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Schedule for today, Tuesday, September 24, 2019
Time Country Event Period Previous value Forecast
00:30 Japan Manufacturing PMI September 49.3  
05:00 Japan Coincident Index July 99.5 99.8
05:00 Japan Leading Economic Index July 93.6 93.6
05:35 Japan BOJ Governor Haruhiko Kuroda Speaks    
08:00 Germany IFO - Current Assessment September 97.3 97.0
08:00 Germany IFO - Expectations September 91.3 91.9
08:00 Germany IFO - Business Climate September 94.3 94.5
08:30 United Kingdom PSNB, bln August 1.97 -6.65
09:55 Australia RBA's Governor Philip Lowe Speaks    
10:00 United Kingdom CBI industrial order books balance September -13 -18
13:00 Belgium Business Climate September -5.8 -6.0
13:00 U.S. Housing Price Index, m/m July 0.2% 0.3%
13:00 U.S. S&P/Case-Shiller Home Price Indices, y/y July 2.1% 2.2%
14:00 U.S. Richmond Fed Manufacturing Index September 1 -11
14:00 U.S. Consumer confidence September 135.1 133.8
22:45 New Zealand Trade Balance, mln August -685 -1464
23:50 Japan Monetary Policy Meeting Minutes    
Major US stock indices closed almost unchanged

Major US stock indices closed near zero, as the fall of the conglomerate sector leveled outperforming data on activity in the US manufacturing sector, which strengthened investor confidence in the strength of the US economy

The latest IHS Markit report showed that US private sector output increased in September, with growth rates slightly outstripping the August reading. The seasonally adjusted composite PMI index rose to 51.0 in September, up from 50.7 in the previous month. The last reading was much lower than the average for the last decade (55.0). The seasonally adjusted index of activity in the manufacturing sector recovered slightly - to 51.0 in September, compared with 50.3 in August and this is the highest since April. Recent data indicate a slight overall improvement in the business environment in the manufacturing sector. Seasonally adjusted, the service sector activity index rose to 50.9 in September from 50.7 in August, but is still one of the lowest in the past three and a half years. Analysts predicted that the manufacturing index would remain at 50.3, while the index for the service sector would rise to 51.5 from 50.7.

Market participants also continued to monitor the course of trade negotiations between the United States and China. Senior Chinese trade officials said the talks last week were “constructive.” US officials said both sides had “productive” trade negotiations ahead of official talks next month. In addition, the media said that the Chinese delegation’s unexpected cancellation of visits to farms in Montana, which was reported late last week, should not be seen as a sign of disruption to the negotiations at the lowest level. US President Donald Trump said China will increase its purchases of US agricultural products through a bilateral trade deal.

Most DOW components completed trading in positive territory (20 out of 30). The biggest gainers were American Express Company (AXP; + 1.25%). Outsider were shares of UnitedHealth Group Incorporated (UNH; -1.65%).

S&P sectors showed multidirectional dynamics. The consumer goods sector grew the most (+ 0.5%). The conglomerate sector showed the largest decrease (-1.4%).

At the time of closing:

Dow 26,950.26 +15.19 +0.06%

S&P 500 2,991.78 -0.29 -0.01%

Nasdaq 100 8,112.46 -5.21 -0.06%

Schedule for tomorrow, Tuesday, September 24, 2019
Time Country Event Period Previous value Forecast
00:30 Japan Manufacturing PMI September 49.3  
05:00 Japan Coincident Index July 99.5 99.8
05:00 Japan Leading Economic Index July 93.6 93.6
05:35 Japan BOJ Governor Haruhiko Kuroda Speaks    
08:00 Germany IFO - Current Assessment September 97.3 97.0
08:00 Germany IFO - Expectations September 91.3 91.9
08:00 Germany IFO - Business Climate September 94.3 94.5
08:30 United Kingdom PSNB, bln August 1.97 -6.65
09:55 Australia RBA's Governor Philip Lowe Speaks    
10:00 United Kingdom CBI industrial order books balance September -13 -18
13:00 Belgium Business Climate September -5.8 -6.0
13:00 U.S. Housing Price Index, m/m July 0.2% 0.3%
13:00 U.S. S&P/Case-Shiller Home Price Indices, y/y July 2.1% 2.2%
14:00 U.S. Richmond Fed Manufacturing Index September 1 -11
14:00 U.S. Consumer confidence September 135.1 133.8
22:45 New Zealand Trade Balance, mln August -685 -1464
23:50 Japan Monetary Policy Meeting Minutes    
DJIA +0.18% 26,982.71 +47.64 Nasdaq +0.11% 8,126.28 +8.60 S&P +0.12% 2,995.76 +3.69
European stocks closed: FTSE 100 7,326.08 -18.84 -0.26% DAX 12,342.33 -125.68 -1.01% CAC 40 5,630.76 -60.02 -1.05%
Incoming ECB President Lagarde: Trade war is weighing "like a big, dark cloud" on the global economy - CNBC

