Economic Data
(CH) Swiss Q2 GDP Q/Q: -0.1% v +0.2%e; Y/Y: 0.5% v 1.6%e
(ES) Spain Aug Net Unemployment M/M: +38.2K v -27.8K prior (first increase in 5 months)
(BR) Brazil Aug FIPE CPI Monthly: 0.3% v 0.3%e
(UK) Aug PMI Construction: 49.0 v 50.0e
(DE) Germany Aug New Car Registrations Y/Y: -4.7% v -5.0% prior - VDIK
(EU) Euro Zone July PPI M/M: 0.4% v 0.2%e; Y/Y: 1.8% v 1.6%e
(ZA) South Africa Aug Naamsa Vehicle Sales Y/Y: 9.4% v 18.3% prior
Fixed Income
(DK) Denmark sold DKK5.0B vs. DKK5.0B indicated in 1.5% 2023 Bonds; Yield 1.46%; Bid to cover 2.04x
(AS) Austria Debt Agency (AFFA) sold total €1.1B vs. €1.2B indicated in 2017 and 2019 bonds
Sold €500M in 4.3% September 2017 RAGB Bonds; Avg Yield 0.829% v 3.980% prior in March 2008; Bid-to-cover: 2.75x
Sold €600M in 1.95% Sept 2019 RAGB Bonds; Avg Yield 1.344% v 2.020% prior; Bid-to-cover: 2.24x
(GR) Greece Debt Agency (PDMA) sells €1.137B vs €875M indicated in 26-week Bills; Avg Yield 4.54% v 4.68% prior; Bid-to-cover: 1.95x v 2.06x prior
(EU) ECB allotted €126.3B in 7-Day Main Refinancing Tender at fixed 0.75% vs. €131.0Be
(CH) Switzerland sold CHF784M in 3-Month Bills; Avg Yield: -0.399% v -0.352% prior
(HU) Hungary Debt Agency (AKK) sold HUF45B vs. HUF45B in HUF 3-Month Bills; Avg Yield 6.68% v 6.84% prior; Bid-to-cover: 1.95x v 2.32x prior
(BE) Belgium Debt Agency sold approx €2.6B vs. €2.8B in 3-month and 6-month Bills
Sold €1.3B in 3-month Bills; Avg yield -0.021% v -0.012% prior; bid-to-cover: 2.97x v 3.17x prior
Sold €1.305B in 6-month Bills; Avg yield +0.004% v +0.002% prior; Bid-to-cover: 2.19x v 2.39x prior
Notes/Observations
RBA keeps rates steady with commentary view as "not so dovish" Economy running close to trend (Dealers note that they do not mention of which way the trend was going.
Moody's changes outlook on EU AAA sovereign rating to negative.
Market pressure on ECB to provide details of bond buying at Thursday's monthly press conference.
Shorter end of European peripheral bond yield sharply lower; Italy spread between the 2-year and 10-year bonds at 330bps, record wide level.
Swiss Q2 GDP comes in lower with prior Q1 revised lower.
Equities
FTSE 100 -0.8% at 5716, DAX -0.3% at 6,992, CAC-40 -0.6% at 3434, FTSE MIB +0.3% at 15,315, SMI -0.7% at 6394, S&P 500 Futures +0.1% at 1406.00
European stocks began the day basically stable but drifted lower after the open on Tuesday. The price action initially shrugged off Moody's decision to downgrade the outlook on the European Union's long-term AAA credit rating from stable to negative and instead seemed to be keeping faith with the euro amid rising expectations that the ECB would announce a round of sovereign debt purchases on Thursday.