UK wages hits two-year low, German CPI in line, Trump/Harris debate tonight and US CPI tomorrow

Notes/observations

- Mixed UK Jobs Report Unlikely to Affect BOE: July unemployment rate print was in line but 3-month employment change was highest in 22 months, as average weekly earnings dropped more than expected to 4.0%, a 2-year low. Data fails to change expectations for Bank of England (BOE) next week. Sterling is little changed at 1.308 and FTSE100 underperforms Europe.

- EU Commission and Court of Justice Swing the Hammer: Reports noted EU will lower tariffs on Tesla and other EV's imported from China after receiving additional information from the companies, a contrasting move to recent escalating trade war; Separately, EU Court of Justice backtracks on Apple's €13.0B Irish tax bill, declaring company was given illegal aid and must pay; Google lost their court battle to overturn a €2.4B fine.

- Asia closed mixed with Nifty50 outperforming +0.6%. EU indices are -0.6% to +0.1%. US futures are -0.3% to -0.1%. Gold -0.2%, DXY +0.1%; Commodity: Brent -1.2%, WTI -1.4%; Crypto: BTC +3.2%, ETH +1.1%.

Asia

- China Aug Trade Balance: $91.0B v $81.1Be; Exports Y/Y: 8.7% v 6.6%e; Imports Y/Y: 0.5% v 2.5%e (imports hurt by depressed domestic demand).

- Australia Aug NAB Business Confidence: -4 v +1 prior.

- Australia Sept Westpac Consumer Confidence Index: 84.6 v 85.0 prior.

- APRA (Australia regulator) proposes update to bank capital framework to strengthen crisis preparedness. Proposed lenders phase out the use of AT1 bonds.

Global conflict/tensions

- North Korea Leader Kim sought to bolster nuclear capabilities and to bolster military power for readiness to use properly at any given time, specifically to have a presence against the US and outside threats.

Europe

- France Fin Min La Maire stated that the govt could and must meet 2024 budget deficit target of 5.1% GDP.

- France's Budget manager Cazenave stated that French public finances remain worrying.

- UK PM Starmer stated that govt was 'going to have to be unpopular' and stressed that reform was the only way to fix NHS (National Health Service.

- Lords’ economic affairs committee stated that PM Starmer must raise taxes or rein in the state, because not doing so would risk putting Britain “on a path to unsustainable debt” that could trigger Liz Truss-style market crises. New fiscal framework was required that ensured the ratio of public debt to GDP would be lower in five years’ time.

Americas

- US July Consumer Credit: $25.5B v $12.0Be

- US House passed BIOSECURE bill that targets some Chinese biotech firms [the measure had not yet been passed by the Senate].

Energy

NHC: Francine quickly becoming better organized, storm surge and hurricane warnings issued for parts of the Louisiana coast.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.2% at 510, FTSE -0.7% at 8216, DAX -0.4% at 18367, CAC-40 +0.1% at 7430, IBEX-35 +0.1% at 11286, FTSE MIB -0.5% at 3275, SMI +0.2% at 11986, S&P 500 Futures -0.1%].

Market Focal Points/Key Themes: European indices opened modestly lower across the board and remained in a holding pattern ahead of important economic events in the next couple of days; among sectors trending higher are technology and utilities; underperforming sectors include telecom and industrials; software stocks supported following Oracle’s results yesterday; Anglogold Ashanti to acquire Centamin in stock and cash deal; reportedly CVC is in advanced talks to acquire Rovi’s assets; earnings expected in the upcoming US session include GameStop.

Equities

- Consumer discretionary: Interparfums [ITP.FR] -3.5% (H1 results for EU ops); Asos [ASC.UK] -3.0% (analyst downgrade).

- Healthcare: Laboratorios Farmaceuticos Rovi [ROVI.ES] +1.0% (press reports CBC in advanced talks to acquire Rovi assets).

- Industrials: Centamin [CEY.UK] +25.0% (takeover offer from Anglogold Ashanti in $2.5B cash and share deal, trading update); Maersk [MAERSKB.DK] +0.5% (notes risk of US dockworker strike and potential impact on operations).

- Materials: Heidelberg Materials [HEI.DE] -2.0% (analyst downgrade).

- Telecom: Gamma Communications [GAMA.UK] -0.5% (H1 results).

Speakers

- EU said to be poised to make small downward adjustments to the additional tariff rates proposed for electric vehicles imported from China.

- Bank of Korea (BOK) Member noted that conditions for easing were gradually maturing.

