Developed macro
1. Equity markets appear to have found some strength in the hope that Fed Chairman Bernanke will offer some fresh stimulus.
2. Expect a clear moderation in the German IFO, but no collapse.
3. The French government is expected to announce fresh fiscal consolidation measures today.
4. US July Durable goods orders are expected to gain 2.3% on transportation.
Interest rate strategy
1. Bunds look mixed today technically. The Greek collateral issue is likely to continue.
2. Market levels may look uncannily similar to last August, but a weak Bund auction this time around is unlikely to spark a sell off.
FX strategy
1. FX markets remain largely well behaved compared to the huge volatility in other asset classes.
2. USD index could recoup losses quickly if as we expect Bernanke fails hint at QE3 at Jackson Hole.
3. Moody’s downgrade of Japan unlikely to have much JPY impact, with USD/JPY continuing to face short-term downside pressure.
Emerging markets
1. China continues push for CNY internationalization; we reiterate sell USD/CNH call
2. Vietnamese CPI inflation to stabilize but outlook is for decline in price pressures as well as growth in the region
3. Thailand to hike key rate but overall Asian central bankers are coming to an end of tightening cycles
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