European Inflation Remains Above ECB Target

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Notes / Observations

  • German July inflation is rising but analysts cite an increase mainly due to base effects; Spain is currently stable at 2.7%.
  • Focus on US Q2 GDP data
  • Day of corporate income. Companies to report on during the NY morning include Albertson, Alliance Data, AGCO, American Tower, Baxter International, Peabody Energy, Carrier, Carlyle Group, Comcast, Citrix Systems, Flex Ltd, Hilton Worldwide, Hershey, IntercontinentalExchange, International Paper, KBR, Keurig DR Pepper, Laboratory Corp, MasterCard, Altria Group, Merck, Northrop Grumman, NetScout, Oshkosh, Overstock, PG&E, Radware, Sally Beauty, S&P Global, MolsonCoors, Tempur Sealy, LendingTree, Textron, Valero Energy, YUM! Brands.

Asia

  • The China Regulatory Commission (CSRC) has recently met with global financial companies, indicating that they will consider impact on markets when making new policies.
  • China has said it will allow Chinese companies to continue to have U.S. IPOs.

Crown virus

  • New data shows that effectiveness of Pfizer / BioNTech Covid vaccine has dropped from 96% to 84% after six months. Data could reinforce Pfizer’s case that a third acceleration shot is needed.

Americas

  • The FOMC has kept its policy steady, but has stated that it has progressed toward targets since the limitation of decline. A committee will continue to assess progress in future meetings.
  • Senate voted 67-32 to promote the bipartisan infrastructure bill with more than a dozen Republicans voting yes to move forward with debate. A final passage remained uncertain, as Republicans would demand amending votes and contributions to the bill and again face a 60-vote hurdle to close a debate.

Speakers / Fixed / FX / Commodities / Erratum

Shares

  • Indexes [Stoxx600 +0.37% at 463.40, FTSE +0.71% at 7,066.55, DAX +0.19% at 15,600.25, CAC-40 +0.75% at 6,658.83, IBEX-35 +0.74% at 8,798.00, FTSE MIB +0.55% at 25,401.50, SMI +0.13% at 12,088.97, S&P 500 Futures +0.12%].
  • Market Focus Points / Key Issues: European indices open higher across the board (a notable exception BEL20, dragged by Orange, AB InBev), and remained positive as the session progressed; sectors leading to supremacy include energy and materials; while sectors prone to the downside include discrete consumers and real estate; an avalanche of results dominates a market reaction; Charles Stanley will acquire Raymond James; focus on U.S. GDP figures later today and also on minutes of ECB; revenues expected during the next US session include KBR, Cenovus, Leonardo and Xcel.

Shares

  • Consumer free: Danone [BN.FR] + 6% (revenue), Nestle [NESN.CH] -1% (income).
  • Commercial commodities: AB InBev [ABI.BE] -5% (income).
  • Energy: Royal Dutch Shell [RDSA.NL] + 3% (revenue), TotalEnergies [FP.FR] + 2% (income).
  • Finances: Lloyds Banking Group [LLOY.UK] + 1% (income), Credit Suisse [CSGN.CH] -3.5% (income).
  • Treatment: Astrazine [AZN.UK] + 1% (revenue), Sanofi [SAN.FR] + 1.5% (income).
  • Industrial: Airbus [AIR.FR] + 4% (revenue), Volkswagen [VOW3.DE] + 1% (income).
  • Technology: STMicroelectronics [STM.FR] + 3% (income).
  • Telecommunications: Nokia [NOKIA.FI] + 7% (income), Orange [ORA.FR] -3% (income).

Speakers

  • The ECB’s Panetta (Italy) reiterated a Council stance that will not raise interest rates until convinced inflation could stabilize at the 2% target in the medium term. Repeated stance that risks of high inflation and overheating were limited. He reiterated that both fiscal and monetary policy need to support the EU economy.
  • Kazakhs of ECB (Latvia) stated that if economy is surprised, it could move faster than currently forecast.
  • Gov Kavcioglu of Turkey Central Bank (CBRT) stated that it is important to maintain a tight monetary policy; not enough on its own to reduce inflation. Current tense stance must be maintained decisively and reiterated stance that political rate outweighs inflation. Fluctuations in inflation will be temporary. Q2 GDP will be very high due to base effects.
  • Turkey’s Central Bank (CBRT) Quarterly Inflation Report (QIR) has raised the end-of-year 2021 inflation forecast from 9.4% to 12.4% and also raised 2022 inflation from 7.0% to 7.5%.
  • Chinese Ministry of Finance (MOF): Eliminate steel product tax rebates for 23 items, confirmed to raise export tariffs for some steel products from August 1.

