US equity futures and global markets were flat in listless trading as investors assessed the outlook for economic recovery and awaited the latest Federal Reserve minutes to gauge the direction of monetary policy while tracking the latest covid lockdown in New Zealand and on edge ahead of possible turbulence in Friday’s OpEx. Overnight the MSCI Asia Pacific Index added 0.4% while Japan’s Topix index closed 0.4% higher. In Europe the Stoxx 600 Index was broadly unchanged. S&P 500 futures pointed to a small move lower at the open, the 10-year Treasury yield was at 1.277%, oil rose and gold moved higher, while cryptos rebounded from a late Tuesday selloff.

Viacom CBS advanced 1.9% in premarket New York trading after Wells Fargo Securities raised the stock to overweight from equal weight, citing the media company’s success with streaming-video services. Targets slumped more than 3% in premarket trading despite posting stronger than expected results as sales growth moderated after the pandemic boom. Here are some of the other biggest U.S. movers today:

• TD Holdings (GLG) shares soar 38% following the China-based company’s second quarter results, where revenue surged 2,981% y/y to $59.84 million.
• Tilray (TLRY) shares rise 6.7% with Cantor Fitzgerald saying its deal to buy a majority position in senior secured convertible bonds issued by MedMen “adds credence” to its U.S. growth aims.
• Virpax Pharmaceuticals (VRPX) rallies 63% in premarket trading, extending Tuesday’s surge after the firm said it received a pre-investigational new drug response from the U.S. Food and Drug Administration for an antiviral barrier product.
• Weibo Corp. (WB) shares rise 5.6% in U.S. premarket trading after the Chinese social media platform reported second- quarter results that topped estimates.

A sense of caution was visible in markets notes Bloomberg, with most assets posting small moves, amid the growing spread of the delta virus variant, the prospect of reduced stimulus support and elevated inflation. While the Fed minutes Wednesday may give some clues about the timeline for tapering stimulus, the next catalyst for markets may not come before the central bank’s Aug. 26-28 conference at Jackson Hole, Wyoming.

“Investors are trying to balance the reopening of economies as vaccination rates go up, but also seeing the effects of the spreading Delta variant and that’s being reflected in the slowing economic data most of which has been surprising on the downside in the last two weeks,” said Kerry Craig, global market strategist at JPMorgan Asset Management.

In a town hall meeting Tuesday, Fed Chair Jerome Powell flagged that the pandemic is “still casting a shadow on economic activity” but didn’t discuss the outlook for monetary policy or specifics on growth and the risks from the delta variant.

“The market remains cautious,” Mizuho strategist Peter Chatwell wrote in a note. Unless Fed minutes “reveal something substantively different from recent source stories, the market is unlikely to react significantly, and choppy trading may continue.”

Today Investors will scan the Fed minutes due 2pm ET for further clues on when the bank might start tapering its bond purchases. “To see a successful taper in the next few months, we need to see more of those strong job prints,” said John Luke Tyner, fixed income analyst and portfolio manager at Aptus Capital Advisors. “I don’t see the Fed backing out of support yet, I think we need to see the unemployment rate fall below 5%.”

European shares rebounded from an early weakness, and edged up with the benchmark STOXX index rising 0.05%. The Euro Stoxx 50 is 0.2% lower, FTSE 100 and CAC lag peers at the margin. Miners, autos and retail names weigh; utilities and health care are the strongest sectors. European utilities stocks outperform, buoyed by gains for Fortum and Verbund with gas prices edging higher, bullishness on the outlook for carbon prices in Europe and a PT raise for the Finnish company. Stoxx 600 Utilities index up as much as 0.9%, touching the highest since April 23; benchmark index little changed. Here are some of the biggest European movers today:

• Alcon shares rise as much as 11%, the most intraday since March 2020, to hit a record high. The eye-care products maker’s 2Q results and raised guidance should be taken positively, with an upbeat read on the recovery in surgical procedures, analysts say.
• Tecan shares rise as much as 6.8% to a record after the Swiss laboratory-equipment maker posted 1H results that Vontobel says “clearly” beat expectations.
• Future shares rise as much as 5.3% as Berenberg (buy) says the media company remains a “top pick,” with multiple synergy opportunities and upside potential. Broker increases price target to a Street high.
• Nel gains as much as 5.4% after entering partnership with SFC Energy.
• Zur Rose fell as much as 7.6% after 1H results as analysts note widened losses as the company steps up marketing and gets ready for the German e-prescriptions system.
• Ambu drops as much as 5.2% as the medtech maker gets downgrades from Nordea and JPMorgan, with both seeing downside to consensus estimates.

