Risk appetite finding some fresh legs after a volatile week

Notes/Observations

- UK Q2 GDP avoids a contraction.

- GBP currency make back all of its losses following last week’s mini-budget.

- EU inflation data mixed but remain elevated; Sept Euro Zone reading moved into double-digits.

- EU unemployment reading steady.

- EU currently holding an emergency Energy Council..

- BOJ to buy more 5- to 10-year, super-long debt in next quarter to cap upward pressure on yields.

Asia

- Japan Aug Jobless Rate: 2.5% v 2.5%e.

- Japan Aug Preliminary Industrial Production M/M: 2.7% v 0.2%e; Y/Y: 5.1% v 1.8%e.

- 19:50 (JP) Japan Aug Retail Sales M/M: 1.4% v 0.2%e; Y/Y: 4.1% v 2.8%e.

- China Sept Manufacturing PMI (Govt Official) register it 1st expansion in 3 months (50.1 v 49.7e).

- China Sept Caixin PMI Manufacturing registered its 2nd straight contraction and matched low from May (48.1 v 49.5e).

- India Central Bank (BI) raised its Repurchase Rate by 50bps to 5.90% (as expected).

Ukraine conflict

- Russia to annex four Ukrainian regions. Russia President Putin to sign treaties with Russia-appointed occupation officials on Fri, Sept 30th
Europe:

- ECB's Lane (Ireland, chief economist) reiterated stance that was taking meeting by meeting approach on calibrating rates. Needed to move away from super low rates. Noted that exchange rate channel was not significant enough to influence monetary policy.

- BOE Chief Economist Pill noted that hard to avoid conclusion that fiscal easing announced would prompt a significant and necessary monetary policy response in Nov; Recognize that Nov might seem like a long time away.

- UK PM Truss reportedly to hold emergency talks with Office for Budget Responsibility (OBR) on Fri, Sept 30th.

- UK Chancellor of the Exchequer (Fin Min) Kwarteng: To announce medium term fiscal plan on Nov 23rd, To announce further supply side growth measures in Oct and early Nov. request that the OBR provide a full forecast alongside the fiscal plan announcement on Nov 23rd.

- Latest YouGov poll showed that Labour had a 33 point lead over Torries, biggest gap since the 1990s.

Americas

- US Senate voted 72 to 25 to pass a stop gap bill to fund government operations through mid-December (**Note: Bill now goes to the House for vote).

- Mexico Central Bank (Banxico) raised Overnight Rate by 75bps to 9.25% (as expected).

- Colombia Central Bankraised the Overnight Lending Rate by 100bps to 10.00% (less-than-expected).

Energy

- Nord Stream spokesperson: Expects gas leaks to be halted on Monday (Oct 3rd); Would assess damage when able to arrive to the area.

- Russia President Putin stated that the "unprecedented sabotage" against the Nord Stream gas pipelines was "an act of international terrorism.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +1.03% at 386.84, FTSE +0.71% at 6,930.42, DAX +1.11% at 12,108.94, CAC-40 +0.90% at 5,728.09, IBEX-35 +1.10% at 7,380.65, FTSE MIB +1.27% at 20,613.00, SMI +0.84% at 10,212.30, S&P 500 Futures +0.94%].

Market Focal Points/Key Themes: European indices open higher across the board and advanced into the green as the session progressed; better equities results in the context of the end of the quarter; sectors among those leading to the upside include energy and financials; lagging sectors include consumer discretionary and utilities; footwear firms under pressure following earnings from Nike; ABB to sell remaining stake in Hitachi; earnings expected during the upcoming US session include Carnival.

Equities

- Consumer discretionary: Aston Martin Lagonda Global Holdings [AML.UK] +3.5% (Geely stake), Adidas [ADS.DE] -4%, Puma [PUM.DE] -4.5% (Nike earnings), Cineworld [CINE.UK] -1.5% (earnings; outlook), Dignity [DTY.UK] -10.5% (earnings), SiS Science in Sport [SIS.UK] -28% (earnings; placement; strategic review).

- Financials: ABN AMRO Bank [ABN.NL] +4% (analyst action), Cembra Money Bank [CMBN.CH] +3% (acquisition; trading update).

