Economic Data
(EU) ECB: €523M borrowed in overnight loan facility vs. €556M prior; €342.1B parked in deposit facility vs. €341.0B prior
(IN) India Aug Markit Services PMI: 55.0 v 54.2 prior; six-month high
(RU) Russia Aug Services PMI: 52.6 v 52.0 prior
(IE) Ireland Aug NCB Services PMI: 51.7 v 49.1 prior; first expansionary reading in 4 months
(FI) Finland Q2 GDP Q/Q: -1.1% v +0.9% prior; Y/Y: -0.1 v +2.2% prior
(SE) Sweden Aug PMI Services: 50.8 v 54.8 prior
(NO) Norway Aug PMI: 48.7 v 50.1e
(CZ) Czech July Retail Sales Y/Y: 0.3% v 0.2%e
(ES) Spain Aug Services PMI: 43.4e v 43.7 prior; highest reading since March but 14th straight monthly contraction
(CH) Swiss Aug CPI M/M: 0.0% v 0.1%e; Y/Y: -0.5% v -0.4%e
(CH) Swiss Aug CPI EU Harmonized M/M: -0.3% v -0.3% prior; Y/Y: -0.5% v -0.8% prior
(TH) Thailand Central Bank left Benchmark Interest Rate unchanged at 3.00% prior; as expected
(IT) Italy Aug PMI Services: 44.0 v 43.3e, (14th straight monthly contraction)
(FR) France Aug Final PMI Services: 49.2 v 50.2e
(DE) Germany Aug Final PMI Services: 48.3 48.3e; lowest reading since July 2009
(EU) Euro Zone Aug Final PMI Services:47.2 v 47.5e; PMI Composite: 46.3 v 46.6e
(TW) Taiwan Aug Foreign Exchange Reserves: $394.2B v $391.1B prior
(IC) Iceland Aug Preliminary Trade Balance (ISK): 12.6B v 2.4B prior
(EU) Euro Zone Retail July Sales M/M: -0.2% v -0.2%e; Y/Y: -1.7% v -1.7%e
(IE) Ireland Aug Live Register Monthly Change: -2.0K v -2.3K prior; Unemployment Rate: 14.7% v 14.8% prior; Live Register Level: 434.4 v 436.4 prior
(ZA) South Africa Q3 BER Business Confidence: 47.0 v 41.0 prior
Fixed Income
(NL) Netherlands Debt Agency (DSTA) closed its book to sell at least $2.0B in 0.25% 2015 DSL bond; Guidance seen between +5 over mid-swaps (initial range was +5-8bps)
(RU) Russia sold RUB24B vs. RUB25B indicated in new 2022 OFZ Bond; Yield 8.01% vs. guidance of 7.95-8.02%
(IN) India sold total INR120B vs. INR120B indicated in 3-month and 12-month Bills
(EU) ECB allotted $2.2Bin 7-Day USD Liquidity Tender at fixed 0.63% vs. prior $6.2B
(SE) Sweden sold SEK3.5B vs. SEK3.5B indicated in 3.75% 2017 Bonds; Yield 0.9646% v 1.3855% prior
(UK) DMO sold £1.75B in 4.5% Dec 2042 Gilts; Avg Yield 2.951% v 3.224% prior; Bid-to-cover: 1.52x v 2.2x prior; Tail: 0.4bps v 0.4bps prior
(DE) Germany sold €3.61B in new 1.5% Sept 2022 Bunds; Avg Yield 1.42% v 1.42% prior; Bid-to-cover: 1.1x v 1.8x prior (technically uncovered)
(BE) Belgium Debt Agency opened book to sell 3-year USD-denominated bond; Guidance seen around +50bps over mid-swaps and to price later today
Notes/Observations
Australia Q2 GDP a touch below expectations; A$ at 6-week low below 1.02
China Services PMI hits 1-year low but stays in expansionary territory
Major European PMI Services data comes in below expectations
Market awaits ECB rate decision and press conference on Thursday to get clarification of planned bond buying scheme to lower peripheral yields. Potential disappointment looming for Europe
Markets also waiting Friday's release of US payroll data to see if Bernanke has an excuse to perform QE3
German new 10-year Bund auction technically uncovered; UK DMO bid-to-cover falls steeply from prior
Equities
Indices: FTSE 100 +0.10% at 5666, DAX +0.30% at 6954, CAC-40 flat at 3401, IBEX-35 +0.40% at 7519, FTSE MIB -0.25% at 15,184, SMI +0.50% at 6391, S&P 500 Futures -0.30% at 1401.75
Following the mixed open, European equity indices are mostly lower, amid the rise in peripheral bond yields, mixed PMI services data and ahead of tomorrow's ECB meeting, in which Draghi is expected to give more details related to the central bank's bond buying plan. Today's weakness has been led by indices in Italy and France.
European banks are mostly in negative territory and underperformers in the sector include French banks. The technically failed auction out of Germany sent buyers back into equities just ahead of the NY morning as the major bourses recovered the bulk of the session losses
Shares of BP [BP.UK] have declined by over 4% amid press reports that US government officials could be concerned about the firm's proposed $7.8B settlement related to the Gulf of Mexico oil spill. Retailer Sports Direct [SPD.UK] is higher by over 3%, following the release of its quarterly sales figures.
In Germany, shares of Norma Group [NOEJ.DE] have traded lower by more than 4%, as 3i placed shares in the company. Fresenius SE [FRE.DE] has outperformed the overall DAX, as the firm's Kabi unit raised its 2012 sales forecast. BMW [BMW.DE] has traded lower by over 1%, after reporting that its US sales declined by 5.7% y/y in Aug.
GM reported that its China sales rose by 7.3%, which was a slowdown from the 15.1% increase seen in July. Additionally, there has been speculation that China's Guangzhou has placed certain restrictions on the number of new vehicles which can travel on roads. Swiss luxury watchmaker Richemont [CFR.CH] has traded slightly higher after issuing its 5-month sales report.