In a session that has been painfully boring so far (yet which should pick up with CPI, jobless claims, industrial production and the NY
Empire Fed on deck, as well as Wal-Mart earnings which will no doubt reflect the continuing disappointing retail plight) perhaps the only notable news was that Japan - the nation that brought you "Fukushima is contained" - was caught in yet another lie. Recall that the upside catalyst (and source of Yen weakness) two days ago was what we classified then as "paradoxical news" that Japan would cut corporate taxes in a move that somehow would offset the upcoming consumption tax hike. Turns out that, as our gut sense indicated, this was merely yet another BS trial balloon out of Japan, which admitted overnight that the entire report was a lie.
From Reuters: "Japan's Chief Cabinet Secretary Yoshihide Suga said on Thursday there is no truth to a report that Prime Minister Shinzo Abe instructed ministers to consider cutting the country's corporate tax rate. The issue will be decided after taking into account various views from the business sector, Suga told a regular news conference. *Citing government sources, the Nikkei newspaper reported on Tuesday that Abe could consider lowering the corporate tax rate to foster an economic recovery.*"
Perhaps the governments of the US, China and Japan can sit down in a room and decide who is the biggest liar without involving the rest of the world's population.
The other notable news was the carryover from the CSCO "non-recurring" annual termination announcement stunner, which promptly wiped out $14 billion, or 10%, from the company's market cap. Also of note is that Brent futs have risen to the highest level since March on conflicting news that the death toll in Egypt has now risen to 525 (or thousands if one listens to the Muslim Brotherhood spokesman). With reports that the MB is planning a Cairo protest, expect this death toll to be orders of magnitude higher by the end of the day.
*Overnight news bulletin from Bloomberg:*
· Treasuries steady, with 10Y yields holding near two-year highs before jobless claims, Empire Manufacturing reports; USD falls against most major counterparts.
· U.K. retail sales rose 1.1% in July, more than forecast, as a heatwave in Britain boosted demand for food and alcohol
· New Zealand’s dollar and bond yields surged as data showed manufacturing expanded at the fastest pace in nine years, job advertisements increased and a gauge of consumer confidence rose
· Japan Finance Minister Taro Aso said Japan’s 2Q GDP supports case for raising sales tax, said Abe didn’t request consideration of cut in corporate income tax
· St Louis Fed’s James Bullard, speaking yesterday in Kentucky, said that the FOMC needs to hold press conferences after every meeting “so that key decisions can be made at any juncture,” which means October is considered an “unlikely venue for important policy action” because no press conference is scheduled
· Bullard’s comments “suggests that October is a more practical time horizon for the first taper,” Jefferies economist Thomas Simon wrote
· JPMorgan expects to be fined by authorities in the U.S. and U.K. over last year’s $6.2b trading loss, which led to criminal charges against two former employees, said a person familiar with the matter
· Billionaire hedge fund manager John Paulson, who told investors as recently as last month that they should own gold, cut his holdings in the metal by more than half as prices plunged into a bear market
· Egypt’s cities emerged from the first night of a curfew imposed by the army-backed government as it sought to quell violence that spread nationwide after police stormed Islamist sit-ins, leaving hundreds dead
· Sovereign yields mostly higher, with New Zealand yields surging for a second day; EU peripheral spreads steady, Euro Stoxx Banks index little changed. Nikkei falls 2.12%, leading Asian stocks lower as JPY gains through 98 level. European stocks, U.S. equity index-futures fall. WTI crude and gold gain, copper falls
*Full Market Recap from RanSquawk*
Stocks in Europe gapped lower at the open, as market participants reacted to press reports overnight which cited Japanese chief cabinet secretary Suga saying that it is not true that Abe has given instructions to lower corporate tax, which in turn weighed heavily on the domestic stock index. Even though stocks failed to recover, it was the health care sector that underperformed, which indicates that there is scope for a bounce, especially if the macroeconomic data from the US due out later on in the session surprises to the upside.
There was little in terms of EU related commentary, but UK based data continued to surprise to the upside and today’s release of better than expected retail sales data, which was boosted by hot weather, saw GBP/USD break through the 200DMA line at 1.5524 and also the 76.4% Fibonacci retracement level at 1.5531 to print a 2-month high at 1.5588.
Trade volumes were particularly light given the Assumption holiday in Europe, though expirations of various options on Friday will see volumes pick up again. Going forward, market participants will get to digest the release of the latest CPI, weekly jobs and Empire Manufacturing Reports, as well as earnings reports from Wal-Mart and Dell.