- Industrials: ABB [ABBN.CH] +1% (divestment).

Speakers

- Various ministers commented at emergency Energy Council.

- German Econ Min Habeck stated that Germany would not cap prices.

- Russia govt spokesperson Peskov stated that Ukraine had shown no willingness to negotiate.

- Japan Cabinet Office (Govt) Sept Economic Report: Maintained its overall economic assessment and sees domestic economy picking up moderately.

- Thailand Constitutional Court: PM Prayuth was not in breach of term limit rule and added he could stay in office until 2025 if re-elected.

- China FX Regulator SAFE said to ask banks to trade the CNY currency (Yuan) closer to the fixing rate.

- China govt said to roll out income tax breaks for some home purchases; effective until end-2023.

Currencies/fixed income

- Some risk appetite in the session pushed the USD to one-week lows against the European pairs. Greenback off approx. 3% from its mid-week highs.

- Recent EU inflation data has been mixed but still showed that the central banks still needed to hike rates.

- EUR/USD holding above the 0.9820 area. As recent CPI data has saw various ECB members put 75 bps on the table for the upcoming Oct policy meeting.

- GBP/USD was back above 1.1170 level as dealers noted that moves by UK Tories to undo some of the market damage caused by last week's tax-slashing, debt-swelling fiscal plan. UK PM Truss was said to hold emergency talks with Office for Budget Responsibility (OBR) on Fri (Treasury Select Committee (made up of MPs from all parties) demanded Fin Min Kwarteng release a full economic forecast from the OBR by the end of October and bring forward his medium-term budget from 23 November). Cable close to erasing all of the precipitous losses in the aftermath of the new government's so-called mini budget last Friday.

- Following the recent CBRT rate cut and calls for Turkey President Erdogan for more cut the Turkey TRY currency (Llira) fell to record lows and poise for its monthly losing streak to hit a 9th straight month (longest since 2001).

Economic data

- (NL) Netherlands Aug Retail Sales Y/Y: 3.7 v 2.8% prior.

- (NL) Netherlands Sept Preliminary CPI EU Harmonized M/M: 2.9% v 2.4% prior; Y/Y: 17.1% v 13.7% prior.

- (FI) Finland Aug Preliminary Retail Sales Volume Y/Y: -4.8% v -4.5% prior.

- (UK) Q2 Final GDP Q/Q: +0.2% v -0.1% prelim; Y/Y: 4.4% v 2.9% prelim.

- (UK) Q2 Final Private Consumption Q/Q: +0.1% v -0.2% prelim; Government Spending Q/Q: -1.5% v -2.9% prelim; Gross Fixed Capital Formation Q/Q: -1.4% v +0.6% prelim; Exports Q/Q: 3.6% v 2.4% prelim; Imports Q/Q: -1.5% v -1.5% prelim.

- (UK) Q2 Final Total Business Investment Q/Q: 3.7% v 3.8% prelim; Y/Y: 5.2% v 5.0% prelim.

- (UK) Q2 Current Account:-£33.8B v -£43.7Be.

- (FI) Finland Aug Final Trade Balance: -€1.3B v -€1.3B prelim.

- (SE) Sweden July Non-Manual Workers’ Wages Y/Y: 3.1% v 3.2% prior.

- (DK) Denmark Q2 Final GDP Q/Q: 0.9% v +0.9% prelim; Y/Y: 3.9% v 3.6% prelim.

- (DK) Denmark Aug Unemployment Rate: 2.3% v 2.4% prior; Gross Unemployment Rate: 2.7% v 2.7% prior.

- (CH) Swiss Aug Real Retail Sales YoY: 3.0% v 3.0% prior.

- (FR) France Sept Preliminary CPI M/M: -0.5% v -0.1%e; Y/Y: 5.6% v 6.0%e (moves off recent cycle high).

- (FR) France Sept Preliminary CPI EU Harmonized M/M: -0.5% v -0.1%e; Y/Y: 6.2% v 6.6%e.

- (FR) France Aug PPI M/M: 2.7% v 1.9% prior; Y/Y: 29.5% v 27.6% prior.

