Another day, another record high in US equity futures as spoos hit a new record high of 4492 just before the European open, with Nasdaq 100 futs also hitting a record as positive news around U.S. vaccination boosted shares of energy and travel-related companies while expectations of a dovish Jackson Hole boosted overall market sentiment. At 7:30 a.m. ET, Dow e-minis were up 57 points, or 0.16%, S&P 500 e-minis were up 7.5 points, or 0.17%, and Nasdaq 100 e-minis were up 39points, or 0.25%.

All three major U.S. stock indexes ended the session sharply higher on Monday, with the benchmark S&P 500 hitting an intra-day record driven by a surge in energy and industrial shares after the CDC gave the first full approval for a COVID-19 vaccine. The rally continued overnight after a rebound in Chinese technology stocks carried through to U.S.-listed Chinese companies in pre-market trading, with Alibaba Group Holding Ltd. and JD.com Inc. up more than 5% and 8% respectively. However, the ramp lost steam after the European open as stocks faded an early jump in the Stoxx 600 as declines for healthcare and utilities offset increases for cyclical shares including travel and autos. Basic resources outperformed as crude oil extended an advance and iron ore surged more than 10%. Treasuries dipped and the dollar was steady.

Gigatech FAAMGs all gained between 0.1% and 0.8% in premarket trading, a day after the Nasdaq Composite index hit an all-time closing high. Oil majors Chevron Corp and ExxonMobil Corp adding 0.8% and 0.9%, respectively, as the bounce in oil continued and Brent rose above $70.  Cruiseliners rose about 1.1%, while casino operators MGM Resorts, Wynn Resorts and online travel agency TripAdvisor added between 1.2% and 2.2% on hopes that increased vaccination rates in the United States would spark a stronger rebound in travel and leisure activities. Here are some of the other biggest U.S. movers:

• Cara Therapeutics (CARA) shares jump 23% in premarket trading after the company and Switzerland’s Vifor announced U.S. FDA approval for Korsuva kidney disease drug.
• Chinese stocks listed in the U.S. rallied, led by gains in JD.com Inc. (JD) with an 8.4% climb and Pinduoduo Inc. (PDD) with an 11% rise, after technology shares extended their rebound in Hong Kong following a months-long rout.
• Palo Alto Networks (PANW) shares rise 11% after the cybersecurity firm’s results and guidance beat estimates, with analysts saying the numbers look strong across the board and raising their share price targets.

In Europe, the Stoxx Europe 600 Index erased earlier gains of as much as 0.4% to trade flat as financials and staple goods stocks offset gains in leisure, travel and automotive shares which were up 1.5%, followed by automakers and miners. The index fell as much as 0.1% before turning flat. The FTSE 100 was down 0.3%, while the Dax is up 0.3%. USTs bear steepen, yields rising most at the 30-year with +1.1bps.

Data showed Germany’s gross domestic product grew by 1.6% on the quarter from April to June, slightly up from its previous estimate of 1.5%, helped by private consumption and state spending. Marks and Spencer Group rose 4.6% after Berenberg and Credit Suisse raised their price targets on the UK retailer’s stock. “Despite it being a moderate environment for UK consumption ... M&S is enjoying favourable positioning, market share gains from peers disappearing,” Credit Suisse analysts said. Norwegian salmon farmer Bakkafrost gained 1.3% following its second-quarter results. Novartis slipped 0.8% after the Swiss drugmaker said its Kymriah CAR-T therapy did not meet the primary endpoint in a late-stage study. Here are some of the biggest European movers today:

• Prosus shares gain as much as 3.7% and Naspers rises as much as 5%, tracking a rally for China’s Tencent. Citi said it continues to see significant value in both Prosus and Naspers.
• Boskalis Westminster shares rise as much as 5.7% after its 1H results, with analysts saying that the update indicates that the recovery for the global dredging market is on track.
• Spectris shares gain as much as 2.4% after the engineer agreed to sell its NDC Technologies arm to Nordson, which Berenberg said looks like “another good deal” for the firm.
• Bavarian Nordic shares rise as much as 7.2%, taking its gains in 2021 to around 78%, with analysts raising their PTs on the firm following news it has secured funding for its Covid-19 vaccine candidate.
• Wood shares decline as much as 5.2% after the energy services group’s 1H results, with RBC flagging concerns on rising net debt and cash conversion.
• Shurgard Self-Storage shares fall as much as 4% after JPMorgan cuts its rating on the stock to neutral on valuation grounds, saying that while the self-storage firm’s outlook is positive, it struggles to see much upside for the stock.

