Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY
- HARRIS, WALZ WILL SIT FOR FIRST CAMPAIGN INTERVIEW ON CNN
- TALKS CONTINUE ON CEASEFIRE DEAL AS WEST BANK OP RAISES TENSIONS
- BOJ TO VIGILANTLY MONITOR MARKETS, DEPUTY GOVERNOR SAYS
- AUSTRALIA JULY CPI AT 3.5%, HIGHER THAN EXPECTED
Figure 1: NVIDIA to deliver quarterly report after-markets
Source: MNI/Bloomberg
NEWS
US (BBG): Harris, Walz Will Sit for First Campaign Interview on CNN
Vice President Kamala Harris and her running mate, Minnesota Governor Tim Walz, will take part in their first joint interview, scheduled for Thursday night on CNN. The network said Tuesday that anchor Dana Bash will talk to the two Democratic nominees in Georgia, a state that’s crucial to the election strategy of both parties. The session will mark the first lengthy interview of Harris since she replaced President Joe Biden at the top of their party’s ticket late last month.
US (BBG): Trump Special Counsel Presses Ahead With 2020 Election Case
The US special counsel investigating Donald Trump is pressing ahead with prosecuting the former president on charges of trying to overturn the 2020 election after facing a recent setback from the US Supreme Court. Special Counsel Jack Smith on Tuesday filed an updated indictment that removes several pages of allegations following the high court’s blockbuster decision finding Trump at least partially immune from prosecution related to his official acts as president. Smith has decided against pursuing a major court hearing to present evidence before the Nov. 5 election.
US/UKRAINE (BBG): Zelenskiy Will Pitch Plan to Force Russia to End War to US
Ukrainian President Volodymyr Zelenskiy will present a plan to force Russia to halt its invasion of his country to Joe Biden just weeks before the US holds presidential elections. Zelenskiy said on Tuesday that he wants to discuss the blueprint with Biden during his trip to the United Nations General Assembly meeting in New York in September. He will also present it to presidential candidates Kamala Harris and Donald Trump, he said.
ISRAEL (MNI): Talks Continue on Ceasefire Deal as West Bank Op Raises Tensions
Reuters confirming reports from 27 Aug that Israeli, Qatari, US and Egyptian negotiators are in the Qatari capital, Doha, today (28 Aug) at a 'technical/working level' looking to reach an agreement on what are seen as the final gaps in a Gaza ceasefire-for-hostages deal with Hamas. The talks come a day after Israeli forces rescued a hostage from a Hamas tunnel in southern Gaza. Axios reports that "Israeli officials say they think the successful operation will put pressure on Hamas leader Yahya Sinwar to agree to a hostage-release and ceasefire deal." However, it remains to be seen how the rescue of one hostage might apply such pressure. Hamas still holds 108 Israeli hostages.
UK/GERMANY (MNI): PM Seeks Bilateral Deal & Improvement In EU Relations on Visit to Germany
Prime Minister Sir Keir Starmer is in Germany for meetings with President Frank-Walter Steinmeier and Chancellor Olaf Scholz as the two sides seek to push for agreement on the 'biggest ever' Anglo-German bilateral treaty. Starmer and Scholz are set to hold a press conference at 0945CET (0545ET, 1045BST). The visit, which will include a trip to Paris and talks with French President Emmanuel Macon on 29 Aug, intends to show it is time for the UK and EU to 'turn a corner on Brexit'. Starmer has sought to use much more positive language when talking about relations with the EU than was the case under previous Conservative gov'ts.
CHINA (MNI EXCLUSIVE): PBOC Reduces Yuan Support, Wide Volatility Band Ahead
MNI discusses the yuan's outlook with FX traders and advisors. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
BOJ (MNI): BOJ to Vigilantly Monitor Markets - Dep Gov Himino
Bank of Japan Deputy Governor Ryozo Himino said on Wednesday that the BOJ would adjust would adjust monetary policy if it has growing confidence "that its outlook for economic activity and prices will be realised," noting the Bank must closely monitor developments in unstable financial markets. “The BOJ also intends to carefully examine the impact these market developments at home and abroad have on the outlook for economic activity and prices, the risks surrounding the outlook, and the degree of confidence in the outlook,” Himino told business leaders in Kofu City.