  • U.S.-China trade war is the biggest threat to the global economy
  • But U.S. economy, the world's largest, remains in a good place
  • Tariffs imposed by the U.S. and China are expected to shave 0.8% off global economic growth in 2020

New York Fed President Williams: Fed actions had desired effect of reducing strains in markets

  • Volatility in repo rates showed markets not effectively distributing liquidity
  • Bank was prepared for liquidity issues and acted quickly and appropriately
  • Daily repo operations are intended to keep Fed funds rate within the target range

U.S.: Services PMI, September 50.9 (forecast 51.5)
U.S.: Manufacturing PMI, September 51.0 (forecast 50.3)
U.S. private sector business activity growth accelerates modestly in September - IHS Markit's survey

Preliminary data released by IHS Markit on Monday pointed to a muted upturn in U.S. private sector growth during September.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 51.0 in September, up from 50.3 in August. That was the highest reading since April and signaled a modest overall improvement in manufacturing sector business conditions. Economists had expected the reading to stay at 50.3. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. According to the report, the increase in the headline PMI mainly reflected stronger rates of output and new order growth, alongside a slight upturn in staffing levels.

Meanwhile, the Markit flash services purchasing manager's index (PMI) rose to 50.9 this month, from 50.7 in the prior month. The latest reading was still one of the lowest seen over the past three-and-a-half years. Economists had expected the reading to increase to 51.5. Subdued demand resulted in a faster decline in volumes of unfinished work and a reduction in employment numbers for the first time in just under ten years, the report said.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 51.0 in September, up from 50.7 in the previous month, signaling a subdued business activity growth.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at HIS Markit, said: “The survey indicates that businesses continue to struggle against the headwinds of trade worries and elevated uncertainty about the outlook. Although picking up slightly, the overall rate of growth in September remained among the weakest since 2016, commensurate with GDP rising in the third quarter at a subdued annualized rate of approximately 1.5%. Prospects also look gloomy, with inflows of new business down to the lowest since 2009 and firms’ expectations of growth over the coming year stuck at one of the most subdued levels since 2012.”

Outlook for GBP is still binary – Rabobank

Jane Foley, the senior FX strategist at Rabobank, suggests the UK’s PM is already in murky waters after an accusation in the weekend press of possible abuse of office while Johnson was London Mayor and if the clouds over the PM do thicken further today, GBP will be faced with another political headwind.

  • “In terms of Brexit news, the outlook for GBP is still binary. If optimism is extended, EUR/GBP can be expected to push back below the 0.88 level this year. By contrast, if hopes that a deal could still be in place by the end of next month are snuffed out, EUR/GBP could be re-setting its sight on the EUR/GBP 0.90 level and potentially above.
  • Our central view is that the Brexit start date will be delayed beyond October 31 in line with the legislation that was pushed through parliament earlier this morning. On this scenario we expect EUR/GBP to be trading in the 0.90 area on a 3-month view.
  • If a Brexit deal were struck between the UK and the EU in the coming weeks, we would expect EUR/GBP to recover to the 0.85 area and for GBP/USD to push towards 1.30. If the Supreme Court rules against the PM today, we would expect GBP to lurch lower.”

