Asian equity markets are mixed, with Shanghai Composite lagging following disappointing set of China PMI (First contraction in 5months) data while other indices continue to rally on expectations of easy Fed for longer after a particularly soft US advance Q2 GDP on Friday. Fixed income markets are no longer pricing in a rate hike until Sept of 2017 as USD consolidated the Friday selloff in the Asia session. Fed is in damage control as traders flocked to Treasuries after disappointing Friday's Q2 GDP report put validity of FOMC assertions of economy prepared for removal of accommodation into question. New York Fed Pres Dudley - one of the more dovish members - said it is still premature to rule out a hike before the end of 2016, adding the market expectations of 1 hike through 2017 is too complacent. Dudley said he still sees US GDP at about 2% over 18 months even with medium-term risks skewed to the downside. He did acknowledge that aftershocks from Brexit could pose some medium-term risks and that a sizeable economic pickup remains unlikely given softer business investment going into US elections. Investors are still digesting the underwhelming BOJ announcement late last week that only expanded ETF program rather than cutting rates deeper and adding to annual asset purchases. Given the rally in financials that have been struggling under negative rate environment, there is a wide range of views whether this was appropriate policy and also what the BOJ will deliver at the Sept meeting after it reviews economic conditions. Nomura argues that Sept meeting could feature changes of how the easing program is structured and may potentially start to target specific level of JGBs rather than the pace of buying, while Barclays claims that while there is some benefits to ETF buying, it will not produce immediate benefits in terms of sparking more inflation. PM Abe's advisor Hamada recommends that Japan acknowledges it is already monetizing its debt and proceed with an aggressive joint monetary/fiscal program.
Nikkei +0.36% Hang Seng +1.46% CSI -0.92% Shanghai -1.05%
Eur$ 1.1172 CNH 6.6347 CNY 6.6342 GBP 1.3245 CHF 0.9694 RUB 66.0993 WTI $ 41.81 (+0.50%)
S&P +0.40% Eurostoxx +1.34% Dax +1.14% SMI +0.55%
Macro :
- All European Banks Except One Pass Stress Test, Citigroup Says
- Renzi Says Italy Fund Solves Bank Bad-Loan Issues: Repubblica
- Clinton Leads Trump After Dem. Convention: Reuters/Ipsos Poll
- Paschi Fix ‘Awkward’ to Roll Out to All Italian Banks: Barclays
- Dombret Says German Banks Must Change Business Models: Bild
- Deficit Fine Would Have Humiliated Spain, Moscovici Tells Pais
- Qatari Diar Delays Part of Chelsea Barracks Project: S. Times
- EU Banks Won’t Need to Set Up U.K. Subsidiaries Post-Brexit: FT
Keep an eye on :
- A2A IM : A2A, Montenegro Sign New Shareholder Agreement for Utility EPCG
- AC FP : AccorHotels Seeks to Boost Brazilian Hotels by 2/3 in 4 Yrs: FT
- AIR FP : Airbus to Keep Working With India After Tanker Tender Is Dropped
- AF FP : Air France to Fly More Than 80% of Monday Services Amid Strike
- AI FP : Air Liquide 1H Operating Income Recurring Misses Estimates
- AAL LN : Anglo American Set to ‘Unbundle’ Kumba, CEO Tells Telegraph
- BKIR LN : Bank of Ireland Says Capital Level Is ‘Strong’ After Stress Test
- BCP PL : Banco Comercial Says Had ‘Strong’ Results in ECB Stress Tests
- BCP PL : Fosun Says BCP Investment to Extend Business in Europe, Africa
- POP IM : Banco Popolare Solid Under Stress Test: CEO to Messaggero:
