CREDIT OPEN: Earnings in the driving seat
For clues on what will drive markets and sentiment today, one need look no further than earnings where a whopping 45 Stoxx600 & 42 S&P500 firms are updating investors over the course of the day.
Grabbing attention overnight, and helping to pull US index futures lower were some disappointing after hours updates from big tech where Tesla posted another profit miss while Alphabet pulled up short of expectations on ad revenue.
Following that, markets are also combing through this morning's European updates which include major banks. That saw BNP Paribas top forecasts with help from a surge in equity trading revenue, Banco Santander up its full year revenue forecast after posting a sharp rise in Q2 profit while UniCredit also raised full year forecasts after profits topped forecasts.
Data also steps up today where preliminary PMI updates from the eurozone and UK offer an early look at how activity is shaping up in July and comes after data in both regions showed a slower pace of expansion in June.
US New Homes Sales for June follows data released Tuesday which showed Existing Home Sales slowed for the fourth straight month on an annualised basis.
ECB's Guindos & Lane both speak and are joined by a couple of Fed speakers although no policy cues are expected this side of next Wednesday's FOMC verdict given that officials are already in blackout.
On the supply front comes longer duration paper from the UK (GBP2.25bn 2054 Gilts) and Germany (EUR5bn 2034 Bunds) while US supply comes at the short end of the curve (USD30bn 2yr FRNs & USD70bn 5yr Notes) and follows a strong sale of 2yr notes on Tuesday.
For more on latest developments see the European Breakfast Briefing.
Wednesday's supply prospects
It is set to be another measured summer session Wednesday but there is potential we will see at least one deal in each of the core currencies. That with EDC already working a USD 4yr FRN, whilst Schleswig-Holstein mandated a EUR 8yr LSA on Tuesday as Severn Trent wrapped up calls for a GBP 14yr sustainable bond. As a reminder the weekly issuance got underway Tuesday where in the single currency financial borrower Mitsubishi HC Capital brought a EUR500m 3yr senior unsecured line along with a small EUR75m Mar 2029 secured tap from HY name Kronos, whilst Inter-American Development Bank tapped an existing Dec 2029 sterling SDB for a further GBP250m (more here).
** Schleswig-Holstein EUR 8yr LSA
** EDC debut USD 4yr global SOFR FRN at SOFR +34 area IPTs
** Severn Trent GBP 14yr sustainable
UnitedHealth Group stole the limelight in the US Tuesday with a bumper USD12bn 8-part trade, which got in ahead of another expected jumbo trade from Occidental. Tuesday's final overall supply tally of USD18.8bn brought ex-SSA issuance for the week to USD27.054bn, already topping the lowest weekly estimate of USD20bn. See THE ENDGAME for more details
What to watch today - PMIs and European bank earnings
** Key Data: FR Jul P HCOB Composite/Manufacturing/Services PMIs (08:15), GE Jul P HCOB Composite/Manufacturing/Services PMIs (08:30), EC Jul P HCOB Composite/Manufacturing/Services PMIs (09:30), UK Jul P S&P Global Composite/Manufacturing/Services PMIs (09:30), US Weekly MBA Mortgage Applications (12:00), US Jul P Wholesale Inventories (13:30), US Jul P S&P Global Composite/Manufacturing/Services PMIs (14:45), US Jun New Home Sales (15:00)
** Key Events: ECB's Guindos (07:45) & Lane (13:00), and Fed's Bowman & Logan (both 21:05) speak
** Auctions: UK to sell GBP2.25bn 2054 Gilts (10:00), GE to sell EUR5bn 2034 Bunds (10:30) and US to sell USD30bn 2yr FRNs (16:30) & USD70bn 5yr Notes (18:00)
** Earnings: 45 Stoxx600 & 42 S&P500 companies release results
All times BST
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