CREDIT OPEN: Cooler heads in evidence as wild week enters home straight
EU stocks look set for modest gains at Friday’s open as markets continue to regain composure following a wild few days.
Helping the tone is the positive Wall Street lead where strong gains for S&P500 (+2.3%) and Nasdaq (+2.87%) came as a drop in jobless claims soothed slowdown worries to leave the indices lower on the week by just 0.51% and 0.69%.
The improved mood on Wall Street got Asian markets off to a good start today although some of the gloss has been coming off towards today’s close. Incredibly though, the Nikkei came within just 0.08% of erasing its entire loss for the week during early trade on Friday. Bulls have a dilemma though given that a firmer or more stable Nikkei seems likely to embolden the BoJ which appeared to blink this week in response to Monday's massive sell-off.
Turning to the day in prospect and data is second tier, and hence won’t be market moving. Overnight, Chinese Jul PPI was unchanged at -0.8% YoY vs the -0.9% f/c while CPI firmed to 0.5% YoY from 0.2% prior vs the 0.3% expected
There are no speakers scheduled today. After hours yesterday, the Fed's Barkin said he was 'pretty optimistic' they will see 'good' inflation in the coming months while Goolsbee is 'a little' uncomfortable moving rates so close to the Presidential election.
Elsewhere, it’s also a slower day for earnings while the rates complex gets a break from supply after Thursday’s USD25bn 30yr bond sale closed out the latest US supply cycle.
For more on latest developments see the European Breakfast Briefing
Friday’s supply prospects
With Thursday seeing the first euro supply of any sort this week, the WTD total stands at just EUR1.5bn. It fell mainly to Coca-Cola to reopen a single currency market with its equally weighted EUR1bn 13yr & 29yr sale which also priced courtesy of symmetrical EUR2.9bn final books, joined on the day by a EUR500m 2yr green FRN from Volkswagen.
Stateside, the week is at USD44.97bn in terms of high grade ex-SSA supply, topping the average estimate of USD37.5bn. That comes as Thursday’s session contributed a further USD6.4bn to follow Wednesday’s 17 deal/37 tranche USD31.80bn tsunami. For more see IGM’s THE ENDGAME
What to watch today
** Key Data: FR 2Q ILO Unemployment Rate (06:30), GE Jul F CPI (07:00), GE Jul F CPI EU Harmonized (07:00), FR 2Q P Wages (07:45), IT Jul F CPI EU Harmonized (09:00), IT Jun Trade Balance Total (10:00)
** Key Events: No key events scheduled for 9th August
** Government Auctions: No major term auctions scheduled for 9th August
** Earnings: 7 Stoxx600 and 1 S&P500 companies release results
All times BST
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