Daily Archives: August 31, 2020

Summary Key Macro Events

French president Emmanuel Macron is due back in Beirut on Monday, where he will follow up on reconstruction efforts (31)

Argentina will learn on Monday whether enough creditors have accepted its offer to restructure $65bn of foreign debt (31)

Fed vice-chair Richard Clarida on Monday speaks about the new monetary policy framework (31)

Eurozone CPI for August (1)

ISM Manufacturing for August (1)

Fed governor Lael Brainard will also address the new monetary policy framework (1)

Bank of England policymakers, including governor Andrew Bailey, update the UK parliament on Wednesday (2)

Fed president John Williams is due on Wednesday to discuss the economy and Covid-19 (2)

An announcement on France’s economic recovery plan (€100 billion), originally due last week, is now scheduled for Thursday (3)

ISM Services for August (3)

Employment report for August (4)



US and eurozone jobs data, Macron visits Beirut https://t.co/WynOgrq5Zo

— FT Economics (@fteconomics) August 30, 2020

Stocks start September in high gear as Apple and Tesla split, and markets await August jobs report https://t.co/Js3aXv5Kb6

— CNBC (@CNBC) August 28, 2020

U.S. Jobless Rate Set to Return to Single Digits: Eco Week Ahead
*Central banks in Australia, Chile, Colombia, Ukraine to meethttps://t.co/1ps9c3ewfQ

— Christophe Barraud (@C_Barraud) August 30, 2020

Will be watching to see in particular if all the different series of discount bonds (Kirchner era bonds, with very limited aggregated voting) go into the deal. Would be a surprise at this stage if any of the Macri bond series drop out


— Brad Setser (@Brad_Setser) August 28, 2020

To get all the discount bonds into the deal you need the votes of 75% of each bond, or if 85% of the pars and discos go into the deal, 67% of each bond.

2/2 pic.twitter.com/8DhrXpjjm9

— Brad Setser (@Brad_Setser) August 28, 2020

Plan de relance économique. Jean Castex répondra aux questions sur RTL jeudi matin https://t.co/dLrNsHCWaa

— Ouest-France (@OuestFrance) August 30, 2020



Focus on Economic Calendar

Tips From Top Forecasters: U.S. Economic Calendar (w36) | New Vehicle Sales, Initial Weekly Claims, Change in Nonfarm Payrollshttps://t.co/YMKz1aj2GQ

— Christophe Barraud (@C_Barraud) August 29, 2020

U.S. New Vehicle Sales Are Expected to Keep Rising In August Despite Lack of New Government Stimulushttps://t.co/KMtckLxyUJ

— Christophe Barraud (@C_Barraud) August 29, 2020

Schedule for Week of August 30, 2020 https://t.co/dIZHxkdQVo The key report this week is the August employment report on Friday.

For data nerds, the BLS will release their 10 year Labor Force Projections on Tuesday. pic.twitter.com/NyF78t0ocK

— Bill McBride (@calculatedrisk) August 29, 2020

August Employment Report: Comments on Temporary Decennial Census Hiring and Education https://t.co/5Lg91fkyc1

— Bill McBride (@calculatedrisk) August 30, 2020



Top 10 Macro/Financial Charts of the Previous Week – w35

⚠ Top 10 Macro/Financial Charts of the Week – w35 ⚠

HT @MacroCharts, @sentimentrader, @ThinkTankCharts, @CapitalComped, @TaviCosta, @zerohedgehttps://t.co/qa7k3Aoj9z

— Christophe Barraud (@C_Barraud) August 30, 2020


According to the European Centre for Disease Prevention and Control, 22 European countries have crossed a key threshold of new coronavirus infections. Latest data showed that the countries have recorded cumulative 14-day infection totals higher than 20 per 100,000 inhabitants, considered an early alarm level by many health experts.

Source: European Centre for Disease Prevention and Control (data as of Aug. 30th)



#Germany's confirmed #coronavirus cases rise by 610 (v 7,85 yesterday) – RKI
*Link: https://t.co/LoHFnnUCU0 pic.twitter.com/OsI9ESqUnf

— Christophe Barraud (@C_Barraud) August 31, 2020



1⃣ Pánico ➡️Para nada la situación no lo requiere.
2⃣ Preocupación➡️Mucha, llevamos 9 semanas de crecimiento de casos. Se hace poco o lo que se hace no funciona. Si siempre crece, si nunca baja, algún día llegarán problemas.
3⃣ Tranquilidad➡️Cuando la tendencia sea a la baja.

