European Shares Bounce After Worst Session in Two Months; UMG Soars in Debut

The pan-European STOXX 600 was up 0.9% by 07:43 GMT after sinking to a two-month low in the previous session.

Media, mining and energy stocks led early gains, while Germany’s DAX rebounded from its lowest level since late-July.

U.S. stock futures also bounced a day after global markets were roiled by concerns the potential default by Evergrande, the world’s biggest property developer, could hurt China’s real estate sector, banks and the global economy.

Evergrande, struggling for cash, owes $305 billion.

Focus this week is also on policy meetings at a slate of central banks, including the U.S. Federal Reserve, with investors expecting some of them to indicate they were ready to ease their pandemic-era stimulus to combat high inflation.

“Concerns about Evergrande remain but for now there appears to be a wait-and-see approach being adopted,” said Michael Hewson, chief market analyst at CMC Markets UK.

“The bigger question given the risks from events in China is whether the Fed adopts a less hawkish stance tomorrow in order to buy itself some time until the situation becomes clearer.”

Europe’s benchmark STOXX 600 has fallen from record highs in September after seven straight months of gains on fears of persistently high COVID-19 cases and signs of a slowdown in the global economic recovery.

However, helping sentiment on Tuesday, travel-related stocks including British Airways-owner IAG, cruiseliner Carnival Corp and InterContinental Hotels Group jumped between 2% and 5% following the relaxation of U.S. travel curbs.

Britain’s National Express rose 4% after rival Stagecoach Group said it was in talks with National Express about a possible all-share merger.

Stagecoach’s shares jumped 17.3%.

Universal Music Group, the business behind singers such as Lady Gaga, Taylor Swift and The Weeknd, surged 38% in its first day of trading, giving it a market capitalisation of more than 46 billion euros ($54 billion).

Shares of owner Vivendi sank 16.7%.

Sweden’s gardening power tools group Husqvarna tumbled 5.4% after warning it could potentially lose top line sales of up to around 2 billion crowns ($230.7 million) due to a supplier dispute.

All major European bourses were up in morning trading, with the UK’s FTSE 100, Spain’s IBEX and Italy’s FTSE MIB gaining between 0.7% and 0.9%.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur)

The Week Ahead – Central Banks back in Focus with the BoE and the FED in Action

On the Macro

It’s a quiet week ahead on the economic calendar, with 37 stats in focus in the week ending 17th September. In the week prior, 62 stats had also been in focus.

For the Dollar:

Prelim private sector PMIs for September will be in focus on Thursday.

Expect the services PMI to be the key stat of the week.

Other stats include housing sector data that will likely have a muted impact on the Dollar and the broader market.

The main event of the week, however, is the FOMC monetary policy decision on Wednesday.

With the markets expecting the FED to stand pat, the economic and interest rate projections and press conference will be pivotal. FED Chair Powell prepped the markets for the tapering to begin this year. The markets are not expecting any hint of a shift in policy on interest rates, however…

In the week ending 17th September, the Dollar Spot Index rose by 0.66% to 93.195.

For the EUR:

It’s a relatively busy week on the economic data front.

Prelim September private sector PMIs for France, Germany, and the Eurozone will draw plenty of interest on Thursday.

While Germany’s manufacturing PMI is key, expect influence from the entire data set. Market concerns over the economic recovery have tested support for riskier assets. Softer PMI numbers would test EUR support on the day.

For the week, the EUR fell by 0.75% to $1.1725.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

On the economic data front, CBI Industrial Trend Orders and prelim private sector PMIs are due out.

Expect the services PMI for September to be the key stat on Thursday.

While the stats will influence, the BoE’s monetary policy decision on Thursday will be the main event.

Persistent inflationary pressure has raised the prospects of a sooner rather than later move by the BoE. Weak retail sales figures have made things less clear, however.

Expect any dissent to drive the Pound towards $1.40 levels.

The Pound ended the week down by 0.71% to $1.3741.

For the Loonie:

It’s another quiet week ahead on the economic calendar.

Early in the week, house price figures for August are due out. The numbers are not expected to have a material impact on the Loonie, however.

Retail sales figures for July, due out on Thursday, will influence, however. Another sharp increase in spending would deliver the Loonie with much-needed support.

The Loonie ended the week down 0.57% to C$1.2764 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no major stats to provide the Aussie Dollar with direction.

While there are no major stats, the RBA monetary policy meeting minutes on Tuesday will influence. The markets will be looking for forward guidance following the latest lockdown measures.

The Aussie Dollar ended the week down by 1.05% to $0.7279.

For the Kiwi Dollar:

It’s another quiet week ahead.

Early in the week, consumer sentiment figures for the 3rd quarter will be in focus.

Trade data, due out on Friday, will be the key numbers for the week, however.

Away from the economic calendar, however, COVID-19 news updates will also be key.

The Kiwi Dollar ended the week down by 1.03% to $0.7040.

For the Japanese Yen:

It’s a relatively busy week on the economic calendar.

Inflation and prelim private sector PMIs are due out on Friday. We don’t expect the numbers to influence the Yen, however.

On the monetary policy front, the BoJ is in action on Wednesday. We aren’t expecting any surprises, however, as the Delta variant continues to deliver economic uncertainty.

The Japanese Yen rose by 0.01% to ¥109.93 against the U.S Dollar.

Out of China

There are also no major stats due out of China for the markets to consider, with the Chinese markets closed early in the week.

On the monetary policy front, the PBoC is in action. We don’t expect any changes to the Loan Prime Rates, however.

The Chinese Yuan ended the week down by 0.34% to CNY6.4661 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia remain the main areas of interest for the markets. News updates from the Middle East, in particular, will need continued monitoring following recent events in Afghanistan.

The Weekly Wrap – Economic Data and Policy Jitters Delivered a Boost for the Greenback

The Stats

It was a busier week on the economic calendar, in the week ending 17th September.

A total of 61 stats were monitored, which was up from 42 stats in the week prior.

Of the 61 stats, 21 came in ahead forecasts, with 27 economic indicators coming up short of forecasts. There were 13 stats that were in line with forecasts in the week.

Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 32 stats, 30 reflected a deterioration from previous.

For the Greenback, upbeat economic data and sentiment towards monetary policy delivered support in the week. In the week ending 17th September, the Dollar Spot Index rose by 0.66% to 93.195. In the previous week, the Dollar had risen by 0.59% to 92.582.

Out of the U.S

Early in the week, inflation figures were in focus.

In August, the annual rate of core inflation softened from 4.3% to 4.0% versus a forecasted 4.2%. While softer than expected, 4% continued to sit well above the FED’s 2% target, leaving tapering on the table.

Mid-week, industrial production and NY Empire State manufacturing figures were market positive.

On Thursday, retail sales, Philly FED Manufacturing PMI, and jobless claims figures were of greater interest, however.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

At the end of the week, consumer sentiment improved, albeit moderately. In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0, falling short of a forecasted 72.0.

