US Futures Rise, Chinese Stocks Soar As Politburo Vows Support, FOMC Meeting Begins

US futures are higher with bond yields also rising higher in quiet, cautious trade ahead of a barrage of earnings including MSFT and GOOGL later today, as well as central bank announcements tomorrow (the FOMC meeting begins today) and Thursday from the ECB and BOJ. S&P futures were fractionally higher, rising 0.1%, as a surge in Chinese stocks spilled over; Nasdaq 100 futures rose as much as 0.4%, after a weak session Monday, with Microsoft Corp. and Alphabet Inc. due to report their first earnings since artificial-intelligence fever broke out. Shares in both companies were about 0.5% higher in New York pre-market trading as investors waited to see if the results justify the companies’ hefty year-to-date share gains. Treasury yields climbed across the curve, while the dollar and oil both reversed earlier losses; iron ore prices climbed while gold reversed modest gains. Today focus will be on MSFT and GOOGL earnings after the close. On macro, we get Case Shiller, Consumer Confidence and Richmond Fed at 10am ET.

 

In premarket trading, megacap stocks again lead higher. Shares in General Motors and General Electric gained in premarket trading as both companies raised their earnings guidance, while NXP Semiconductors NV advanced as its results beat expectations. China stock traded in the US rallied after China’s Politburo was far more dovish than expected: HSI and CSI added 4.1% and 2.9% today; FXI closed with a 2.1% gain yesterday. Here are the most notable premarket movers:

Goldman Sachs Group shares slipped as Citi cut its rating on the stock to neutral from buy, saying that the company’s targets are achievable, but it will take time and a better investment banking environment to attain them.Walmart rises 1.2% in premarket trading after being upgraded to overweight from neutral at Piper Sandler, which said the retailer has a chance to further extend market share gains as grocery inflation subsides. The broker also raises its price target on Walmart to a Street high.Rackspace Technology falls as much as 4.3% in premarket trading on Tuesday as Citigroup downgrades the infrastructure software company’s stock to sell from neutral, saying the valuation does not reflect the estimated downside potential.US-listed Chinese stocks extend their rally in premarket trading Tuesday, after Beijing’s pledge to support the economy spurred fresh bets that more stimulus measures could be on the way. Alibaba (BABA US) +1.6%, Baidu +1.8%.Zevia is downgraded to neutral from buy at Goldman Sachs after the beverage producer reported preliminary 2Q revenue that missed estimates due to supply chain interruptions. The broker said it now sees a balanced risk/reward ratio, and therefore moves to the sidelines.AMC drops as much as 15% in premarket trading — narrowing the spread between its common and preferred shares — after a Delaware court judge sent a new letter to the company and its shareholders about the movie-theater chain’s stock-conversion plan.

Some 48% of the S&P by market cap, or companies with a market value of $16.3 trillion, are reporting earnings this week. Despite stocks trading near 2023 highs, investors seem unwilling to place big bets, given uncertainty over what signals Federal Reserve and European Central Bank policymakers might send, with the Fed’s potential policy path, especially, crucial for global markets.

“Investors are unlikely to feel safe enough to get into the equities water before such an eventful week,” Mizuho International Plc strategists Evelyne Gomez-Liechti and Helen Rodriguez wrote in a note.

Despite the listless mood, hopes have grown that the US economy will be able to escape a sharp recession. That’s lifted the Dow Jones Industrial Average 5% so far this month, as investors price a better outlook for companies making industrial equipment and heavy machinery. That’s put the Dow index in the midst of its longest winning streak in more than six years.

