CREDIT OPEN: Pipeline cleared out at end of frantic week
EU stocks look set to start Friday’s de facto month end session with modest losses to follow a strong session on Thursday which saw Stoxx600 come tantalisingly close to challenging its record high set in early July.
Thursday’s upward revision to US Q2 GDP data and a modest fall in jobless claims helped ease some of the growth concerns that had plagued markets earlier in the month. However, Wall Street gains fizzled with S&P closing flat and Nasdaq ending 0.23% in the red as Nvidia tumbled by 6.4% after its results failed to meet the loftiest of market expectations.
Asian stocks are up though, led by Hang Seng and mainland China markets, amid a rally in EV makers, while US index futures are also in the green ahead of today's Wall Street open and holiday weekend.
This morning’s busy data schedule delivers prelim eurozone CPI for August which follows soft inflation data from Germany and Spain released on Thursday where the former dropped below 2% on an annual basis. The BBG consensus calls for the annual eurozone reading to fall sharply to +2.2% YoY (Jul +2.6%), another step towards the ECB's 2% target.
Already out this morning, UK Aug Nationwide House Prices showed an unexpected monthly fall of 0.2% in Aug (exp +0.2%, prev +0.3%).
Later, headlining a flurry of US releases comes the US PCE inflation reading for July where the annual core reading is seen edging up to 2.7% (from 2.6%).
Rates markets get a break from supply.
There are a few ECB speakers on the calendar, namely Schnabel, Rehn, Kazaks, Simkus and Muller.
For more on latest developments see the European Breakfast Briefing.
Friday’s supply prospects
At the time of writing there were no confirmed deals for Friday's business, suggesting a slow end to what has been a frenetic week for new issuance. Even if nothing should pop up then the weekly single currency volume would finish at EUR55.9bn and beyond the highest combined average estimate of EUR45bn given by participants in our weekly issuance estimates report conducted last Friday. In turn, this week is also the biggest euro week since the w/e 17-May (EUR65.8bn) and the fourth highest of 2024 so far.
While it may not have seemed like it after only two ex-SSA borrowers tapped the US high grade primary market this week, the month of August more than lived up to street expectations. Despite three “zero” issuance days, the month of August, a month that is not historically known for robust issuance produced USD106.995bn in ex-SSA issuance, more than enough to top the monthly average estimate of USD90bn, and only the fourth time that August issuance has topped the century mark. For more colour see THE ENDGAME.
What to watch today
** Key Data: FR Jul Consumer Spending (07:45), FR Aug P CPI (07:45), FR Q2 F GDP (07:45), SP Jul Retail Sales (08:00), GE Aug Unemployment Rate (08:55), IT Jul Unemployment Rate (09:00), UK Jul Net Consumer Credit (09:30), UK Jul Mortgage Approvals (09:30), EC Aug CPI (10:00), EC Jul Unemployment Rate (10:00), IT Aug P CPI (10:00), US Jul Personal Income/Spending (13:30), US Jul Core PCE Price Index (13:30), US Aug MNI Chicago PMI (14:45) and US Aug F Uni of Michigan Sentiment (15:00)
** Key Events: ECB’s Schanel speaks (08:00), whilst Kazaks, Muller, Rehn, Simkus and Schnabel take part in a panel (08:35)
** Auctions: No major term auctions scheduled for Friday 30th Aug
** Earnings: 3 Stoxx600 companies report
All times BST
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