Earlier in the session, Asian stocks rebounded, led by cyclicals, after a four-day selloff dragged the regional benchmark to its lowest level in almost eight months. The MSCI Asia Pacific Index rose as much as 0.8%, with financials and information technology sectors being the top performers. Chinese tech shares gave up gains after bouncing back following a five-day rout while a gauge of Southeast Asian equities jumped the most in about a month.  Wednesday’s respite comes after the MSCI Asia Pacific Index slumped 1.3% in the previous session to close at its lowest level since Dec. 28. Investors are assessing the economic impact from the spread of the delta variant of the coronavirus while also waiting for the release of the latest Federal Reserve minutes.

“Fed minutes due later tonight should show further indications that the Fed is leaning towards taper by the end of the year,” Eugene Leow, a strategist at DBS Bank in Singapore, wrote in a note. “We do not think that the delta variant changes the timeline for Fed normalization.” Equity benchmark in the Philippines, dominated by old-economy names, was the biggest gainer amid the broad rally in Asia on Wednesday.

Japanese equities rose, erasing early losses, as investors looked beyond a well-flagged extension of the latest coronavirus state of emergency. “It’s a technical rebound,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “There is some anticipation that the spread of virus cases could ease with the state of emergency now officially extended and expanded.” Electronics makers were the biggest boost to the Topix, which gained 0.4%. Fast Retailing was the largest contributor to a 0.6% advance in the Nikkei 225, which ended a four-day losing streak. Prime Minister Yoshihide Suga announced measures Tuesday evening that extend the state of emergency to Sept. 12 from its previously scheduled end of Aug. 31, and widen it to 13 prefectures from 6.  Meanwhile, the finance ministry reported Wednesday that the value of Japan’s exports increased 37% in July compared with last year’s depressed level, slowing from a 49% jump in the prior month

India’s benchmark equity index snapped a four-session streak of gains to slip from record highs, led by ICICI Bank.  The S&P BSE Sensex fell 0.3% to 55,629.49 in Mumbai, while the NSE Nifty 50 Index dropped by a similar amount to 16,568.85. Both indexes had climbed to fresh peaks on Tuesday. Out of 30 shares in the Sensex index, 10 rose, while 20 fell. Thirteen of the 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of metal stocks. ICICI Bank Ltd was the biggest drag on both indexes, declining 1.8%.  “We remain cautious on the markets as there is no clear direction over the next move,” said Ajit Mishra, vice president of research at Religare Broking Ltd. “High volatility and profit taking in broader markets are adding to the participants’ worries. We suggest investors to remain selective and prefer investing in defensive sectors such as consumer goods, IT and pharma.” 

In rates, the yield on benchmark 10-year Treasury notes rose to 1.2767% compared to its U.S. close of 1.258% on Tuesday. Germany’s 10-year yield, the benchmark for the euro area, was down 1 basis point at -0.475% by 0805 GMT, above the lowest in nearly two weeks of -0.501% touched on Tuesday.

In FX, the South Korean won led gains among Asian currencies after a six-day hammering prompted the finance ministry to monitor the currency market more closely. The New Zealand dollar recouped losses made after the Reserve Bank of New Zealand delayed a widely expected rise in interest rates as the country was put into a snap COVID-19 lockdown. The kiwi fell to a nine-month low of $0.6868 after the decision although it soon recovered, climbing back to $0.6919, as investors absorbed RBNZ projections showing policymakers still expect to raise rates over coming months.

“They’ve said no go, because you’ve got COVID and too much uncertainty. Give it a few weeks, let the smoke clear then the tightening cycle is still on the table,” said Imre Speizer, head of NZ strategy at Westpac.

The Bloomberg Dollar Spot Index is little changed, faded Asia’s modest strength. SEK and GBP top the G-10 scoreboard, NZD lags although ranges are small. The euro touched a fresh year-to-date low earlier before reversing its losses; sentiment in options suggests a breach of the $1.17 handle is probable. The pound drifted in a narrow range after U.K. inflation eased in July. It’s the first time in four months that inflation rose less than economists had expected. Aussie steadied after yesterday’s loss; iron ore extended its rout as BHP Group warned it sees an increasing likelihood of “stern cuts” to China’s steel output this year.