U.S. Stocks open: Dow -0.36%, Nasdaq -0.17% S&P -0.30%
ECB's Draghi: Recent data and forward-looking indicators do not show convincing signs of a rebound in growth in the near future

  • Eurozone growth momentum has slowed markedly
  • Growth momentum has slowed more than we had previously anticipated
  • We need a coherent economic strategy in the eurozone that complements and enhances the effectiveness of monetary policy
  • Slowdown is mainly due to weakness in international trade in an environment of persistent uncertainties
  • Underlying inflation remains muted
  • The longer manufacturing weakness extends, the higher the chances of a spillover
  • Enhanced guidance helps to reduce uncertainty about the expected path of interest rates in the short-to-medium term
  • ECB is ready to use all instruments
  • New two-tier system will make sure that the ability of banks to extend loans to their customers at favourable terms remains unimpaired

Before the bell: S&P futures -0.08%, NASDAQ futures -0.02%

U.S. stock-index futures traded little chaged, as investors remained cautious about progress in U.S.-China trade negotiation and awaited Markit’s “flash” survey on activity in U.S manufacturing and services sectors.


Global Stocks:



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Crude oil






EU's Chief Brexit negotiator Barnier: UK proposals on border between Ireland and Northern Ireland are unacceptable

  • Right now we have no basis for a deal but we will continue to talk
  • We can't pick and choose when it comes to protecting the single market and consumers
  • Hard to see how we can arrive at a solution that fulfills all the objectives of the backstop

Target price changes before the market open

Amazon (AMZN) target lowered to $2,200 from $2,300 at Morgan Stanley

Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)

3M Co















Amazon.com Inc., NASDAQ










Apple Inc.





AT&T Inc





Boeing Co





Caterpillar Inc





Chevron Corp





Cisco Systems Inc





Citigroup Inc., NYSE





Exxon Mobil Corp





Facebook, Inc.





Ford Motor Co.





Freeport-McMoRan Copper & Gold Inc., NYSE





General Electric Co





General Motors Company, NYSE





Goldman Sachs





Google Inc.





Intel Corp





International Business Machines Co...





International Paper Company





Johnson & Johnson





JPMorgan Chase and Co





Microsoft Corp










Procter & Gamble Co





Starbucks Corporation, NASDAQ





Tesla Motors, Inc., NASDAQ





Verizon Communications Inc










Wal-Mart Stores Inc





Walt Disney Co





Yandex N.V., NASDAQ





Downgrades before the market open

Alcoa (AA) downgraded to Neutral from Buy at Goldman; target lowered to $25

Chicago Fed National Activity Index rises to +0.10 in August

The Chicago Federal Reserve announced on Monday the Chicago Fed national activity index (CFNAI), a weighted average of 85 different economic indicators, came in at +0.10 in August, solidly up from a revised -0.41 in July (originally -0.36), pointing to a pickup in economic growth.

Economists had forecast the index to come in at -0.35 in August.

At the same time, the index’s three-month moving average rose to -0.12 in August from -0.20 in July.

According to the report, all four broad categories of indicators that make up the index grew from July, but three of the four categories made negative contributions to the index in August.

Production-related indicators made a positive contribution of +0.16 to the CFNAI in August, up from -0.26 in July. Meanwhile, the contribution of the sales, orders, and inventories category to the CFNAI improved up to -0.02 in August from -0.07 in July, while the contribution of the personal consumption and housing category to the CFNAI ticked up to -0.02 in August from -0.03 in July. Employment-related indicators contributed -0.02 to the CFNAI in August, up slightly from -0.05 in July.

U.S.: Chicago Federal National Activity Index, August 0.10 (forecast -0.35)
Canada: Wholesale Sales, m/m, July 1.7% (forecast 0.3%)
Eurozone’s preliminary September PMIs disappoint – TD Securities

Analysts at TD Securities note that Eurozone’s preliminary September PMI estimates were extremely disappointing.

