Developed macro
1. Upbeat sentiment dissipated: The Sarkozy-Merkel meeting generally fell short of market expectations.
2. Eurozone July HICP inflation to be confirmed at 2.5% YoY on lower core inflation.
3. BoE minutes under scrutiny following the uptick in July CPI inflation. We expect unanimity votes in favour of the rates status quo.
4. US July PPI to post a small increase (+0.1%). Core measure also expected up (+0.2%).
Interest rate strategy
1. Although the sovereign crisis is contained by the ECB for now, poor econ data ha supported core rates markets in the Euro area.
2. Today’s Schatz auction is something of a test of demand at these yields, which are 90 bp below those at the previous auction.
3. We expect uneventful Portuguese bill sales, given recent periphery bill auction results.
FX strategy
1. EUR: Supported by ECB action, but for how long.
2. GBP: BoE minutes to support bulls.
3. CHF: Key test looms as government members meet.
Emerging markets
1. Cautious day: Asian currencies under pressure but likely to be range-bound.
2. Watch Singaporean July NODX for any sign of recovery going into Q3.
3. CE4 growth slowed; domestic demand is slowing and the exports boost is fading.
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http://www.easyforexnews.net/wp-content/uploads/2011/08/WMT_2011-08-17.pdf
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