TradeTheNews.com Staff
TradeTheNews.com
Notes/observations
- European equities fade slightly and US dollar is flat ahead of US CPI at 08:30 ET, the main catalyst of the session. Inflation secondary part of Fed mandate right now, with larger focus on jobs data. However, concerns persist for any potential resurgence in inflation. Ahead of Nov 7th Fed decision (just after election), CME futures price 80% chance of 25bps rate cut and 20% of pause. Overnight, Fed’s Daly said she sees one or two more additional rate cuts this year.
- Hurricane Milton made landfall in Florida, with a last-minute drop in severity down to Cat 3 and redirection marginally to the south. Insurance bond market feels reprieve as insurers in Europe trade higher.
- Highly anticipated Tesla ‘Robotaxi’ event scheduled later today. Speculation over a Tesla taxi that has no steering wheel or pedals and is fully automated. Some analysts are expecting a collaboration with a major food delivery company, potentially Uber or McDonalds.
- Another presentation expected today is AMD’s ‘Advancing AI 2024’ Event, where AMD’s Chair and CEO Lisa Su set to discuss AMD next-gen products.
- Worth noting Germany Retail Sales data returned for first time since May, notching 1.6% MoM and 2.4% YoY.
- Asia closed mixed with Hang Seng outperforming +3.0%. EU indices are -0.4% to +0.1%. US futures are -0.1% to -0.2%. Gold +0.3%, DXY 0.0%; Commodity: Brent +1.1%, WTI +1.3%; Crypto: BTC -2.1%, ETH -2.0%.
Asia:
- Japan Sept PPI (domestic CGPI) M/M: 0.0% v -0.3%e; Y/Y: 2.8% v 2.3%e.
- Japan Sept Bank Lending Y/Y: 2.7% v 3.0% prior; Bank Lending (ex-trusts) Y/Y: 3.1% v 3.3% prior.
- Australia Oct Consumer Inflation Expectation: 4.0% v 4.4% prior.
- China PBOC confirmed to set up Securities, Funds, Insurance company swap facility of CNY500B (**Reminder on Sept 24th China PBOC, SCRC and NFRA (China’s top 3 financial regulators) briefing stated to plan at least CNY500B of liquidity support related to equities).
Global conflict/tensions
- White House Press Sec stated that President Biden and Netanyahu spoke for 30 minutes, had a direct and productive talk. Reports circulated that US Officials know neither the timing nor nature of Israel strike against Iran.
- Israel defense Min stated that its retaliation against Iran would be deadly, precise and above all surprising.
Europe
- UK Sept RICS House Price Balance: 11% v 10%e.
Americas
- Hurricane Milton made landfall in Florida as a Category 3 storm; Tampa Bay avoids a direct hit.
- FOMC Sept Minutes noted that some members would have preferred a 25bps cut; almost all members saw lower inflation risks but higher risks to the labor market.
- Fed’s Daly (voter): Fully supported the 50bp rate cut; One or two additional rate cuts likely this year.
- Fed's Collins (non-voter for 2024; voter for 2025): Reiterates support for additional rate cuts.
- Trump pledged to end double taxation for expat Americans.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 -0.17% at 519.16, FTSE -0.08% at 8,236.91, DAX -0.32% at 19,196.35, CAC-40 -0.28% at 7,538.97, IBEX-35 -1.05% at 11,618.00, FTSE MIB +0.14% at 33,981.00, SMI +0.11% at 12,119.92, S&P 500 Futures -0.19%].
Market focal points/key themes: European indices opened mixed but took on a negative bias through the early part of the session; loss of risk appetite despite increased expectations of faster monetary policy easing as investors weigh signs of sluggish growth; among sectors managing gains are financials and industrial; sectors pulling lower include technology and consumer discretionary; reportedly Italian government sell 13.5% stake in Poste Italiane; reportedly Score to acquire Humensis from Albin Michel; focus on release of ECB minutes and Tesla to present its robotaxi later in the day; earnings expected in the upcoming US session include Delta Airlines.
Equities
- Consumer discretionary: Delivery Hero [DHER.DE] -1.5% (Stifel initiates at buy, Tesla Robotaxi event later today), Centaur Media [CAU.UK] -23.0% (trading update), Ryanair [RYA.IE] -1.0% (Oddo cuts to underperform), About You [YOU.DE] -1.0% (Q2 results, strong start to fall/winter) - Consumer staples: Suedzucker [SZU.DE] -1.0% (final H1 results, affirms guidance) - Telecom: Deutsche Telekom [DTE.DE] +1.5% (plans €2.0B buybacks, increased div and mid-term targets at CMD) - Financials: Lancashire [LRE.UK] +3.0%, Hiscox [HSX.UK] +1.5%, Beazley [BEZ.UK] +1.5% (Hurricane Milton impact on natural catastrophe insurance being assessed as Milton moving through Florida) - Healthcare: GSK [GSK.UK] +5.5% (93% of US Zantac cases will be resolved for up to $2.2B; Expects to recognize an incremental charge in its Q3 Results for FY24 of £1.8B ($2.3B)), Basilea [BSLN.CH] +1.5% ($1.25M milestone payment triggered for Cresemba) - Industrials: Mercedes-Benz [MBG.DE] -0.5% (vehicle sales).