Out of the UK

It was also a busy week. Employment, inflation, and retail sales figures were in focus. The stats were skewed to the positive.

In August, claimant counts fell by a further 58.6k after having fallen by 48.9k in July. In July, the unemployment rate fell from 4.7% to 4.6%.

The UK’s annual rate of inflation accelerated from 2.0% to 3.25 in August, also delivering Pound support.

At the end of the week, retail sales disappointed, however. Month-on-month, core retail sales fell by 1.2% in August, following a 3.2% slide in July. Retail sales fell by 0.9% after having fallen by 2.8% in July. Economists had forecast a pickup in spending.

In the week, the Pound fell by 0.71% to end the week at $1.3741. In the week prior, the Pound had fallen by 0.23% to $1.3839.

The FTSE100 ended the week down by 0.93%, following a 1.53% loss from the previous week.

Out of the Eurozone

Economic data included wage growth, industrial production, trade, and finalized inflation figures for the Eurozone.

Finalized inflation figures for Spain, France, and Italy were also out but had a muted impact on the EUR.

In the 2nd quarter, wage fell by 0.4%, year-on-year, partially reversing a 2.1% increase recorded in the previous quarter.

Industrial production and trade data were positive, however.

Production increased by 1.5%, reversing a 0.1% fall from June, with the Eurozone’s trade surplus widening from €17.7bn to €20.7bn.

At the end of the week, finalized inflation figures for the Eurozone were in line with prelim figures. The Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August.

For the week, the EUR fell by 0.75% to $1.1725. In the week prior, the EUR had fallen by 0.56% to $1.1814.

The CAC40 slid by 1.40%, with the DAX30 and the EuroStoxx600 ending the week with losses of 0.77% and 0.96% respectively.

For the Loonie

Economic data included manufacturing sales, inflation, and wholesale sales figures.

The stats were mixed in the week.

In July, both manufacturing sales and wholesale sales disappointed with falls of 1.5% and 2.1% respectively.

Providing support, however, was a pickup in the annual rate of inflation from 3.3% to 3.5%.

The pickup in inflationary pressure and rising oil prices were not enough to support the Loonie against the Greenback.

In the week ending 17th September, the Loonie fell by 0.57% to C$1.2764. In the week prior, the Loonie had fallen by 1.34% to C$1.2692.

Elsewhere

It was another bearish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar fell by 1.05% to $0.7279, with the Kiwi Dollar ending the week down by 1.03% to $0.7040.

For the Aussie Dollar

Business and consumer confidence figures were in focus in the 1st half of the week.

In spite of the latest lockdown measures, the stats were skewed to the positive.

The NAB Business Confidence Index rose from -8 to -5 in August.

More significantly, the Westpac Consumer Sentiment Index increased by 2.0% in September. The index had fallen by 4.4% in August.

On Thursday, employment figures disappointed, however.

In August, full employment fell by 68k following a 4.2k decline in July. Employment tumbled by 146.3k, however, versus a forecasted 90.0k decline. In July, employment had risen by 2.2k.

According to the ABS,

  • The unemployment rate fell from 4.6% to 4.5%, with the participation rate declining from 66.0% to 65.2%.
  • Year-on-year, the number of unemployed was down by 298,000.

For the Kiwi Dollar

It was also a mixed week on the economic data front.

2nd quarter GDP numbers impressed, with the NZ economy expanding by 2.8%, quarter-on-quarter. The economy had expanded by a more modest 1.4% in the previous quarter.

On the negative, however, was a slide in the Business PMI from 62.6 to 40.1 in August. The figures reflected the impact of the latest lockdown measures on production, justifying the RBNZ’s decision to leave the cash rate unchanged.

For the Japanese Yen

It was a relatively quiet week, with the numbers skewed to the negative.

According to finalized figures, industrial production fell by 1.5% in July. While in line with prelim figures, this was a partial reversal of a 6.5% jump from June.

In August, Japan’s trade balance fell from a ¥439.4bn surplus to a ¥635.4bn deficit. Exports rose by 26.2%, year-on-year, after having been up by 37% in July.

The Japanese Yen rose by 0.01% to ¥109.93 against the U.S Dollar. In the week prior, the Yen had fallen by 0.21% to ¥109.94.

Out of China

Fixed asset investment and industrial production figures were in focus mid-week.

There were yet more disappointing numbers from China for the markets to consider.

In August, fixed asset investment increased by 8.9%, year-on-year. This was softer than a 10.3% increase in July.

More significantly, industrial production was up by 5.3% in August versus 6.4% in July.

In the week ending 17th September, the Chinese Yuan fell by 0.34% to CNY6.4661. In the week prior, the Yuan had ended the week up by 0.18% to CNY6.4443.

The CSI300 and the Hang Seng ended the week down by 3.14% and by 4.90% respectively.

UK Shares Rise on Travel, Banking Boost; Retail Sales Data Ease Taper Fears

The blue-chip FTSE 100 index rose 0.3%, with banking shares gaining after a series of brokerage upgrades and price target hikes.

Asia-focused banks HSBC Holdings and Standard Chartered jumped 1.8% and 0.5%, respectively, after Barclays raised price targets on the stocks. RBC also upgraded HSBC to “outperform” from “sector perform”.

However, gains on the FTSE 100 were capped by miners Rio Tinto and Anglo American, which slipped 2.7% and 3.6% after Morgan Stanley cut its price targets on the stocks.

The domestically focused mid-cap FTSE 250 index advanced 0.5%.

British retail sales dropped 0.9% on the month in August versus a Reuters poll for a rise of 0.5%, after data earlier this week pointed towards a sharp recovery in the jobs market and a spike in inflation.

Investor focus will now be on the outcome of Bank of England’s (BoE) policy meeting next week.

“Next week’s policy decision should reaffirm that some tightening will be needed over the next few years to keep inflation (and the economy) in check. But we don’t expect the BoE to conclude that there is a sufficient case yet for near-term rate hikes,” Deutsche Bank economist Sanjay Raja said.

Airlines Wizz Air, Ryanair Holdings and British Airways owner IAG, and holiday company TUI AG rose between 1.2% and 4.7%, as Britain was set to consider easing its COVID-19 rules for international travel.

“The hope will be that a shift in the rules is the precursor to people jetting off for autumn and winter getaways,” said Russ Mould, investment director at AJ Bell.

Wickes Group jumped 5.6% to the top of FTSE 250 index after Deutsche upgraded the DIY retailer to “buy” from “hold”.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Shounak Dasgupta)

UK Shares Dip as British Inflation Data Reignites Taper Fears

The blue-chip index slipped 0.1%, with food delivery company Just Eat Takeaway.com dropping 3.5% to the bottom of the index following a media report that Amazon and rival Deliveroo will offer free delivery to prime subscribers in the UK.

Deliveroo shares were up 0.9%.

