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
- TRUMP SAFE AFTER SECRET SERVICE FOILS ASSASSINATION ATTEMPT
- HOUTHIS FIRE MISSILE FROM YEMEN INTO CENTRAL ISRAEL, WARN OF MORE STRIKES
- FLOOD DEATH TOLL RISES IN EUROPE WITH MORE HEAVY RAIN FORECAST
- ECB WILL ALMOST CERTAINLY WAIT FOR DECEMBER TO CUT, KAZIMIR SAYS
Figure 1: E-Mini S&P reapproaches record highs at start of Fed, BoJ week
Source: MNI/Bloomberg
NEWS
US (BBG): Trump Safe After Secret Service Foils Assassination Attempt
Former President Donald Trump is safe after his Secret Service detail opened fire at a man who was wielding an assault rifle at his West Palm Beach, Florida, golf course Sunday, in what the Federal Bureau of Investigation called an apparent assassination attempt. A suspect in custody was identified by federal officials as Ryan Routh, 58. He has eight arrests on his record, apparently for minor offenses, CNN reported. In 2002, Routh was convicted of possessing a machine gun, NBC reported, citing court records.
ISRAEL/MIDEAST (WaPo): Houthis Fire Missile From Yemen Into Central Israel, Warn of More Strikes
Yemen's Houthi militia claimed responsibility for a surface-to-surface missile attack targeting central Israel on Sunday morning, marking a continued escalation between the Iranian-backed group and Israel. The missile caused no direct injuries, Israel said, though the country's Magen David Adom emergency services said it was treating nine people who were injured on their way to shelters after sirens sounded.
EUROPE (BBG): Flood Death Toll Rises in Europe With More Heavy Rain Forecast
The death toll from flooding in central Europe is climbing, with Poland preparing to declare a state of emergency. Storm Boris has brought torrential rain to the region, with red alerts still in place for parts of Austria, the Czech Republic, Hungary and southern Germany. Six people were confirmed to have died as flash floods hit Romania over the weekend, with hundreds evacuated.
EUROPE (MNI): Eurozone Consumption Not Recovering - De Guindos
The eurozone is not seeing a recovery in consumption recovery, with weak growth a “fundamental” problem for the blocl European Central Bank Vice President Luis de Guindos said on Monday. Despite good wages and labour market data, consumption of goods is not matching consumption of services due to “confidence factors,” De Guindos said in an event in Madrid. There is great uncertainty regarding purchasing power over the mid-to-long term and families have no clear future perspectives, he said.
ECB (BBG): ECB Will Almost Certainly Wait for December to Cut, Kazimir Says
The European Central Bank will probably only be in a position to lower interest rates again at its final meeting of the year, according to Governing Council member Peter Kazimir. “We will almost surely need to wait until December for a clearer picture before making our next move,” he said Monday in a statement. “I would require a significant shift, a powerful signal, concerning the outlook to consider backing another cut in October. But the fact is that very little new information is in the pipeline.”
ITALY (MNI): BOI's Panetta Warns on Energy Transition Costs
The energy transition “will be expensive” and overall costs will be difficult to bear, “particularly for energy-intensive businesses and vulnerable households,” Bank of Italy Governor Fabio Panetta said on Monday at a G7 event in Rome. Panetta said strategies should “simultaneously address the environmental and social aspects of the problem and strike the right balance between ambition and feasibility.”
EU (MNI): Breton Resigns, Attacks VdL's 'Questionable Governance'
The already-fraught process of putting together a new European Commission has suffered a further complication with the resignation of French Commissioner for Industry and the Internal Market Theirry Breton with immediate effect. In his resignation letter Breton, who was believed to be set for a second term in the Commission, alleged that "a few days ago" Commission President Ursula von der Leyen had asked the French gov't to withdraw its endorsement of Breton "for personal reasons" in exchange for an "allegedly more influential portfolio".
CHINA (BBG): Shanghai Slammed by Strongest Typhoon to Hit City Since 1949
The strongest typhoon in more than seven decades has struck China’s financial hub, leading to widespread flight cancellations and disrupting holidaymakers at the start of a days-long national festival. Typhoon Bebinca - known as Beibijia in China - crossed the coast in the Yangtze River Delta region on Monday morning, and is expected to dump heavy rain across Jiangsu, Zhejiang and Anhui provinces as it tracks inland and weakens, according to reports from state media.
MEXICO (BBG): Mexico’s Controversial Judicial Reform Is Signed by President
Mexican President Andrés Manuel López Obrador signed a bill into law on Sunday that will require all federal judges, including those on the Supreme Court, to be elected by popular vote. AMLO, as the president is known, signed the document in a video published on social media. He was accompanied by President-elect Claudia Sheinbaum. The new law mandates that starting next year, members of the Supreme Court will be elected in a national vote along with half of all federal judges, rather than by appointment.