  • “French manufacturing fell from 51.1 to 50.3 (mkt 51.2) and services from 53.4 to 51.6 (mkt 53.2). Details for France weren't too terrible, but there the new orders component was soft and that leaves us pessimistic about a rebound next month.
  • Germany's numbers were even worse though, with the Manufacturing PMI falling from 43.5 to 41.4 (mkt 44.0), a 123-month low, and the Services PMI from 54.8 to 52.5 (mkt 54.3), a 9-month low. Details of the report of very soft, with Markit noting that the manufacturing PMI is "signaling the sharpest decline in business conditions across the goods-producing sector since the depths of the global financial crisis in mid-2009." The auto sector was also "highlighted as a particular source of weakness" and "lower demand from abroad also remained a key factor." The report also noted the slowest rise in output prices in 3 years, which may raise an eyebrow or two at the ECB.
  • Overall, the weakness in Eurozone manufacturing, in particular, was quite surprising given the lack of bad news on the trade war front over the last few weeks. We thought that would have given some room for at least a short-term bounce in manufacturing sentiment, but it seems like the weakness is too far entrenched to benefit from a less dire news flow.”

USD longs surged, EUR shorts dropped – Rabobank

According to CFTC Commitment of Traders Report, USD net longs surged to their strongest levels since April 2017 last week, note Rabobank's analysts.

  • “Net EUR short positions dropped to their most extreme levels since June.
  • Net short GBP positions dropped moderately having surged the previous week.
  • JPY net positions have been back in positive ground for seven straight weeks on safe-haven demand, though they are off their recent highs.
  • CHF net shorts climbed a little last week. Despite its safe-haven status, signs that the SNB has recently intervened in the FX market have distorted demand for the CHF.
  • CAD net long positions surged as the BoC remained defiant at its Sep 4 policy meeting. This view was subsequently underpinned by a strong Canadian jobs report.
  • AUD net shorts dropped last week. The AUD’s role as a proxy for confidence in China suggests that trade talks between the US and China are providing direction.”

Markit's U.S. PMI data in focus – TD Securities

Analysts at TD Securities note the Markit PMI data from the U.S. are to offer a preliminary first look at countrywide manufacturing activity for September, with the market looking for an unchanged print at 50.3.

  • “It stands in contrast with the ISM manufacturing reading, which dipped below 50 in August. Conversely, the preliminary Markit services PMI is projected to have advanced to 51.5, up from 50.7 in August.”

U.S. President Trump is not in a hurry to get a trade deal with China - Rabobank

Analysts at Rabobank remain skeptical about a major breakthrough in the trade war in the coming months as China would have to change its economic model to address those issues – something that Beijing is not prepared to do.

  • “President Trump said that reaching a deal with China is not a priority ahead of the 2020 presidential election. Trump said he was not interested in “a partial deal”. He also claimed that the dispute will not undermine his chances to get re-elected (something that Beijing is most likely hoping for) and that his goal is a “complete deal” with China.
  • To our mind remarks from Trump imply that he expects China to address other crucial issues: intellectual property theft, barriers to entry for foreign companies and generous subsidies for state companies. China would have to change its economic model to address those issues – something that Beijing is not prepared to do.
  • Trump's positive assessment of the US economy is one of the reasons why he does not seem to be under pressure to get a deal. Meanwhile, Trump’s chief economic adviser Kudlow remains optimistic about the prospects for the US economy. The S&P 500 Index – one of the key barometers for Trump – continues to trade close to the all-time high. Perhaps if there is a major sell-off in excess of at least 10%, Trump will adopt a different approach.”

China's Premier Li: Will ensure economic operations are within reasonable range - Xinhua reports
China's fiscal policy may continue to do the heavy lifting – Standard Chartered

Analysts at Standard Chartered suggest that, in response to higher U.S. tariffs, the Chinese government believes it has adequate room for manoeuver.

  • “While a couple of experts we met suggested that there is no specific growth target that needs to be met at any cost, many still expected the government to take actions to secure above-6% growth this and next year to achieve a “moderately prosperous society” by 2020.
  • Fiscal policy may continue to do the heavy lifting. The 2020 official budget deficit is likely to approach the implicit ceiling of 3% of GDP. In addition, part of the 2020 local government special bond quota will be distributed this year, although a lack of quality projects suggests the actual issuance may take place next year.
  • Most experts foresee a rebound in infrastructure investment, although this may not be enough to offset weakness in manufacturing investment. Property investment may also decelerate as developers anticipate an extended period of tight policy.
  • The People’s Bank of China (PBoC) is cautious about monetary loosening due to concerns about risks of credit flowing to undesirable areas. However, the State Council meeting in early September appears to have set the tone for more policy accommodation to lower the real interest rate.
  • We expect another 50 bps cut in the reserve requirement ratio (RRR) and a 20bps cut in the MLF rate for the rest of the year.”