Losses in the index, however, were limited by decent gains by heavyweight oil majors BP, Royal Dutch Shell and life insurers.

The domestically focused mid-cap FTSE 250 index declined 0.3%.

Consumer prices last month rose by 3.2% in annual terms, its biggest monthly jump in at least 24 years, largely due to a one-off boost reflecting the “Eat Out to Help Out” scheme that pushed down restaurant meal prices last year.

The data came on the heels of a strong jobs report, with the focus now shifting to BoE’s policy meeting due next week as policymakers remain split on whether basic conditions for a rate hike are met by the economy.

“The key question for investors is how this impacts the timing of the first rate hike. The bank will be reluctant to move until it is also confident that the economy has successfully negotiated the end of the furlough scheme,” said Hugh Gimber, global market strategist at J.P. Morgan Asset Management.

“With inflation running hot and wages on the rise, the bank looks quite likely to be one of the first major central banks to hike rates next year.”

A Reuters poll forecasts the BoE will raise borrowing costs by end-2022, earlier than previously thought, and there is a chance it comes even sooner.

Among other stocks, Darktrace jumped 10.3% after the cybersecurity company increased its revenue growth forecast for its 2022 financial year.

Tullow Oil added 5.6% after the Africa-focused oil and gas company swung to a profit in the first half.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Sherry Jacob-Phillips)

European Stocks Under Pressure From Weak China Data

The benchmark STOXX 600 index fell 0.1% by 07:11 GMT.

Asian stocks tumbled after data showed China’s factory and retail sectors faltered in August following fresh coronavirus outbreaks and supply disruptions.

Travel & leisure stocks were the top decliners in Europe, down 1.1%, with gaming companies hit after Macau casino operator stocks plummeted as the government kicked off a public consultation that investors fear will lead to tighter regulations in the world’s largest gambling hub.

The owner of fashion brand Zara Inditex rose about 1% as its sales approached pre-pandemic levels, but Sweden’s H&M slipped 3% as quarterly sales increased less than expected.

UK’s FTSE 100 edged lower and mid-cap stocks fell 0.2% after data showed British inflation hit a more than nine-year high last month.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

Luxury, Mining Stocks Weigh on Europe Ahead of U.S. Inflation Data

The pan-European STOXX 600 index was down 0.2% after a partial recovery on Monday from last week’s slump.

Luxury stocks including LVMH, Kering and Richemont fell between 1.6% and 2.0%, tracking their Asian peers lower on concerns about the spread of COVID-19 cases in China.

Jewellery maker Pandora rose 3.7% after it said it aims to achieve sales growth between 6.0% and 8.0% over the coming years.

Mining stocks dragged UK’s commodity-heavy FTSE 100 0.3% lower, even as data showed British employers added a record 241,000 staff to their payrolls last month.

Danish brewer Carlsberg fell 2.6% after a double downgrade to “sell” by Berenberg.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

Energy Stocks Help Steady FTSE 100 After Worst Week Since Mid-August

By Devik Jain

The blue-chip index climbed 0.6%, after sliding 1.5% last week on concerns of a stalling domestic economic recovery.

Oil majors BP and Royal Dutch Shell each rose nearly 2%, tracking crude prices, while banks were 1.9% higher. [O/R]

The domestically focused mid-cap FTSE 250 index advanced 0.2%.

Investor focus is now on data releases in Britain and the United States later this week, including jobs and keenly watched inflation and retail sales, for clues on monetary policy actions ahead of central bank meetings next week.

“There appears to be a build up in anxiety that the continued rise in inflationary pressure may well be much more persistent than central bankers would have us believe,” Michael Hewson, chief market analyst at CMC Markets UK, said.

“In July both UK and U.S. consumer prices saw a pause as some base effects dropped out of the headline numbers, and while there is some expectation that this might continue in August, this appears to be more of a hope than anything else.”

Last week, a Reuters poll forecast that the Bank of England will raise borrowing costs by end-2022, earlier than previously thought, and it could come even sooner.

Among individual stock moves, Associated British Foods fell 2.4% after fourth-quarter sales at its Primark fashion business were lower than expected.

Recruiter SThree rose 3.8% after forecasting annual earnings “significantly above” estimates.

Transport company FirstGroup jumped 3.2% after saying its First bus passenger volumes reached 65% of pre-pandemic levels on average in recent weeks.

Martin Sorrell’s S4 Capital fell 3.8% despite the advertising group lifting its annual gross profit guidance, driven by strong demand from global tech platforms.

(Reporting by Devik Jain and Amal S in Bengaluru; Editing by Shounak Dasgupta and Alexander Smith)

U.S. Shares Retreat, European Shares end Little-Changed

Major U.S. indexes were lower, pulling back from earlier gains but still close to all-time highs.

The Dow Jones Industrial Average fell 133.74 points, or 0.38%, to 34,897.33, the S&P 500 lost 14.45 points, or 0.32%, to 4,499.62 and the Nasdaq Composite dropped 4.28 points, or 0.03%, to 15,282.36 by mid afternoon.

Federal Reserve Bank Governor Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Earlier in the day, U.S. data showed the number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

After falling as much as 0.9% in morning trade, the pan-European STOXX 600 index ended largely unchanged around 467.57 points. The index had shed 1.5% over the past two days on fears of a more-hawkish-than-expected ECB.

Euro zone bonds yields tumbled as the European Central Bank took its first tentative step in withdrawing COVID-era stimulus. Southern Europe led a fall in euro zone sovereign bond yields.

The euro rose 0.15% against the dollar, climbing for the first time in four sessions, while bond markets cheered by sending French 10-yields negative again.

“We’re seeing some modest weakness mainly because the market is just in flux. There is no real clarity on when we will start to see the Fed and ECB start to pull back stimulus,” said Edward Moya, a senior market analyst with OANDA in New York.

Instead of hinting at any potential end date for its pandemic-era purchase programme, European Central Bank President Christine Lagarde instead channelled the spirit of former British Prime Minister Margaret Thatcher, saying: “The lady isn’t tapering.”

Germany’s 10-year yield, the benchmark for the bloc, fell. [GVD/EUR]

FRAGILE CHINA

MSCI’s benchmark for global equity markets fell 0.33% to 740.33. Emerging markets stocks fell 1.18%.

The UK’s FTSE 100 dropped 1% with low-cost airline easyJet tumbling over 10% as it tapped shareholders for 1.2 billion pounds ($1.7 billion). [.EU]

MSCI’s broadest index of Asia-Pacific shares ended down 1%, which was its worst daily performance since Aug. 19, the last time markets decided they were worried about the U.S. Federal Reserve tapering its massive asset purchase programme.

Chinese tech giants Tencent, NetEase and Alibaba had slumped 8.5%, 11% and 6% respectively after online gaming chiefs were summoned by authorities to check they are sticking to strict new rules for the sector.

