Focus on ECB today after US Tech recovery

Focus on ECB today after US Tech recovery 150 150 Realm

US technology stocks recovered with a strong session on Wednesday but remain well off recent highs. Investors will be focusing today on the latest European Central Bank meeting and the latest decision on monetary policy. 


Global Macro

  • Stocks of crude oil in the United States increased by 2.9 million barrels in the week ended September 4th, 2020, after a 6.36 million draw in the previous week and compared with market expectations of a 1.4 million drop, data from the American Petroleum Institute showed.
  • The number of job openings in the US increased by 617,000 from a month earlier to 6.618 million in July of 2020, above market expectations of 6.0 million. Still, vacancies remained below their pre-pandemic level of 7 million. By industry, the largest gains in openings were in retail trade (+172,000), health care and social assistance (+146,000), and construction (+90,000). The number of job openings increased in the South and Midwest regions. Meanwhile, the number of hires slumped by 1,183,000 to 5.8 million, while total separations including quits, layoffs and discharges, and other separations was little changed at 5.0 million.
  • Mortgage applications in the United States increased 2.9 percent in the week ended September 4th, the first rise since the week ended August 7th and after a 2 percent fall in the previous week, data from the Mortgage Bankers Association showed. Applications to refinance a home loan rose 3 percent and homebuyer mortgage applications went up 2.6 percent. The average fixed 30-year mortgage rate decreased 1 bps to 3.07 percent.
  • China’s producer prices declined by 2 percent year-on-year in August 2020, after a 2.4 percent decrease in July and matching market estimates. This was the seventh straight month of fall in factory prices but the smallest in five months, as the economy continues to try to recover from the severe damage caused by the COVID-19 outbreak. Means of production cost deflation eased (-3 percent vs -3.5 percent in July) due to extraction (-5.8 percent vs -7.1 percent), raw materials (-6.4 percent vs -6.9 percent) and processing (-1.4 percent vs -1.8 percent). At the same time, consumer goods price inflation slowed to 0.6 percent from 0.7 percent in July, amid a slowdown in cost of food production (3.1 percent vs 3.7 percent), while prices continued to fall for clothing (-1.3 percent vs -1.1 percent), daily use goods (-0.4 percent vs -0.8 percent) and consumer durables (-1.5 percent vs -1.6 percent).
  • China’s annual inflation rate eased to 2.4 percent in August 2020 from 2.7 percent in the previous month and in line with market expectations. This was the lowest figure since May as food inflation slowed (11.2 percent vs 13.2 percent in July). Meantime, prices for non-food products and services went up 0.1 percent, compared to a flat reading in July, with cost of other goods and services rising faster (6.1 percent vs 5.1 percent in July). At the same time, health inflation was littlechanged (1.5 percent vs 1.6 percent), while cost of education, culture & recreation was flat, after a 0.3 percent rise in July. Also, prices continued to fall for transport (-3.9 percent vs -4.4 percent); rent, fuel, and utilities (-0.7 percent vs 0.7 percent); household goods and services (-0.1 percent vs -0.1 percent); and clothing (-0.5 percent vs -0.5 percent). On a monthly basis, consumer prices rose 0.4 percent in August, following a 0.6 percent gain in July.
  • On Wednesday: European stocks close on a strong note on as stocks bounced back after the U.S. market staged a smart rally, led by technology stocks that had taken a severe hammering in recent sessions. US stocks showed a strong move to the upside during trading on Wednesday, regaining ground following the sell-off seen over the three previous sessions. The major averages all climbed firmly into positive territory but remain well off their recent highs. The rebound on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following the recent sell-off.

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