BOJ (MNI EXCLUSIVE): BOJ Set for Sept Pause, Rate Hike Path Intact
The BOJ's long-term policy plans remain intact. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
JAPAN (BBG): Japan Issues Highest Warning as Typhoon Shanshan Nears Coast
Japan issued its highest emergency alert as Typhoon Shanshan barrels toward the southern island of Kyushu, with the very strong storm set to bring heavy rain before making landfall. Shanshan has maximum sustained winds of 95 knots (176 kilometers) an hour near its center and is expected to intensify as it approaches Kyushu on Thursday, according to the Japan Meteorological Agency. The storm is currently equivalent to a Category 2 hurricane on the five-step Saffir-Simpson scale.
CORPORATE (BBG): Nvidia Investors Betting on Another Blowout Quarter: Preview
Nvidia Corp., the world’s most valuable chipmaker, will deliver its quarterly report on Wednesday, showing whether it can once again shatter sales expectations for artificial intelligence computing. Analysts, on average, are predicting that the company will project revenue growth of more than 70% for the current quarter. Some are estimating an even larger surge - and investors have bid up the shares in recent weeks on the hope that another blowout quarter is coming. Nvidia’s fiscal second-quarter results and third-quarter forecast also will serve as a barometer for AI spending across much of the technology industry.
CORPORATE (BBG): Seven & I Shares Fall on Potential Hurdle for Takeover Offer
Seven & i Holdings Co. shares dropped as much as 4% after the operator of 7-Eleven stores asked Japan’s government for a designation that would raise potential hurdles for a takeover. The Japanese retailer is seeking designation as a “core” company under the Foreign Exchange and Foreign Trade Act, which would require prior notification of any entity’s purchase of its shares above 10%, according to people with knowledge of the matter. The stock has risen 19% since Alimentation Couche-Tard Inc.’s buyout proposal was made public on Aug. 19, rebounding from 30-month lows.
DATA
FRANCE DATA (MNI): France Consumer Sentiment In-Line With Consensus
- FRANCE AUG CONSUMER SENTIMENT 92
France Consumer Sentiment was in line with consensus printing at 92 in August (vs 91 prior), making it the highest since February 2022, although remains below the long run average (from January 1987 to December 2023) of 100. From the sub-components, both general economic situation and financial situation in the next 12 months improved, to -45 (from -50) and -9 (from -10), making the former the highest since February 2024 and latter highest since March.
MNI CHINA LIQUIDITY INDEX: Economic Outlook Drops in August
- AUG CHINA LIQUIDITY INDEX 32.6
MNI (Beijing) Local interbank trader’s see China's economic performance at a 12-month low in August, as weak July economic data pushed the People's Bank of China to maintain ample liquidity to support growth, the MNI China Liquidity survey showed. The MNI China Economy Condition Index read 41.9 in August, down from 47.7 previously, the fourth consecutive monthly decline and the lowest reading since August 2023.
AUSTRALIA DATA (MNI): Aussie July CPI at 3.5%, Higher Than Expected
The monthly CPI indicator printed at 3.5% y/y for July, 10 basis points higher than market expectations, and 30bp lower than June, while trimmed mean slowed to 3.8% from the prior month’s 4.1%, data from the Australian Bureau of Statistics showed. Housing (+4.0%), food and non-alcoholic beverages (3.8%), alcohol and tobacco (7.2%), and transport (3.4%) were the most significant contributors to the annual rise. The RBA held the cash rate steady at 4.35% in August, despite the board considering a hike due largely to sticky services inflation.
NEW ZEALAND DATA (MNI): Filled Jobs Show Weak Labour Demand at Start of Q3
July filled jobs fell 0.1% m/m, the fourth straight monthly decline, to be down 0.5% y/y, the lowest annual growth since April 2010. Given that employment data is quarterly and the next update is not until November 6 and filled jobs are on the RBNZ's list of high frequency data, the series is an important gauge of labour market trends. It is signalling weak labour demand continued at the start of Q3 and so cuts at the RBNZ's two remaining 2024 meetings are likely.
FOREX: USD Index Firmer, But Uncomfortably Close to Cycle Lows
- The greenback is firmer, but well off the session's best levels headed into the NY crossover. Market focus remains on the cycle lows in the USD Index posted yesterday at 100.514, with Fed pricing and the closing proximity to the September FOMC decision still largely responsible. OIS markets price ~33bps of easing at present, but it's year-end and early '25 rates pricing that's proving more influential, with markets now pricing 100bps of cuts across the full year and 175bps by the end of H1 next year - leading the greenback lower.