*Asian Headlines*
Japanese chief cabinet secretary Suga said it is not true that Abe has given instructions to lower corporate tax, whilst finance minister Aso said that lowering the corporate tax rate would have little impact and that tax breaks on corporate capex is an option.
Japanese government's monthly economic report offered the most up beat view on prices in nearly 4 years, stating that deflation is ending and that the economy is almost no longer facing chronic price declines.
*EU & UK Headlines*
UK Retail Sales Ex Auto Fuel (Jul) M/M 1.1% vs. Exp. 0.6% (Prev. 0.2%)
UK Retail Sales Ex Auto Fuel (Jul) Y/Y 3.1% vs. Exp. 2.7% (Prev. 2.1%, Rev. 2.1%)
UK Retail Sales w/Auto Fuel (Jul) M/M 1.1% vs. Exp. 0.7% (Prev. 0.2%)
UK Retail Sales w/Auto Fuel (Jul) Y/Y 3.0% vs. Exp. 2.4% (Prev. 2.2%, Rev. 1.9%)
- ONS says feedback from supermarkets suggested July's sunny weather boosted sales.
UK DMO sells GBP 2.25bln 4.5% 2034 gilts, b/c 1.48 vs. Prev. 1.98 and yield 3.520% vs. Prev. 2.786% (yield tail 0.7bps vs. Prev. 0.3bps)
*US Headlines*
Fed's Bullard said Fed Chair should hold a press conference after every FOMC meeting. Repeated view that Fed needs more data before deciding to taper bond purchases. Said FOMC GDP forecasts have been too optimistic. Added that October now thought of as "unlikely venue for important policy action" because no press conference is scheduled.
*Equities*
Stocks in Europe gapped lower at the open, as market participants reacted to press reports overnight which cited Japanese chief cabinet secretary Suga saying that it is not true that Abe has given instructions to lower corporate tax, which in turn weighed heavily on the domestic stock index. Even though stocks failed to recover, it was the health care sector that underperformed, which indicates that there is scope for a bounce, especially if the macroeconomic data from the US due out later on in the session surprises to the upside.
After the closing bell yesterday, Cisco announced that it is to cut 4000 jobs or 5% of workforce and expects USD 250mln-300mln charges from jobs cuts. Co. also commented that momentum is not growing as fast as it wants. Co. sees Q1 adj. EPS USD 0.50-0.51.
*FX*
UK based data continued to surprise to the upside and today’s release of better than expected retail sales data, which was boosted by hot weather, saw GBP/USD break through the 200DMA line at 1.5524 and also the 76.4% Fibonacci retracement level at 1.5531 to print a 2-month high at 1.5588.
USD/JPY traded heavy, just below the 50DMA at 98.35, with implied vols also under pressure as option related flow dominated the price action given the sizeable option expiries between 97.00 to 99.00 for Friday’s NY cut. While the 1-month 25D R/R advanced to highest since late June to -0.0325.
*Commodities*
Geopolitical tensions remained at the forefront, which saw Brent Crude futures advance to highest level since late March, as market participants continued to fret over the implications that ongoing rioting in Egypt will have on stability in the region.
Gold demand fell 12% to a 4-year low of 856.3 tons in Q2, according to the World Gold Council. According to the report, central bank gold acquisitions fell 57%to 71.1 tons in Q2 and gold ETFs post outflow of 402.2 tons in Q2. Paulson & Co. cut its stake in SPDR Gold Trust in Q2, whilst there were also reports that Soros dumped his SPDR stake. China July refined copper output at 534,600 tons.
It was reported that Russia will probably boost duties on most oil shipments abroad by 2.9% on Aug. 1 after Urals crude prices rose.
* * *
Jim Reid recaps the remainder of the overnight news:
The US market (S&P 500 -0.52%) fell for the 6th day in 8. This is in contrast to the European market (Stoxx600 +0.27%) which rose for the 6th day in 8. Over the same period the Stoxx600 has outperformed the S&P 500 by 3%. This has gone some way in reversing the YTD underperformance of the European index (+10.4% YTD) relative to the US (S&P500 +18.2% YTD).