- Materials: Givaudan [GIVN.CH] +1.0% (earnings).
Speakers
- Sweden Central Bank (Riksbank) Gov Thedeen stated that Inflation had stabilized close to target and that conditions now in place for economic recovery and a rise in real wages.
- Hungary Central Bank Dep Gov Virag stated that recent developments had shifted bias towards pausing rate cut cycle.
- South Africa Central Bank (SARB) Gov Kganyago stated that GDP 'probably' rebounded in Q3 as consumers had renewed confidence in economy.
- BOJ's Dep Gov Himino stated that would adjust policy and raise rates if economic outlook was realized but not on a pre-set course on rate path.
- China State Planner NDRC presented draft guidelines on private economy promotion law; targets ensuring fair competition for private firms in law.
Currencies/fixed income
- USD retraced a bit from its recent multi-week high against major pairs ahead of the highly anticipated Sept CPI reading. Greenback hit a 2-month high after FOMC Sept minutes showed policymakers were split in the decision to cut interest rates by 50 basis points.
- EUR/USD at 1.0935 as market participants now see the Fed cutting rates less than the ECB by year-end.
- USD/JPY back above the 149 level with pair supported by higher USD yields. The 155 area remains pivotal resistance.
- GBP/USD staying below the 1.31 area. Policy divergence on pace of rate cuts aiding the USD.
Economic data
- (NL) Netherlands Aug Manufacturing Production M/M: +2.1% v -0.8% prior; Y/Y: -0.5% v -4.3% prior; Industrial Sales Y/Y: -4.0% v 6.5% prior.
- (FI) Finland Aug Industrial Production M/M: -0.9% v +1.9% prior; Y/Y: 2.6% v 6.1% prior.
- (DE) Germany Aug Retail Sales M/M: 1.6%; Y/Y: 2.4%.
- (SE) Sweden Aug GDP Indicator M/M: 1.1% v 0.5%e; Y/Y: 0.7% v -1.1% prior.
- (SE) Sweden Aug Private Sector Production M/M: +1.6% v -0.9% prior; Y/Y: +1.1% v -1.0% prior.
- (SE) Sweden Aug Industrial Orders M/M: +5.1% v -3.4% prior; Y/Y: +4.0% v -0.3% prior.
- (SE) Sweden Aug Industry Production Value Y/Y: -3.2% v -2.0% prior; Service Production Value Y/Y: +2.0% v -0.2% prior.
- (SE) Sweden Aug Household Consumption M/M: 0.8% v 1.2% prior; Y/Y: +0.1% v -1.0% prior.
- (NO) Norway Sept CPI M/M: 0.3% v 0.5%e; Y/Y: 3.0% v 3.2%e.
- (NO) Norway CPI Underlying M/M: 0.3% v 0.4%e; Y/Y: 3.1% v 3.2%e.
- (DK) Denmark Sept CPI M/M: -0.3% v -0.4% prior; Y/Y: 1.3% v 1.4% prior.
- (DK) Denmark Sept CPI EU Harmonized M/M: -0.4% v -0.5% prior; Y/Y: 1.2% v 1.4% prior.
- (RO) Romania Q2 Final GDP (3rd reading) Q/Q: 0.3% v 0.1% prelim; Y/Y: 0.9% v 0.8% prelim.
- (HU) Hungary Sept CPI M/M: -0.1% v 0.0%e; Y/Y: 3.0% v 3.1%e.
- (AT) Austria Aug Industrial Production M/M: -0.8% v +1.0% prior; Y/Y: -2.5% v -1.5% prior.
- (CZ) Czech Sept CPI M/M: -0.4% v -0.5%e; Y/Y: 2.6% v 2.4%e.
- (CZ) Czech Aug Import Price Index Y/Y: 3.1% v 4.7% prior; Export Price Index Y/Y: 4.0% v 5.0% prior.
- (TR) Turkey Aug Unemployment Rate: 8.5% v 8.8% prior.
- (TR) Turkey Aug Industrial Production M/M: -1.6% v +0.3% prior; Y/Y: -5.3% v -2.0%e.
- (IT) Italy Aug Industrial Production M/M: 0.1% v 0.2%e; Y/Y: -3.2% v -3.1%e; Industrial Production (unadj) NSA Y/Y: -6.1% v +2.8% prior.
- (GR) Greece Aug Industrial Production Y/Y: 3.1% v 9.9% prior.
