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Rise and shine everyone.
The big news for today is the US PCE Inflation numbers set to be released at 8:30am ET. The consensus is for a reacceleration in both Headline and Core Numbers. Headline is expected to come in at 3.3% vs. 3% prior and Core is expected to come in at 4.2% vs. 4.1% last month.
Speaking of inflation, we go the much awaited inflation numbers from Europe. Headline came in hotter at 5.3% flat from previous and higher than consensus of 5.1%. Core Inflation eased to 5.3% from 5.5%, coming inline with expectations. The hotter than expected headline was driven in part by higher energy costs while services CPI decline marginally but goods CPI increased. Initial reactions to the data saw a drop in expectations for a hike by the ECB on Sep 14.
We also got the official Chinese PMI numbers that showed services slipping slightly from 51.5 to 51, still in expansionary territory. Manufacturing PMI improved to 49.7 from 49.3 but still remains in contractionary territory. The bright spot was the New Orders that moved into expansionary territory. The markets still didn’t see this as great news.
US Equity Futures are marginally higher after yet another day of strength yesterday. The US Dollar is higher this morning after a dip yesterday, yields are lower with the 10Y dipping more than the 2Y or 30Y. The Yield Curve remains stable at -0.77%. Bitcoin is flat, Gold marginally higher, and Oil is higher +0.77%
Asia and Australia
Asian equities ended mixed Thursday. Greater China opened brightly but closed in the red again to complete a miserable month for the country's equity markets. Losses for Seoul and Taipei, India lower as Adani stocks tumbled on a promotor investor report.
Multiple Chinese lenders are set to slash deposit rates from 1-Sep, second round of cuts in less than three months
PBOC hosted a symposium with other regulators, financial institutions and private enterprises Wednesday, vowing to improve their access to funding.
China moves to stabilize finances of troubled shadow bank. Move potentially prepares ground for state-led rescue of Zhongrong, according to Bloomberg..
Japan industrial production softer than expected falling -2% in July. Retail sales was a beat rebounding 2.1%. The retail sales number is a welcome sign and could be the path to sustainable consumption - what the BoJ wants to see.
South Korea's industrial production fell -8.0% y/y in July versus consensus -6.0% and June's -2.0%; tenth consecutive monthly contraction and longest stretch of industrial output decline since records began in 1976.
Europe, Middle East, Africa
European equity markets mostly firmer. Real Estate, Financial Services and Travel/Leisure lead; Food/Beverage/Tobacco, Consumer Products/Services and Healthcare lag
Money markets traders pared back expectations for an ECB rate hike next month to 30% from 50%, following a speech by ECB's Schnabel and Eurozone inflation data.
German retail sales for July declined 0.8% m/m vs 0.3% increase expected. Equates to (2.2%) y/y in real terms vs (1.4%) expected. Retail sales had been gradually improving since March 2023, but current print stalling the trend.
UK: The Lloyds Bank business barometer rose 10 points to hit 18-month high of 41% in August.
Riksbank's Thedeen says SEK weakness not justified
Zambia’s inflation accelerates to a 16-month high in August, with prices rising 10.8% from year ago
The Americas
Dollar General is down -16.5% in the premarket after posting a double miss on results. They discussed the increase in theft and lowered their FY EPS guidance to $7.30 from $8.10 vs. est $10.
Visa published its payment volume update Wednesday after the close. Street takeaways leaned slightly positive with the focus on an acceleration in US volume growth from 5% in July to 7% in August.
Salesforce reported good Q2 results with the focus on 11% y/y cc cRPO growth, which came in 1pp ahead of guidance, along with fairly well-received guidance for 10% growth in Q3.
Crowdstrike reported results in line with analysts' expectations in Q2 FY2024, with revenue up 36.7% year on year to $731.6 million. The company also expects next quarter's revenue to be around $776.7 million, in line with analysts' estimates. Turning to EPS, CrowdStrike made a non-GAAP profit of $0.74 per share, improving from its profit of $0.36 per share in the same quarter last year.
Goldman Sachs: CTA equity demand has flipped back to buy with large demand in a flat, up, or even down tape in next five days. Firm said it sees $11B of demand per day over next five days and $107B over next month in a flat tape.
Shopify, Amazon agree deal for merchants to offer Buy with Prime on Shopify stores
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)
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