The better-than-expected Eurozone GDP numbers helped European equities find an early floor yesterday. The overall Eurozone GDP number came in at 0.3% for Q2 which broke an unprecedented streak of six consecutive quarters of negative growth and is also the highest reading since Q1 2011. Our economists point out that the positive surprise was broad-based. While Italy and Spain were still in recession in Q2 (-0.2% and -0.1% qoq respectively), the near-stability comes as a relief in light of the recent dynamics there. France did remarkably well with a 0.5% qoq gain (vs 0.2% expected and -0.2% in Q1), and Germany, expected to display a strong performance, did even better (+0.7% vs 0.6% expected and 0.1% in Q1). Other details are scarce, and some one-offs may have distorted Q2, but it also seems that the improvement in economic activity is broad-based in terms of components, according to the qualitative comments from the German statistics office and the detailed figures released by INSEE.
There was some semblance of stability in rates markets over the last 24 hours but Gilts continued to fare poorly. The static UK unemployment reading of 7.8% was largely expected but many noted the improvement in the underlying data suggesting that unemployment may reach the BoE’s 7% forward guidance knock-out level before 2016. The Bank of England minutes didn’t help either after it was revealed that one MPC member dissented against the Bank’s forward guidance. 10yr UST yields closed virtually unchanged at 2.71% after a session of range-trading. The Fed’s Bullard said that he was still wary about low inflation and said that there is not much evidence of inflation building up towards the 2.5% target. He added that the FOMC would prefer to see more economic data before making a judgement on tapering. Bullard is a voting member on the FOMC. Bullard has dissented in recent Fed policy statements, saying that the central bank needs to signal that it would “defend its inflation goal” in light of low readings. In July, the Fed added that it was aware of the risks of low inflation and Bullard did not dissent.
Away from equities and fixed income, the upward pressure on crude oil continued following the crackdown on Egyptian protestors loyal to ex President Morsi yesterday. Reuters reported that the toll from Wednesday’s violence was at least 200 while other sources suggested the fatalities were multiple times higher. The country is now in a State of Emergency which could last for a month. Brent added 0.35% (+0.33% this morning) for its fourth straight gain and is now about 13% above its April’s lows. Staying in the commodities space, Silver added 2% yesterday bringing its total gain since late June to 20% and outperforming gold by 8 percentage points. Our commodities research team note that while gold ETPs suffered outflows in June and July, Silver ETPs saw inflows over the same period.
Switching focus to Asia, the evidence of increasing signs of economic stimulus is building in China. According to Hong Kong’s South China Morning Post, China Development Bank (CDB) has signed MoUs with three mainland provincial governments (Hebei, Jiangsu, and Qinghai) to offer financial support for a variety of local projects ranging from a new airport to public housing. This follows on from an earlier report by the same news outlet that the Agricultural Bank of China has signed an agreement with the Shanghai Government last week to extend credit worth RMB250bn (or 12.5% of Shanghai’s 2012 GDP) to support China’s second Disneyland project and pay for improvements needed to implement Shanghai’s free-trade zone. On top of these, China Daily yesterday noted that Beijing authorities are aiming to boost the consumption of information products and services and make the sector a new engine for boosting domestic demand. China’s consumption of information products and services is expected to grow at an annual pace of at least 20% to reach CNY3.2 trillion ($518 billion) by the end of 2015, according to a guideline released by the State Council yesterday. Clearly
these are far from the ‘big-bang’ approaches in the wake of the Lehman crisis but these headlines seem to suggest that targeted support is being ‘quietly’ released to try to stabilise growth.
Speaking of growth there are also some other signs of stability as China’s industrial power usage rose to a one-year high in July. According to official data, power usage by companies in the mining, manufacturing and construction sectors rose 8.1% yoy to 366.6bn kilowatt-hours. Despite all these headlines, Chinese equity markets are trading somewhat softer overnight (SHCOMP -0.01%). The Hang Seng (+0.1%) is up modestly after resuming from a typhoon-led closure yesterday. The Nikkei (-1.8%) is leading the region lower on the back of a stronger JPY and after Finance Minister Aso expressed doubts that a corporate tax cut would benefit the economy.
Turning to the day ahead, we have a busy US data docket starting with CPI and jobless claims, followed by industrial production and the NY Empire survey. This will be followed by the NAHB homebuilder sentiment index and the Philly Fed. A quieter day is in store for Europe with no major data releases aside from UK retail sales for July. Merkel is scheduled to make the first of 56 scheduled campaign rallies in the lead up to the Sept 22nd elections in Germany. Walmart will be reporting earnings before the US opening bell which will be interesting after disappointing guidance from Macy’s yesterday. Reported by Zero Hedge 2 hours ago.