As everyone knows by now, investors are awaiting U.Jerome Powell’s speech at the annual Jackson Hole symposium on Friday for hints on the central bank’s asset purchases tapering plans. “Since the release of the Fed minutes last week, the consensus for the start of tapering has moved slightly forward, from the beginning of 2022 to December 2021,” Unicredit analysts said. “A hawkish surprise from Jackson Hole appears less likely and the next topic of major relevance is probably the U.S. labour market report on Sept. 3.”

Earlier in the session, Asian stocks were poised for their biggest two-day gain since early February, as Chinese technology stocks extended their rebound and investor attention turned toward reopening possibilities. The MSCI Asia Pacific Index gained as much as 1.4%, extending Monday’s 1.6% advance. Alibaba and Tencent were the biggest contributors to the regional benchmark’s gain, amid continued bargain hunting following the recent tech selloff.  U.S. stocks climbed overnight as full approval of the Pfizer-BioNTech vaccine was seen bolstering the Covid-19 immunization drive. Cases are falling in many U.S. delta-variant hot spots, encouraging hopes for reopening. “An overly pessimistic view of the global economy is unwarranted, in our view. Delta has delayed the recovery, but not derailed it,” DBS macro strategists Eugene Leow and Philip Wee wrote in a note. “We think it makes sense to pre-position for a recovery as the world looks to cresting the current wave.” Hong Kong’s Hang Seng Index rose more than 2%, leading gains in the Asia Pacific. Key equity gauges in China, South Korea, Japan, Malaysia and the Philippines rose by at least 1%.

Japanese stocks gained for a second day after Wall Street extended a rebound on full approval for the Pfizer Inc.-BioNTech SE shot. The Topix rose 1% to 1,934.20 as of the 3 p.m. close in Tokyo, while the Nikkei advanced 0.9% to 27,732.10. Today, 1,798 of 2,188 shares rose, while 311 fell; 28 of 33 sectors were higher, led by electric appliances stocks. Sony Group Corp. contributed the most to the Topix’s gain, increasing 3.5%.  Ryuta Otsuka, a strategist at Toyo Securities Co., said Japan’s rising vaccination rate could become a positive factor for stocks. A total of 115.7 million Covid vaccine doses have now been administered in Japan, according to data collected by Bloomberg News and Johns Hopkins University.

“Japan’s full-vaccination rate is approaching that of the U.S. -- if it exceeds America, it could attract interest to Japanese equities,” Otsuka said.  U.S. index futures gained during Asia trading hours. On Monday, the S&P 500 and Nasdaq 100 rebounded from lows last week as the shot approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery

In Australia, the S&P/ASX 200 index rose for a second session, adding 0.2% to close at 7,503.00. Shares were underpinned by strength in the energy and mining sectors. Nanosonics was the best-performing stock after its FY revenue beat analyst estimates. Kogan was the biggest laggard after its FY net profit dropped. In New Zealand, the S&P/NZX 50 index was little changed at 13,071.86, its highest since Feb. 3.

Worries the Fed was edging closer to tapering its stimulus weighed on global markets last week, but investors are now much less confident Powell’s speech at Jackson Hole will indicate a timeline for winding down the Fed’s bond-buying program.

“I can’t see a shift in monetary policy in the next two to three months”, said Mikael Jacoby, head of continental European sales trading at Oddo Securities in Paris. Jacoby argued that the resurgent pandemic was pushing central bankers on the side of caution and that strong earnings and abundant liquidity were keeping the market afloat. Spiking COVID-19 infections caused by the highly contagious Delta variant have fuelled concerns about the recovery, but the U.S. Food and Drug Administration granted full approval yesterday to the COVID-19 vaccine developed by Pfizer, raising hopes inoculations could accelerate.

In rates, treasuries were slightly cheaper with the curve steeper amid long-end led losses and as U.S. stock futures remain elevated, around Monday’s highs. Yields cheaper by up to 2bp across long-end of the curve, steepening 2s10s, 5s30s spreads by 0.7bp and 1bp on the day; the 10- year yield was around 1.265%, trading 1.5bp cheaper vs. both bunds and gilts. Auctions kick-off with $60b 2-year note sale at 1pm ET.  Auction cycle begins with $60b 2-year note sale at 1pm ET, followed by 5- and 7-year Wednesday and Thursday. The WI 2-year at ~0.253% is 4bp cheaper than July’s stop-out, which tailed the WI by 0.2bp -- current WI level is cheapest since February 2020 stop.  Peripheral spreads move tighter to core. Bloomberg Dollar Spot index little changed, while the New Zealand Dollar and Norwegian Krone lead G-10 peers. 

