CREDIT OPEN: Earnings in the spotlight
EU stocks look set to marginally extend Monday's rebound at the open although much will depend on how earnings play out, the pace of which ramp up significantly today.
That comes after Nasdaq (+1.58%) snapped a 3-day losing streak on Monday as the recent rotation out of tech paused, with S&P500 (+1.08%) also rising for the first time in four sessions. Following that, US index futures have dipped slightly as markets continue to assess the prospect of a Trump/Harris presidential race which appears too close to call if recent polls are any guide.
Otherwise, it was instructive to note that despite the huge US political developments that broke over the weekend, VIX moved lower throughout Monday's session, more than reversing a minor opening rise to close 9.75% lower on the day.
Over in Asia, markets are mixed with mainland China underperforming again with Monday's reductions in several key lending rates doing little to boost the CSI300 which fell by up to 1.2% today. That follows a 0.7% loss on Monday with markets evidently still concerned over what a potential Trump presidency could mean for US/China trade.
Turning to today and it's another slow session for data where the only releases of note come this afternoon in the form of prelim eurozone July Consumer Confidence and US Jun Existing Home Sales.
That will heap even more attention on corporate news where earnings ramp up (25 Stoxx600 and 34 S&P500 firms update investors today) including some notable tech heavyweights where Alphabet reports after the Wall Street close.
Auction supply also steps up and comes from UK (GBP1bn 2039 Linkers), Germany (EUR5bn 2026 Schatz) and US (USD69bn 2yr Notes).
Today's sole central bank speaker is ECB chief eco Lane while Fed speak remains off the menu with officials already having entered blackout ahead of next Wednesday's FOMC verdict.
For more on latest developments see the European Breakfast Briefing.
Tuesday's supply prospects
The immediate pipeline remains empty going into Tuesday's session, suggesting another measured day for the European primary bond market. That after Monday's goose egg extended the recent slowdown that saw just EUR16.15bn issued last week, less than half the previous week's final EUR33.87bn, with earnings and seasonal factors taking a stronger grip.
Six high grade borrowers raised USD8.254bn in the US on Monday, bringing ex-SSA issuance for the month of July to USD79.954bn and within touching distance of the lowest monthly estimate of USD80bn. For more colour, see THE ENDGAME.
What to watch today
** Key Data: EC Jul P Consumer Confidence (15:00), US Jun Existing Home Sales (15:00) and US Jul Richmond Fed Manufacturing Index (15:00)
** Key Events: ECB's Lane speaks (08:00)
** Auctions: UK to sell GBP1bn 2039 Linkers (10:00), GE to sell EUR5bn 2026 Schatz (10:30) and US to sell USD69bn 2yr Notes (18:00)
** Earnings: 25 Stoxx600 and 34 S&P500 companies release results. Former includes Akzo Nobel & LVMH, whilst latter includes Tesla, Coca-Cola & General Motors
All times BST
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