“The global story is looking soft and it’s being hit by the Delta variant plus concern about potentially the Fed still moving towards a taper,” said Rob Carnell, Asia head of research at ING. “It’s an unsettling combination of things.”

The China angst had meant Hong Kong, where many heavyweight Chinese firms are also listed, shed 2.3%.

News that Chinese authorities had told gaming firms to resolutely curb incorrect tendencies such as focusing “only on money” and “only on traffic” had hurt companies with large gaming operations. Tencent fell 8.5%, Bilibili lost nearly 9% and NetEase slumped 11%.

There was more turbulence too for the country’s most indebted property giant, Evergrande.

Media reports the company would suspend some interest payments on loans and payments to its wealth management products sent its shares down more than 10% at one point, although they recovered almost half of the drop on news that some creditors had agreed to loan payment extensions.

Korea’s Kospi fell 1.5%, also under pressure from regulatory scrutiny of local tech players. In Korea’s case, fintech names such as Kakao Corp , which sank 7.2%, and Naver Corp, down 6.9%, were in the spotlight.

Australian stocks lost nearly 2% after payrolls data showed a sharp drop in jobs in the first half of August.

Gold steadied in choppy trading, buoyed by a slight retreat in the dollar. Spot bullion prices were up 0.4%.

Oil prices fell on China’s plan to tap state reserves and a smaller-than-expected drawdown in U.S. crude supplies.

Brent crude was last down $1.14, or down 1.57%, at $71.46 a barrel. U.S. crude was last down $1.16, or down 1.66% at %68.15.

($1 = 0.7246 pounds)

(Additional reporting by Alun John in Hong Kong; Editing by Carmel Crimmins and Nick Zieminski)

FTSE 100 Drops 1% as Commodity, Financial Stocks Weigh

The blue-chip index fell 1.1% and was on course for its worst daily performance in three weeks. Life insurers and banks dragged the most, dropping 2% and 1.3%, respectively.

Miners slumped 1.4%, tracking iron-ore prices, while BP and Royal Dutch Shell shed 1.4% each.

The domestically focused mid-cap FTSE 250 index declined 0.5%.

Globally, investors treaded lightly as a resurgence in COVID-19 cases fuelled concerns about slowing global growth amid talk of major economies easing crisis-era stimulus measures.

The European Central Bank’s policy decision, due later in the day, was on the radar for cues on whether the bank would take a step towards reducing its emergency economic support for the bloc.

“The potential taper talk doesn’t necessarily please investors, as the COVID situation remains uncertain and European businesses need the ECB’s support to go through what might be another dark winter,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“I believe that the divergent opinions at the heart of the ECB won’t let the bank make any sharp move in the close future.”

Domestically, Bank of England governor Andrew Bailey said policymakers were split evenly last month on whether basic conditions for a rate hike were met by the British economy’s recovery.

easyJet fell 9.7% after the British airline said it rejected a takeover offer and would raise $1.7 billion from shareholders to fund its pandemic recovery and expand operations.

Genus slid 9.5% as Peel Hunt downgraded the livestock genetics firm’s stock to “hold” from “buy” after it missed annual profit estimates.

On the other hand, Hays jumped 3% to top the FTSE 250 index after Barclays upgraded the recruitment agency’s stock to “overweight” from “equalweight”.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty and Devika Syamnath)

European Stocks Slide Ahead of ECB Meeting, EasyJet Tumbles

The continent-wide STOXX 600 index was down 0.8%, hitting a three-week low, with UK’s FTSE 100 leading losses with a 1.1% drop and Germany’s DAX touching over a one-month low.

British airline easyJet tumbled 13.8% after it revealed plans to raise 1.2 billion pounds ($1.7 billion) and said it had rejected a takeover offer.

Travel stocks, down 1.8%, fell the most among sectors, while miners, technology and automakers dropped between 1.0% and 1.4%.

The ECB is expected to slow its bond buying via its Pandemic Emergency Purchase Programme (PEPP), according to a Reuters poll, but also reassure markets that this is not the start of a gradual exit from easy policy.

Asian shares dropped more than a percent, with Chinese gaming stocks coming under pressure from fresh regulatory scrutiny, while data showed China’s factory gate inflation hit a 13-year high in August.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)

Worries Over Economic Recovery Shake World Stocks, Wall Street

Accommodative central bank policies and optimism about reopening economies have pushed equities to record levels but concerns are growing about the impact of rising coronavirus infections due to the Delta variant.

Markets are also still assessing data from last week which showed the U.S. economy created the fewest jobs in seven months in August, and wondering how the U.S. central bank will respond.

The Fed should move forward with a plan to taper its massive asset purchase programme despite the slowdown in job growth, St. Louis Federal Reserve Bank President James Bullard said in an interview with the Financial Times on Wednesday.

“Everything is tapering, tapering, tapering. We are looking at every single central bank – when is the next one?” said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management, though he added: “The Delta variant impact is still running like a wild card”.

The Dow Jones Industrial Average fell 76.74 points, or 0.22 percent, to 35,023.26, the S&P 500 lost 7.8 points, or 0.17 percent, to 4,512.23 and the Nasdaq Composite dropped 87.96 points, or 0.57 percent, to 15,286.37 by 2:17 p.m. EST (18:17 GMT).

MSCI’s world equity index fell 0.41% by after seven consecutive days of gains.

European stocks fell 1% and hit their lowest in nearly three weeks. Britain’s FTSE 100 struck two-week lows, down 0.75%.

“September is the month investors confront reality,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, pointing to uncertainty over the Fed’s tapering plans and inflation fears as a reason investors are taking profits or reallocating funds.

The coronavirus Delta variant and concerns over the economic recovery were also weighing.

“What is likely ahead of us is a continued but temporary deceleration of economic activity of one to three months which likely started in August,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Federal official Robert Kaplan was due to speak later on Wednesday.

In Europe, markets are focused on whether the European Central Bank will this week begin to scale back its bond purchase programme.

The dollar paired some gains after jumping to a one-week high against a basket of other major currencies. It also hit a one-week peak against the the single currency and was trading at $1.1826.

The dollar’s strength offset investors’ risk aversion to pressure bullion to a two-week low. Spot gold prices fell 0.1%.

Longer-dated U.S. government bond yields slipped on Wednesday coming off a two-day climb after labor market data and ahead of an auction by the Treasury in 10-year notes. Yields on 10-year Treasury notes fell to 1.3495%, retreating from this week’s eight-week highs.

Germany’s 10-year Bund yield also hit eight-week highs before edging lower to -0.32% .

“Fears that central banks might start to taper their asset purchases seems to have knocked away a little confidence, particularly given tomorrow’s ECB decision where many expect we’ll begin to see the start of that process, not least with inflation there running at its highest levels in almost a decade,” Deutsche Bank analysts said in a note.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.77%, stemming an eight-session string of gains.

Chinese blue chips dropped 0.41%, weighed down by recent soft data in the world’s second-biggest economy.