- BBVA SM : BBVA to Work With ECB on Capital Planning
- BMPS IM : Paschi’s Tononi Says ECB Gave Key Support for New Plan: Corriere
- BMPS IM : Paschi Approves Sale of EU27.7b Gross NPLs at 33% Value: Stampa
- BMPS IM : Paschi Plan Execution Risk Not Very Low But Manageable: CEO
- BMPS IM : EU: Monte Paschi Capital-Raising Plan Fully in Line With Rules
- CABK SM : CaixaBank FL CET1 8.5% in Stress Test, Bank Says
- DBK GY : Deutsche Bank Can Build Up Capital Organically, Lewis Tells FAS
- EDF FP : Hinkley Point presents cost and security issues
- FGR FP : France’s Hollande Seeks Further Investment in Autoroutes: Figaro
- ENI IM : Talks on Mozambique at Very Advanced Stage: Eni CEO to MF
- EZJ LN : EasyJet’s Amsterdam-Based Pilots to Strike on Monday Morning
- FRA GY : Fraport Sells Thalita Stake to Qatar Investment Authority
- GKP LN : Gulf Keystone Won’t Engage With DNO After Takeout Offer
- GS US : U.S. Issued Subpoenas to Goldman Sachs for 1MDB Documents: WSJ
- ISAT LN : Inmarsat in Takeover Approach for Avanti: Sky
- ISP IM : Intesa Strongest Among Europe Big Banks in Stress Test: CEO
- ISP IM : Intesa Not Interested in Paschi Even After Clean-Up: Messaggero
- IPN FP : Ipsen Says FDA Approves Dysport for Treatment of PLL
- LR FP : Legrand Keeps 2016 Outlook; 1H Adjusted Operating Profit Grows
- LSE LN : Deutsche Boerse's proposed merger receives 63.65% acceptances from Deutsche Boerse shareholders
- MFON LI : MegaFon Mulls Buying ER-Telecom Fixed-Line Carrier: Vedomosti
- MRW LN : Morrisons Announces Price Cuts; Cites Brexit Concern
- MOR GY : Morphosys Posts 1H Loss, Sees 2016 Ebit Loss; Sticks to Outlook
- NATZ IM : Natuzzi Says It Cut 355 Jobs
- PARG SW : Pargesa 1H Net Loss CHF361.2m Vs Net Income CHF398.6m Y/y
- PARRO FP : Parrot 2Q Loss Widens, Sees ‘Significant Upturn’ for 3Q Sales
- UG FP : French July Car, Light-Vehicle Registrations -7.7%, CCFA Says
- PUB FP : Publicis Says Saatchi & Saatchi Chairman Roberts Put on Leave
- RNO FP : Nissan takes on European premium rivals with Infiniti brand
- RNO FP : French July Car, Light-Vehicle Registrations -7.7%, CCFA Says
- SK FP : SEB CEO Says Double-Digit Growth Continues in China: Investir
- SREN VX : Natural disasters weigh on Swiss Re
- STAN LN : Hedge funds sue StanChart over Indian bonds
- TEL NO : Vimpelcom shareholder Telenor plans to sell 33% stake on LSE eyeing no less than USD 2.3bn; hires advisors
- TSLA US : Tesla, SolarCity Said to Announce Merger Monday: Reuters
- TUI LN : TUI CEO Says Won’t Cut U.K. Prices After Brexit: Euro Am Sonntag
- UBI IM : Italy Banks to Benefit From Paschi Plan Success: UBI CEO to Sole
- UBER IPO : Uber Is Said to Merge China Business With Didi in $35b Deal
- UCG IM : UniCredit to Work With SSM to See If More Cap Measures Needed
- UCG IM : Caltagirone Doesn’t Exclude Increasing UniCredit Stake: Stampa
- VIE FP : Veolia 1H Sales In Line, Net Falls 29%; Confirms 2016 Targets
- VIE FP : Caisse des Depots to Buy 20% of Transdev from Veolia for EU220m
- DG FP : France’s Hollande Seeks Further Investment in Autoroutes: Figaro
- VIV FP : Vivendi Never Considered Mediaset Takeover: CEO to Corriere
- VIV FP : Vivendi warns Mediaset of “other plans”
- VIV FP : Vivendi CEO Says Mediaset Not the Only Possible Partner: Echos
- VOD LN : EU Said Set to Approve Liberty/Vodafone Dutch Ops Deal: Reuters
- VOW3 GY : Volkswagen to Respond to $176M Washington Fine in Due Time: FAZ
- VOW3 GY : VW Unit Skoda to Consider U.S. Entry in 2017: Handelsblatt