Empire Fed on deck, as well as Wal-Mart earnings which will no doubt reflect the continuing disappointing retail plight) perhaps the only notable news was that Japan - the nation that brought you "Fukushima is contained" - was caught in yet another lie. Recall that the upside catalyst (and source of Yen weakness) two days ago was what we classified then as "paradoxical news" that Japan would cut corporate taxes in a move that somehow would offset the upcoming consumption tax hike. Turns out that, as our gut sense indicated, this was merely yet another BS trial balloon out of Japan, which admitted overnight that the entire report was a lie.
From Reuters: "Japan's Chief Cabinet Secretary Yoshihide Suga said on Thursday there is no truth to a report that Prime Minister Shinzo Abe instructed ministers to consider cutting the country's corporate tax rate. The issue will be decided after taking into account various views from the business sector, Suga told a regular news conference. *Citing government sources, the Nikkei newspaper reported on Tuesday that Abe could consider lowering the corporate tax rate to foster an economic recovery.*"
Perhaps the governments of the US, China and Japan can sit down in a room and decide who is the biggest liar without involving the rest of the world's population.
The other notable news was the carryover from the CSCO "non-recurring" annual termination announcement stunner, which promptly wiped out $14 billion, or 10%, from the company's market cap. Also of note is that Brent futs have risen to the highest level since March on conflicting news that the death toll in Egypt has now risen to 525 (or thousands if one listens to the Muslim Brotherhood spokesman). With reports that the MB is planning a Cairo protest, expect this death toll to be orders of magnitude higher by the end of the day.
*Overnight news bulletin from Bloomberg:*
· Treasuries steady, with 10Y yields holding near two-year highs before jobless claims, Empire Manufacturing reports; USD falls against most major counterparts.
· U.K. retail sales rose 1.1% in July, more than forecast, as a heatwave in Britain boosted demand for food and alcohol
· New Zealand’s dollar and bond yields surged as data showed manufacturing expanded at the fastest pace in nine years, job advertisements increased and a gauge of consumer confidence rose
· Japan Finance Minister Taro Aso said Japan’s 2Q GDP supports case for raising sales tax, said Abe didn’t request consideration of cut in corporate income tax
· St Louis Fed’s James Bullard, speaking yesterday in Kentucky, said that the FOMC needs to hold press conferences after every meeting “so that key decisions can be made at any juncture,” which means October is considered an “unlikely venue for important policy action” because no press conference is scheduled
· Bullard’s comments “suggests that October is a more practical time horizon for the first taper,” Jefferies economist Thomas Simon wrote
· JPMorgan expects to be fined by authorities in the U.S. and U.K. over last year’s $6.2b trading loss, which led to criminal charges against two former employees, said a person familiar with the matter
· Billionaire hedge fund manager John Paulson, who told investors as recently as last month that they should own gold, cut his holdings in the metal by more than half as prices plunged into a bear market
· Egypt’s cities emerged from the first night of a curfew imposed by the army-backed government as it sought to quell violence that spread nationwide after police stormed Islamist sit-ins, leaving hundreds dead
· Sovereign yields mostly higher, with New Zealand yields surging for a second day; EU peripheral spreads steady, Euro Stoxx Banks index little changed. Nikkei falls 2.12%, leading Asian stocks lower as JPY gains through 98 level. European stocks, U.S. equity index-futures fall. WTI crude and gold gain, copper falls
*Full Market Recap from RanSquawk*
Stocks in Europe gapped lower at the open, as market participants reacted to press reports overnight which cited Japanese chief cabinet secretary Suga saying that it is not true that Abe has given instructions to lower corporate tax, which in turn weighed heavily on the domestic stock index. Even though stocks failed to recover, it was the health care sector that underperformed, which indicates that there is scope for a bounce, especially if the macroeconomic data from the US due out later on in the session surprises to the upside.
There was little in terms of EU related commentary, but UK based data continued to surprise to the upside and today’s release of better than expected retail sales data, which was boosted by hot weather, saw GBP/USD break through the 200DMA line at 1.5524 and also the 76.4% Fibonacci retracement level at 1.5531 to print a 2-month high at 1.5588.
Trade volumes were particularly light given the Assumption holiday in Europe, though expirations of various options on Friday will see volumes pick up again. Going forward, market participants will get to digest the release of the latest CPI, weekly jobs and Empire Manufacturing Reports, as well as earnings reports from Wal-Mart and Dell.