- (GR) Greece Sept CPI Y/Y: 2.9% v 3.0% prior; CPI EU Harmonized Y/Y: 3.1% v 3.2% prior.
Fixed income issuance
- (IT) Italy Debt Agency (Tesoro) sold €7.5B vs. €7.5B indicated in 12-month bills; Avg Yield: 2.859% v 2.892% prior; Bid-to-cover: 1.54x v 1.52x prior.
Looking ahead
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (ZA) South Africa Aug Total Mining Production M/M: No est v -0.9% prior; Y/Y: -1.3%e v -1.4% prior; Gold Production Y/Y: No est v -3.5% prior; Platinum Production Y/Y: No est v -0.8% prior.
- 05:30 (CH) Swiss National Bank to sell 1-month and 12-month bills.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.
- 05:40 (UK) BOE 7-day Short-term Repo operation.
- 06:00 (IE) Ireland Sept CPI M/M: No est v 0.1% prior; Y/Y: No est v 1.7% prior.
- 06:00 (IE) Ireland Sept CPI EU Harmonized M/M: No est v 0.1% prior; Y/Y (final): No est v 0.2% prelim.
- 06:00 (PT) Portugal Aug Trade Balance: No est v -€2.1B prior.
- 06:00 (PT) Portugal Sept Final CPI M/M: No est v 1.3% prelim; Y/Y: 2.1%e v 2.1% prelim.
- 06:00 (PT) Portugal Sept CPI EU Harmonized M/M: No est v 1.6% prelim; Y/Y: No est v 2.6% prelim.
- 06:00 (RO) Romania to sell 7.1 % July 2034 bonds.
- 07:00 (ZA) South Africa Aug Manufacturing Production M/M: 0.2%e v 2.1% prior; Y/Y: 0.1%e v 1.7% prior.
- 07:00 (CZ) Czech Central Bank to comment on recent release of CPI data.
- 07:30 (EU) ECB Sept Meeting Account (Minutes).
- 07:30 (CL) Chile Central Bank Economist Survey.
- 08:00 (BR) Brazil Aug Retail Sales M/M: -0.6%e v +0.6% prior; Y/Y: 4.2%e v 4.4% prior.
- 08:00 (BR) Brazil Aug Broad Retail Sales M/M: 0.2%e v 0.1% prior; Y/Y: 4.2%e v 7.2% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Sept CPI M/M: 0.1%e v 0.2% prior; Y/Y: 2.3%e v 2.5% prior.
- 08:30 (US) Sept CPI (ex-food/energy) M/M: 0.2%e v 0.3% prior; Y/Y: 3.2%e v 3.2% prior.
- 08:30 (US) Sept CPI Index NSA: 314.884e v 314.796 prior; CPI Core Index: No est v 319.768 prior.
- 08:30 (US) Sept Real Avg Hourly Earning Y/Y: No est v 1.3% prior; Real Avg Weekly Earnings Y/Y: No est v 0.9% prior.
- 08:30 (US) Initial Jobless Claims: 230Ke v 225K prior; Continuing Claims: 1.83Me v 1.826M prior.
- 08:30 (UR) Ukraine Sept CPI M/M: 1.3%e v 0.6% prior; Y/Y: 8.1%e v 7.5% prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 09:00 (RU) Russia Gold and Forex Reserve w/e Oct 4th: No est v $633.6B prior.
- 10:30 (US) Weekly EIA Natural Gas Inventories.
- 10:30 (US) Fed’s Barkin.
- 11:00 (MX) Mexico Central Bank (Banxico) Sept Minutes.
- 11:00 (US) Fed’s Williams.
- 11:30 (CH) SNB’s Martin.
- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.
- 12:00 (CA) Canada to sell 2-year Bonds.
- 13:00 (US) Treasury to sell 30-Year Bond Reopening.
- 15:00 (AR) Argentina Sept National CPI M/M: 3.6%e v 4.2% prior; Y/Y: 209.3%e v 236.7% prior.
- 17:30 (NZ) New Zealand Sept Manufacturing PMI: No est v 45.8 prior.
- 17:30 (NZ) New Zealand Sept Food Prices M/M: No est v 0.2% prior.
- 17:30 (NZ) New Zealand Aug Net Migration: No est v 3.0K prior.
- 19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to cut Reference Rate by 25bps to 5.00%.
- 19:50 (JP) Japan Sept M3 Money Supply Y/Y: No est v 0.9% prior; M2 Money Supply Y/Y: No est v 1.3% prior.
- 21:00 (KR) Bank of Korea (BOK) Interest Rate Decision: Expected to cut 7-day Repo Rate by 25bps to 3.25%.
- 21:10 (JP) BOJ Outright Bond Purchase Operation.
- 22:35 (CN) China to sell 30-year Special Bonds; Avg Yield: 2.190% prior (Sept 23rd 2024).
- 23:30 (JP) Japan to sell 3-Month Bills.
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