In FX, the Bloomberg Dollar Spot Index was little changed, after ending its five-day rising streak yesterday, and the greenback was lower against most of its Group-of-10 peers as resource-based currencies extended their advance. Last week, the dollar index hit a nine-month high on bets the Fed would start shifting away from its accommodative monetary policy, but that view began to change on Friday when Dallas Fed President Robert Kaplan said he might reconsider his hawkish stance if the coronavirus harms the economy.

The euro inched lower, paring some of Monday’s gains; euro sentiment in the front-end turned neutral as investors waited for the Fed’s guidance at the Jackson Hole symposium. The Australian dollar rose as iron ore prices played catch-up with a rally in regional shares; New Zealand’s dollar extended gains after a central bank official said a 50bps rate hike was discussed at a policy meeting last week. The yen edged lower as a rise in stocks fueled risk sentiment, keeping it in recent ranges against the dollar; Japanese bonds fell across the curve after a weak five-year debt sale.

In commodities, crude climbed for a second day, with WTI rising 1% to the $66-handle, and Brent back over $70/bbl. LME copper up ~0.2%  on supply woes. Spot gold is little changed above the key $1,800 level. Bitcoin has been trading between $49,000 and $50,000, rising slowly but surely to a new all time high.

Looking at the day ahead now, and data highlights from the US include new home sales for July, and the Richmond Fed’s manufacturing index for August. Separately, earnings releases include Medtronic and Intuit, while G7 leaders will be meeting virtually to discuss the situation in Afghanistan.

Market Snapshot

• S&P 500 futures up 0.2% to 4,486.25
• STOXX Europe 600 up 0.1% to 472.57
• German 10Y yield fell 0.1 bps to -0.482%
• Euro down 0.1% to $1.1732
• MXAP up 1.5% to 196.95
• MXAPJ up 1.8% to 645.31
• Nikkei up 0.9% to 27,732.10
• Topix up 1.0% to 1,934.20
• Hang Seng Index up 2.5% to 25,727.92
• Shanghai Composite up 1.1% to 3,514.47
• Sensex up 0.7% to 55,959.17
• Australia S&P/ASX 200 up 0.2% to 7,502.98
• Kospi up 1.6% to 3,138.30
• Brent Futures up 1.2% to $69.60/bbl
• Gold spot down 0.2% to $1,801.51
• U.S. Dollar Index up 0.10% to 93.05

Top Overnight News from Bloomberg

• Vice President Kamala Harris warned that China poses a threat to countries in Asia, while reassuring nations in the region the U.S. won’t force countries to choose between the world’s biggest economies
• An autopsy of this month’s blockbuster 10-year Treasury auction shows global funds bought a record amount. Traders will be scrutinizing this week’s sales for a possible repeat
• House Speaker Nancy Pelosi and a group of centrist Democrats will resume talks Tuesday on how to advance President Joe Biden’s legislative agenda, after hours of negotiations failed to break a stalemate. Lawmakers will be continuing talks that went late into the night on Monday. Pelosi said the House would convene at noon and vote later
• Money-market securities ranging from Treasury bills to repurchase agreements continue to trade below 0.05% -- the offering rate on the overnight reverse repo facility, which is supposed to act like a floor for the front end
• Fed Chair Jerome Powell has built a reputation as a skilled advocate for the U.S. central bank, thanks to strong personal ties forged with Congress that will help if he’s nominated for a second term
• The German economy grew faster than initially reported in the second quarter, bolstered by a surge in private consumption.  output increased 1.6% in the three months through June, compared with an earlier estimate of 1.5%

