes of Bond Market Group meetings held on July 9-10th; BOJ should decide and announce the planned amount of JGB purchases for the next two years at the upcoming Monetary Policy Meeting. Meanwhile, the planned amount in each maturity segment should be quarterly determined by the Financial Markets Department from the viewpoint of ensuring flexibility.

- (JP) Poll of economists says 76% believe BOJ will hold rates at July 31st meeting; Instead to cut back bond purchase program (inline) - financial press poll.

- (CN) China President Xi chairs symposium on depending reform – Xinhua.

- (IN) India Central Bank (RBI) Gov Das: Banks should implement prudent liquidity management measures, reviewing the liquidity coverage ratio framework.

Taiwan

- (TW) Taiwan Foreign Minister: We need to rely on ourselves for defense, defense spending continues to rise.

Mid-East

- (IL) Follow Up: 1 casualty reported from air attack related to Tel Aviv, there were also at least 10 injuries – AP.

Ukraine conflict

- (US) Reportedly GOP Presidential candidate Trump and Ukraine Pres Zelenskiy plan phone call, which could occur as soon as on Friday, July 19th - press.

Europe

- Reportedly LSE platforms suffer outage preventing press releases from being published - press.

- Sky news channel back on air after outage - press.

- (EU) ECB's Simkus (Lithuania): No doubt topic of cut will be discussed in Sept; No reason for cuts to exceed 25bps each; Rates will keep getting lower and quite significantly.

- (EU) ECB's Muller (Estonia): Important not to pre-commit on Sept decision; Rates are sufficiently high to curtail borrowing demand; Need more confidence that inflation going to 2% to cut rates again; Hard to say how many cuts this year.

- (EU) Saxo Bank analysts: Unlikely ECB cuts interest rates in September, while moves in October and December are possible.

Americas

- Crowdstrike is aware of reports of crashes on windows relared to crowdstrike falcon sensor [*Note: earlier, major US airlines grounded all flights, UK's LSE platform had tech issues, EU airports reported system incidents and key Australian banks, media and govt offices were experiencing outages].

- (US) Former Pres Trump accepts the GOP Presidential Nomination and gives Keynote Address to conclude the 4-day RNC for 2024.

- (US) Reuters citing one Biden campaign official source on Biden candidacy: "Yes, it's over. Just a matter of time"; Another source said "Biden's soul searching is actually happening, I know that for a fact... He's thinking about this very seriously."

- (US) Follow up: Former House of Representatives speaker Pelosi reportedly believes Pres Biden can be convinced 'fairly soon' to drop out - WaPo.

- (US) Russia prosecutors seek 18 years in jail for WSJ reporter Evan Gershkovich; To announce the verdict later on Fri, July 19th - press.

Energy

- Several major Oil and Gas trading desks in London and Singapore struggle to execute trades due to cyber outage - press.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.71% at 510.36, FTSE -0.31% at 8,179.60, DAX -0.78% at 18,220.55, CAC-40 -0.30% at 7,563.78, IBEX-35 -0.15% at 11,130.66, FTSE MIB -0.38% at 34,398.00, SMI -0.62% at 12,185.82, S&P 500 Futures -0.14%].

Market focal points/key themes: European indices open lower across the board and maintained the terned through the early part of the session; bourses say trading in equities normal despite global IT issues that have affected some commodity trading; among sectors holding on to gains are energy and health care; sectors trending lower include industrials and technology; travel subsector dragged down by multiple airlines suspending operations due to global IT issue; Piovan to be taken private by Automation Systems; UK FCA clears Nationwide’s takeover of Virgin Money; earnings expected in the upcoming US session include Halliburton, SLB, American Express and Wipro.

Equities

- Consumer discretionary: Electrolux [ELUXB.SE] +2.0% (earnings; outlook), Ubisoft [UBI.FR] -8.5% (earnings).

- Industrials: Skanska [SKAB.SE] +3.5% (earnings).

- Technology: Darktrace [DARK.UK] +0.5% (reports suggest CrowdStrike's software update led to global wide-spread IT outage), Microsoft [MSFT.DE] -2.5% (Statement - Progressing mitigation efforts for 365 Apps, services).

- Materials: Yara International [YAR.NO] +4.5% (earnings; cost reduction), Antofagasta [ANTO.UK] -1.5% (Chile earthquake).

Speakers

- (AU) Australia PM Albanese: Australia has not experienced any impact to critical infrastructure, government services or Triple-0 emergency services at this stage.

- (AE) UAE Foreign Ministry: Global tech issue affecting all electronic systems.

- (EU) ECB's Muller (Estonia): Important not to pre-commit on Sept decision; Rates are sufficiently high to curtail borrowing demand; Need more confidence that inflation going to 2% to cut rates again; Hard to say how many cuts this year.

- (EU) ECB's Villeroy (France): Inflation will continue to decline a bit slower; Watching Services inflation carefully.

- (EU) ECB's Simkus (Lithuania): No doubt topic of cut will be discussed in Sept; No reason for cuts to exceed 25bps each; Rates will keep getting lower and quite significantly.

- (FI) ECB’s Rehn (Finland): Risk of faster-than-expected inflation remains.

Currencies/fixed income

Economic data

- (UK) Jun Retail Sales (Ex Auto/fuel) M/M: -1.5% v -0.5%e; Y/Y: -0.8% v +0.2%e; Retail Sales (including auto/fuel) M/M: -1.2% v -0.6%e; Y/Y: -0.2% v +0.2%e.

- (UK) Jun Public Finances (PSNCR): £6.6B v £18.8B prior; PSNB (Ex-banking Groups): £14.5B v £11.2Be.

-(EU) Euro Zone May Current Account: €37.0B v €36.7B prior.

- (DE) Germany Jun PPI M/M: 0.2% v 0.1%e; Y/Y: -1.6% v -1.6%e.

-(PT) Portugal May Current Account: -€0.9B v +€0.9B prior.

-(IT) Italy May Current Account: €2.1B v €2.4B prior.

- (MY) Malaysia Q2 Advance GDP Y/Y: 5.8% v 4.7%e.

-(ES) Spain May Total Mortgage Lending Y/Y: -13.2% v +21.4% prior; House Mortgage Approvals Y/Y: -18.2% v +28.0% prior.

Fixed income issuance

- (MY) Malaysia sells 2039 Bonds: Avg Yield: 3.972%; bid-to-cover: 3.10x.

- (AU) Australia sells A$700M v A$700M indicated in 2.75% Nov 2027 bonds; Avg Yield: 3.9797% v 3.9644% prior ; bid-to-cover 4.39x v 3.02x prior.

Looking ahead

- 05:30 (IN) India to sell bonds.

- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L Bonds.

- 06:00 (UK) DMO to sell 1-month, 3-month and 6-month bills.

- 07:30 (IS) Iceland to sell Bonds.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (CA) Canada May Retail Sales M/M: No est v % prior; Retail Sales (ex-auto) M/M: No est v % prior.

- 08:30 (CA) Canada Jun Industrial Product Price M/M: No est v % prior; Raw Materials Price Index M/M: No est v % prior.

- 11:00 (CO) Colombia May Trade Balance: No est v $B prior; Total Imports: No est v $B prior.

- 13:00 (US) Weekly Baker Hughes Rig Count.

- 12:45 (US) Fed's Bostic.