- (FR) France Aug Consumer Spending M/M: 0.0% v -0.1%e; Y/Y: -3.8% v -3.7%e.

- (ES) Spain Aug Adjusted Retail Sales Y/Y: 0.0% v -0.5% prior; Retail Sales (unadj) Y/Y: +0.8% v -3.2% prior.

- (CH) Swiss Sept KOF Leading Indicator: 93.8 v 85.0e.

- (CH) Swiss Q2 Foreign exchange transactions (CHF): 0.0B v 5.7B prior.

- (AT) Austria Sept Preliminary CPI M/M: 1.6% v 0.0% prior; Y/Y: 10.5% v 9.3% prior.

- (AT) Austria Aug PPI M/M: 1.4% v 1.5% prior; Y/Y: 21.3% v 20.7% prior.

- (CZ) Czech Q2 Final GDP (3rd reading) Q/Q: 0.5% v 0.5% prelim; Y/Y: 3.7% v 3.7% prelim.

- (HU) Hungary Aug PPI M/M:4.1% v 5.7% prior; Y/Y: 43.4% v 37.9% prior.

- (TR) Turkey Aug Trade Balance: -$11.2B v -$11.3Be.

- (TH) Thailand Aug Current Account: -$3.5B v -$4.2B prior; Overall Balance of Payments (BOP): +$0.4B v -$2.6B prior; Trade Account Balance: -$1.0B v -$0.4B prior; Exports Y/Y: 8.2% v 3.4% prior; Imports Y/Y: 23.8% v 25.3% prior.

- (CN) Weekly Shanghai copper inventories (SHFE): 30.5K v 36.9K tons prior.

- (DE) Germany Sept Net Unemployment Change: +14.0K v +20.0Ke; Unemployment Claims Rate: 5.5% v 5.5%e.

- (ES) Spain July Current Account: €1.3B v €0.1B prior.

- (IT) Italy Aug Unemployment Rate: 7.8% v 7.9%e.

- (NO) Norway Sept Unemployment Rate: 1.6% v 1.5%e.

- (NO) Norway Central Bank (Norges) Oct Daily FX Purchases (NOK): 4.3B v 3.5Be.

- (PL) Poland Sept Preliminary CPI M/M: 1.6% v 0.9%e; Y/Y: 17.2% v 16.4%e.

- (CZ) Czech Aug M2 Money Supply Y/Y: 5.3% v 5.3% prior.

- (RU) Russia Narrow Money Supply w/e Sept 23rd (RUB): 14.90T v14.66T prior.

- (UK) Aug Net Consumer Credit: £1.1B v £1.4Be; Net Lending: £6.1B v £4.9Be.

- (UK) Aug Mortgage Approvals: 74.3K v 62.0Ke.

- (UK) Aug M4 Money Supply M/M: -0.2% v +0.5% prior; Y/Y: 3.8% v 4.4% prior; M4 (ex IOFCs) 3-Month Annualized: 2.2% v 4.9% prior.

- (HK) Hong Kong Aug Retail Sales Value Y/Y: % v 2.7%e; Retail Sales Volume Y/Y: % v 1.3%e.

- (HK) Hong Kong Aug Budget Balance (HKD) -48.6B v -25.1B prior.

- (EU) Euro Zone Sept CPI Estimate Y/Y: 10.0% v 9.7%e; CPI Core Y/Y: 4.8% v 4.7%e.

- (EU) Euro Zone Aug Unemployment Rate: 6.6% v 6.6%e.

- (BE) Belgium Aug Unemployment Rate: 5.8% v 5.9% prior.

- (IT) Italy Sept Preliminary CPI M/M: 0.3% v -0.2%e; Y/Y: 8.9% v 8.4%e.

- (IT) Italy Sept Preliminary CPI EU Harmonized M/M: 1.7% v 1.6%e; Y/Y: 9.5% v 9.4%e.

- (GR) Greece July Retail Sales Value Y/Y: -2.8% v -3.8% prior; Retail Sales Volume Y/Y: 11.9% v 12.0% prior.