Quick look at global markets courtesy of Newsquawk

Asia-Pac stocks sustained the momentum from Wall St where the S&P 500 and Nasdaq notched fresh record highs, while the advances were led by energy after oil prices rallied over 5% and with some tailwinds from the FDA's full approval of the Pfizer/BioNTech COVID vaccine. The ASX 200 (+0.2%) was propped up by strength in energy names and gold miners - which were buoyed by the recent upside in underlying commodity prices, but with gains in the index capped amid ongoing Delta variant concerns and as participants digested a slew of earnings with the list of worst-performing stocks heavily populated by Cos that reported. The Nikkei 225 (+0.9%) was positive as most exporters benefitted from the recent currency moves and the global constructive mood which helped the index brush off reports of a potential expansion of the State of Emergency to Hokkaido and three other prefectures. The Hang Seng (+2.5%) and Shanghai Comp. (+1.1%) both traded higher as tech spearheaded the outperformance in Hong Kong with the sector also encouraged as JD.com shares rallied following a beat on earnings, although the mainland had a sluggish start after the US SEC issued disclosure requirements for Chinese companies seeking a US listing which added to the recent IPO-related woes following yesterday’s reports that Chinese bourses halted processing of over 40 IPOs amid investigations concerning intermediaries in the deals. Finally, 10yr JGBs are flat with demand subdued by the broad positive risk sentiment and despite the slightly improved results at this month's 5-year JGB auction, while the Aussie 10yr yield was higher by around 3bps after Australia sold AUD 3.25bln in 2032 indexed-bonds through syndication

Top Asian News

• China’s Largest Developer Sees Profit Rebound With Curbs
• Xi’s Data Clampdown Spurs Novel Solution From Tim Hortons China
• Baht Outperforms Asian Peers as Thailand’s Virus Outbreak Eases

Stocks in Europe lost some steam (Stoxx 600 +0.1%) as the initial modest optimism, which reverberated from APAC, wore thin in the absence of catalysts and ahead of the Fed’s Jackson Hole Symposium. US equity futures have held onto their mild overnight gains - the NQ (+0.3%) narrowly outperformed in early trade vs the ES (+0.1%), RYT (+0.2%) and YM (+0.2%), potentially on the recent moderation in yields. European equity futures are also mixed with the breadth of the market narrow. Sectors remain pro-cyclical but to a lesser extent than the morning. Travel & Leisure top the chart with some tailwinds emanating from the US FDA fully approving the Pfizer/BioNTech vaccine, whilst China’s Global Times also noted that the COVID outbreak in Beijing city is contained. In Europe, reports via UK press indicated that the most vulnerable Brits would be offered a booster jab, but healthy over-70s may have to wait. Autos & Parts also remain supported, with some potential follow-through from source reports that Ford has doubled the production target for electric f-150 trucks based on solid pre-launch demand. Defensive names predominantly reside at the bottom, but banks have also been hit as yields faltered. Healthcare also lags with sector behemoth Novartis (-1.1%), extending on losses after its Phase III BELINDA study did not meet the primary endpoint of event-free survival.

Top European News

• Britain’s Labor Market Paradox Threatens to Choke Its Economy
• German Consumers Help Deliver Faster-Than-Expected Growth
• Sweden’s Biggest Pension Firm Cuts Stocks on Inflation Concern
• Structured Credit Manager Ymer Hires Three for Its Stockholm HQ

In FX, the Kiwi was already elevated on the back of an acceleration in NZ retail sales overnight, but got a further boost from RBNZ assistant Governor Hawkesby who revealed that raising the OCR by 50 bp rather than 25 bp was under consideration last week and the Bank only refrained from tightening due to communication challenges as opposed to economic risks. Hence, the decision to stand pat constitutes a pause and underlines market perceptions of a hawkish hold before a hike next time - see 7.57BST post on the Headline Feed for more snippets from his interview and some analysis. In response, Nzd/Usd extended beyond 0.6940 towards Fib resistance at 0.6947 (50% retracement from m-t-d peak to last Friday’s 0.6805 trough), while Aud/Nzd is back below 1.0450 even though the Aussie has breached 0.7200 vs its US counterpart amidst the ongoing recovery in commodities and other risk assets.