Currencies / Fixed income

  • USD was softer after the Fed acknowledged progress on tight conditions, but added that it still has some way to go. Markets is now looking at Aug Jackson Hole’s symposium meeting for clarity. USD weakness attributed to the Fed cautious stance.
  • Greenback has also eased after some easing of fearsome Chinese markets that have hampered the demand for safe havens.
  • EUR / USD approaching the 1.19 quarter as various German state inflation data. Analysts note that Eurozone inflation will rise more than many expect in the second half (according to the ECB’s view).
  • GBP / USD at 1-month high as the pair approached the 1.3970 level in the session. Optimism about the recent decline in cases of British coronavirus aiding sensation.

Economic data

  • (DE) Germany July CPI North Rhine-Westphalia M / M: 0.8% v 0.5% previous; J / J: 4.1% versus 2.5% previously.
  • (ZA) South Africa Jun M3 Monetary Supply J / J: 0.1% v 2.0% e; Private Sector Credit J / J: -0.5% v + 0.4% e.
  • (FR) France Jun PPI M / M: 1.1% v 0.4% previous; J / J: 7.5% versus 7.2% previously.
  • (ES) Spain July Preparatory CPI M / M: -0.7% v -0.6% e; J / D: 2.9% v 2.7% e.
  • (ES) Spain July Preparatory CPI EU Harmonized M / M: -1.2% v -1.2% e; J / J: 2.9% v 2.9% e.
  • (ES) Spain Q2 Unemployment Rate: 15.3% v 15.1% e.
  • (SE) Sweden July Consumer Confidence: 106.5 v 109.3 previous; Factory Confidence: 129.2 v 125.1 previous; Economic Trend Survey: 122.4 v 119.8 previous.
  • (TR) Turkey July Economic Confidence: 100.1 v 97.8 previous.
  • (SE) Sweden Q2 GDP Indicator T / T: 0.9% v 0.7% e; Y / Y: 10.0% v 0.0% previous.
  • (SE) Sweden Jun GDP Indicator M / M: 2.5% v 0.4% previous; J / J: 10.5% versus 10.2% previously.
  • (SE) Sweden Jun Unemployment Rate: 10.3% versus 9.8% before; Unemployment Rate (seasonally adj): 9.5% v 9.1% previous; Trend Unemployment Rate: 9.2% versus 9.1% before.
  • (DE) Germany July Online Unemployment Change: -91.0K v -29.0Ke; Unemployment Claim Index: 5.7% v 5.8% e.
  • (DE) Germany July CPI Brandenburg M / M: 1.0% v 0.5% previous; J / J: 4.3% v2.4% previous.
  • (DE) Germany July CPI Hesse M / M: 0.8% v 0.3% previous; J / J: 3.4% versus 2.2% previously.
  • (DE) Germany July CPI Bavaria M / M: 0.9% v 0.4% previous; J / J: 3.8% v 2.4% previous.
  • (DE) Germany July CPI Baden Wuerttemberg M / M: 0.8% v 0.4% previous; J / J: 3.4% versus 2.4% previously.
  • (IT) Italy Jun Hourly Wage M / M: 0.2% v 0.0% previous; Y / Y: 0.6% v 0.6% previous.
  • (UK) Jun Net Consumer Credit: £ 0.3B versus £ 0.5B; Online Lending: £ 17.9 B versus £ 7.0 £ Be.
  • (UK) Youth Mortgage Approvals: 81.3K v 84.5Ke.
  • (UK) Jun M4 Money Supply M / M: 0.5% v 0.5% previous; J / J: 6.9% versus 7.4% previously; M4 (ex-IOFC-aged: 5.9% versus 4.7% previous.
  • (PT) Portugal Consumer Index for July: -14.1 v -14.2 previous; Economic Climate Indicator: 1.8 v 1.6 previous.
  • (EU) Eurozone July Economic Confidence: 119.0 v 118.2e; Industrial Confidence: 14.6v 13.0e; Service Confidence: 19.3 v 19.3e; Consumer Confidence (final): -4.4 v -4.4 advance.
  • (DE) Germany July CPI Saxony M / M: 1.0% v 0.3% previous; J / J: 3.7% versus 2.1% previously.
  • (IT) Italy Jun PPI M / M: 1.7% v 1.3% previous; J / J: 11.0% versus 10.0% previously.
  • (BE) Belgium Q2 Preparatory GDP Q / Q: 1.4% v 1.1% previous; J / J: 14.5.% V -0.5% before.

Fixed income edition

  • (DK) Denmark sold a total of DKK4.0B in monthly, 3-month, 6-month and 9-month invoices.
  • (IT) Italian Debt Agency (Treasury) sold a total of € 7.5B against € 6.5-7.5B indicated in 5-year and 10-year BTP Bonds.
  • Sold € 4.5B versus € 4.0-4.5B indicated range in 0.00% Apr 2026 BTP bonds; Average Yield: 0.02% v 0.12% previous; Cover: 1.29xv 1.37x previous (30th June 2021).
  • Sold € 3.0B versus € 2.5-3.0B indicated range in 0.95% Dec 2031 BTP; Average Yield: 0.66% v 0.81% previous; offered to cover: 1.33xv 1.57x front.
  • (IT) Italian Debt Agency (Treasury) sold € 1.25B against € 0.75-1.25B indicated range in 0.65% Apr 2029 Floating Tax Note (CCTeu); Average Yield: 0.05%; offer cover: 1.86x.

