Developed macro
1. Risk appetite stabilised somewhat amid speculation about policy measures to contain the eurozone crisis
2. ECB speakers continue to hint at policy accommodation in October, at least on the liquidity front, while the case for a rate cut has strengthened.
3. Eurozone M3 annual growth to remain weak in August.
4. US September Consumer Confidence less pessimistic. Job conditions in focus.
Interest rate strategy
1. Italian and Spanish auctions potential sentiment drivers
2. ECB refinancing operations to influence short-term rates, whereby risk is for further downward pressure on Eonia rates
FX strategy
1. EUR recovers on hope of concerted policy initiatives.
2. We now expect the ECB to cut by 50bp in October. The EUR effect is ambiguous.
3. USD will take its cue from EUR sentiment, not US data.
Emerging markets
1. Sentiment to improve in Asia on hopes for policy action in Europe
2. Trade data out of Hong Kong and Philippines to provide clues on impact of global slowdown on regional growth
3. Government bond auctions in South-East Asia watched for indications of continued foreign demand
Commodity markets
1. Gold’s safe-haven/low-risk status being called into question.
2. Base metals: Potential for a rebound as shorts cover…
3. …And production cuts have started.
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