But Japan’s Nikkei jumped 0.89% and hit a five-month high, helped by revised gross domestic product growth figures beating expectations.

Bitcoin continued its rout, down 1.1%.

Shares of Coinbase Global Inc dropped over 2% after the firm revealed it has received a legal notice from the top U.S. markets regulator.

U.S. crude oil jumped 1.39% to $69.32 a barrel and Brent crude rose 1.4% to $72.69 per barrel, with prices supported by a slow restart to production in the Gulf of Mexico after Hurricane Ida hit the region.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Alun John in Hong Kong; Editing by Kenneth Maxwell & Shri Navaratnam, Editing by William Maclean and Nick Tattersall)

World Equities Under Pressure as Economic Worries Mount

Key U.S. equity benchmarks were down and the MSCI world equity index retreated from a record hit overnight, following seven consecutive days of gains to all-time highs. Earlier in the session, hopes of extra stimulus in Japan and strong China trade data had boosted Asia shares.

The Dow Jones Industrial Average fell 209.2 points, or 0.59%, to 35,159.89 and the S&P 500 lost 9.96 points, or 0.22 percent, to 4,525.47 by 2:22 p.m. ET (18:22 GMT). The Nasdaq Composite bucked the trend, adding 0.18% to 15,391.26.

“The combination of exorbitant expectations, nosebleed valuations and slowing macro environment make the go-forward reward/risk outlook less attractive,” said Jeffrey Carbone, managing director at Cornerstone Wealth in Huntersville, North Carolina.

European stocks retraced ahead of an ECB policy meeting on Thursday. The STOXX 600 benchmark fell 0.5% but were not far from last month’s lifetime peak hit.

Data on Friday showed the U.S. economy created 235,000 jobs in August, the fewest in seven months as hiring in the leisure and hospitality sectors stalled, reducing expectations that the Fed will opt for an early tapering of its monthly bond purchases.

The market took the surprisingly soft U.S. payrolls report on Friday “in stride, with the assumption that the COVID-19 Delta variant had an impact on economic activity in August,” Arthur Hogan, chief market strategist at brokerage National Holdings in New York, said in a market note.

Speeches by a number of U.S. policymakers later this week will be closely watched for any indication about how the weak jobs report has impacted the Fed’s plans on tapering its bond purchases and keeping its expansive policy for the near-term.

The recent equity rally started after Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium in August.

“Given that before Jackson Hole many FOMC members had come out in favor of tapering on a tight timetable, we’ll see if they confirm, or align with Powell’s more moderate message,” said Giuseppe Sersale, fund manager at Anthilia.

U.S. government bond yields rose on Tuesday, continuing the climb seen on Friday in the wake of the jobs report and ahead of a fairly busy week of Treasury auctions.

Japanese shares rallied further on hopes the ruling Liberal Democratic Party will offer additional economic stimulus and easily win an upcoming general election after Prime Minister Yoshihide Suga said he would quit.

Tokyo’s Nikkei crossed the 30,000 mark for the first time since April, also helped by an announcement on its reshuffle, and the broader Topix index climbed 1.1% to a 31-year high.

Anthilia’s Sersale said investors had a defensive positioning on Japanese stocks that led to a short squeeze.

“I was positive on Tokyo (stocks) and remain so, but perhaps at this point it is better to look for a less overbought entry point,” he said.

Mainland Chinese shares extended gains, with the Shanghai Composite rising 1.5% to its highest since February, helped by Chinese trade data showing both exports and imports grew much more quickly than expected in August.

“The mood is improving on hopes the government will take measures to support the economy and that the monetary environment will be kept accommodative,” said Wang Shenshen, senior strategist at Mizuho Securities.

A rout in bonds and shares of China Evergrande Group deepened on Tuesday after new credit downgrades on the country’s No. 2 developer.

The euro retreated 0.16% at $1.1849, while Europe’s broad FTSEurofirst 300 index dropped 0.46% to 1,821.56.

The ECB is seen debating a cut in stimulus, with analysts expecting purchases under its Pandemic Emergency Purchase Programme (PEPP) falling, possibly as low as 60 billion euros a month from the current 80 billion euros.

Germany’s 10-year yield hit its highest since mid-July.

The Australian dollar briefly rose after the central bank went ahead with its planned tapering of bond purchases, but quickly gave up those gains after the bank reiterated its need to see sustainably higher inflation to raise interest rates.

The Aussie fell 0.6%, off its 1-1/2-month high set on Friday.

The U.S. dollar rose 0.3% against a basket of other major currencies, pressuring gold prices. Spot bullion prices were down 1.4%. U.S. gold futures settled 1.9% lower at $1,798.5 an ounce.

Elsewhere in commodities, oil prices slid on concerns over weak demand in the United States and Asia. Saudi Arabia’s sharp cuts to crude contract prices for Asia had earlier revived demand concerns.

Brent crude futures fell 1.02% to $71.46 per barrel, while U.S. crude futures declined 1.75% to $68.08.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chris Prentice in Washington, Danilo Masoni in Milan and Hideyuki Sano in Tokyo; Editing by Jane Merriman, Dan Grebler and Alex Richardson)

Financial Stocks Drag FTSE 100 Lower; DS Smith Outperforms

The blue-chip index fell 0.3%, with shares of banking and investment banking and brokerage services providers shedding 0.8% and 0.6%, respectively.

Heavyweight oil majors BP and Royal Dutch Shell slipped about 0.4% as oil prices remained muted amid fears over slower demand.

The domestically focused mid-cap FTSE 250 index was flat.

DS Smith gained 3.3% as J.P.Morgan raised its price target on the cardboard maker’s stock after it said trading continued to progress well in line with the trends.

TP ICAP Group Plc fell 4.6% after the world’s largest inter-dealer broker reported a lower half-year profit as market volatility eased.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty)

 

The Week Ahead – Monetary Policy Decisions Put the EUR, the Loonie, and the Aussie Dollar in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 38 stats in focus in the week ending 10th September. In the week prior, 80 stats had also been in focus.

For the Dollar:

It’s a quiet week ahead and a quiet start to the week, with the U.S markets closed for Labor Day on Monday.

On Tuesday, JOLT’s job openings will draw interest, with little else for the markets to consider.

The focus will then shift to the weekly jobless claim figures on Thursday.

Wholesale inflation numbers wrap things up at the end of the week.

In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035.

For the EUR:

It’s a relatively busy week on the economic data front.

The German economy will be back in the spotlight in the week ahead.

German factory orders and industrial production figures will be in focus on Monday and Tuesday.

On Thursday, German trade data will also draw plenty of attention.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence on Tuesday.

The main event of the week, however, will be the ECB monetary policy decision.

With the markets expecting the ECB to stand pat on policy, the focus will be on the ECB Press Conference. Will the ECB continue to see reflation as transitory?

For the week, the EUR rose by 0.72% to $1.1880.