Major economic events and indicators for the week – Deutsche Bank

Deutsche Bank's analysts point out major economic indicators and events, which are expected to influence the global markets' movements this week.

  • “Tuesday.

  1. Data: Japan preliminary September Manufacturing, Services and Composite PMI; France September manufacturing confidence, business confidence; Germany September Ifo business climate index; UK August public sector net borrowing; US July FHFA house price index, July S&P CoreLogic Case-Shiller house price index; September Richmond Fed manufacturing index; September Conference Board consumer confidence.
  2. Central Banks: BoJ's Kuroda, ECB's Villeroy speak.
  3. Politics: General Debate of the United Nations General Assembly begins.

  • Wednesday.

  1. Data: Japan August services PPI; Germany October GfK consumer confidence; France September consumer confidence; US weekly MBA mortgage applications, August new home sales
  2. Central Banks: BoJ minutes of July meeting; BoJ's Masai, ECB's Coeure, Fed's Evans and George speak.

  • Thursday.

  1. Data: Japan final August machine tool orders; Euro Area August M3 money supply; US third estimate Q2 GDP, personal consumption, core PCE, preliminary August wholesale inventories, weekly initial jobless claims, August pending home sales, September Kansas City Fed manufacturing activity
  2. Central Banks: Bank of Mexico decision; ECB publishes Economic Bulletin; Fed's Kaplan, Bullard, Clarida, Daly, Kashkari and Barkin, ECB's Draghi, BoE's Carney and Cunliffe speak.

  • Friday.

  1. Data: UK September GfK consumer confidence; Japan September Tokyo CPI; China August industrial profits; France August PPI, consumer spending, preliminary September CPI; Italy September consumer confidence, manufacturing confidence, economic sentiment, August PPI; Euro Area September economic confidence, business climate indicator, industrial confidence, services confidence, final September consumer confidence; US August personal income, personal spending, preliminary August durable goods orders, final September University of Michigan sentiment
  2. Central Banks: BoE's Saunders, ECB's Guindos, Knot, Hernandez De Cos, Fed's Quarles and Harker speak.”

Russia's Energy Minister Novak: Russia plans to cut September oil production to comply with OPEC+ deal
Bundesbank’s experts: No cause for concern just yet - Bundesbank’s Monthly Report

  • Bundesbank’s experts do not believe that a potential contraction in GDP in two consecutive quarters represents cause for concern just yet
  • Only a slight decline in GDP is to be expected overall, even including the second quarter
  • Such a decline should currently be seen as part of a cyclical return to normality as the German economy emerges from a period of overheating
  • Experts see heightened geopolitical or trade tensions potentially extending or exacerbating the downturn, especially in German industry
  • It is still unclear whether industrial activity will recover before the downturn spills over to more domestically oriented economic sectors

USD/JPY: short-term top in place? – UOB

According to FX Strategists at UOB Group, there is the chance that USD/JPY could have topped around 108.50.

24-hour view: “Expectation for USD to “trade sideways” last Friday was incorrect as it dropped sharply to 107.51. Despite the subsequent bounce from the low, the underlying tone remains weak. From here, barring a move back above 108.00 (minor resistance at 107.80), USD could weaken further to 107.30. For today, the next support at 107.00 is not expected to come into the picture”.

Next 1-3 weeks: “The sharp drop of -0.41% last Friday (NY close 107.55) has increased the risk of a short-term top. However, only a break of 107.50 (no change in ‘strong support’ level) would indicate that the recovery phase that started more than 2 weeks ago has run its course. In other words, a break of 107.50 would suggest that last Wednesday (18 Sep) high of 108.47 is a short-term top. From here, unless USD can move stay above 108.00 by end of today’s NY session, a break of 107.50 would not be surprising. Looking ahead, a breach of 107.50 would indicate the start of a consolidation phase and USD would then likely to trade sideways to slightly lower for a period”.

