Morning all… Wall St had a lacklustre close with the S&P closing around unchanged after a choppy session indicative of month/Quarter end. Asia however had a stronger session led by the Nikkei which finished up 2.6% on the day again due to demand at half-year end and a belief that this weeks Tankan report may spur the BoJ to add to the easing programme. However USDJPY had a muted response to this rally; caught in a 40 pip range. The US10y yield climbed 2bps to 2.068% after falling overnight and oil was marginally higher but S&P futures surged 16 points from the US close.. Japan’s industrial production declined again in August, losing 0.5%mom, after contraction of 0.8%mom in July. The decline was unexpected (Bloomberg consensus: +0.9%, CS: +0.5%mom, METI’s survey: +2.8%mom). The average for July-August was lower than that for the April-June average by 1.1%, suggesting the mounted risk of two consecutive quarters of negative growth in the July-September quarter (3Q) (-1.4%qoq in 2Q). Meanwhile, retail trade grew 0.8%yoy in August, at its slowest pace since March, lower than the market expected rise of 1.2% and upwardly revised 1.8% increase in July. Monthly retail sales remained flat in August, weaker than revised 1.4% growth in the previous month. Rather poor data. Australia’s building approvals plunged 6.9%mom in August worse than median estimated drop of 2.0% and upwardly revised surge of 7.9% in July. In year-on-year terms, approvals advanced 5.1% in August after a revised 17.9% increase in the previous month. AUD was quiet but holds above .7000 for most of the session.
Today ends what is likely to be one of the worst quarters for global risk for 4 years and at the moment we’re all looking for the catalyst as to what brings this extended period of volatility and uncertainty to an end. Yesterday was a quieter day but despite there being little in the way of new news or headlines, the S&P 500 capped a 1.5% intraday range but finally snapped five days of consecutive losses and nudged into positive territory in the final minutes of trading, closing up a modest +0.12% after being supported by a rebound in healthcare names. Hardly convincing. We have a lot of data this week that may upset things starting with US ADP today, US ISM Thursday and the Japanese Tankan business survey on the same day. Make the most of this lull. This morning we get French Consumer spending data, German unemployment, A final look at UK Q2 GDP and EU CPI and Unemployment data. Good luck..