- (IS) Iceland Aug Final Trade Balance (ISK): -16.9B v -23.3B prelim.

Fixed income issuance

- None seen.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (IN) India to sell combined INR330B in 2024, 2029, 2032 and 2062 bonds.

- 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2029, 2046 and 2050 Bonds.

- 06:00 (IE) Ireland Sept CPI EU Harmonized M/M: No est v 0.2% prior; Y/Y: No est v 9.0% prior.

- 06:30 (IN) India Aug Fiscal Deficit (INR): No est v 187.7B prior.

- 06:00 (UK) DMO to sell £3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively).

- 06:45 (US) Daily Libor Fixing.

- 07:00 (IN) India announces upcoming bill issuance (held on Wed).

- 07:00 (MX) Mexico July Gold Production: No est v 6.8K prior; Silver Production: No est v 369.0K prior; Copper Production: No est v 36.1K prior.

- 07:00 ECB's Elderson (Netherlands).

- 07:30 (IN) India Aug Eight Infrastructure (key) Industries: No est v +4.5% prior.

- 07:30 (IN) India Weekly Forex Reserve w/e Sept 23rd: No est v $545.7B prior.

- 07:30 (IS) Iceland to sell 2024 and 2031 RIKB Bonds.

- 08:00 (ZA) South Africa Aug Trade Balance (ZAR): 23.7Be v 24.8B prior.

- 08:00 (ZA) South Africa Aug Monthly Budget Balance (ZAR): -45.0Be v -129.5B prior.

- 08:00 (BR) Brazil Aug National Unemployment Rate: 8.9%e v 9.1% prior.

- 08:00 (CL) Chile Aug Manufacturing Production Y/Y: -3.2%e v -5.1% prior; Industrial Production Y/Y: -3.3%e v -5.1% prior; Copper Production: No est v 430.0K prior.

- 08:00 (CL) Chile Aug Retail Sales Y/Y: -14.1%e v -10.9% prior; Commercial Activity Y/Y: No est v -11.2% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (ES) Spain Debt Agency (Tesoro) announcements on upcoming issuance.

- 08:30 (US) Aug Personal Income: 0.3%e v 0.2% prior; Personal Spending: 0.2%e v 0.1% prior; Real Personal Spending (PCE): 0.1%e v 0.2% prior.

- 08:30 (US) Aug PCE Deflator M/M: 0.1%e v -0.1% prior; Y/Y: 6.0%e v 6.3% prior.

- 08:30 (US) Aug PCE Core Deflator M/M: 0.5%e v 0.1% prior; Y/Y: 4.7%e v 4.6% prior.

- 08:30 (BR) Brazil Aug Nominal Budget Balance (BRL): -71.7Be v -22.5B prior; Primary Budget Balance: -28.6Be v +20.4B prior; Net Debt to GDP Ratio: 57.5%e v 57.3% prior.

- 09:45 (US) Sept Chicago Purchase Manager’s Index (PMI): 51.8e v 52.2 prior.

- 09:45 (UK) BoE Gilt Buybacks operation.

- 10:00 (US) Sept Final University of Michigan Confidence: 59.5e v 59.5 prelim.

- 10:00 (MX) Mexico Aug Net Outstanding Loans (MXN): No est v 5.17T prior.

- 11:00 (CO) Colombia Aug National Unemployment Rate: No est v 11.0% prior; Urban Unemployment Rate: 11.1%e v 11.3% prior.

- 11:00 (EU) Potential sovereign ratings after European close.

- 11:00 (US) Fed's Bowman.

- 11:15 (IT) ECB's Visco (Italy).

- 11:30 (DE) ECB's Schnabel (Germany).

- 12:00 (US) USDA Quarterly.

- 12:30 (US) Fed's Barkin.

- 13:00 (US) Weekly Baker Hughes Rig Count.

- (MX) Mexico Aug YTD Budget Balance (MXN): No est v -49.3B prior.

- 20:00 (KR) South Korea Sept Trade Balance: -$2.4Be v -$9.5B prior; Exports Y/Y: 3.1%e v 6.6% prior; Imports Y/Y: 17.0%e v 28.2% prior.