*Asian Headlines*
Japanese chief cabinet secretary Suga said it is not true that Abe has given instructions to lower corporate tax, whilst finance minister Aso said that lowering the corporate tax rate would have little impact and that tax breaks on corporate capex is an option.
Japanese government's monthly economic report offered the most up beat view on prices in nearly 4 years, stating that deflation is ending and that the economy is almost no longer facing chronic price declines.
*EU & UK Headlines*
UK Retail Sales Ex Auto Fuel (Jul) M/M 1.1% vs. Exp. 0.6% (Prev. 0.2%)
UK Retail Sales Ex Auto Fuel (Jul) Y/Y 3.1% vs. Exp. 2.7% (Prev. 2.1%, Rev. 2.1%)
UK Retail Sales w/Auto Fuel (Jul) M/M 1.1% vs. Exp. 0.7% (Prev. 0.2%)
UK Retail Sales w/Auto Fuel (Jul) Y/Y 3.0% vs. Exp. 2.4% (Prev. 2.2%, Rev. 1.9%)
- ONS says feedback from supermarkets suggested July's sunny weather boosted sales.
UK DMO sells GBP 2.25bln 4.5% 2034 gilts, b/c 1.48 vs. Prev. 1.98 and yield 3.520% vs. Prev. 2.786% (yield tail 0.7bps vs. Prev. 0.3bps)
*US Headlines*
Fed's Bullard said Fed Chair should hold a press conference after every FOMC meeting. Repeated view that Fed needs more data before deciding to taper bond purchases. Said FOMC GDP forecasts have been too optimistic. Added that October now thought of as "unlikely venue for important policy action" because no press conference is scheduled.
*Equities*
Stocks in Europe gapped lower at the open, as market participants reacted to press reports overnight which cited Japanese chief cabinet secretary Suga saying that it is not true that Abe has given instructions to lower corporate tax, which in turn weighed heavily on the domestic stock index. Even though stocks failed to recover, it was the health care sector that underperformed, which indicates that there is scope for a bounce, especially if the macroeconomic data from the US due out later on in the session surprises to the upside.
After the closing bell yesterday, Cisco announced that it is to cut 4000 jobs or 5% of workforce and expects USD 250mln-300mln charges from jobs cuts. Co. also commented that momentum is not growing as fast as it wants. Co. sees Q1 adj. EPS USD 0.50-0.51.
*FX*
UK based data continued to surprise to the upside and today’s release of better than expected retail sales data, which was boosted by hot weather, saw GBP/USD break through the 200DMA line at 1.5524 and also the 76.4% Fibonacci retracement level at 1.5531 to print a 2-month high at 1.5588.
USD/JPY traded heavy, just below the 50DMA at 98.35, with implied vols also under pressure as option related flow dominated the price action given the sizeable option expiries between 97.00 to 99.00 for Friday’s NY cut. While the 1-month 25D R/R advanced to highest since late June to -0.0325.
*Commodities*
Geopolitical tensions remained at the forefront, which saw Brent Crude futures advance to highest level since late March, as market participants continued to fret over the implications that ongoing rioting in Egypt will have on stability in the region.
Gold demand fell 12% to a 4-year low of 856.3 tons in Q2, according to the World Gold Council. According to the report, central bank gold acquisitions fell 57%to 71.1 tons in Q2 and gold ETFs post outflow of 402.2 tons in Q2. Paulson & Co. cut its stake in SPDR Gold Trust in Q2, whilst there were also reports that Soros dumped his SPDR stake. China July refined copper output at 534,600 tons.
It was reported that Russia will probably boost duties on most oil shipments abroad by 2.9% on Aug. 1 after Urals crude prices rose.
* * *
Jim Reid recaps the remainder of the overnight news:
The US market (S&P 500 -0.52%) fell for the 6th day in 8. This is in contrast to the European market (Stoxx600 +0.27%) which rose for the 6th day in 8. Over the same period the Stoxx600 has outperformed the S&P 500 by 3%. This has gone some way in reversing the YTD underperformance of the European index (+10.4% YTD) relative to the US (S&P500 +18.2% YTD).
