MNI China Daily Summary: Wednesday, September 4

MNI: UK AUG FINAL SERVICES PMI 53.7 (FLASH: 53.3); JUL 52.5

RPT-MNI POLICY: Fed Prefers Gradual Rates Easing If Jobs Allow

MNI: PBOC Sets Yuan Parity Higher At 7.1148 Weds; +2.17% Y/Y

MNI: PBOC Net Drains CNY276.6 Bln via OMO Wednesday

CHINA PBOC CONDUCTS CNY0.7 BLN VIA 7-DAY REVERSE REPOS WEDS

US MBA: REFIS -0.3% SA; PURCH INDEX +3% SA THRU AUG 30 WK

MNI: US MBA: MARKET COMPOSITE +1.6% SA THRU AUG 30 WK

MNI: EUROZONE JUL PPI +0.8% M/M, -2.1% Y/Y

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

UK: Week Ahead

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EGBS: Bunds Off Highs As Risk Assets Stabilises, Peripherals Still Wider

EGBS
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The stabilisation of European equity and crude oil prices has helped Bunds away from intraday highs, though futures remain +25 ticks today at 134.18.

  • The Aug 29 high in Bunds is still intact at 134.49. A breach of this level would strengthen a near-term bullish condition.
  • Risk sentiment remains subdued though, which has prompted BTP futures to underperform (+7 today at 119.02) and broader 10-year peripheral spreads to Bunds widen ~1.5bps.
  • The Eurozone August final services PMI was slightly weaker than implied by the flash release, though the Olympics-driven French print was confirmed at 55.0.
  • Meanwhile, commentary from several ECB speakers continues to point to a rate cut in September, with little firm guidance provided beyond that gathering.
  • The German cash curve has bull steepened, with yields -3.5 to -1.5bps lower at typing. The bidding deadline for today’s 15-year Bund supply is at 1030BST/1130CET.
  • Broader focus turns to the Bank of Canada decision and US job openings data this afternoon, while BdF’s Villeroy is scheduled to appear on a panel at 1200BST.
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The stabilisation of European equity and crude oil prices has helped Bunds away from intraday highs, though futures remain +25 ticks today at 134.18.

  • The Aug 29 high in Bunds is still intact at 134.49. A breach of this level would strengthen a near-term bullish condition.
  • Risk sentiment remains subdued though, which has prompted BTP futures to underperform (+7 today at 119.02) and broader 10-year peripheral spreads to Bunds widen ~1.5bps.
  • The Eurozone August final services PMI was slightly weaker than implied by the flash release, though the Olympics-driven French print was confirmed at 55.0.
  • Meanwhile, commentary from several ECB speakers continues to point to a rate cut in September, with little firm guidance provided beyond that gathering.
  • The German cash curve has bull steepened, with yields -3.5 to -1.5bps lower at typing. The bidding deadline for today’s 15-year Bund supply is at 1030BST/1130CET.
  • Broader focus turns to the Bank of Canada decision and US job openings data this afternoon, while BdF’s Villeroy is scheduled to appear on a panel at 1200BST.