For the Pound:

It’s a busier week ahead on the economic calendar.

BRC Retail sales figures will be in focus early in the week. With the markets looking to see how the UK economy is faring, the numbers should have more influence than usual.

A lack of stats mid-week will leave the Pound in the hands of market risk sentiment ahead of a busy Friday.

Industrial and manufacturing production and trade data due out on Friday will be the key stats of the week.

The Pound ended the week up by 0.78% to $1.3871.

For the Loonie:

It’s a quiet week ahead on the economic calendar.

Ivey PMI numbers will be in focus on Wednesday ahead of employment figures on Friday.

While the employment numbers will be key, the BoC policy decision on Wednesday will be the main event.

BoC forward guidance will be the key area of focus on the day.

The Loonie ended the week up 0.76% to C$1.2524 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no material stats to consider in the week.

While it’s a quiet week on the economic data front, the RBA is in action on Tuesday.

Have the latest lockdown measures left the RBA in a lengthier holding pattern on policy?

The Aussie Dollar ended the week up by 2.02% to $0.7460.

For the Kiwi Dollar:

It’s a quiet week ahead.

Electronic card retail sales figures on Friday will be the only key stat of the week.

From elsewhere, economic data from China will also influence, as will COVID-19 news updates.

The Kiwi Dollar ended the week up by 2.10% to $0.7158.

For the Japanese Yen:

Household spending will be in focus on Tuesday. On Wednesday, 2nd quarter GDP numbers will also draw interest. The markets will be looking for any revisions from the 1st estimates.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar.

Out of China

Trade data will have a material impact on market risk sentiment on Tuesday.

Private sector PMIs for July and August disappointed. Weak trade data will raise further question marks over the economic recovery.

With inflation still a hot topic, Inflation numbers on Thursday will also be key.

The Chinese Yuan ended the week up by 0.25% to CNY6.4560 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia will continue to be the main areas of interest for the markets. News updates from the Middle East, in particular, will need monitoring following recent events in Afghanistan.

The Weekly Wrap – A Particularly Busy Economic Calendar Left the Greenback in the Red

The Stats

It was a particularly busy week on the economic calendar, in the week ending 3rd September.

A total of 80 stats were monitored, which was up from 49 stats in the week prior.

Of the 81 stats, 34 came in ahead forecasts, with 41 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 34 of the stats reflected an upward trend from previous figures. Of the remaining 46 stats, 41 reflected a deterioration from previous.

For the Greenback, FED monetary policy and economic data delivered Dollar weakness. In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035. In the previous week, the Dollar had fallen by 0.88% to 92.653.

Out of the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

Out of the UK

Economic data was on the lighter side once more. Finalized private sector PMIs for August disappointed in the week.

The all-important services PMI fell from 59.6 to 55.0, which was down from a prelim 55.5. Of less significance was a fall in the manufacturing PMI from 60.4 to 60.3, which was up from a prelim 60.1.

In the week, the Pound rose by 0.78% to end the week at $1.3871. In the week prior, the Pound had risen by 1.04% to $1.3764.

The FTSE100 ended the week down by 0.14%, partially reversing a 0.85% loss gain the previous week.

Out of the Eurozone

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

For the week, the EUR rose by 0.83% to $1.1795. In the week prior, the EUR had fallen by 0.84% to $1.1698.

The CAC40 rose by 0.12%, while the DAX30 and the EuroStoxx600 ended the week with losses of 0.45% and 0.09% respectively.

For the Loonie

GDP and trade data were the key stats of the week.

In the 2nd quarter, the Canadian economy contracted by 0.3%, quarter-on-quarter. The economy had expanded by 0.3% in the previous quarter.

On an annualized basis, the economy contracted by 1.1% after having expanded by 5.5% in the quarter prior.

Trade figures were also weak, with the trade surplus narrowing from C$2.56bn to C$0.78bn.

While the stats were disappointing, crude oil prices held relatively steady following the previous week’s rebound, to deliver support.

In the week ending 3rd September, the Loonie rose by 0.76% to C$1.2524. In the week prior, the Loonie had rallied by 1.57% to C$1.2620.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 2.02% to $0.7460, with the Kiwi Dollar ending the week up by 2.10% to $0.7158.

For the Aussie Dollar

Company gross operating profits were upbeat for the 2nd quarter, surging by 7.1%. In the previous quarter, profits had fallen by 0.3%.

Private sector credit rose by 0.7% off the back of a 0.9% increase in June.

Also positive were GDP numbers for the 2nd quarter. Year-on-year, the economy grew by 9.6% compared with 1.1% in the previous quarter. Quarter-on-quarter, the economy expanded by 0.7% after having expanded by 1.8% in the quarter prior.

Trade data on Thursday were upbeat, with the trade surplus widening from A$10.496bn to A$12.117bn.

Retail sales figures were negative, however. In July, retail sales fell by 2.7%, which was in line with prelim figures. Lockdown measures weighed, with sales having fallen by 1.8% in June.

For the Kiwi Dollar

It was a relatively quiet week, with business confidence in focus.

In August, the ANZ Business Confidence Index slid from -3.8 to -14.2. While negative for the Kiwi, the markets were in forgiving mood, however. Expectations of a rebound in confidence limited the damage.

For the Japanese Yen

It was a relatively busy week, with the numbers skewed to the positive.

Retail sales rose by 2.4% in July, which followed a more modest 0.1% increase in June.

Capital spending was also on the rise. In the 2nd quarter, capital spending rose by 5.3%, year-on-year, partially reversing a 7.8% slide from the previous quarter.

Industrial production fell by a relatively modest 1.5%, however, partially reversing a 6.5% jump from June.

Service sector PMI numbers also disappointed in August, falling from 47.4 to 42.9.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar. In the week prior, the Yen had fallen by 0.05% to ¥109.84.

Out of China

Private sector PMIs were key stats in the week and were skewed to the negative.

Both the NBS and the Markit Caixin figures disappointed.

According to the NBS, the manufacturing PMI fell from 50.4 to 50.1, with the non-manufacturing PMI falling from 53.3 to 47.5.

Of greater significance, however, was a fall in the Caixin Manufacturing PMI from 50.3 to 49.2.

According to the Markit Caixin survey, things were not much better for the services sector. The Caixin Services PMI slid from 54.9 to 46.7 in August.

In the week ending 3rd September, the Chinese Yuan rose by 0.25% to CNY6.4560. In the week prior, the Yuan had ended the week up by 0.45% to CNY6.4720.

The CSI300 and the Hang Seng ended the week up by 0.33% and by 1.94% respectively.

British Midcaps Hit Record High Ahead of Factory Activity Data

The blue-chip FTSE 100 index climbed 0.8%, with spirits maker Diageo Plc and banking shares gaining 1.7% and 1%, respectively.

Industrial and aero stocks added 0.7% and 0.3%, respectively.