European shares also edged higher, lifted by resources firms such as Anglo American Plc and Rio Tinto Plc that benefited after China’s Politburo signaled more support. The Stoxx 600 is up 0.2% after the Hang Seng finished with gains of 4.1%. Mining stocks have outperformed while Adidas and Bayer are all higher post-earnings. Among individual movers, consumer-goods giant Unilever Plc stood out, gaining as much as 5.7% after beating sales estimates, while spirits group Remy Cointreau SA surged after Chinese sales helped it surpass forecasts. European market sentiment was dampened by a euro-area bank lending survey which showed a record plunge in loan demand from the bloc’s companies. Alongside a dismal business outlook reading from Germany, the data raise questions over the ECB’s capacity to hike interest rates much beyond the 25 basis points priced for this Thursday’s meeting. Here are some of the most notable European movers:

Unilever shares rise about 5.7% after the consumer-staples company reported better-than-expected second-quarter sales. The beat showed continued volume resilience, according to Morgan StanleyAdidas shares gained as much as 6.6% in Frankfurt trading after the sale of the sportswear retailer’s inventory of Yeezy sneakers from a canceled partnership with the rapper Kanye WestRandstad rises as much as 4.2%, reversing a decline in early trading, as investors digested a set of results showing second- quarter underlying Ebita beat estimates while the Dutch staffing firm missed on revenue and gross profitsBayer gained 1.8%, reversing an initial drop of as much as 3.2%, as investors look beyond an expected cut to 2023 guidance following a slew of warnings from chemical companiesLogitech shares gain as much as 6.3% in Zurich after the Swiss maker of computer peripherals boosted its outlook for the first half of fiscal 2024. Sales for gaming and pointing devices beat estimatesCompass shares fall as much as 4.7% after the catering company reported 3Q earnings. Tuesday’s update is “fine,” but “investors may have been looking for slightly more,” according to BarclaysDSV shares decline as much as 6.3%. While the transport and logistics company’s second-quarter Ebit before significant items came in ahead of expectations, the Air & Sea segment missed estimatesDassault Systemes shares fall as much as 6.1%, their biggest drop since April, after the software firm reported slower growth in key areas from its cloud-based design platformElior sinks as much as 10%, biggest intraday drop since May 17, after the French catering company cuts its FY profit margin forecast for the second time this year, citing higher costs due to inflation and new contractsThales shares fall as much as 2.7% after the French defense group reached an agreement with Thoma Bravo for the acquisition of 100% of Imperva based on an enterprise value of $3.6 billionBabcock shares drop as much as 3.9% on Tuesday, snapping an 11-day winning run, as Liberum restarts coverage with a hold rating and says last week’s results were “not as good as they looked”Idorsia shares tumble as much as 17%, touching an all-time low, after the Swiss pharmaceuticals producer reported an operating loss for 2Q and suspended its 2025 profitability target

Attention is now turning to LVMH, Europe’s biggest company on what it says about Chinese consumer trends in its report later in the day.

Earlier in the session, Asian stocks advanced, lifted by Chinese shares after the country’s top leadership signaled fresh support for the ailing economy, while investors braced for key central bank meetings this week. The MSCI Asia Pacific Index rose as much as 1%, led by material and communication services shares. Most regional markets rallied, with technology and property shares propelling mainland Chinese and Hong Kong benchmarks. Chinese stocks drive Asian equity gains following an ADR rally in New York on Politburo’s pro-growth message. Hang Seng Tech index surges as much as 5.3% and H shares jump more than 4%. The CSI 300 rallied 2.6% – poised for its best day in five months – as developer shares soar the most in seven months.

China’s top leaders on Monday pledged to boost consumption and offer more support for the troubled property sector to help revive a slowing economy. The statement from the Politburo meeting was taken positively by investors, who say the outcome was better than expected. “The Politburo met earlier and was more dovish than expected, promising housing easing, local debt resolution, and a boost to capital markets. It could be a defining moment, akin to October 2018,” Morgan Stanley economists including Robin Xing wrote in a note. “We expect a meaningful growth rebound in 4Q, keeping full-year growth at the government’s target of 5%.”

