EU Market Update: Mixed European PMI and Unemployment data in session



Articles menu

Article content EU Market Update: Mixed European PMI and Unemployment data in session

01.07.2014 12:05 Tuesday
- Japan Q2 Tankan Large Manufacturers Index register its first sequential decline in six quarters 12 v 15e but capex shows positive momentum to continue in economy
- China Jun Manufacturing PMI: 51.0 v 51.0e for a 6-month high
- China Jun Final HSBC Manufacturing PMI: 50.7 v 50.8e
- German Jun unemployment unexpectedly rose thus supporting ECB's latest round of easing measures
- Major European PMI Manufacturing data continued its bumpy ride with slight downward revisions

***Key Economic Data in session***
- (AU) RBA left its Cash Rate Target unchanged at 2.50%, as expected (10th straight pause)
- (JP) Japan Jun Vehicle Sales Y/Y: -0.7% v -5.6% prior; third straight decline
- (IE) Ireland Jun Manufacturing PMI: 55.3 v 55.0 prior
- (IN) India Jun Manufacturing PMI: 51.5 v 51.4 prior
- (RU) Russia Jun Manufacturing PMI: 49.1 v 48.5e
- (SE) Sweden Jun PMI Manufacturing: 54.8 v 53.8e
- (CZ) Czech Q1 Final GDP Q/Q: 0.8% v 0.4% prelim; Y/Y: 2.9% v 2.5% prelim
- (NO) Norway Jun Manufacturing PMI: 49.6 v 50.0e; second straight month of contraction
- (NL) Netherlands Jun Manufacturing PMI: 52.3 v 53.6 prior; 11th straight month of expansion
- (HU) Hungary Jun Manufacturing PMI: 51.5 v 53.9 prior; 11th month of expansion
- (TR) Turkey Jun Manufacturing PMI: 48.8v 50.1 prior; first contraction in 11 months and lowest reading since Jun 2011
- (PL) Poland Jun Manufacturing PMI: 50.3 v 51.0e; 12th month of expansion but lowest since Jun 2013
- (EU) ECB €3.1B borrowed in overnight loan facility vs. €56.0M prior; €28.6B parked in deposit facility vs. €25.4B prior - Daily Eurosystem Liquidity Conditions
- (ES) Spain Jun Manufacturing PMI: 54.6 v 53.0e; 7th straight month of expansion and highest since June 2007
- (CH) Swiss Jun PMI Manufacturing: 54.0 v 52.3e
- (CZ) Czech Republic Jun Manufacturing PMI: 54.7 v 56.9e; 14th straight month of expansion) but lowest since Dec 2013)
- (IT) Italy Jun Manufacturing PMI: 52.6v 53.2e
- (FR) France Jun Final Manufacturing PMI: 48.2 v 47.8e; lowest since Dec 2013 and confirms second straight month of contraction
- (DE) Germany Jun Unemployment Change: +9K v -10Ke; Unemployment Rate: 6.7% v 6.7%e
- (DE) Germany Jun Final Manufacturing PMI: 52.0 v 52.4e; confirms 12th straight month of growth
- (IT) Italy May Preliminary Unemployment Rate: 12.6% v 12.6%e
- (EU) Eurozone Jun Final Manufacturing PMI: 51.8 v 51.9e; confirms 12th straight month of expansion but lowest since Nov 2013
- (GR) Greece Jun Manufacturing PMI: 49.4 v 51.0 prior; first contraction in three months and lowest reading since Nov 2013
- (UK) UK PMI Jun Manufacturing: 57.5 v 56.8e; 16th month of expansion and highest reading since Nov 2013
- (EU) Euro Zone May Unemployment Rate: 11.6% v 11.7%e
- (ZA) South Africa Jun Kagiso Manufacturing PMI: 46.6 v 47.0e, third straight month of contraction
- (DK) Denmark Jun Danish PMI Survey: 50.3 v 59.7 prior

Fixed Income:
- (DK) Denmark sold total DKK5.92B in 2019 and 2025 bonds
- (EU) ECB allotted €97.1B in 7-Day Main Refinancing Tender at fixed 0.15% vs. €100.0Be
- (CH) Switzerland sold CHF391M in 3-month Bills; Yield: -0.134% v -0.134% prior

Indices [Stoxx50 +0.5%, FTSE 100 +0.5% at 6,777, DAX +0.3% at 9,864, CAC-40 +0.6% at 4,451, IBEX-35 +0.3% at 10,952, FTSE MIB +0.5% at 21,394, SMI +0.3% at 8,582, S&P 500 Futures +0.2% at 1,956]

- Market Focal points/Key Themes: Equity markets open higher following gains on the Nikkei, Shares of Portugal's Banco Espirito Santo decline despite naked short selling ban, BNP rises after leaving dividend unchanged, German industrial services firm Bilfinger SE declines sharply on profit warning, Resource related firms gain following China PMI data, European PMI data mixed