- An early phase of crude oil weakness has worked against oil- and commodity-tied FX, forcing NOK underperformance against all others in G10 on an intraday basis. As a result, EUR/NOK has recovered off the 50-dma support of 11.6973 - a level that's been tested, and held, on several occasions across August.
- GBP/USD hit a new cycle high yesterday at 1.3266, and we flag the close co-movement of the pair and US equity markets, noting that despite the fade off mid-July highs in the GBP net position (still long ~30% of open interest), options markets remain cognizant of the upside risk - GBP/USD 3m risk reversals are further reversing the premium for put vol over calls, which has persisted since March 2020 and the onset of the COVID pandemic in March 2020.
- Datapoints are few and far between Wednesday, keeping focus on central bank comms, with BoE's Mann and Fed's Bostic both scheduled to speak. NVidia's after-market earnings should also draw focus given the stock's lead across US equity markets and the proximity to all-time highs in the e-mini S&P.
EGBS: Crude Pullback Provides Support to EGBs
The pullback in Brent crude futures has helped Bunds recover from yesterday’s lows, with futures +23 ticks today at 134.10.
- Recent weakness in Bund futures has appeared corrective, with bears needing to push through the 50-day EMA at 133.34 to signal scope for a deeper retracement.
- Today’s regional data releases were not market movers, with French consumer confidence meeting consensus at 92, and Eurozone money supply growth below expectations at 2.3% Y/Y (vs 2.7% cons, 2.3% prior).
- There have not been any conventional EGB auctions today, though Austria are issuing a new 5-year benchmark via syndication (the 2086 RAGB tap was dropped).
- The German cash curve has bull flattened, though 2s10s remains 1.6bps steeper this week.
- 10-year EGB spreads to Bunds remain flat to 1bps wider. 10-Year OAT/Bunds still can’t move sustainably below 70bp, while 10-Year BTP/Bunds fails to hold moves below 135bp.
- The remainder of today’s regional calendar is light, with focus on the August flash inflation round on Thursday/Friday.
GILTS: Yields A Touch Lower, Comments From BoE's Mann Due Later
Gilt futures (Z4) stick to a narrow 21-tick range, +14 at 98.94.
- Initial resistance at yesterday’s high (99.21), support at yesterday’s low (98.54).
- First notice for G U4 is tomorrow, with over 85% of the roll complete.
- Yields 1-2bp lower across the curve.
- Crude oil futures hit the lowest level of the week, providing some background support for gilts.
- BoE hawk Mann will appear on a panel discussing “The Value of Economic Research for Policy” (13:15 London). There is no live streaming of the event.
- Don’t expect much new from Mann today.
- BoE comments have refrained from signalling a need for back-to-back cuts, stopping the market from fully discounting sequential easing at meetings through early ’25 (~40bp of cuts currently priced through year end).
- GBP1.5bn of 0.75% Nov-33 I/L supply was smoothly digested.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Sep-24 | 4.905 | -4.5 |
| Nov-24 | 4.688 | -26.2 |
| Dec-24 | 4.549 | -40.1 |
| Feb-25 | 4.353 | -59.7 |
| Mar-25 | 4.209 | -74.1 |
| May-25 | 4.043 | -90.7 |
| Jun-25 | 3.947 | -100.3 |
EQUITIES: Eurostoxx 50 Futures Holding Onto Recent Gains
Eurostoxx 50 futures traded higher last week and price is holding on to its latest gains. The contract has recently pierced the 50-day EMA, at 4875.55. An extension higher would undermine the recent bearish theme and highlight a stronger reversal. Sights are on 4951.00 next, the Jul 31 high. For bears, a reversal lower would refocus attention on the bear trigger at 4494.00, the Aug 5 low. Initial support lies at 4839.22, the 20-day EMA. S&P E-Minis are in consolidation mode. A bullish theme is intact and the contract traded to a fresh cycle high Monday. Price has recently cleared 5600.75, Aug 1 high, signalling scope for an extension towards key resistance and the bull trigger at 5721.25, Jul 16 high. A break would resume the primary uptrend. Support to watch lies at 5504.86, the 50-day EMA. A clear breach of it is required to instead highlight a potential bearish threat.