UK households' financial worries hit five-year high - IHS Markit

British households' worries about the outlook for their personal finances rose to their highest in almost six years in September, pushing a broader measure of consumer sentiment to a four-month low, a monthly survey showed.

The IHS Markit Household Finance Index sank to 43.1 in September from August's reading of 43.6, driven by greater reluctance to make big purchases, concerns about job security and the most negative outlook since November 2013.

"The latest data suggest that the robust performance of the UK labour market may not be sufficient enough to dispel the pessimistic financial outlook, which could ultimately see weaker consumption trends at a time where the economy hinges on domestic resilience," IHS Markit economist Joe Hayes said.

UBS sees ‘potential for resolution’ in the US-China trade talks despite current ‘volatility’

Negotiations between the U.S. and China may appear volatile at times, but there’s still a chance the two countries could resolve their differences over the longer term, the chairman of UBS said on Saturday.

“You have to look through these because there’ve been ups and downs in these negotiations, there’s been a lot of volatility on both sides about these negotiations,” Axel Weber, chairman of the Swiss wealth management giant, told CNBC.

“What we’re interested in is the long term developments and whilst there is a big dispute at the moment, I think there’s also potential for resolution. And the potential for resolution lies in the very fact that trade is really beneficial to both sides,” he said.

The International Monetary Fund warned that elevated tariffs as a result of the U.S.-China dispute could shave 0.8% off global economic output in 2020 — and potentially result in further losses in the following years.

Both the U.S. and China would not be spared from such adverse economic impact — that’s one of the factors that would continue to prod both parties to return to the negotiating table, predicted Weber.

Mechanical engineering industry expects production to fall by 2% in 2020 - Germany's VDMA

Germany's VDMA Engineering Association said that global economic weakness, trade disputes and industrial structural change are weighing on business in mechanical engineering. A rapid upswing is not in sight. However, a good order backlog softens the decline.

The mechanical engineering industry in Germany must continue to adjust to considerable burdens. The trade dispute between the USA and China and a growing protectionism around the globe have a big impact on this industrial branch which counts among the world‘s  export leaders. Other factors include the global economic downturn, Brexit and structural change in key customer groups. "All of these factors have already led to concrete burdens for numerous customers of our machines and systems worldwide and they unsettle investors, who are therefore reluctant to invest. A  sustainable change for the better is not foreseeable in the near future. We therefore expect a real decline in production of 2 percent in mechanical engineering in 2020," explains VDMA Chief Economist Dr. Ralph Wiechers. The VDMA economists confirm their production forecast for the current year - also down 2% on the previous year.

Low interest rates look “quasi-permanent” - ECB's Knot

Interest rates in the euro zone look set to stay low for a long time, Dutch central bank governor and ECB board member Klaas Knot said in an interview published on Monday.

"The ECB's decision last week has shown that the low interest rates are not exactly of a temporary nature, but rather becoming a quasi-permanent phenomenon," Knot told.

A frequent critic of the bank's ultra-easy monetary policy, Knot slammed the ECB's new stimulus measures this month as disproportionate. But low interest rates are not the result of monetary policy alone, he said.

"The interest rate drop over the last decades has to do with structural factors. We save a lot, but invest less. So, yes, monetary policy does have an impact, but it is definitely not the dominant factor.”

Eurozone close to stalling in September as factory downturn deepens - IHS Markit

According to the report from IHS Markit, the Eurozone economy came close to stalling at the end of the third quarter as demand for goods and services fell at the fastest rate in over six years. A deepening manufacturing recession, where output fell at the sharpest pace since 2012, was accompanied by a slower service sector expansion. Jobs growth and price pressures meanwhile waned and sentiment about the outlook remained among the lowest for seven years.

The Eurozone Composite PMI fell to 50.4 in September, down from 51.9 in August to signal the weakest expansion of output across manufacturing and services since June 2013. The slowdown was driven by new orders for goods and services falling for the first time since January, dropping at the sharpest rate since June 2013. Backlogs of work fell for the ninth time in the past ten months as, facing a dearth of new orders, companies occupied their workforces by working through previously placed orders. The resulting drop in backlogs of orders was the largest since November 2014 and points to the increasing development of spare capacity. The deteriorating current business situation was matched by ongoing gloom about the outlook. Expectations for the year ahead remained stuck at one of the lowest levels since 2012, lifting only marginally higher since August.

