Economic Data
(RU) Russia Gold & Forex Reserve w/e Aug 17th: $507.9B v $510.0B prior
(DE) Germany Q2 Final GDP Q/Q: 0.3% v 0.3%e; Y/Y: 0.5% v 0.5%e; GDP WDA Y/Y: 1.0% v 1.0%e
(DE) Germany Q2 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.2%e; Capital Investment: -0.9% v -1.5%e; Construction Investment: -0.3% v +2.0%e; Domestic Demand: -0.1% v -0.2% prior; Exports: 2.5% v 1.2%e; Imports: 2.1% v 1.0%e
(CH) Swiss July Trade Balance (CHF): 2.9BB v 2.3B prior; Real Exports M/M: -0.6% v +0.5%e; Real Imports M/M: -1.2% v -3.5% prior
(DK) Denmark Aug Consumer Confidence: 0.0 v 0.0e
(FR) France Aug Preliminary PMI Manufacturing: 46.2 v 43.7e (highest since April 2012); PMI Services: 50.2 v 50.0e (three-month high)
(DE) Germany Aug Preliminary PMI Manufacturing: 45.1 v 43.4e (fourth consecutive contraction but first monthly improvement since Jan); PMI Services: 48.3 v 50.1e
(SE) Sweden July Unemployment Rate:7.0% v 7.2%e; Unemployment Rate Seasonally Adj: 7.5 v 7.5% prior
(EU) Euro Zone Aug Preliminary PMI Manufacturing: 45.3 v 44.2e; PMI Services: 47.5 v 47.7e; PMI Composite: 46.6v 46.5e
(NO) Norway Q2 GDP Q/Q: 1.2% v 1.3%e; GDP Mainland: 1.0% v 1.0%e
(TW) Taiwan July Industrial Production Y/Y: 0.0% v -1.9%e; Commercial Sales Y/Y: -0.8% v -1.4%e
(UK) July BBA Loans for House Purchase: 28.4K v 27.3Ke
(IC) Iceland July Wage Index M/M: 0.1% v 0.0% prior; Y/Y: 6.0% v 6.9% prior
Fixed Income
(UK) DMO sold £3.75B in 5% 2018 Gilts; Avg Yield 0.796% v 1.434% prior; Bid-to-cover: 1.43x v 1.92x prior; Tail: 0.3bps v 0.7bps prior
(HU) Hungary Debt Agency (AKK) solds total HUF47B vs. HUF44B target in 2015, 2017 and 2028 Bonds
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Notes/Observations
China HSBC Manufacturing PMI hits 9 month low, 47.8 down from 49.5 in July
FOMC minutes surprised by being even more dovish than expected: Monetary accommodation warranted fairly soon.
Major European advanced PMI Manufacturing data beat expectations but remain in contraction territory
Equities
Indices: FTSE 100 +0.40% at 5796, DAX +0.20% at 7032, CAC-40 +0.20% at 3467, IBEX-35 -0.70% at 7293, FTSE MIB -0.20% at 15,133, SMI +0.20% at 6486, S&P 500 Futures +0.30% at 1416.25
European equity indices opened broadly higher, as European traders initially reacted to the US Fed FOMC minutes. However, markets have since pared gains amid the rise in Spanish bond yield and as dealers reassess the comments out of the Fed against some of the data releases which have shown improvements (such as July industrial production, retail sales).
In terms of the European advance manufacturing PMI data, the German and French data improved m/m and beat analyst expectations. Conversely, China's manufacturing PMI for Aug declined and continued to show contraction (export orders index hit lows not seen since March 2009), raising concerns that China's economic rebound could be delayed and that the government's 2012 growth target (7.5%) may not be met. Various Chinese officials have said that the 2012 growth target will be met as they expect growth to rebound in H2. China's H1 growth was approx 7.8%. European banks are trading mixed. Outperformers in the sector include Italian and French banks, while Spanish financials have lagged. Most resource related firms are trading higher, as comments out of the US Fed led to a rally in commodity prices.
Shares of Diageo [DGE.UK] are slightly higher, as the company reported FY12 results which were largely in with analyst expectations. Russian gold miner Petropavlovsk [POG.UK] is lower by over 9%, as the firm reported a sharp y/y decline in its H1 net profits. Periodicals and book retailer WH Smith [SMWH.UK] is higher by more than 3% as the company announced a stock buyback program and guided its FY results at the top end of market expectations. Swiss travel company Kuoni [KUNN.CH] is trading lower by over 5%, after reporting weaker than expected results. Dutch supermarket chain Ahold [AH.NL] has traded lower by over 2% on weaker than expected Q2 profits.