- BOJ said to see 'little need' to hike interest rates at next week’s policy decision.

- China Commerce Ministry (MOFCOM) commented on EU NEV tariffs noting that it was challenging to reach a consensus with EU but would keep talks open on issue.

Currencies/fixed income

- USD price action was again sidelined with focus on the upcoming Presidential debate between Trump and Harris. Dealers also focusing on Wed’s release of US CPI data to better gauge the magnitude of Fed’s Sept rate cut.

- UK wage data suggested that inflation was coming back under control but markets continue to believe that the BOE will keep policy steady next week before easing again in Nov. GBP/USD holding around the 1.31 neighborhood.

- EUR/USD drifting lower with focus on Thurs ECB rate decision. Dealers expected ECB to ease policy further later this week. Markets expect communication to remain cautious and non-committal, with no change in the formal language.

- USD/JPY at 143.45 and steady despite reports that BOJ saw 'little need' to hike interest rates at next week’s policy decision.

Economic data

- (NL) Netherlands July Manufacturing Production M/M: -1.1% v +0.4% prior; Y/Y: -4.4% v -5.0% prior; Industrial Sales Y/Y: +5.6% v -5.8% prior.

- (NL) Netherlands Aug CPI M/M: 0.3% v 1.5% prior; Y/Y (final): 3.6% v 3.6% prelim.

- (NL) Netherlands Aug CPI EU Harmonized M/M: 0.4% v 0.4% prelim; Y/Y: 3.3% v 3.3% prelim.

- (FI) Finland July Industrial Production M/M: 1.9% v 3.5% prior; Y/Y: 6.4% v 2.8% prior.

- (DE) Germany Aug Final CPI M/M: -0.1% v -0.1% prelim; Y/Y: 1.9% v 1.9% prelim.

- (DE) Germany Aug CPI EU Harmonized M/M: -0.2% v -0.2% prelim; Y/Y: 2.0% v 2.0% prelim.

- (UK) Aug Jobless Claims Change: +23.7K v +102.3K prior; Claimant Count Rate: 4.7% v 4.6% prior; Payrolled Employees (Monthly Change): -59K v +23Ke.

- (UK) July Average Weekly Earnings 3M/Y: 4.0% v 4.1%e; Weekly Earnings (ex-bonus) 3M/Y: 5.1% v 5.1%e (2-year low).

- (UK) July ILO Unemployment Rate: 4.1% v 4.1%e; Employment Change 3M/3M: +265K v +12Ke.

- (SE) Sweden July GDP Indicator M/M: -0.8% v +0.8% prior; Y/Y: -0.9% v +2.3% prior.

- (SE) Sweden July Private Sector Production M/M: -0.9% v +0.1% prior; Y/Y: -0.7% v 1.2% prior.

- (SE) Sweden July Industrial Orders M/M: -3.9% v +2.7% prior; Y/Y: 0.1% v 1.0% prior.

- (SE) Sweden July Industry Production Value Y/Y: -1.6% v +0.4% prior; Service Production Value Y/Y: 0.3 v 1.3% prior.

- (SE) Sweden July Household Consumption M/M: +0.7% v -0.8% prior; Y/Y: -1.1% v -1.7% prior.

- (NO) Norway Aug CPI M/M: -0.9% v -0.9%e; Y/Y: 2.6% v 2.8%e.

- (NO) Norway Aug CPI Underlying M/M: -0.7% v -0.7%e; Y/Y: 3.2% v 3.2%e.

- (NO) Norway Aug PPI including Oil M/M: 1.9% v 0.1% prior; Y/Y: 3.6% v 6.5% prior.

- (DK) Denmark Aug CPI M/M: -0.4% v +1.1% prior; Y/Y: 1.4% v 1.1% prior.

- (DK) Denmark Aug CPI EU Harmonized M/M: -0.5% v +1.3% prior; Y/Y: 1.4% v 1.0% prior.

- (JP) Japan Aug Preliminary Machine Tool Orders Y/Y: -3.5% v +8.4% prior.

- (HU) Hungary Aug CPI M/M: 0.0% v 0.2%e; Y/Y: 3.4% v 3.6%e.

- (ES) Spain July Industrial Production M/M: -0.4% v -0.2%e; Y/Y: -0.4% v +0.4%e; Industrial Output NSA (unadj) Y/Y: +4.4% v -4.3% prior.

- (AT) Austria July Industrial Production M/M: 1.3% v 0.2% prior; Y/Y: -1.1% v -3.3% prior.