Eurozone: Services PMI, September 52.0 (forecast 53.3)
Eurozone: Manufacturing PMI, September 45.6 (forecast 47.3)
German Composite PMI falls to lowest since October 2012 - IHS Markit

According to the flash report from IHS Markit, the German economy contracted in September, as the downturn in manufacturing deepened and service sector growth lost momentum. Job creation meanwhile stalled as firms reported weakening demand and pessimism towards the outlook for activity. The fall in output was accompanied by easing price pressures, with average charges for goods and services rising at the slowest rate for over three years.

The Flash Germany Composite Output Index – which is based on approximately 85% of usual monthly replies – registered 49.1 in September, down from 51.7 in August and its first reading below the 50 ‘no change’ threshold since April 2013. The rate of decline signalled was the steepest in almost seven years. 

Growth of business activity in the service sector slowed sharply since August to one of the weakest rates seen over the past three years. Manufacturing fared even worse, however, recording an eighth straight monthly decrease in output and the steepest rate of decline since July 2012.

September’s Flash Germany Manufacturing PMI read 41.4, signalling the sharpest decline in business conditions across the goods producing sector since the depths of the global financial crisis in mid 2009. The survey showed a sustained decline in underlying demand, with total inflows of new business falling for the third month running and at the quickest rate for seven years. 

Firms’ expectations towards the outlook for output over the next 12 months remained in negative territory, albeit ticking up slightly from August’s 81-month low. Manufacturers remained especially downbeat, with sentiment remaining around the weakest recorded since this series began in July 2012.

Germany: Services PMI, September 52.5 (forecast 54.3)
Germany: Manufacturing PMI, September 41.4 (forecast 44.0)
France: Services PMI, September 51.6 (forecast 53.2)
France: Manufacturing PMI, September 50.3 (forecast 51.2)
Eurozone PMIs, ECB Draghi’s testimony: Key market movers today – Danske Bank

Analysts at Danske Bank enlist the key economic events of note due later in the day ahead.

“This week, focus turns to the real economy, where the highlights are today's PMI figures. Last month, the manufacturing PMIs ticked up in both the euro area and Germany. However, both remain two-speed economies, with the service sectors shielding growth from the weak manufacturing sectors. With new orders improving slightly in August, we expect the manufacturing PMI to remain broadly stable at 47.0 in September. However, we see downside potential for the service print after the drop in business expectations last month and expect it to decline to 53.0. If there is no increase in PMIs in the US, this will indicate that Q3 showed the weakest growth since 2009. Today at 15:00 GMT Draghi will make his usual appearance at the European Parliament. We will look for any signs of the monetary policy stance and how he will address the diverging views within the governing council.”

China needs to change way it finances economy - think tank

China needs to develop a better system for financing small businesses that drive innovation in the economy but currently struggle to access the funds they need for growth, a leading Chinese think-tank said in a report published Sunday.

China’s economic development over the past 40 years has taken place through a financial system that has high government intervention and is “absolutely dominated by banks”, the China Finance 40 Forum said in an annual report.

Such a model, however, tends to distort financial resources in favor of large companies, the report said. That comes at the expense of smaller firms, which are the main drivers of innovation in the economy but usually lack the necessary assets for collateral or government guarantees to secure finance for growth. Financial regulators have also failed to prevent certain financial risks, the report said.

The current financial system “is clearly not well suited to the core task of current high-quality economic development. Therefore, an important task of financial reform should be to adjust the financial structure,” the report said.

CAD: BoC poised to join the cutting game - CIBC

CIBC Research discusses BoC rate call and CAD outlook. CIBC targets USD/CAD at 1.33 by year-end.

