Harris to make her first presidential campaign stop in Milwaukee

EU mid-market update: Market walks a turbulent path between political twists and comments on consumer demand as volume of earnings picks up; Harris to make her first presidential campaign stop in Milwaukee.

Notes/Observations

- Mixed trade across Europe, following a similar Asia session, where India presented 2024 budget with a plethora of tax changes and budget adjustments. World focus remains fixed on US political spotlight, with press reporting that VP Harris has enough support to lead Democrats; Still, no timing has been announced for any US Pres Biden’s nation address this week.

- VP Harris to make first presidential campaign stop in Milwaukee later today and then set to travel to Indianapolis on Wed for a previously scheduled event; Harris’ Presidential Campaign said to have raised over $100M since Sunday.

- EU tech sector was lifted from SAP and Logitech earnings where both raised outlook (after US market close); Meanwhile, chip sector under pressure after NXPI’s outlook.

- Few economic data releases, with focus on Euro Zone advance consumer confidence and US existing home sales at 10:00 ET. Rate decisions expected from Turkey and Hungary at 07:00 and 08:00 ET respectively.

- Upcoming earnings before open: Spotify, UPS, GE Aerospace, GM, Coca-Cola, Lockheed Martin, Comcast, Polaris, Philip Morris.

- Notable earnings after close: Tesla, Alphabet, Enphase, Visa, Texas Instruments, Chubb, Seagate.

- Asia closed mixed with Shanghai Composite underperforming -1.7%. EU indices are -0.1% to +0.6%. US futures are -0.1% to -0.4%. Gold +0.4%, DXY 0.0%; Commodity: Brent +0.2%, WTI +0.2%; Crypto: BTC -0.3%, ETH +0.9%.

Asia

- India Budget 2024: Govt determined to ensure Indians make progress; Raises the tax rate for equity investments held for less than one year from 15% to 20% and for shares held for more than 12 months from 10% to 12.5% - Finance Minister Sitharaman speech.

- Japan considers raising minimum wage to at least ¥1,050/hr (+4.8% y/y) for this Fiscal Year - Japanese press.

- Japan says China has lifted anti-dumping duties on stainless steel - Japanese press.

- Thailand and Japan renew Bilateral FX Swap agreement of up to $3.0B (unchanged).

- Thailand Dep PM: Thailand will not re-criminalize cannabis; To focus instead on medicinal use.

- Taiwan stabilization fund to continue ‘watching markets’ – Taiwan Press.

- Taiwan issues land warning for Typhoon Gaemi - press.

Europe

- ECB's De Guindos (Spain): Sept is a 'more convenient' month for decision making; Reiterates need to be prudent due to uncertainty.

- French Pres Macron calls for a “political truce” during the summer Olympics in Paris; Reportedly Macron may Not appoint a new head of French govt until after the Olympic games end on Aug 11th.

- New leader of UK Conservative Party to be announced on Nov 2nd - UK press.

Americas

- VP Harris has enough pledged delegates (verbal commitments) for Democratic Presidential nomination during the first round of voting, expected between Aug 1st and 7th ahead of DNC - press.

- Democratic National Convention Chair Harrison: If only one candidate reaches 300 delegate threshold, virtual voting could happen as early as Aug 1st; Democratic Party will deliver a Presidential Nominee by Aug 7th - US press.

- Brazil Pres Lula: We will make a budget freeze every time we need it.

Conflict/tensions

- Japan to impose first sanctions against Israeli settlers in West Bank, following moves by US and UK - NHK.

- Reportedly VP Harris is expected to meet with Israeli PM Netanyahu separately from Pres Biden later this week; Biden currently scheduled to meet with Netanyahu on Thursday, July 25th.

Energy

- Australia Fed govt announces new offshore gas exploration permits for domestic east and west coast producers - financial press.

- Reportedly transit of Russian oil from Lukoil to Slovakia and Hungary via Ukraine still has not resumed - press.

Speakers/fixed income/fx/commodities/erratum

Equities

Indices [Stoxx600 +0.01% at 514.80, FTSE -0.13% at 8,188.48, DAX +0.62% at 18,530.85, CAC-40 -0.08% at 7,615.94, IBEX-35 +0.15% at 11,160.33, FTSE MIB +0.20% at 34,686.00, SMI -0.14% at 12,284.05, S&P 500 Futures -0.20%].

Market focal points/key themes: European indices open mixed and took on a downward bias as the session wore on; outperforming sectors include technology and financials; while materials and industrials sectors are among the underperformers; DAX and tech sector supported following SAP’s results; Eni confirms in exclusive talks to sell stake in Enilive; focus on Euro Zone consumer confidence data later in the day; earnings expected in the upcoming US session include Danaher, UPS, General Motors and Avery Denison.