Looking ahead

  • (BE) Belgium July CPI M / M: Not est v 0.2% previous; Y / Y: Not up 1.6% ago.
  • 05:25 (EU) Daily ECB liquidity statistics.
  • 05:30 (ZA) South Africa Jun PPI M / M: 0.4% ev 0.4% previous; J / J: 7.3% versus 7.4%.
  • 05:30 (HU) Hungarian Debt Agency (AKK) to sell bonds.
  • 06:00 (CA) Canada July CFIB Business Barometer: There is no v 70.1 previous.
  • 06:00 (PT) Portugal Jun Retail Sales M / M: Not est v 3.9% previous; Y / Y: Not before 16.1%.
  • 06:45 (USA) Daily Book Repair.
  • 07:00 (BR) Brazil July FGV Inflation IGPM M / M: 0.9% ev 0.6% previous; J / J: 34.0% ev 35.8% previous.
  • 07:30 (IS) Iceland will sell 3-month, 6-month and 9-month Bills.
  • 08:00 (DE) Germany July Preparatory CPI M / M: 0.6% ev 0.4% previous; J / J: 3.2% before 2.3% before.
  • 08:00 (DE) Germany July Preparatory CPI EU Harmonized M / M: 0.4% ev 0.4% previous; J / J: 2.9% versus 2.1%.
  • 08:30 (US) Q2 Previous GDP year (first reading) T / T: 8.5% ev 6.4% previous; Personal Consumption: 10.5% ev 11.4% before.
  • 08:30 (United States) Q2 Previous GDP Price Index: 5.4% ev 4.3% previous; Core PCE Q / Q: 6.1% ev 2.5% previous.
  • 08:30 (US) Initial Unemployment Claims: 385Ke v 419K previous; Ongoing Claims: 3.199Me v 3.236M prior.
  • 08:30 (USA) Weekly USDA Net Export Sales.
  • 09:00 (RU) Russian Gold and Forex Reserve with July 23: None before $ 597.4B.
  • 10:00 (USA) Jun Pending Home Sales M / M: 0.5% ev 8.0% previous; J / J: -3.3% ev + 13.9% before.
  • 10:30 (US) Weekly Inventories of EIA Natural Gases.
  • 11:30 (USA) Treasury will sell 4-Week and 8-Week Invoices.
  • 13:00 (USA) Treasury will sell 7-year Tickets.
  • (AR) Index of Consumer of Argentina of Julio in Argentina: It is not v 34.6 previous.
  • 17:00 (KR) South Korean Aug Trade Factory Survey: Not est v 99 prior; Business Non-Factory Survey: There is no v 82 previous.
  • 18:00 (NZ) New Zealand July Consumer Index: Not v 114.1 previous.
  • 18:45 (NZ) New Zealand Jun Building Permits M / M: Not up -2.8% ago.
  • 19:00 (KR) South Korea Jun Industrial Production M / M: + 1.5% ev -0.7% before; J / J: 9.6% before 15.6% before.
  • 19:01 (UK) July India Barometer Lloyds: Not before 33%.
  • 19:30 (JP) Japan Youth Employment Rate: 3.0% ev 3.0% before; Proportion of Demand to Applicant: 1.10ev 1.09 previous.
  • 19:50 (JP) Japan Jun Preparatory Industrial Production M / M: + 5.0% ev -6.5% before; J / J: 20.7% and 21.1% before.
  • 19:50 (JP) Japan Youth Retail Sales M / M: + 2.7% ev -0.3% previously (revised by -0.4%; Y / Y: 0.2% ev 8.3% previous (revised by 8.2%).
  • 19:50 (JP) Japanese Jun Dependent Shop, Supermarket Sales J / J: 0.5% ev 5.7% before.
  • 21:30 (AU) Australian Youth Private Sector Credit M / M: 0.4% ev 0.4% previous; Y / Y: 2.4% versus 1.9%.
  • 21:30 (AU) Australia Q2 PPI M / M: No est v 0.4% previous; Y / Y: Not before 0.2%.
  • 22:00 (SG) Singapore Jun M2 Money Supply Y / Y: Not ahead of 7.0%; M1 Money Supply Y / Y: Not before 16.5%.
  • 22:00 (SG) Singapore Jun Foreign-Currency Deposits (SGD): Not before 770.4B.
  • 23:30 (JP) Japan will sell 3-Month Bills.

Source

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