• USD - Some consolidation for the Dollar after Monday’s more pronounced set-back or correction that saw the DXY relinquish 93.000+ status amidst the upturn in sentiment and outflows from safer-havens. However, the index remains somewhat hesitant within a 93.084-92.949 range awaiting this week’s main event from Jackson Hole in the form of Fed chair Powell’s keynote speech that may well be shaped by data in the run up, such as IJC and PCE metrics, if either represent further progress towards the substantial levels set for tapering.
• CAD/GBP/CHF/JPY/EUR - All narrowly mixed against the Greenback, with the Loonie and Pound still gleaning support from crude’s impressive revival yesterday and the latter also deriving more impetus via the Eur/Gbp cross while it holds below 0.8600. Nevertheless, Usd/Cad has not been able to crack 1.2600, while Cable ran into a formidable chart hurdle a fraction under 1.3750 as 1.3748 represents 38.2% of the fall from 1.3983 to 1.3602 and there are two Fib supports in Eur/Gbp protecting 0.8500, at 0.8538 (38.2%) and 0.8522 (50%). Elsewhere, the Franc has extended further beyond 0.9150, the Yen through 110.00 and the Euro is inching nearer 1.1750, though all still eyeing yield differentials alongside the broad market tone, and Usd/Jpy is flanked by decent option expiry interest as well (109.00-10 in 1.04 bn, 109.60-65 in 1.07 bn and 109.90-00 in 1.17 bn).
• SCANDI/EM - Brent’s extension to within 25 cents of the Usd 70/brl mark has given the Nok another boost, but the Zar is lagging as Gold flags into converging 100 and 200 DMAs and SA unemployment rose in Q2, while the Cny and Cnh are somewhat betwixt and between following a firmer PBoC midpoint fix for the on-shore unit, but GDP and Yuan downgrades from ING.

In commodities, WTI and Brent front month futures hold onto the mild gains seen overnight, with the complex kept afloat by the broader constructive risk tone across the market. There were also reports yesterday that the US Energy Department is planning to auction off some 20mln bbls of crude – marking the largest sale in seven years. Some analysts state that the US will likely not encounter problems with this sale, given that supply has not caught up to demand. News flow remains light in the summer lull, and aside from the scheduled weekly Private Inventory data later today and in the absence of COVID newsflow, prices will likely take their cues from the overall risk tone. WTI Oct’ trades just under USD 66.50/bbl (vs low USD 65.41/bbl) while its Brent counterpart resides north of USD 69.50/bbl (vs low USD 68.50/bbl). Spot gold and silver trade sideways, awaiting further catalysts. The former lies just north of USD 1,800/oz, but participants also note the converging 100 and 200 DMAs at USD 1,809.60/oz and USD 1,810.29/oz, respectively. Elsewhere, LME copper holds onto modest gains but remains above USD 9,000/t within a tight range amid the lack of catalysts. Overnight, Dalian coking coal and coke futures surged to hit limit up again as prices remain underpinned by supply woes.

US Event Calendar

• 10am: Aug. Richmond Fed Index, est. 24, prior 27
• 10am: July New Home Sales MoM, est. 3.1%, prior -6.6%
• 10am: July New Home Sales, est. 697,000, prior 676,000

DB's Jim Reid concludes the overnight wrap

After a fairly poor performance for risk assets last week, yesterday saw a sizeable rebound as optimism returned to markets once again, with the S&P 500 (+0.85%) finishing a miniscule -0.004% away from its all-time closing high. In some ways it was a surprising outcome, particularly given the weaker-than-expected numbers from the flash PMIs, but there seemed to be increasing optimism that the weakening outlook might actually lead to a more cautious attitude by central bankers when it comes to withdrawing monetary policy support. On top of that, there have also been some more promising signs on the pandemic, with the data at a global level indicating that the number of new cases are beginning to plateau following 9 successive weekly increases. That may not be much consolation with case rates still at high levels, but given consumers have become more cautious in a number of key economies, the fact that we’re seeing some sort of stabilisation in case rates offers hope that matters aren’t set to dramatically worsen.

Looking at those moves in more depth, the S&P 500 (+0.85%) advanced for a 3rd consecutive session thanks to a strong performance from cyclical industries, as well as an even more impressive performance among tech stocks, which sent the NASDAQ (+1.55%) to a fresh record high. Separately, the FANG+ index (+2.46%) index of megacap tech stocks saw even larger gains to put in its best performance for over 3 months, whilst in Europe the STOXX 600 (+0.66%) bounced back from its worst week since February to close within 1% of its own all-time high.

Though cyclical stocks propelled the advance, the biggest sectoral winner on both sides of the Atlantic yesterday were energy stocks, which came amidst a sharp rise in commodity prices that saw Bloomberg’s Commodity Spot Index (+2.17%) record its strongest daily performance in over a year. Oil prices surged higher, with Brent Crude (+5.48%) and WTI (+5.33%) erasing the majority of their declines last week, though metals ranging from copper (+2.42%) to gold (+1.37%) put in a strong performance as well and agricultural prices also posted gains.