In commodities, West Texas Intermediate crude rose above $67 per barrel after the American Petroleum Institute’s report that inventories fell last week outweighed concern over the impact of the pandemic on demand leading to four days of straight declines. Brent trades near $69.50. Spot gold trades a narrow range, holding in the green near $1,787/oz. Base metals are in the red with LME lead and aluminum under-performing.

Bitcoin advanced after two days of losses and traded around $45,500 apiece.

Looking at the day ahead now, the main highlight will likely be the release of the FOMC minutes from the July meeting, while St. Louis Fed President Bullard will also be speaking. On the data side, there’s also US housing starts and building permits for July, along with the UK and Canadian CPI readings for that month. Finally, earnings releases include Nvidia, Cisco, Lowe’s, Target and TJX.

Market Wrap

• S&P 500 futures down 0.1% to 4,437.25
• STOXX Europe 600 little changed at 473.73
• MXAP up 0.4% to 196.54
• MXAPJ up 0.5% to 644.48
• Nikkei up 0.6% to 27,585.91
• Topix up 0.4% to 1,923.97
• Hang Seng Index up 0.5% to 25,867.01
• Shanghai Composite up 1.1% to 3,485.29
• Sensex down 0.2% to 55,657.43
• Australia S&P/ASX 200 down 0.1% to 7,502.15
• Kospi up 0.5% to 3,158.93
• Brent Futures up 0.5% to $69.40/bbl
• Gold spot up 0.1% to $1,787.22
• U.S. Dollar Index little changed at 93.07
• German 10Y yield rose 1.5 bps to -0.478%
• Euro little changed at $1.1719

Top Overnight News from Bloomberg

• New Zealand’s central bank refrained from raising interest rates during a coronavirus outbreak and nationwide lockdown, but signaled it intends to start tightening monetary policy soon.
• New Zealand found six additional cases of Covid-19 as it began a nationwide lockdown, all connected to a single delta infection discovered Tuesday with a link to an outbreak in Australia. New South Wales state saw a surge in infections as the virus spreads throughout Sydney despite Australia’s largest city being in lockdown for almost two months.
• Japan’s export recovery showed signs of peaking in July, with shipments to China and Europe losing strength amid a global resurgence of the coronavirus.
• Oil held a four-day drop driven by escalating concern that the spread of delta coronavirus variant is setting back the recovery in key economies, potentially jeopardizing a revival in energy consumption.
• President Xi Jinping said China must pursue “common prosperity,” in which wealth is shared by all people, as a key feature of a modern economy, while also curbing financial risks.
• The U.S. has frozen nearly $9.5 billion in assets belonging to the Afghan central bank and stopped shipments of cash to the nation as it tries to keep a Taliban-led government from accessing the money, an administration official confirmed Tuesday.
• Norway’s $1.4 trillion sovereign wealth fund, the world’s biggest, generated a 9.4% return in the first half of the year after its investments in energy, finance and technology companies helped drive double-digit gains in its stock portfolio
• President Xi Jinping put China’s wealthiest citizens on notice Tuesday, offering an outline for “common prosperity” that includes income regulation and redistribution, according to state media reports

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac bourses gradually improved and managed to shrug-off the early cautiousness stemming from the weak handover from Wall Street where the major indices snapped their streak of record closes. Upside in Asia was limited as participants digested a plethora of earnings releases. ASX 200 (-0.1%) was indecisive with outperformance in utilities and financials offset by losses in the mining-related sectors, while there was an abundance of earnings releases including BHP and Woodside Petroleum although their shares failed to benefit despite printing firmer results and the announcement a petroleum merger, with the headwinds due to weakness in underlying commodity prices. NZX 50 (+0.7%) was underpinned after the RBNZ surprisingly kept rates unchanged at 0.25% in which it cited the lockdown and uncertainty for its decision to refrain from a lift-off, while Nikkei 225 (+0.6%) gradually strengthened despite the initially choppy mood which was at the whim of the domestic currency and after mixed machinery orders and trade data. Hang Seng (+0.5%) and Shanghai Comp. (+1.1%) conformed to the mild positive bias with focus shifting to incoming earnings including Tencent which are due later today, while reports also noted that China vowed to increase the proportion of the middle-income group and is said to be seeking to raise rural consumption to as much as CNY 10tln. Finally, 10yr JGBs were lacklustre amid mixed data from Japan and with demand sapped after risk sentiment in Tokyo gradually improved, but with downside also stemmed given the BoJ’s presence in the market for over JPY 1.3tln of JGBs with 1yr-10yr maturities.