The domestically focussed mid-cap index advanced 0.4%. Tyman Plc jumped 4.8% to the top of the index after Berenberg upgraded the construction materials supplier’s stock to “buy” from “hold”.

Figures from mortgage lender Nationwide showed British house prices rose by 2.1% month-on-month in August after a subdued 0.6% increase in July, despite the phasing-out of a tax break for purchases in England and Northern Ireland.

All eyes are now on the IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) data due at 08:30 GMT.

Among other stocks, WH Smith slipped 5.5%, after the retailer warned profitability for the year ending August 2022 would be at the lower end of market expectations, due to charges and uncertainty in travel recovery.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu)

Global Equities Hit Record Highs; Oil Closes Higher

MSCI’s benchmark for global equity markets hit a record. The S&P 500 .SPX and Nasdaq also rose to all-time highs as dovish remarks from the Federal Reserve last week bolstered optimism in an economic rebound and eased fears of a sudden tapering in monetary stimulus.

The Dow Jones Industrial Average rose 5.8 points, or 0.02%, to 35,461.6, the S&P 500 gained 26.47 points, or 0.59%, to 4,535.84 and the Nasdaq Composite added 154.43 points, or 1.02%, at 15,283.93 by 3:06 p.m. ET (19:06 GMT).

The Europe-wide STOXX 600 rose 0.07% and was on course to end August with a rise of more than 2% – its seventh month of gains in what would be its longest such winning run in over eight years.

Asian stocks hit a two-week high and Japan’s blue-chip Nikkei closed up 0.5%.

Positive sentiment in equity markets was underpinned by Friday’s Jackson Hole speech by Fed Chair Jerome Powell in which he said tapering of stimulus measures could begin this year, but added the central bank would remain cautious.

“The questions now should pivot from the timing of the taper to its speed. How fast will the Fed reduce its purchases from the current $120 billion monthly rate?” said Christopher Smart, chief global strategist & head of the Barings Investment Institute.

“That will likely be determined by some of the data coming in this week, including U.S. consumer confidence and jobs, but also European inflation and Chinese PMIs.”

With the market focused on the “medium-term,” traders have seen any weakness as buying opportunities, said Pictet Wealth Management strategist Frederik Ducrozet.

“We are going from great to good – the outlook is not as great as it was earlier this year but it’s still consistent with further equity market gains,” he added.

Chinese shares remained the outlier, with the U.S.-listed shares of gaming firms such as NetEase Inc dropping on signs of further regulation.

Chinese regulators cut the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays, state media reported.

The new rules come amid a broad crackdown by Beijing on China’s tech giants, such as Alibaba Group and Tencent Holdings that has hammered Chinese shares traded at home and abroad.

OIL OFF HIGHS

Oil prices edged higher but were off a four-week high as Hurricane Ida weakened into a Category 1 hurricane within 12 hours of coming ashore.

Nearly all U.S. offshore Gulf oil production, or 1.74 million barrels per day, was suspended in advance of the storm.

Focus turned to a meeting of the Organization of the Petroleum Exporting Countries and its allies on Wednesday, with sources telling Reuters the group is likely to keep its oil output policy unchanged and continue with its planned modest production increase.

Brent crude futures settled up 71 cents at $73.42 a barrel after touching four-week highs. They rose more than 11% last week in anticipation of disruptions to oil production from Hurricane Ida.

U.S. oil rose 47 cents to $69.21 a barrel, having jumped a little more than 10% over the last week.

“Hurricane Ida will dictate oil’s near-term direction,” said Jeffrey Halley, senior market analyst at OANDA. “If Ida weakens and its path of destruction is lower than expected, oil’s rally will temporarily lose momentum here.”

In bond and currency markets, it was the Fed’s dovish tone that held sway, with Friday’s key U.S. jobs report in focus.

U.S. Treasury yields retreated as the market looked ahead to the release this week of the August employment report and the possibility it could factor into the timing of the Fed’s tapering announcement.

The 10-year U.S. Treasury yield was around 1.2852% , while the dollar index – which measures the greenback against a basket of currencies – edged higher after touching a two-week low.

The euro edged up to $1.18, off a three-week peak touched earlier in the session.

“If we get a (U.S. payrolls) number close to a million that would increase the odds of taper being announced in September, but if the number is line with expectations then there’s a 50-50 chance for a September move,” said Vasileios Gkionakis, global head of FX strategy at Lombard Odier Group.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chris Prentice and Dhara Ranasinghe; additional reporting by Alex Lawler in London; editing by Mark Potter, Bernadette Baum, Pravin Char and Richard Chang)

The Week Ahead – A Particularly Busy Economic Calendar to Keep the Markets Busy

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 76 stats in focus in the week ending 3rd September. In the week prior, 49 stats had also been in focus.

For the Dollar:

In the first half of the week, consumer sentiment, ADP nonfarm employment, and ISM Manufacturing PMI figures are in focus.

Expect the consumer sentiment and ADP numbers to be key.

In the 2nd half of the week, the focus will shift to the jobless claim figures on Thursday.

Wrapping things up, however, will be the nonfarm payrolls and ISM Non-Manufacturing PMIs for August. Another surge in hiring and that could be the green light for the FED to make a move.

In the week ending 3rd September, the Dollar Spot Index fell by 0.87% to 92.686.

For the EUR:

It’s a particularly busy week on the economic data front.

On Tuesday, French consumer spending and 2nd quarter GDP numbers are due out along with German unemployment data.

Expect the GDP and unemployment figures to be of greater influence.

On Wednesday, German retail sales and Spanish and Italian manufacturing PMIs are due out. Finalized numbers for France, Germany, and the Eurozone will also draw attention, however.

Barring marked revisions to prelim numbers, Italy and the Eurozone’s PMIs and German retail sales will be key.

At the end of the week, service sector PMIs will also be in focus.

For the week, the EUR rose by 0.83% to $1.1795.

For the Pound:

It’s a quiet week ahead on the economic calendar.

Finalized private sector PMIs for August are due out on Wednesday and Friday.

Expect any revision to the services PMI to be key.

The Pound ended the week up by 1.04% to $1.3764.

For the Loonie:

It’s a busier week ahead on the economic calendar.

2nd quarter GDP numbers will be key on Tuesday. On Thursday, trade data will also influence, however.

The Loonie ended the week up 1.57% to C$1.2620 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Company gross operating profits and private sector credit will be in focus early in the week.

GDP numbers on Wednesday and trade data on Thursday will be the key stats of the week, however.

The Aussie Dollar ended the week up by 2.52% to $0.7312.

For the Kiwi Dollar:

It’s a quiet week ahead.

Building consents and business confidence figures are due out on Tuesday.

Expect business confidence figures for August to be key.

From elsewhere, private sector PMIs from China and COVID-19 news updates will also influence.

The Kiwi Dollar ended the week up by 2.57% to $0.7011.

For the Japanese Yen:

Retail sales figures for July gets things going on Monday.