As mentioned at the top, those gains for equity markets came in spite of some underwhelming numbers from the flash PMIs in August, which pointed to fading momentum across a number of key economies. Having already had the Japanese and Australian composite PMIs in contractionary territory overnight, the numbers from France (55.9 vs. 56.1 expected), Germany (62.0 vs. 60.6 expected) and the UK (55.3 vs. 58.7 expected) all came in beneath expectations, with the UK underperforming in particular amidst supply constraints. The US number similarly pointed to sagging momentum as their composite PMI fell to an 8-month low of 55.4. Instead, the one bright spot came from the Euro Area, where the composite PMI for the single currency area as a whole was basically in line with the consensus at 59.5 (vs. 59.6 expected), which points to a stronger performance among the European periphery countries that don’t release their own flash PMIs.

Overnight in Asia, markets have taken Wall Street’s lead with the Nikkei (+0.99%), Hang Seng (+1.60%), Shanghai Comp (+1.00%) and Kospi (+1.37%) all moving higher. Sentiment there has been further supported by a PBoC statement overnight that they’re going to improve credit support for the real economy and also make overall credit growth more stable. Outside of Asia, futures on the S&P 500 have risen +0.16% while yields on 10y USTs are up +1.2bps to 1.265%.

Turning to sovereign bond markets, US Treasuries saw little movement yesterday as investors awaited Fed Chair Powell’s Friday speech at the (virtual) Jackson Hole symposium. Indeed by the close of trade, 10yr Treasury yields were just -0.3bps lower at 1.252%, as higher inflation breakevens (+1.6bps) were slightly overpowered by a move lower in real rates (-1.9bps). Over in Europe however, there was a more decisive move higher in yields, with those on 10yr bunds (+1.4bps), OATs (+1.5bps) and BTPs (+3.5bps) all climbing on the day.

Meanwhile in the US House of Representatives, the standoff between moderate members of the House Democratic caucus and their leadership continued yesterday, as the fight goes on about how to pass the $3.5tn reconciliation package and the bipartisan infrastructure agreement that make up President Biden’s economic agenda. The moderates have continued to maintain their position that they won’t support the reconciliation bill unless the infrastructure package is passed first, which in turn is something that those on the progressive wing won’t accept, and thus has the potential to delay the passage of both. After further haggling yesterday between the two sides, we got the news just after midnight on the East Coast that the House wouldn’t be voting on a budget/infrastructure rule that evening, and would instead be resuming negotiations today. Irrespective of what happens in the House however, one interesting point from the Senate yesterday was that moderate Democratic Senator Kyrsten Sinema of Arizona reiterated her position that she wouldn’t support a reconciliation bill that totalled $3.5tn. That’s potentially a big issue for the Democrats given that their control of the 50-50 Senate is only thanks to Vice President Harris’ casting vote. In practice that means they can’t afford to lose any votes from their own side assuming unified Republican opposition, so the opposition of moderate senators from their own side could have a major impact on the overall size of any plan.

Looking at the latest on the pandemic, yesterday saw confirmation from the US FDA thatthe Pfizer-BioNTech vaccine had become the first to receive full approval, as opposed to the emergency use authorisation it was previously being issued under. For now however, that full approval only applies to those 16 and over, with those aged 12-15 still only receiving the vaccine under the emergency use authorisation. In turn, the full approval has led to additional vaccine mandates on the federal and state/local levels as well as among corporations, with New York City requiring all public school teachers and staff to be fully vaccinated following the news. Meanwhile in the Asia-Pacific, New Zealand reported another 41 cases today to take the total number in the latest outbreak to 148, with all the cases being in Auckland or Wellington. Separately in Australia, New South Wales has recorded 753 new cases in the past 24 hours, which is down from the 830 cases reported on Sunday.

Over in Germany, DB’s Barbara Boettcher put out a fresh update yesterday on the state of play ahead of the election (link here), looking at the latest polls and potential coalition options. In particular, Barbara notes it’s looking increasingly likely that the liberal FDP will be needed to form a majority government in the next Bundestag, which would have important policy implications. For example, they’d likely push for a resumption of a fiscally conservative path domestically, and at the EU level they’re against turning the NGEU into a permanent fiscal capacity.

Other than the flash PMIs, there wasn’t much in the way of other data yesterday, though we did get the US existing home sales numbers for July, which rose to a stronger-than-expected annualised rate of 5.99m (vs. 5.83m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area in August fell to -5.3 (vs. -4.9 expected) in its second consecutive monthly decline.

To the day ahead now, and data highlights from the US include new home sales for July, and the Richmond Fed’s manufacturing index for August. Separately, earnings releases include Medtronic and Intuit, while G7 leaders will be meeting virtually to discuss the situation in Afghanistan.