- (CZ) Czech Aug CPI M/M: 0.3% v 0.0%e; Y/Y: 2.2% v 2.0%e.

- (CZ) Czech July Import Price Index Y/Y: 4.7% v 2.9% prior; Export Price Index Y/Y: 5.0% v 2.9% prior.

- (TR) Turkey July Unemployment Rate: 8.8% v 9.2% prior.

- (TR) Turkey July Industrial Production M/M: +0.4% v -2.4% prior; Y/Y: -3.9% v -5.0% prior.

- (IT) Italy July Industrial Production M/M: -0.9% v -0.2%e; Y/Y: -3.3% v -1.8%e; Industrial Production NSA (unadj) Y/Y: +2.8% v -5.6% prior.

- (IS) Iceland Aug Preliminary Trade Balance (ISK): -33.1B v -35.5B prior.

- (GR) Greece July Industrial Production Y/Y: 10.6% v 9.9% prior.

- (GR) Greece Aug CPI Y/Y: % v 2.7% prior; CPI EU Harmonized Y/Y: 3.2% v 3.0% prior.

Fixed income issuance

- (IT) Italy Debt Agency (Tesoro) opened its book to sell new EUR-denominated Oct 2054 BTP bond via syndicate; guidance seen +15bps.

- (EU) European Union opened its book to sell EUR-denominated 2031 and 2050 NGEU bonds via syndicate.

- (NL) Netherlands Debt Agency (DSTA) sold €1.96B vs. €1.0-2.0B indicated range in 0.00% Jan 2052 DSL Bonds; Avg Yield: 2.581% v 2.501% prior.

- (ID) Indonesia sold total IDR8.0T vs. IDR8.0T target in Islamic bills and bonds (sukuk).

- (ES) Spain Debt Agency (Tesoro) sold total €2.133B vs. €1.5-2.5B indicated range in 3-month and 9-month bills.

- (UK) DMO sold £900M in 0.625% Mar 2045 inflation-linked Gilts (UKTi); Real Yield: 1.200% v 1.304% prior; bid-to-cover: 3.44x v 3.88x prior.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:25 (CH) Switzerland to sell 3-month Bills.

- 05:30 (DE) Germany to sell €500M in 2.10% Apr 2029 Green BOBL.

- 05:30 (DE) Germany to sell €500M in 0.0% Aug 2050 Green Bunds.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (BE) Belgium Debt Agency (BDA) to sell combined €3.2B in 3-month and 12-month bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2033, 2038 and 2053 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 06:00 (US) Aug NFIB Small Business Optimism Index: 93.7e v 93.7 prior.

- 06:00 (IL) Israel Aug Consumer Confidence: No est v 51.0 prior.

- 06:00 (FI) Finland to sell €2.0B in 9-month and 12-month bills.

- 06:30 (TR) Turkey to sell Bonds (2 tranches).

- 07:00 (ZA) South Africa July Manufacturing Production M/M: +1.2%e v -0.5% prior; Y/Y: +0.9%e v -5.2% prior.

- 07:00 (CZ) Czech Central Bank to comment on recent CPI data.

- 07:30 (CL) Chile Central Bank Economist Survey.

- 08:00 (IS) Iceland Aug Unemployment Rate: No est v 3.1% prior.

- 08:00 (BR) Brazil Aug IBGE Inflation IPCA M/M: 0.0%e v 0.4% 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).

- 08:30 (UR) Ukraine Q2 GDP Q/Q: No est v 1.2% prior; Y/Y: 4.1%e v 6.5% prior.

- 08:30 (UR) Ukraine Aug CPI M/M: 0.1%e v 0.0% prior; Y/Y: 6.9%e v 5.4% prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 10:30 (CA) Canada to sell 1-month, 3-month, 6-month and 12-month bills.

- 13:00 (US) Treasury to sell 3-Year Notes.

- 16:30 (US) Weekly API Oil Inventories.

- 17:05 (NZ) RBNZ Assistant Gov Silk.

- 18:45 (NZ) New Zealand July Net Migration: No est v 2.7K prior.

- 19:00 (KR) South Korea Aug Unemployment Rate: 2.6%e v 2.5% prior.

- 20:20 (AU) RBA's Hunter.

- 21:00 (US) Harris, Trump Presidential Debate.

- 21:30 (JP) BOJ Board Nakagawa.

- 22:35 (CN) China to sell 1-year and 5-year Bonds.

- 23:00 (KR) South Korea Aug Total Bank Lending to Household (KRW): No est v 1,120T prior.