Top Asian News

• Japan’s Faster Vaccine Rollout is Good News for the Economy
• Japan Cancels F1 Grand Prix for Second Year in a Row
• Taliban Ring Kabul Airport With Checkpoints: Afghanistan Update
• Korean Firm Moves With IPO to Fund Eco-friendly Ships: ECM Watch

European equities (Eurostoxx 50 -0.3%) trade with a mild negative bias as gains in the futures markets faded ahead of the cash open. Hopes had been for a firmer start to the session given the more upbeat tone seen in Asia-Pac bourses, however, a lack of fresh macro impulses from a European perspective saw enthusiasm wane amid holiday-thinned conditions. Stateside, futures are hugging the unchanged mark as investors await minutes from the FOMC’s July announcement and pre-market earnings from US retailer Target while Lowe’s beat on top and bottom lines alongside raising FY21 guidance. Sectoral performance in Europe is relatively mixed with modest outperformance in Real Estate and Travel & Leisure names. Basic Resources lag peers as BHP gives back some of yesterday’s earnings-inspired gains with the Co. facing criticism over its decision to abandon its FTSE 100 listing in favour of Sydney. Individual movers are somewhat sparse as the region heads out of earnings season. That said, results from Alcon (+11.0%) and a subsequent guidance raise have sent their shares to the top of the Stoxx 600. Carlsberg (+2.8%) is also gaining post-earnings with the Co. increasing guidance and announcing a share buyback following a recovery in beer volumes. To the downside, Persimmon (-2.5%) sit near the foot of the FTSE 100 despite noting that current forward sales are up around 9% from pre-pandemic levels.

Top European News

• World’s No. 1 Wealth Fund Makes $110 Billion as Stocks Soar
• Tesla Wins Volkswagen’s Support in Push for India EV Tax Cut
• Carlsberg Raises Earnings Forecast Again as Bars Reopen
• Philip Morris Buys 22.61% of Vectura’s Shares on the Market

In FX, the Sterling has pushed forward past its G10 peers with no clear catalyst behind the rise. UK CPI metrics fell short of expectations for July across the board with clothing and footwear, and a variety of recreational goods and services made the largest downward contributions, whilst the upside was led by rises in second hand vehicles. Pre-data, desks flagged a cooling of inflation as a by-product of the base effects from 2020 – with the August report expected to mark a pickup in inflation. GBP/USD rebounded from its current 1.3729 base back above 1.3750 ahead of its 200DMA at 1.3778. EUR/USD trades just north of 1.1700 having tested the level to the downside in the early hours, with technicians flagging 1.1695 as the next support point (38.2% fib of the 2020-21 move), a dip below that opens the door to 1.1688 (16th Oct low) ahead of the psychological 1.1650. The pair was unmoved by unrevised EZ CPI metrics across the board.

• DXY – The Buck is on a mildly softer footing as risk sentiment is seemingly more constructive than it had been earlier this week – with some desks also noting of a reversal in the crowded long USD. The Fed Chair kept his cards close to his chest during yesterday’s appearance and ahead of tonight’s FOMC minutes (full preview available in the Newsquawk research suite). DXY threatens a breach of 93.000 at the time of writing having had waned from its earlier 93.150 high, whilst the next point of support is still some way off at yesterday’s 92.611 low.
• NZD, AUD, CAD – The non-US Dollars resided near the top of the G10 bunch in early European trade with mild gains but then lost the top spots to the EUR and GBP. Overnight, the RBNZ opted for a hawkish hold in its OCR vs dwindling expectations for a 25bps hike heading into the confab. The central bank’s stance is being framed as hawkish nonetheless as it remains on a course towards removing monetary stimulus given the backdrop of strong economic data, with this decision merely a “pause” in the face of a COVID threat, whilst banks suggest that lockdown downfalls can be addressed by fiscal policy. NZD/USD saw a knee-jerk lower to a new YTD low (0.6868) upon the surprise hold but immediately retraced it and reclaimed a 0.6900 handle as the rate path saw sizeable upgrades across the board. NZD/USD however encounters some mild pressure as US players enter the fray and react to the RBNZ. The AUD/NZD cross similarly fleetingly spiked above 1.0500 to match yesterday’s 1.0540 best before relinquishing the level. Meanwhile, AUD/USD traded subdued overnight as base metal prices continued to be impacted by Chinese intervention with the AUD/USD pair around the 0.7250 mark within a narrow 0.740-69 range. Elsewhere, the Loonie looks ahead to its inflation figures later in the session with the USD/CAD pair just north of 1.2600 but off the 1.2640 overnight high. Analysts at SocGen suggest that the pair above its 200 DMA (1.2560) opens the door for a rise closer towards 1.3000 – with the CAD-WTI correlation also strengthening over the past month to 0.5 from 0.25.
• JPY, CHF – The traditional safe-havens are flat with not much to report as traders look for the next catalyst. USD/JPY found support at 109.50 and just about eclipsed its 100 DMA at 109.65, with the 50 DMA then seen at 110.15. USD/CHF is sandwiched between its 50 and 100 DMA at 0.9148 and 0.9124 respectively.

In commodities, WTI and Brent front-month futures are on a mildly firmer footing, with the former around USD 67/bbl (vs low USD 66.42/bbl) and the latter around USD 69.50/bbl (vs low USD USD 68.90/bbl). However, in the grander scheme, prices are consolidating amid a lack of catalysts ahead of the FOMC policy decision. Last night’s inventory report turned out to be mildly bullish but participants await confirmation from the EIA metrics later, with the headline seen drawing 1.055mln bbls. Another development to keep on the radar – India has begun selling oil from strategic reserves after a policy shift and as part of a plan to commercialise its storage and lease space. Meanwhile, spot gold and silver are overall little changed ahead of the FOMC minutes, with the former hitting interim resistance at USD 1,794/oz (vs low USD 1,787/oz). Some reports that have been gaining focus – US-listed Palantir has bought USD 50.7mln in gold bars and will be accepting payment in gold as the firm prepares for a “black swan event”. Turning to base metals, LME copper is flat within a tight range amid a lack of catalysts. Elsewhere, Dalian iron ore future and Shanghai rebar futures again saw a session of hefty losses, with some traders citing steel producers re-selling iron ore bought under longer term contracts to miners after China cut its steel output target. Further, China’s Dalian commodity exchange is to increase speculative margin requirements for September coke futures to 20%, as of the August 20th settlement.

US Event Calendar

• 7am: Aug. MBA Mortgage Applications -3.9%, prior 2.8%
• 8:30am: July Building Permits MoM, est. 1.0%, prior -5.1%, revised -5.3%
• 8:30am: July Housing Starts MoM, est. -2.6%, prior 6.3%
• 8:30am: July Building Permits, est. 1.61m, prior 1.6m, revised 1.59m
• 8:30am: July Housing Starts, est. 1.6m, prior 1.64m
• 2pm: July FOMC Meeting Minutes

DB’s Jim Reid concludes the overnight wrap

Global equity markets continued to lose ground yesterday as investor angst ratcheted up further about the spread of the delta variant and the economic consequences of further virus outbreaks. Indeed, recent weeks have shown that even among those countries with a relatively good track record on containing the virus, a number have had to deal with repeated flareups, which suggests that there could be sustained disruption in the coming months, particularly as the northern hemisphere winter begins and people spend more time indoors where respiratory viruses spread more easily. New Zealand is just the latest example of this (more on which below), but separate surges in Australia and China of late have also magnified fears of a potential growth slowdown. And even in the US, which hasn’t been following an elimination strategy, they’ve moved from a situation in June where cases were rising at the slowest rate since March 2020, to now where they’re experiencing the most fastest increase in over 6 months.

Amidst these jitters, the S&P 500 (-0.71%) fell back from its all-time high the previous day, with cyclicals leading the declines as part of a broad risk-off move. In this recent low-volatility market, that was actually the largest single-day drop for the S&P since July 19, which roughly erases the gains of the past three sessions. Given the delta concerns, some of the more Covid-sensitive assets were among the biggest underperformers, with the S&P 500 airlines index falling -2.68% yesterday in its 4th consecutive move lower. That leaves it -23.7% down from its closing high in April, back when there was far more optimism about a return to normality later in the year given the vaccine rollout. And other US indices fared badly as well, including the NASDAQ (-0.93%) and the small-cap Russell 2000 (-1.19%). Meanwhile on the earnings front, Home Depot (-4.27%) saw the largest decline in the Dow Jones after weaker-than-expected results, though Walmart (-0.03%) was “just” flat even after the company raised their full-year outlook.

The decline in risk appetite was reflected in other asset classes too, with oil prices continuing to fall as delta fears saw increasing questions being asked the strength of economic demand over the coming months. By the close, Brent Crude (-0.69%) and WTI (-1.04%) had both posted their 4th successive losses for the first time since March, and other cyclical commodities like copper (-2.80%) witnessed similar downward pressure. One exception to this were European equities, which were a bit more resilient having closed before the later selloff, and the STOXX 600 was up +0.07% by the close. That said, this masked a sharp regional divergence as southern European assets struggled in particular, with Italy’s FTSE MIB (-0.85%) and Spain’s IBEX 35 (-0.68%) both moving lower, just as the spread of Italian (+1.1bps) and Spanish (+0.8bps) 10yr yields over bunds widened for a 3rd day running.

Overnight, one of the big pieces of news has come from the Reserve Bank of New Zealand, who maintained their Official Cash Rate at 0.25 per cent given the imposition of a nationwide lockdown. That lockdown was confirmed shortly after we went to press yesterday, and follows the discovery of the first community case for New Zealand since February. In response, the New Zealand dollar fell sharply, with the currency experiencing the worst performance in the G10 yesterday (-1.44% vs USD), although it’s recovered +0.28% this morning after RBNZ projections pointed to them still hiking rates at least once this year. Nevertheless, it was also confirmed last night that there were a further 6 cases on top of that, which raises the prospect of a further extension to the lockdown as New Zealand seeks to maintain its Covid elimination strategy. Meanwhile in Australia, which is dealing with its own surge, New South Wales recorded a record 633 new cases yesterday.

Elsewhere in Asia overnight, the risk-off sentiment has eased up this morning with the Nikkei (+0.74%) and the Hang Seng (+0.75%) on track to end a run of 4 successive declines, the Shanghai Comp (+0.67%) poised to end a run of 5 declines, and the Kospi (+0.92%) looking to end a run of 8 declines. Elsewhere, futures on the S&P 500 are up +0.10%.

Back to yesterday, safe havens were once again one of the few winners given current conditions, with the US Dollar index (+0.54%) climbing to its highest level since late March, even as yields on 10yr US Treasuries were mostly unchanged (-0.3bps) at 1.262%, as were those on 10yr bunds (-0.2bps). We did hear from Fed Chair Powell in a town hall discussion with educators, but he said very little of relevance to investors, who are instead focusing on his speech at the Jackson Hole symposium next week.

In terms of the latest on the pandemic, New Zealand has been a major focus over the last 24 hours as mentioned, and the latest lockdown will see schools and most businesses closed over this period. In the US meanwhile, Reuters reported that the government is planning to extend mask mandates for travellers on airplanes, trains, and buses through January 18 at the earliest. Separately on the US, we’re expecting to hear from President Biden today on booster shots at 4:30pm ET, with the New York Times reporting that the recommendation will be that vaccinated individuals get a booster shot 8 months after their second dose. This would mean that some of the elderly and at-risk who were first vaccinated would be eligible as soon as next month.

On the ongoing crisis in Afghanistan, NATO chief Stoltenberg said the US, UK, Turkey, Norway, and other allies are working to securing Kabul airport and continue evacuations. The US announced they are aiming for a flight every hour, eventually hoping to fly 5-9k people out of the country per day, and that the operation could continue for a few weeks. That came as the Washington Post reported that the Biden administration had frozen Afghan government reserves in US bank accounts.

Looking at yesterday’s data, there was a mixed bag of releases from the US that did little to clarify the outlook ahead Jackson Hole symposium. On the one hand, retail sales fell by -1.1% in July (vs. -0.3% expected), but industrial production was more resilient with growth of +0.9% (vs. +0.5% expected). Separately, the NAHB housing market index for August unexpectedly fell to 75 (vs. 80 expected). That’s its lowest level in over a year, though for context that still leaves it some way above its pre-pandemic levels.

There was more positive news on the UK labour market however, where the unemployment rate in the 3 months to June unexpectedly fell to 4.7% (vs. 4.8% expected). The report also showed that the number of payrolled employees was up +182k in July, marking the 8th consecutive increase, while the number of job vacancies in the three months to July rose to a record high of 953k. That leaves the focus on this morning’s CPI report, which follows the last couple of releases both surprising to the upside.

To the day ahead now, and the main highlight will likely be the release of the FOMC minutes from the July meeting, while St. Louis Fed President Bullard will also be speaking. On the data side, there’s also US housing starts and building permits for July, along with the UK and Canadian CPI readings for that month. Finally, earnings releases include Nvidia, Cisco, Lowe’s, Target and TJX