By Sector
- Financials [BNP +3.0% (confirmed DoJ settlement, maintained dividend), Talanx TLX.DE +1.5% (broker commentary)]
- Consumer Discretionary [Greggs GRG.UK +2% (26-week sales +3.1%); Ocado OCDO.UK -4% (profit taking after earnings)]
- Basic Materials/Resources [Kloeckner KCO.DE -3.5% (broker commentary)]
- Health Care [Galapagos GLPG.BE +3% (milestone payment), Rhoen-Klinikum RHK.DE -2% (share placement)]
- Industrials [Bilfinger SE GBF.DE -15% (profit warning)]
- Technology [Optimal Payments OPAY.UK +7% (acquisition)]
- Stoxx50 sectors [Utilities +0.9%, Telecom +0.7%, Basic Materials +0.5%, Energy +0.4%, Technology +0.4%, Consumer Non-Cyclical +0.2%; Industrials -0.7%, Consumer Cyclical -0.2%]

- Italy Fin Min Paodoan stated that it might review 2014 GDP growth forecast after Q2 data
- South Africa Fin Min Nhlanhla Nene: Domestic economy faces period of high interest rates
- Russia Central Bank Gov Nabiullina: GDP slowdown driven by domestic factors; labor productivity is key to stable growth; Inflation expectations are high and unanchored
- Russia lower house (Duma) calls for extension to cease-fire in Ukraine
- South Africa Metalworker's Union (NUMSA) spokesperson Ngobese: Strike by the metal and engineering workers has begun

Currencies/Fixed Income:
- The USD was little changed from its Asian opening levels but on the defensive technically.
- The GBP/USD pair was holding above the pivotal level of 1.7050 and at its best level since 2007 while the EUR/USD continued to hit 6-weeek highs
- AUD/USD hit an 8-Month high following the RBA Meeting which left rates on hold. Dealer chatter noting an analyst note that perhaps the RBA had a high tolerance for the Aud currency strength

Political/In the Papers:
- (UK) UK's Unite union indicates that a vote of 2-1 has been cast in favor of a local Govt worker strike related to pay disputes - press
- (UR) Ukraine Pres Poroshenko: Ending ceasefire against pro-Russian separatists; Announces to attack and liberate Ukraine's land
- (CN) China top military general Xu Caihou accused for accepting bribes; Highest ranking official investigated in China since the start of President Xi's campaign against corruption

**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- (RO) Romania Central bank Interest Rate Decision: Expected to leave Interest Rate unchanged 3.50% prior (90% hold, 10% cut)
- (RO) Romania Jun International Reserves: No est v $33.8B prior
- (RU) Russia Jun Reserve Fund: No est v $87.1B prior; Wellbeing Fund: No est v $87.3B prior
- (ZA) South Africa Jun Naamsa Vehicle Sales Y/Y: No est v -9.2% prior
- (ZA) South Africa to sell 2030, 2032 and 2048 Bonds
- 05:30 (BE) Belgium to sell €1.0-2.0B in 3-Month and 6-Month Bills
- 05:30 (UK) DMO to sell £4.0B in 1.75% 2019 Gilts
- 06:45 (US) Daily Libor Fixing
- (US) Auto preview
- 07:00 (RU) Russia announces upcoming OFZ bonds
- 07:45 (US) Weekly ICSC Chain Store Sales
- 08:00 (US) Treasury Sec Lew
- 08:00 (CZ) Czech Jun Budget Balance (CZK): No est v -9.5B prior
- 08:15 (US) Baltic Dry Bulk Index
- 08:55 (US) Weekly Redbook Retail Sales
- 09:00 (BR) Brazil Jun Manufacturing PMI: No est v 48.8 prior
- 09:00 (EU) Weekly ECB Forex Reserves
- 09:45 (US) Jun Final Manufacturing PMI: 57.5e v 57.5 prior
- 10:00 (US) Jun ISM Manufacturing: 55.8e v 55.4 prior; Prices Paid: 60.0e v 60.0 prior
- 10:00 (US) Construction Spending annual revisions
- 10:00 (US) May Construction Spending M/M: 0.5%e v 0.2% prior
- 10:00 (US) July IBD/TIPP Economic Optimism: 48.0e v 47.7 prior
- 10:00 (MX) Mexico May Total Remittances: $2.2Be v $2.0B prior
- 10:00 (MX) Weekly Mexico International Reserves
- 10:30 (MX) Mexico Jun Manufacturing PMI: No est v 51.9 prior
- 11:30 (Treasury to sell $30B in 4-Week Bills
- 12:00 (IT) Italy Jun New Car Registrations Y/Y: No est v -3.8% prior
- 13:00 (MX) Mexico Jun IMEF Manufacturing Index (Seasonally Adj): 52.9e v 52.2 prior; Non-Manufacturing Index: 51.0e v 50.1 prior
- 14:00 (BR) Brazil Jun Trade Balance: $2.8Be v $712M prior; Total Exports: No est v $20.8B prior; Total Imports Y/Y: No est v $20.0B prior
- 21:30 (AU) Australia May Trade Balance: No est v -A$122M prior
- (US) Jun Total Vehicle Sales: 16.40Me v 16.70M prior; Domestic Vehicle: 13.00Me v 13.11M prior
- (IT) Italy Jun Budget Balance: No est v -6.4B prior