"We’re sticking with our call for a lone quarter point cut from the Bank of Canada, and while we merely nudged that a month earlier (to December), market expectations have swung more wildly, initially having bet heavily on an October cut, but subsequently dropping odds for a cut at all this year. The Bank’s statement and a follow-up speech didn’t hint at imminent action, arguing it had anticipated a slowing global climate in ending its rate hikes at lower levels than the US. In response to the BoC and strong jobs data, the C$ caught a bid as the probability of an October move was reduced. But a rate cut either delivered or strongly hinted at in December should see the dollar-Canada hovering near 1.33 at year end and into H1 2020. Canada’s current account deficit narrowed by more than expected in Q2, helped in part by a surplus for investment income. But over the medium-term, we see enough disappointments on trade to keep the current account in the red, and a negative for the C$. Look for a depreciation in the C$ over the course of 2020 and into 2021, reaching 1.38 by Q4 2020," CIBC adds. 

Chinese farm official says "good outcome" from trade talks - state media

China did not cancel planned visits to farms in the United States because of challenges in trade negotiations with the U.S., the country's senior agricultural representative in the talks said, according to a report by state-backed media group Yicai on Sunday, who added the talks last week achieved a "good outcome."

Chinese officials on Friday unexpectedly cancelled visits to farms in Montana and Nebraska scheduled for this week, as deputy trade negotiators wrapped up two days of talks in Washington, casting further uncertainty over a Sino-U.S. trade deal.

Last week's trade negotiations were constructive and made thorough preparation for talks in early October, said Han Jun, the deputy director of the Office of the Central Rural Work Leading Group, at an event in Washington, D.C., according to Yicai.

"There was a good outcome from the negotiations in the agriculture area too. The two sides had thorough and candid communications," Han said, according to Yicai.

The farm visits were planned separately to the trade talks, and the U.S. side has said they will send out another invite another time, Han said, according to the report.

The farm visits were seen as a goodwill gesture, which could have led to purchases of U.S. soybeans and pork.

Options levels on monday, September 23, 2019 EURUSD GBPUSD


Resistance levels (open interest**, contracts)

$1.1167 (2043)

$1.1134 (2081)

$1.1097 (1431)

Price at time of writing this review: $1.1021

Support levels (open interest**, contracts):

$1.0985 (5521)

$1.0943 (3180)

$1.0897 (2179)


- Overall open interest on the CALL options and PUT options with the expiration date October, 4 is 94780 contracts (according to data from September, 20) with the maximum number of contracts with strike price $1,1050 (12057);


Resistance levels (open interest**, contracts)

$1.2624 (1448)

$1.2598 (1791)

$1.2577 (846)

Price at time of writing this review: $1.2472

Support levels (open interest**, contracts):

$1.2387 (887)

$1.2354 (566)

$1.2317 (781)


- Overall open interest on the CALL options with the expiration date October, 4 is 16831 contracts, with the maximum number of contracts with strike price $1,2500 (1791);

- Overall open interest on the PUT options with the expiration date October, 4 is 18416 contracts, with the maximum number of contracts with strike price $1,1900 (1462);

- The ratio of PUT/CALL was 1.09 versus 1.10 from the previous trading day according to data from September, 20


* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Commodities. Daily history for Friday, September 20, 2019
Raw materials Closed Change, %
Brent 63.63 -0.34
WTI 58.27 -0.53
Silver 17.95 1.01
Gold 1516.347 1.2
Palladium 1638.27 1.29
Stocks. Daily history for Friday, September 20, 2019
Index Change, points Closed Change, %
NIKKEI 225 34.64 22079.09 0.16
Hang Seng -33.28 26435.67 -0.13
KOSPI 11.17 2091.52 0.54
ASX 200 13.3 6730.8 0.2
FTSE 100 -11.5 7344.92 -0.16
DAX 10.31 12468.01 0.08
CAC 40 31.7 5690.78 0.56
Dow Jones -159.72 26935.07 -0.59
S&P 500 -14.72 2992.07 -0.49
NASDAQ Composite -65.21 8117.67 -0.8
Currencies. Daily history for Friday, September 20, 2019
Pare Closed Change, %
AUDUSD 0.67637 -0.44
EURJPY 118.521 -0.65
EURUSD 1.10183 -0.21
GBPJPY 134.12 -0.89
GBPUSD 1.24693 -0.44
NZDUSD 0.62578 -0.67
USDCAD 1.32635 0.03
USDCHF 0.99085 -0.17
USDJPY 107.552 -0.44

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