N. KOREA (MNI): N. Korea Calls Parliament Meeting for Oct 7 to Amend Constitution
Yonhap News Agency (citing the Korean Central News Agency) reports that North Korea will convene a parliamentary meeting on October 7 to discuss the proposed amendments to the constitution, which would formally designate South Korea as the reclusive country's "primary foe." North Korean Supreme Leader Kim Jong-un called for the constitutional change during a Supreme People's Assembly (SPA) meeting in January, abandoning the earlier formal commitment to Korean unification. This was followed by the dismantling of the Arch of Reunification in Pyongyang in a symbolic act serving to reaffirm a policy pivot.
COMMODITIES (BBG): Oil Steadies as Falling Libyan Exports Offset Weak Chinese Data
Oil steadied after its first weekly gain in a month as a drop in Libyan exports was offset by signs an economic slump in China is deepening. Brent futures traded below $72 a barrel, while West Texas Intermediate was near $69. Libyan exports have declined markedly as United Nations-led talks failed to break an impasse over control of the central bank, which has spilled over into its oil industry.
FOREX: USDJPY Trades Below 140.00 as Fed & BOJ Decisions Loom
- The continued uncertainty over the Fed’s decision this week and the associated downward pressure on US yields has weighed on the greenback Monday, with the USD index down 0.42% mid-way through the European session. As expected, the Japanese Yen is the main beneficiary here, and USDJPY (-0.75%) trades below the 140.00 mark for the first time since July 2023.
- The tilt towards 50bp being a very possible scenario has seen the pair fall as low as 139.58, although we have bounced around 40 pips in recent trade as major equity benchmarks remain buoyant, providing some support for cross/JPY.
- While the JPY outperforms, the greenback weakness is broad across the G10 basket, with most majors rising around 0.5% against the dollar and the Canadian dollar a relative underperformer ahead of domestic inflation data on Tuesday.
- As such, EURUSD finds itself back above 1.11 and bridging the gap to key short-term resistance at 1.1155, the Sep 6 high. A break of which would be a bullish development. For GBPUSD, the pair extends the bounce from last week’s low around 1.3000 to roughly 1.5%. A stronger reversal higher would refocus attention on key short-term resistance ahead of the BOE decision this week. This resides at 1.3266, the Aug 27 high.
- Canada manufacturing sales and US Empire State manufacturing headlines a quiet economic calendar. A reminder that both Japan and China remain out for respective national holidays on Monday.
EGBS: Bunds Weighed by Equity Recovery, BTPs Outperform
BTPs lightly outperform Bunds this morning, helping the 10-year BTP/Bund spread narrow to 135bps, its tightest since late-August. Regional headline flow has been light, with broader focus on Wednesday’s Fed decision, and the potential for a 50bp rate cut.
- The recovery in European equity futures has aided the tightening in BTP spreads, with Estoxx 50 futures now back towards intraday highs.
- ECB-hawk Kazimir has become the latest advocate for the next ECB rate cut to come in December. However, OIS markets continue to assign a ~30% implied probability of a 25bp move in October.
- Eurozone Q2 labour costs saw a 6 tenths upward revision from the flash estimate to 4.7% Y/Y, but the overall trend of moderating labour cost pressures remains intact.
- German cash yields are +0.5 to +1.5bps higher today, with the 2s10 curve little changed and 5s30s lightly bear flattening.
GILTS: Off Highs as Equities Recover
Gilts take cues from core global FI peers, early rally fading a little as equities recover from session lows.
- Futures +3 at 101.09 vs. highs of 101.30, sticking within Thursday’s range for a second day.
- Technicals remain bullish, initial resistance at the Sep 12 high (101.51), initial support at the Sep 10 high (100.64).
- Yields little changed to 1bp higher across the curve, light steepening.
- 10-Year yields hover just above a key support cluster ahead of this week’s event risk.
- UK CPI (Wednesday) & the BoE decision (Thursday) headline the UK calendar this week, while the latest FOMC decision tops the macro calendar (due Wednesday, unusually split market pricing of 25/50bp cut following last week’s dovish press articles).
- SONIA futures +2.5 to -0.5, SFIH5 respects August high.
- BoE-dated OIS little changed to 2.5bp more dovish through mid-’25, 5bp of cuts priced for this week, ~52bp showing through year end and ~139bp if easing priced through June ’25.
- Note that the BoE will sell GBP725mln of medium-dated gilts from its APF this afternoon.