Other Asian markets are narrowly mixed: Japanese stocks traded in a narrow range as investors awaited policy decisions from the Federal Reserve and the Bank of Japan. The Fed is expected to further raise interest rates, while the BOJ is projected to stand pat as it waits for sustainable inflation. Kospi nudged higher while the ASX 200 was positive with the index led by gains in the mining and energy sectors amid recent strength in underlying commodity prices owing to the Chinese stimulus hopes. Key stock gauges in India closed flat on Tuesday while small and mid-sized companies continued their rally to new peaks as ongoing earnings season unfolds. The S&P BSE Sensex was little changed at 66,355.71 in Mumbai, while the NSE Nifty 50 Index was also flat at 19,680.60. BSE Ltd.’s small- and mid-cap stocks rallied more than 0.3% each.

In FX, the Bloomberg’s Dollar Spot Index traded in the red, on track to snap five sessions of gains, while the euro touched a two-week high against the greenback after China signaled renewed support for its struggling economy.

The offshore yuan jumped to its strongest level in more than a week after the People’s Bank of China continued its support for the currency.The euro dropped and German bonds briefly recovered losses after a bank lending survey released by the European Central Bank showed a bigger-than-expected fall in demand for loans due to higher interest rates. A soft reading for the German business outlook also weighed on the currency.EUR/GBP declined as much as 0.3% to 0.8603, lowest in a week: The pound rose, on course to end its longest losing streak since March 2020 against the US dollar; GBP/USD rose as much as 0.3% to $1.2865The Australian dollar led the advance among the Group-of-10 currencies, gaining 0.5% as optimism on China spurred exporters to get some hedging on board before Wednesday’s local inflation data, according to Asia-based FX traders

In rates, treasury yields are higher by 2bp-3bp across the curve as the Bloomberg Dollar Spot Index falls 0.1%; 2s10s curve is optically steeper after switch to new 2-year note sold at auction Monday. The new 2-year trades around 4.87% after drawing 4.823% in the auction, highest yield for an auction of the tenor since 2007. Still, vs the 10-year at 3.89% its 98bp spread is tighter than the old 2-year note’s; the higher-yielding old 2-year traded nearly 106bp cheap to the 10- year Monday. Bunds are in the red although they briefly pared declines after German IFO missed expectations. German 10-year yields are up 2bps. Auction cycle continues with $43b 5-year. Apart from new 2-year, benchmark yields are highest since July 12 as wagers that the Fed will raise rates again this year after an expected quarter-point hike at the meeting that concludes Wednesday have increased somewhat. Ahead of auction at 1pm New York time, WI 5-year yield at around 4.15% is higher than 5-year auction stops since October; last month’s drew 4.019%.

Commodity prices were mostly on the rise after Chinese leaders used this week’s Politburo meeting to flag more aid to the economy. Oil prices held near three-month highs, with brent futures trading near $83 while copper and steel-making staple iron ore both rose, given their importance for China’s property sector. US-listed Chinese stocks also extended their rally in premarket trading.

In Crypto, Binance and CEO Zhao are planning to seek a dismissal of the CFTC complaint, according to Bloomberg. Crypto exchange Kraken says it is investigating reports that some clients are experiencing funding delays. UK Information Commission will examine Worldcoin (WDC), a project by OpenAI CEO Sam Altman, according to a spokesperson cited by CoinDesk.

Looking ahead, the US economic calendar includes July Philadelphia Fed non- manufacturing activity at 8:30am, May FHFA house price index and S&P CoreLogic home prices at 9am, and July Conference Board consumer confidence and Richmond Fed manufacturing at 10am; Fed speakers are in self-imposed quiet period ahead of Wednesday’s rate decision