- Japan's NIKKEI closed higher by 83.14 pts or +0.22% at 38371.76 and the TOPIX ended 11.32 pts higher or +0.42% at 2692.12.
- Elsewhere, in China the SHANGHAI closed lower by 11.302 pts or -0.4% at 2837.429 and the HANG SENG ended 182.22 pts lower or -1.02% at 17692.45.
- Across Europe, Germany's DAX trades higher by 113.66 pts or +0.61% at 18794.99, FTSE 100 lower by 2.75 pts or -0.03% at 8342.82, CAC 40 up 34.24 pts or +0.45% at 7600.02 and Euro Stoxx 50 up 25.17 pts or +0.51% at 4923.95.
- Dow Jones mini down 3 pts or -0.01% at 41353, S&P 500 mini up 5 pts or +0.09% at 5650, NASDAQ mini up 33 pts or +0.17% at 19686.5.
Time: 10:05 BST
COMMODITIES: WTI Futures Extend Pullback From Monday's Highs
WTI futures have recovered from their recent lows and the contract traded sharply higher Monday. The climb is considered corrective, however, price has traded through the 50-day EMA. A clear break of this average would undermine the recent bearish theme. Attention is on key resistance at $78.54, the Aug 12 high. For bears, a stronger reversal lower would refocus attention on $70.88 key support. Bullish trend conditions in Gold remain intact. The recent breach of resistance at $2483.7, the Jul 17 high, confirmed a resumption of the primary uptrend. Note that moving average studies are in a bull-mode set-up and this highlights a dominant uptrend. The focus is on a climb towards $2536.4 next, a Fibonacci projection. Initial support to watch lies at $2472.2, the 20-day EMA. Short-term weakness would be considered corrective.
- WTI Crude down $0.65 or -0.86% at $74.86
- Natural Gas down $0.01 or -0.32% at $1.898
- Gold spot down $16.33 or -0.65% at $2508.34
- Copper down $6.05 or -1.41% at $424.25
- Silver down $0.43 or -1.45% at $29.5415
- Platinum down $17.19 or -1.79% at $945.34
Time: 10:05 BST
MNI (LONDON)
| Date | GMT/Local | Impact | Country | Event |
| 28/08/2024 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 28/08/2024 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 28/08/2024 | 1530/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 28/08/2024 | 1700/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 28/08/2024 | 2200/1800 | US | Atlanta Fed's Raphael Bostic | |
| 29/08/2024 | 0130/1130 | * |  AU | Private New Capex and Expected Expenditure |
| 29/08/2024 | 0600/0800 | ** |  SE | Retail Sales |
| 29/08/2024 | 0600/0800 | *** | SE | GDP |
| 29/08/2024 | 0700/0900 | *** |  ES | HICP (p) |
| 29/08/2024 | 0700/0900 | ** | SE | Economic Tendency Indicator |
| 29/08/2024 | 0800/1000 | *** |  DE | North Rhine Westphalia CPI |
| 29/08/2024 | 0800/1000 | *** | DE | Bavaria CPI |
| 29/08/2024 | 0900/1100 | ** |  EU | EZ Economic Sentiment Indicator |
| 29/08/2024 | 0900/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 29/08/2024 | 0915/1115 | EU | ECB's Lane in panel "Inflation - challenges..." | |
| 29/08/2024 | 1200/1400 | *** | DE | HICP (p) |
| 29/08/2024 | 1230/0830 | *** | US | Jobless Claims |
| 29/08/2024 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 29/08/2024 | 1230/0830 | *** | US | GDP |
| 29/08/2024 | 1230/0830 | * |  CA | Current account |
| 29/08/2024 | 1230/0830 | * | CA | Payroll employment |
| 29/08/2024 | 1230/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 29/08/2024 | 1400/1000 | ** | US | NAR Pending Home Sales |
| 29/08/2024 | 1430/1030 | ** | US | Natural Gas Stocks |
| 29/08/2024 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 29/08/2024 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 29/08/2024 | 1700/1300 | ** | US | US Treasury Auction Result for 7 Year Note |
| 29/08/2024 | 1930/1530 | US | Atlanta Fed's Raphael Bostic |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.