EQUITIES: E-Mini S&P Remains Firm, Holding Onto Last Week's Gains
Eurostoxx 50 futures are holding on to their recent gains. Despite the latest recovery, a bear threat remains present. The move down between Sep 3 - 6, resulted in a move below both the 20- and 50-day EMAs. A resumption of the bear leg would signal scope for weakness towards 4686.53, a Fibonacci retracement point. First resistance is at 4864.94, the 50-day EMA. A clear break of this average would strengthen a bullish condition. S&P E-Minis remains firm. Last week’s recovery highlights a bullish reversal and the end of the corrective cycle between Sep 3 - 6. The contract is trading above the 20- and 50-day EMAs and a continuation higher would signal scope for a test of 5730.50, Sep 3 high. Clearance of this level would open 5785.00, the Jul 16 high and bull trigger. On the downside, a reversal lower and a breach of 5451.25, the Sep 6 low, would reinstate a bearish theme.
- Across Europe, Germany's DAX trades lower by 64.77 pts or -0.35% at 18635.27, FTSE 100 lower by 2.69 pts or -0.03% at 8270.94, CAC 40 up 1.96 pts or +0.03% at 7467.91 and Euro Stoxx 50 up 0.18 pts or +0% at 4844.71.
- Dow Jones mini up 60 pts or +0.14% at 41484, S&P 500 mini up 4.75 pts or +0.08% at 5633.75, NASDAQ mini down 2.5 pts or -0.01% at 19524.75.
Time: 09:50 BST
COMMODITIES: Bearish Conditions in WTI Futures Remain Intact
WTI futures remain in a bearish condition. Last Tuesday’s strong sell-off reinforces current conditions and this confirmed an extension of the bear cycle. The most recent bounce appears to be a short-term correction that is allowing an oversold condition to unwind. A resumption of the downtrend would open $63.93 next, a Fibonacci projection point, ahead of the psychological $60.00 handle. Firm resistance is at $71.06, the 20-day EMA. A bullish structure in Gold remains intact and the metal is starting the week on a firm note, trading once again, to a fresh all-time high. Last week’s gains confirmed a resumption of the primary uptrend and marked the end of the recent period of consolidation - a pause in the uptrend. Moving average studies are in a bull-mode set-up, highlighting a clear uptrend. The focus is on $2600.0 next. Firm support lies at $2508.5, the 20-day EMA.
- WTI Crude up $0.69 or +1.01% at $69.31
- Natural Gas down $0.01 or -0.56% at $2.292
- Gold spot up $9.55 or +0.37% at $2587.1
- Copper down $2.4 or -0.57% at $421.2
- Silver up $0.22 or +0.71% at $30.9285
- Platinum down $3.2 or -0.32% at $995.15
Time: 09:50 BST
MNI (LONDON)
| Date | GMT/Local | Impact | Country | Event |
| 16/09/2024 | 1200/1400 |  EU | ECB's Lane Speech at European Investment Bank Chief Economists' Meeting | |
| 16/09/2024 | 1230/0830 | ** |  CA | Monthly Survey of Manufacturing |
| 16/09/2024 | 1230/0830 | ** |  US | Empire State Manufacturing Survey |
| 16/09/2024 | 1300/0900 | * | CA | CREA Existing Home Sales |
| 16/09/2024 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 16/09/2024 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 17/09/2024 | - | US | FOMC Meeting / S.E.P. | |
| 17/09/2024 | 0900/1100 | *** |  DE | ZEW Current Conditions Index |
| 17/09/2024 | 0900/1100 | *** | DE | ZEW Current Expectations Index |
| 17/09/2024 | 0900/1000 | ** |  GB | Gilt Outright Auction Result |
| 17/09/2024 | 1215/0815 | ** | CA | CMHC Housing Starts |
| 17/09/2024 | 1230/0830 | *** | CA | CPI |
| 17/09/2024 | 1230/0830 | *** | US | Retail Sales |
| 17/09/2024 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 17/09/2024 | 1300/1500 | EU | ECB's Elderson in supervisory effectiveness panel | |
| 17/09/2024 | 1315/0915 | *** | US | Industrial Production |
| 17/09/2024 | 1400/1000 | * | US | Business Inventories |
| 17/09/2024 | 1400/1000 | ** | US | NAHB Home Builder Index |
| 17/09/2024 | 1530/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 17/09/2024 | 1700/1300 | ** | US | US Treasury Auction Result for 20 Year Bond |
| 17/09/2024 | 2200/1800 | CA | BOC Sr Deputy Rogers fireside chat on women in finance. |
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.