Market Snapshot

S&P 500 futures up 0.2% to 4,591.50MXAP up 1.3% to 168.30MXAPJ up 1.9% to 532.87Nikkei little changed at 32,682.51Topix up 0.2% to 2,285.38Hang Seng Index up 4.1% to 19,434.40Shanghai Composite up 2.1% to 3,231.52Sensex little changed at 66,334.14Australia S&P/ASX 200 up 0.5% to 7,339.67Kospi up 0.3% to 2,636.46STOXX Europe 600 up 0.2% to 466.57German 10Y yield little changed at 2.45%Euro little changed at $1.1063Brent Futures down 0.3% to $82.46/bblGold spot up 0.3% to $1,960.69U.S. Dollar Index little changed at 101.33

Top Overnight News

US national security officials are scrutinizing an Abu Dhabi sovereign wealth fund’s planned $3bn takeover of New York-based Fortress Investment Group amid concerns in Washington over the United Arab Emirates’ ties to China. FTUnilever reported higher than expected underlying sales growth in the first half of the year driven by continued price rises, but sales volumes were flat as the cost of living crisis squeezed consumers. The company said “we have passed peak inflation”, adding that it had moderated its price rises. Prices rose 9.4 per cent in the first half, compared to 13.3 per cent in the fourth quarter of 2022. FTThe slow pace of Ukraine’s counteroffensive against entrenched Russian invaders is dimming hopes that negotiations for an end to the fighting could come this year and raising the specter of an open-ended conflict, according to Western officials. WSJCorporate loan demand in the euro area fell the most on record in the second quarter as rate hikes started to bite, an ECB survey showed. Demand for mortgages and other consumer borrowing declined, and lenders expect more tightening to come. Germany is probably still stuck in a recession, Ifo’s head said, as its business outlook worsened in July. BBGChipmakers warned that shortages of technicians, engineers and computer scientists are threatening US plans for rapid expansion of the sector. About 115,000 new jobs are expected by 2030 but current graduation rates imply more than half may remain unfilled, an industry body said. BBGMcCarthy says House probes into the foreign business activities of the Biden family rose to the level of an impeachment inquiry. The HillDeSantis is no longer Trump’s main rival as the Florida governor’s campaign continues to falter. London TimesThe FDIC hit out at some US banks for incorrectly reporting the amount of their uninsured deposits, after dozens of lenders restated their figures downward earlier this year. The regulator said banks were wrong to exclude deposits that were collateralized by pledged assets. The level of uninsured deposits at banks came into focus after the collapse of SVB and Signature Bank. BBGGeneral Motors has raised its guidance for the second time this year, citing strong customer demand. The Detroit carmaker predicted it will earn between $12bn and $14bn this year, having raised the bar in April when it said it would bring in $12.5bn at most. FTUS data surprises have been positive in the last couple of months, while European and China data have undershot…

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly higher amid a rally in Chinese stocks after the Politburo’s support pledges, although gains for the rest of the region were capped after soft global PMIs and with some cautiousness heading into risk events. ASX 200 was positive with the index led by gains in the mining and energy sectors amid recent strength in underlying commodity prices owing to the Chinese stimulus hopes. Nikkei 225 lagged as speculation remained rife regarding this week’s BoJ meeting with source reports noting the central bank is to consider a large increase in its 2023 inflation outlook and could raise its forecast to around 2.5%. Hang Seng and Shanghai Comp were boosted with gains led by a surge in property and tech stocks after the Politburo’s support pledges which lifted the Hang Seng Tech Index by around 5%, while the Hang Seng Mainland Properties Index rose by a double-digit percentage from early on as the Politburo’s statement omitted the language that homes are not for speculation.

Top Asian News

China’s NDRC held a meeting with private firms including ANTA (2020 HK), NIO (9866 HK) and TCL where it listened to the companies’ opinions and suggestions on the current economic situation, according to Reuters.