The better-than-expected Eurozone GDP numbers helped European equities find an early floor yesterday. The overall Eurozone GDP number came in at 0.3% for Q2 which broke an unprecedented streak of six consecutive quarters of negative growth and is also the highest reading since Q1 2011. Our economists point out that the positive surprise was broad-based. While Italy and Spain were still in recession in Q2 (-0.2% and -0.1% qoq respectively), the near-stability comes as a relief in light of the recent dynamics there. France did remarkably well with a 0.5% qoq gain (vs 0.2% expected and -0.2% in Q1), and Germany, expected to display a strong performance, did even better (+0.7% vs 0.6% expected and 0.1% in Q1). Other details are scarce, and some one-offs may have distorted Q2, but it also seems that the improvement in economic activity is broad-based in terms of components, according to the qualitative comments from the German statistics office and the detailed figures released by INSEE.
There was some semblance of stability in rates markets over the last 24 hours but Gilts continued to fare poorly. The static UK unemployment reading of 7.8% was largely expected but many noted the improvement in the underlying data suggesting that unemployment may reach the BoE’s 7% forward guidance knock-out level before 2016. The Bank of England minutes didn’t help either after it was revealed that one MPC member dissented against the Bank’s forward guidance. 10yr UST yields closed virtually unchanged at 2.71% after a session of range-trading. The Fed’s Bullard said that he was still wary about low inflation and said that there is not much evidence of inflation building up towards the 2.5% target. He added that the FOMC would prefer to see more economic data before making a judgement on tapering. Bullard is a voting member on the FOMC. Bullard has dissented in recent Fed policy statements, saying that the central bank needs to signal that it would “defend its inflation goal” in light of low readings. In July, the Fed added that it was aware of the risks of low inflation and Bullard did not dissent.
Away from equities and fixed income, the upward pressure on crude oil continued following the crackdown on Egyptian protestors loyal to ex President Morsi yesterday. Reuters reported that the toll from Wednesday’s violence was at least 200 while other sources suggested the fatalities were multiple times higher. The country is now in a State of Emergency which could last for a month. Brent added 0.35% (+0.33% this morning) for its fourth straight gain and is now about 13% above its April’s lows. Staying in the commodities space, Silver added 2% yesterday bringing its total gain since late June to 20% and outperforming gold by 8 percentage points. Our commodities research team note that while gold ETPs suffered outflows in June and July, Silver ETPs saw inflows over the same period.
Switching focus to Asia, the evidence of increasing signs of economic stimulus is building in China. According to Hong Kong’s South China Morning Post, China Development Bank (CDB) has signed MoUs with three mainland provincial governments (Hebei, Jiangsu, and Qinghai) to offer financial support for a variety of local projects ranging from a new airport to public housing. This follows on from an earlier report by the same news outlet that the Agricultural Bank of China has signed an agreement with the Shanghai Government last week to extend credit worth RMB250bn (or 12.5% of Shanghai’s 2012 GDP) to support China’s second Disneyland project and pay for improvements needed to implement Shanghai’s free-trade zone. On top of these, China Daily yesterday noted that Beijing authorities are aiming to boost the consumption of information products and services and make the sector a new engine for boosting domestic demand. China’s consumption of information products and services is expected to grow at an annual pace of at least 20% to reach CNY3.2 trillion ($518 billion) by the end of 2015, according to a guideline released by the State Council yesterday. Clearly
these are far from the ‘big-bang’ approaches in the wake of the Lehman crisis but these headlines seem to suggest that targeted support is being ‘quietly’ released to try to stabilise growth.
Speaking of growth there are also some other signs of stability as China’s industrial power usage rose to a one-year high in July. According to official data, power usage by companies in the mining, manufacturing and construction sectors rose 8.1% yoy to 366.6bn kilowatt-hours. Despite all these headlines, Chinese equity markets are trading somewhat softer overnight (SHCOMP -0.01%). The Hang Seng (+0.1%) is up modestly after resuming from a typhoon-led closure yesterday. The Nikkei (-1.8%) is leading the region lower on the back of a stronger JPY and after Finance Minister Aso expressed doubts that a corporate tax cut would benefit the economy.
Turning to the day ahead, we have a busy US data docket starting with CPI and jobless claims, followed by industrial production and the NY Empire survey. This will be followed by the NAHB homebuilder sentiment index and the Philly Fed. A quieter day is in store for Europe with no major data releases aside from UK retail sales for July. Merkel is scheduled to make the first of 56 scheduled campaign rallies in the lead up to the Sept 22nd elections in Germany. Walmart will be reporting earnings before the US opening bell which will be interesting after disappointing guidance from Macy’s yesterday. Reported by Zero Hedge 2 hours ago.