The much anticipated payrolls day, expected to provide at least some more clarity on future Fed policy, has arrived and heading into today's report both price action and newsflow has been muted. U.S. equity index futures were fractionally higher, as European stocks rise 0.6% while Asia was flat. Gold fell as the dollar rose, while comments by Vladimir Putin which endorsed an OPEC oil production freeze while granting Iran an exemption, have pushed oil higher.
An important election is coming up, and I’m not talking about the US presidential election. The upcoming referendum in Italy this fall will have a major macroeconomic impact on the world. But hardly anyone outside of Italy is paying much attention to it - yet.
Less than two weeks after news of a probe into Monte Paschi fasle accounting leaked, Milan prosecutors have filed a request to shelve a probe for alleged market manipulation and false accounting against the chief executive of Monte dei Paschi di Siena and the bank's former chairman, three judicial sources said.
Angela Merkel, and Europe in general, had hoped they had managed to move beyond the unprecedented wave of refugees unleashed on the content in 2015 courtesy of the German Chancellor's open door policy, with the fragile March 2016 refugee deal signed with Turkey. Sadly - for both Europeans who have suffered a surge in terrorist attacks as a result and for Merkel, whose approval rating has subsequently plunged - Europe is once buckling under the weight of a new wave of migrants.
The August market doldrums were on display on the last day of the month as S&P futures were fractionally lower on non-existent volume, while both Europe and Asia were modestly in the green; ten-year Treasury yields headed for the biggest monthly jump in more than a year while the dhe dollar gained for a sixth day against the yen in the longest winning streak since March. European stocks advanced for a second day, adding to a monthly gain as oil trimmed its advance in the best month since April.
After Friday's Jackson Hole repricing of Fed hike expectations, which made it clear that the fate of a September rate hike is now in the hands of the August payrolls number, the main risk event of the week is therefore this Friday's US NFPs for which consensus expects a reading of 180K, down from last month's 217K print. A number substantially above this will make a September hike virtually certain, and potentially risks roiling markets as good news will likely be bad news this time around.
The dollar index rose to a two-week high on Monday, while bond yields jumped to their highest since June and global stocks sold off after senior Federal Reserve officials indicated a U.S. interest rate increase was on the cards in the near term. The Fed effect - and the stronger dollar - reverberated through markets, pressuring stocks in Europe and emerging markets, pushing oil below $47 and the commodity complex lower.
In one generation, Europe will be unrecognizable. Eastern Europe now has "the largest population loss in modern history", while Germany overtook Japan by having the world's lowest birth rate. Europe, as it is aging, no longer renews its generations, and instead welcomes massive numbers of migrants from the Middle East, Africa and Asia, who are going to replace the native Europeans, and who are bringing cultures with radically different values.