European bourses are managing to eke out marginal gains, Euro Stoxx 50 +0.1%, with macro drivers downbeat since the APAC upside seen on Chinese stimulus. Mining names outperform given Politburo stimulus while Unilever +5.0% is supporting the FTSE 100 and AEX post-earnings; on that point, European heavyweight LVMH reports after the Paris close. Stateside, futures are in the green but only modestly so with specific drivers somewhat light ahead of tomorrow’s FOMC and with numerous large-cap earnings due in- and after-hours today; ES +0.1%.

Top European News

ECB Euro area bank lending survey: net 14% of EZ banks tightened credit standards in Q2 vs. 27% in Q1. Banks expect more moderate net tightening on loans to firms in Q3. The cumulated net tightening since the beginning of 2022 has been substantial. Firms’ net demand for loans fell strongly in the second quarter of 2023, dropping to an all-time low since the start of the survey in 2003.EU ministers have given the final approval to the EU chips, according to the European Council.UK pensions regulator warned that pension fund trustees must consider widening the range of their investments including in start-ups and other illiquid assets or face “robust intervention”, according to FT.5.7 magnitude earthquake occurred in central Turkey, via EMSC.

FX

DXY slips within 101.430-180 range before another boost from the Euro after weak German Ifo.EUR/USD tests Fib support at 1.1055 from 1.1086 peak near 1bln option expiry interest.Aussie rebounds alongside Yuan ahead of CPI data, AUD/USD probes 0.6770 expiries from 0.6726 base, USD/CNY and USD/CNH both sub-7.1400 from 7.1600+ and 7.1900 respective highs.Yen retains recovery momentum vs Dollar between 141.62-21 bounds amidst demand at the overnight Tokyo fix.Pound holds onto the 1.2800 handle against Buck amidst supportive EUR/GBP tailwinds within 0.8637-03 range.PBoC set USD/CNY mid-point at 7.1406 vs exp. 7.2044 (prev. 7.1451)China’s major state-owned banks were seen selling dollars in the offshore and onshore spot FX markets in early Asian trades, according to sources cited by Reuters.

Fixed Income

Bond bears back in the driving seat as post-EU PMI momentum wanes and EGBs only bounce partially after dire German Ifo survey.Bunds back below par within 133.77-14 range, Gilts remain soft between 96.78-38 parameters irrespective of decent demand for 2038 DMO issuance and T-note nearer 111-23+ trough than 112-01+ peak ahead of US data, consumer confidence and 5 year supply.BTPs also on the back foot following mixed Italian auctions.

Commodities

WTI and Brent are now mostly softer intraday as the complex came off the best levels seen overnight with added pressure from the German Ifo Survey which, in fitting with yesterday’s PMIs, underscored a worsening economic situation in Germany.Spot gold continues to oscillate on either side of its 100 DMA (1,962.91/oz) ahead of a triple-threat of central banks including the likes of the FOMC tomorrow, ECB on Thursday, and BoJ on Friday.Base metals have been underpinned this week by the Chinese Politburo meeting which reignited some optimism in industrials via the hint of further stimulus, albeit the upside is currently capped by the German economic woes telegraphed by the Ifo data.Agriculture remains a theme as supply risks grow with Chicago Wheat rallying some 10% overnight at one point, whilst corn prices were also supported.Kremlin says it is impossible to return to lapsed Black Sea Grain deal.Russian Finance Ministry plans to cut the discount it uses to set taxes on the country’s crude oil exports to USD 20/bbl from USD 25/bbl currently, according to Finance Minister Siluanov cited by Reuters.Kazakh Energy Minister said there are no issues with shipping Kazakh crude via Russia amid Black Sea tensions.Kazakhstan’s Tengizchevroil has reduced daily output by 12-13k/T due to unscheduled maintenance, via Deputy Energy Minister.China’s H1 gold output rose 2.2% Y/Y to 178.6 metric tons and gold consumption rose 16.4% Y/Y to 554.9 metric tons, according to Reuters citing state media.

Geopolitics

White House said the US does not support attacks inside of Russia when asked about the drone strikes in Moscow.Japan launched a protest against North Korea over its missile launch, while it noted that North Korea’s missile launch is unacceptable and threatens not only Japan but also the regional and international society’s peace and stability.China’s government said a delegation led by Politburo member Li Hongzhong is to visit North Korea from July 26th. Subsequently, a Russian delegation is to visit North Korea this week, led by the Russian Minister of Defence, via KCNA. Additionally, the Russian Defence Ministry says Defence Minister Shoigu ‘s visit to North Korea will contribute to strengthening military relations between the two countries, via Al Arabiya.Russian authorities have announced the suspension of navigation within the Gulf of Sevastopol, via Al Arabiya.China’s Foreign Ministry said a senior official of the Japanese defense ministry has grossly interfered in China’s internal affairs, and China is firmly opposed to this and has lodged stern representations with Japan, via Global Times.Japan and Italy to hold joint fighter jet drills at Komatsu Base Aug 2-10; Japan and Australia to hold joint fighter jet drills at the Base Aug 23-September 15.

US event calendar

08:30: July Philadelphia Fed Non-Manufactu, prior -16.609:00: May S&P CS Composite-20 YoY, est. -2.35%, prior -1.70%09:00: May S&P/Case-Shiller US HPI YoY, prior -0.24%09:00: May S&P/CS 20 City MoM SA, est. 0.70%, prior 0.91%10:00: July Conf. Board Consumer Confidenc, est. 112.0, prior 109.7
July Conf. Board Present Situation, prior 155.3July Conf. Board Expectations, prior 79.310:00: July Richmond Fed Business Conditio, prior -12
July Richmond Fed Index, est. -10, prior -7

DB’s Jim reid concludes the overnight wrap

Sentiment has been a bit more negative than markets over the last 24 hours, as weak data from the flash PMIs for July was a bit worrying. However, DM equities just about shrugged it off and US bonds sold off after a weak 2yr Treasury auction, and traded in completely the opposite direction to the way European bonds did after the weak PMIs. The Chinese stimulus announcement yesterday has turned momentum overnight in their bourses, with Chinese real estate stocks up c.+7%, reducing YTD losses to c.-13.7%, so there’s some interesting global push/pull factors going on at the moment. Markets are now awaiting this week’s round of central bank decisions, multiple data releases, and a raft of earnings over the rest of the week.

As you’ll see in the day ahead, there’s lots to look forward to today including earnings from Microsoft and Alphabet after the bell; however, the one I’m most intrigued about is the latest quarterly ECB bank lending survey. The last survey, conducted in the weeks after the March banking stress, saw our aggregate indicator of BLS credit conditions decline to its weakest since the GFC amid a sharp fall in demand for loans and tightening credit standards. Banks did expect a partial rebound in credit conditions in Q2 so we’ll see if that materialised. It’s tough to disentangle recent shocks (energy spike and regional bank/Credit Suisse crisis) and their recovery, from the cyclical (400bps of hikes in a year). As well as a steer on Europe it might also give us clues as to the all important Fed SLOOS next week.

Back to those flash PMI numbers, it became clear things were surprising on the downside from the get-go in the European session. For instance, the French composite PMI hit a 32-month low of 46.6 (vs. 47.7 expected), whilst the manufacturing PMI hit a 38-month low of 44.5 (vs. 46.0 expected). Then in Germany, the composite PMI fell to an 8-month low of 48.3 (vs. 49.8 expected), with the manufacturing PMI diving deeper into contractionary territory, falling to a 38-month low of 38.8 (vs. 41.0 expected). That was then followed up by the Euro Area-wide numbers, where the composite PMI also hit an 8-month low of 48.9 (vs. 49.6 expected).

Outside of the Euro Area the picture was a bit brighter, but to be frank it still wasn’t great. In the US, the composite PMI fell to a 5-month low of 52.0 (vs. 53.0 expected), which added to the signs from other indicators that the economy is decelerating. Likewise in the UK, the composite PMI hit a 6-month low of 50.7 (vs. 52.3 expected). So in both cases the composite PMI was still above the 50-mark that separates expansion from contraction, but the numbers were weaker than expected.