On Tuesday industrial production figures for July will also draw plenty of interest.

Through the rest of the week, capital spending and finalized private sector PMIs will also be in focus.

The Japanese Yen fell by 0.05% to ¥109.84 against the U.S Dollar.

Out of China

Private sector PMIs for August will influence market risk sentiment through the week.

On Tuesday, the NBS numbers are due out ahead of the all-important Caixin Manufacturing PMI on Wednesday.

At the end of the week, the Caixin Services PMI will also provide riskier assets with direction.

The Chinese Yuan ended the week up by 0.45% to CNY6.4720 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia continue to be the main areas of interest for the markets. News updates from the Middle East, in particular, will need continued monitoring…

Chatter from Capitol Hill over Afghanistan will also need tracking.

The Weekly Wrap – Economic Data and FED Chair Powell Delivered Commodity Currencies a Boost

The Stats

It was a relatively busy week on the economic calendar, in the week ending 27th August.

A total of 49 stats were monitored, which was down from 52 stats in the week prior.

Of the 49 stats, 17 came in ahead forecasts, with 28 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 17 of the stats reflected an upward trend from previous figures. Of the remaining 32 stats, 31 reflected a deterioration from previous.

For the Greenback, FED monetary policy and economic data delivered Dollar weakness. In the week ending 27th August, the Dollar Spot Index fell by 0.87% to 92.686. In the previous week, the Dollar had risen by 1.02% to 93.549.

Out of the U.S

Early in the week, private sector PMIs were in focus. Weaker numbers weighed, with the Services PMI falling from 59.9 to 55.2 in August, according to prelim figures.

On Wednesday, core durable goods rose by 0.7% in July, following a 0.6% increase in June, which was a positive.

2nd quarter GDP numbers were also revised up on Thursday. In the 2nd quarter, the economy grew by 6.6%, which was up from a 6.5% first estimate.

Jobless claims disappointed, however, with initial jobless claims rising from 349k to 353k.

At the end of the week, personal spending and inflation figures delivered mixed results.

In July, the Core PCE Price Index rose by 3.6% year-on-year, which was in line with forecasts and June figures. Month-on-month, the index rose by 0.3% following a 0.5% increase in June.

Personal spending disappointed, however, with spending up by just 0.3%. Spending had risen by 1.1% in June.

While the stats did influence, FED Chair Powell’s speech on Friday was the main event of the week…

The FED Chair Powell delivered what the markets were looking for, weighing on the Dollar while supporting riskier assets. In line with expectations, Powell talked of tapering later in the year but highlighted that tapering did not mean tightening and that it would not translate into a shift in policy on interest rates…

Out of the UK

Economic data was on the lighter side. Prelim private sector PMIs for August disappointed at the start of the week.

The all-important services PMI fell from 59.6 to 55.5, with the manufacturing PMI down from 60.4 to 60.1.

CBI industrial trend orders for August were of little comfort, in spite of an increase from 17 to 18.

In the week, the Pound rose by 1.04% to end the week at $1.3764. In the week prior, the Pound had fallen by 1.75% to $1.3623.

The FTSE100 ended the week up by 0.85%, partially reversing a 1.81% loss from the previous week.

Out of the Eurozone

Prelim private sector PMIs for August and the German economy were in focus, with the stats skewed to the negative.

Germany’s manufacturing PMI fell from 65.9 to 62.7, with the services PMI declining from 61.8 to 61.5.

For France, the manufacturing PMI fell from 58.0 to 57.3, with the services PMI falling from 56.8 to 56.4.

As a result, the Eurozone’s manufacturing PMI fell from 62.8 to 61.5. The services PMI slipped from 59.8 to 59.7.

From Germany, the economy grew by 1.6% in the 2nd quarter, coming in ahead of a forecasted 1.5%. Year-on-year, the economy grew by 9.8%. Year-on-year, the economy had contracted by 3.4% in the previous quarter.

While the GDP numbers were upbeat, business and consumer sentiment disappointed.

Germany’s IFO Business Climate Index fell from 100.7 to 99.4, with the GfK Consumer Climate Indicator falling from -0.40 to -1.20.

For the week, the EUR rose by 0.83% to $1.1795. In the week prior, the EUR had fallen by 0.84% to $1.1698.

The CAC40 rose by 0.84%, with the DAX30 and the EuroStoxx600 ending the week with gains of 0.28% and 0.76% respectively.

For the Loonie

It was a quiet week on the economic data front, with RMPI numbers for July the key stat of the week.

In July, the RMPI, increased by 2.2%, month-on-month. The RMPI had risen by 3.90% in June.

Adding to the upside for the Loonie in the week was a sharp rebound in crude oil prices. FED Chair Powell’s outlook also put monetary policy divergence in favor of the Loonie.

In the week ending 27th August, the Loonie rose by 1.57% to C$1.2620. In the week prior, the Loonie had fallen by 2.45% to C$1.2821.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 2.52% to $0.0.7312, with the Kiwi Dollar ending the week up by 2.57% to $0.7011.

For the Aussie Dollar

Private new capex and retail sales figures were the key stats of the week.

In the 2nd quarter, private new CAPEX rose by 4.4% following a 6.0% increase in the previous quarter.

On the negative, however, was a 2.7% slide in retail sales in July. In June, retail sales had fallen by 1.8%. COVID-19 lockdown measures weighed on consumption in July, limiting the impact on the Aussie Dollar.

For the Kiwi Dollar

It was a relatively busy week, with retail sales and trade data in focus.

Retail sales figures for the 2nd quarter impressed, with retail sales up 3.2% and core retail sales up 3.4%. In the previous quarter, retail sales had been up 2.8%, with core retail sales up 3.2%.

On the negative, however, were trade figures for July. Month-on-month, the trade balance fell from a NZ$245m surplus to a NZ$402m deficit.

Year-on-year, the deficit widened from NZ$280m to NZ$1,100m. While the headline figure was negative, a more marked increase in imports, supported by strong demand, impacted the trade balances.

For the Japanese Yen

It was a relatively quiet week.

Private sector PMIs and Tokyo inflation figures were in focus.

PMI numbers disappointed, with the services PMI falling from 47.4 to 43.5. The manufacturing PMI saw a more modest decline from 53.0 to 52.4.

On the inflation front, Tokyo core consumer prices remained unchanged in August, year-on-year. In July, core consumer prices had fallen by 0.5%. The numbers had a muted impact on the Yen, however.

The Japanese Yen fell by 0.05% to ¥109.84 against the U.S Dollar. In the week prior, the Yen had fallen by 0.17% to ¥109.78.

Out of China

There were no major stats from China to influence the markets in the week.

In the week ending 27th August, the Chinese Yuan rose by 0.45% to CNY6.4720. In the week prior, the Yuan had ended the week down by 0.37% to CNY6.5015.

The CSI300 and the Hang Seng ended the week up by 1.21% and by 2.25% respectively.