Equities

- Consumer discretionary: Compass Group [CPG.UK] +3.5% (trading update).

- Financials: Sabadell [SAB.ES] -0.5% (earnings; raises outlook).

- Healthcare: Fresenius [FRE.DE] +2.5% (analyst upgrade).

- Industrials: Porsche [P911.DE] -3.5% (cut outlook), Thales [HO.FR] -5.0% (earnings).

- Technology: SAP [SAP.DE] +5.5% (earnings; raises FY25 ambitions), STMicro [STM.FR] -2.0%, ASML [ASML.NL] -0.5% (NXP Semiconductors outlook), Logitech [LOGN.CH] -0.5% (earnings; raises outlook).

- Materials: Akzo Nobel [AKZA.NL] -3.5% (earnings), Givaudan [GIVN.CH] -5.0% (earnings).

Speakers

- ECB's De Guindos (Spain): Sept is a 'more convenient' month for decision making; Reiterates need to be prudent due to uncertainty.

- ECB's Lane (Ireland, chief economist): Newly-developed ECB wage tracker is based on granular data on collective bargaining agreements, allowing the ECB to interpret the latest signals on developments in wages in the euro area and conduct sectoral analysis.

- Czech Central Bank (CNB) Member Kubicek: Still room to cut rates, even after sharp policy easing since last year.

- Philippines Fin Min Recto: Hopes Q2 GDP will grow at 6%; Open to a rate cut as early as Aug - press.

- South Korea Fin Min Choi: Prices may rise in Jul on unusual weather; stabilization may occur after Aug.

- India PM Modi: Budget steps aim to make India defense sector self sufficient - post budget comments.

- (NL) Netherlands July Consumer Confidence: -24 v -23 prior.

- (SG) Singapore Jun CPI M/M: -0.2% v 0.0%e; Y/Y: 2.4% v 2.7%e; CPI Core Y/Y: 2.9% v 3.0%e (slowest since 2022).

- (FI) Finland Jun Unemployment Rate: 8.3% v 10.2% prior.

- (JP) Japan Jun Final Machine Tool Orders Y/Y: 9.7% v 9.7% prelim.

- (DK) Denmark July Consumer Confidence Indicator: -5.4 v -4.4 prior.

- (TR) Turkey July Consumer Confidence: 75.9 v 78.3 prior.

- (ZA) South Africa May Leading Indicator: 111.9 v 113.0 prior.

- (PL) Poland Jun Unemployment Rate: 4.9% v 4.9%e.

- (TW) Taiwan Jun Industrial Production Y/Y: 13.2% v 17.0%e.

Fixed income issuance

- Australia sells total A$100M vs. A$100M indicated in indexed Sep 2030 bonds.

- South Korea sells KRW500B in 20-year bonds: Avg Yield: 3.085%.

- Philippines sells PHP25.0B vs. PHP25.0B indicated in 20-year bonds; Avg Yield: 6.430% v 6.860% prior, bid-to-cover: 1.80x v 1.70x prior.

- Indonesia sells total IDR22.0T vs. IDR22.0T target in bills and bonds.

- DMO sells £1.0B vs. £1.0B indicated in 0.125% Mar Inflation-Linked 2039 Gilts (UKTI); Real Yield: 1.053% v 1.051% prior; Bid-to-cover: 3.08x v 3.16x prior.

Looking ahead

- 05:00 (AT) Austria Debt Agency (AFFA) to sell €2.0B in 3-month and 6-month bills.

- 05:00 (UK) DMO to sell £1.0B in 0.125% Mar 2039 Gilt Linker.

- 05:30 (DE) Germany to sell €5.0B in new Sept 2026 Schatz.

-07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 50.00%.

-08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to cut Base Rate by 25bps to 6.75%.

-08:30 (US) July Philadelphia Fed Non-Manufacturing Activity Regional Index: No est v 2.9 prior.

-10:00 (EU) Euro Zone July Advance Consumer Confidence: -13.5e v -14.0 prior.

-10:00 (US) July Richmond Fed Manufacturing Index: -7e v -10 prior; Business Conditions: No est v -11 prior.

-10:00 (US) Jun Existing Home Sales: 3.99Me v 4.11M prior.

-17:00 (KR) South Korea July Consumer Confidence: No est v 100.9 prior.

-19:00 (AU) Australia July Preliminary Manufacturing PMI: No est v 47.2 prior; Services PMI: No est v 51.2 prior; Composite PMI: No est v 50.7 prior.

-20:30 (JP) Japan July Preliminary Manufacturing PMI: No est v 50.0 prior; Services PMI: No est v 49.4 prior; Composite PMI: No est v 49.7 prior.

-22:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision.