Market Movers
A very light calendar today in terms of data releases with euro area consumer confidence the only figure of interest. On the one hand consumer sentiment is supported by the very low oil and gasoline prices but on the other we expect a spill-over from weakness in China and emerging markets. As the latter should mainly affect business sentiment, we look for a small increase in consumer confidence in September whereas consensus is for an unchanged reading.
We expect Turkey's central bank to keep its key rate unchanged at 7.50 as the TRY's recent slide due to political uncertainty and its weak prospects on Fed hike expectations have stabilised.
We also have a rate decision in Hungary today. Anything but unchanged interest rates at 1.35% from the National Bank of Hungary will be a big surprise.
Before markets open in Europe tomorrow the Chinese Caixin flash manufacturing PMI for September is released. This will probably be the first number that reflects the real impact from the Emerging Markets' turmoil during August and early September. While we see downside risk to growth in China in the short term, this was already reflected in the very low PMI for August when it dropped to 47.1. We look for a slight rise in September to 47.5, which is still a very low level. However, the markets have already priced in a high risk of a hard landing in China and if we were to see even a small increase this might be taken as a minor relief.
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