Those prints led to a decent sovereign bond rally across Europe, with yields on 10yr bunds (-4.9bps), OATs (-4.7bps) and BTPs (-4.6bps) all moving lower. In part, that was because of growing doubts that the ECB would deliver another hike in September after their move this week. For example, expectations of a second hike by September were down from 65% on Friday to 58% by the close yesterday, so it’s becoming increasingly balanced in terms of market pricing.

For US Treasuries however, it was a somewhat different story ahead of the Fed’s decision tomorrow. 2yr yields were up an impressive +7.7bps to 4.92% given the global data. The sell-off accelerated after the European close as we saw a $42bn auction of 2-year notes issued at 4.823%, the highest interest rate since 2007. The move in the 10yr was more moderate, with a +3.5bps sell-off to 3.87%. Higher inflation breakevens drove things, with the 10yr breakeven up +4.7bps to 2.40%, marking its highest level since SVB’s collapse in early March. The bond sell-off came as investors raised their Fed funds expectations, with the December 2024 pricing up +11.0bps on Monday to 4.145%.

That shift in inflation expectations came against the backdrop of significant commodity price moves yesterday. For instance, wheat (+8.60%) hit a 5-month high, following a Russian attack in Ukrainian ports of Reni and Izmail on the Danube river, which have been used for grain exports. Other agricultural goods have also been affected, with corn (+5.97%) and soybeans (+1.62%) both rising in trading yesterday. Energy prices also moved higher, with Brent crude oil prices (+2.06%) at a 3-month high of $82.74/bbl, while WTI oil prices (+2.17% to $78.74/bbl) outperformed following news of a refinery outage in the US. In aggregate, it’s clear that we’re experiencing one of the strongest commodity advances of the last year now.

Those commodity price moves were helpful for energy stocks, which lifted a broader rally across several equity indices. Among others, the S&P 500 rose +0.40% to close just shy of its 15-month high last week. And there was a particular milestone for the Dow Jones (+0.52%), which rose for an 11th consecutive session for the first time since February 2017. That run of advances in 2017 lasted for 12 consecutive sessions, so another positive day today would match that. And if there were a 13th gain tomorrow, that would match a record last set in January 1987. Meanwhile in Europe, the STOXX 600 (+0.06%) still posted a very modest gain despite the disappointing PMI data.

In other economic news on Monday, we got a readout from a key economic policy meeting of China’s Politburo, which showed an increased focus on the “new difficulties and challenges” facing the economy. The meeting did not offer immediate stimulus measures but our China economists see the meeting as setting an encouraging tone for stronger policy easing down the road. See their reaction note here for more details.

Asian equity markets are mostly higher this morning as a result. The Hang Seng (+3.17%) is leading gains buoyed by locally-listed Chinese stocks while the CSI (+2.49%) and the Shanghai Composite (+1.87%) are also trading sharply higher with property leading the gains. Elsewhere, the KOSPI (+0.09%) is swinging between gains and losses with the Nikkei (-0.43%) bucking the regional trend. US stock futures are fairly flat.

Early morning data showed that South Korea’s seasonally adjusted GDP expanded +0.6% in April-June on a quarterly basis (v/s +0.5% expected) following a +0.3% increase in the preceding three months, despite a decline in exports.

To the day ahead now, and data releases from the US include the Conference Board’s consumer confidence measure and the Richmond Fed’s manufacturing index for July. Alongside that, there’s the FHFA house price index for May. Over in Germany, there’s the Ifo business climate indicator for July. From central banks, we’ll get the Euro Area bank lending survey. Finally, today’s earnings releases include Microsoft, Alphabet, Visa, General Motors, General Electric and Spotify