- SNAPSHOT: Equities down, Treasuries up, Crude down, Dollar up
- REAR VIEW: ISM Mfg rebounds less than expected, Prices Paid unexpectedly rise, Employment also gains; RCM Economic Optimism hits a 17mth high; Record amount of corporate issuance; Libya’s oil feud looks set to subside; BoJ says they would continue to hike if economy/prices perform as expected; Soft Swiss CPI
- COMING UP: Data: Australian, Japanese, EZ, UK PMIs (F), Australian GDP, US International Trade, US Durable Goods, JOLTS Job Openings. Events: BoC & NBP Policy Announcement. Speakers: ECB’s Elderson; BoC Governor Macklem & Rogers. Supply: Germany. Earnings: Direct Line, Barratt Developments, Dollar Tree, Hewlett Packard, Hormel Foods
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MARKET WRAP
Stocks were slammed on return from the Labor Day weekend with the Nasdaq underperforming amid a slump in the tech sector which saw losses of c. 4.5%. The Tech weakness was led by downside in chips with AI-darling Nvidia (NVDA) falling 9.5% in the first trading session of September, which typically is the worst month for stocks. Energy and Communication names also underperformed, while the defensive sectors, Consumer Staples, Real Estate, and Utilities outperformed. T-notes were bid across the curve in risk-off trade with peaks seen after the US ISM Manufacturing PMI and Construction Spending headline missed estimates. However, T-notes pared from peaks with the ISM Prices Paid and Employment components rising, with prices above expectations. T-notes initially sold off on a record amount of corporate issuance, however a rally then ensued with IFR citing dip buyers at the CME open while CTAs covered shorts and leveraged funds were linked to chunky purchases of futures. The lower oil prices also likely supported the move higher, with oil prices slumping on Bloomberg reports that a Libyan Central Banker expected a deal leading to an oil restart to happen “soon”, while elsewhere there were reports of several refineries coming back online. In FX, havens outperformed with the Yen as the clear leader, supported by documents submitted by BoJ’s Governor Ueda to a government panel, which revealed that the BoJ would continue to hike if the economy/prices performed as expected. The Dollar saw mild gains but cyclical currencies lagged as stocks tumbled, with the Antipodes taking the largest hit with AUD traders turning their attention to GDP data overnight.
US
ISM MANUFACTURING PMI: ISM Manufacturing PMI for August rose to…