— ngb padel (@ngbpadel2) August 30, 2020



*Positivity Rate: 4.1%❗(v 4.0% prior).
*Santé Publique France: https://t.co/bZLT3Rguuz pic.twitter.com/c11sABqxMg

— Christophe Barraud (@C_Barraud) August 30, 2020

Mise à jour avec les données du jour pour les tests (27/08), ⚠️les taux de la semaine 35 (cette semaine) sont estimés avec les données des 24-25-26-27/08 (suivre l'évolution avec les données disponibles les prochains jours). pic.twitter.com/NiB0Ss1Pj3

— Germain Forestier (@gforestier) August 30, 2020

#France Tightens Mask Protocols Amid Gain in Virus Infections – Bloomberghttps://t.co/cVWgZtu5EQ

— Christophe Barraud (@C_Barraud) August 30, 2020



*Link: https://t.co/eItJ5WGBeK pic.twitter.com/yTLdpN8qWc

— Christophe Barraud (@C_Barraud) August 30, 2020



Daily New Confirmed Cases (7-day moving average)

*Note: Data can’t be directly compared to lockdown period amid methodology change and increasing frequency of tests (see below).


Daily New Tests (7-day moving average)


Positivity Rates (7-day moving average)


Daily New Confirmed Deaths (7-day moving average)


U.S. Treasury yields fall ahead of data, Fed speeches https://t.co/jbCcchGWUj

— CNBC (@CNBC) August 31, 2020

There isn’t any urgency for the Fed to offer more clarity on how long it will hold interest rates near zero, Minneapolis Fed President Neel Kashkari says https://t.co/hPBUe7l20g

— Bloomberg Markets (@markets) August 31, 2020

American Air Cuts October Capacity 55% After Dropping 15 Cities – Bloomberghttps://t.co/GLU9dQ6tcp

— Christophe Barraud (@C_Barraud) August 30, 2020

Twitter took down a tweet containing a false claim about the CDC’s coronavirus death statistics — a post that President Donald Trump had retweeted earlier in the day. https://t.co/O9BsrBL0Xu

— CNN (@CNN) August 31, 2020

After a fatal shooting in Portland, allies of Trump and Biden on Sunday sought to attribute the violence and chaos occurring amid protests across the country to the opposing candidatehttps://t.co/cKvNHz61LR

— POLITICO (@politico) August 30, 2020


#Japan's ruling LDP to hold leadership vote on September 14 to pick Abe successor – Jiji – Reutershttps://t.co/LmRcRGmtAo

— Christophe Barraud (@C_Barraud) August 31, 2020

Japan July retail sales fall 2.8% year-on-year, government data shows https://t.co/pi1xcJekWI pic.twitter.com/A2oly5JiAz

— Reuters Business (@ReutersBiz) August 31, 2020

China factory outlook slips in August amid slow recovery https://t.co/5vbplm66Db

— Bloomberg Economics (@economics) August 31, 2020


— Christophe Barraud (@C_Barraud) August 31, 2020

#China strikes debt deals with poor nations under #G20 scheme – FThttps://t.co/CixPgqD5L7

— Christophe Barraud (@C_Barraud) August 31, 2020

China throws a wrench into Trump’s plan to force a TikTok sale https://t.co/ykQqursGLo

— Bloomberg Economics (@economics) August 31, 2020

#HongKong schools to resume face-to-face classes during week of September 21, source says – SCMPhttps://t.co/yC0xNdlREU

— Christophe Barraud (@C_Barraud) August 31, 2020

India’s finance minister will meet commercial banks and shadow lenders on Thursday to review loan restructuring programs following Covid-19 related stress https://t.co/e5EYZzXsAi

— Bloomberg Economics (@economics) August 31, 2020


#Europe #Covid_19: Daily Summary (August 31st)https://t.co/18apq1dDHF

— Christophe Barraud (@C_Barraud) August 31, 2020

Plan de relance économique. Jean Castex répondra aux questions sur RTL jeudi matin https://t.co/dLrNsHCWaa

— Ouest-France (@OuestFrance) August 30, 2020

Spanish EconMin: Spanish Economy Is Growing Currently At A Pace Of More Than 10% In Q3

— LiveSquawk (@LiveSquawk) August 31, 2020

Italy reports a record-large slump in its economy https://t.co/aghVrDbY6S

— Bloomberg Markets (@markets) August 31, 2020

Turkey's economy shrinks 9.9% in the second quarter, less than economists had forecast https://t.co/sozUanZaw4

— Bloomberg Markets (@markets) August 31, 2020

Rishi Sunak has built his popularity with the response to pandemic, but now he has to raise UK taxes and cut spending amid an uncertain economic outlook (via @_DavidGoodman & @AlexJFMorales) https://t.co/clx8ud5D8L

— Bloomberg Economics (@economics) August 31, 2020

UK Ready To Walk Away From Brexit Trade Talks Over State Aid Demands – City AM https://t.co/iLtrhM7ZVc

— LiveSquawk (@LiveSquawk) August 30, 2020

French foreign minister Le Drian blames Britain's 'unrealistic attitude' for Brexit talks impasse https://t.co/82nFHfZmTC

— Michel Rose (@MichelReuters) August 31, 2020

A combination of the market capitalizations of the S&P 500 Information Technology Index, Amazon, Facebook and Google parent Alphabet — which are classified in other sectors — has surpassed that of Europe’s benchmark Stoxx 600 Index for the first time on record – Bloomberg pic.twitter.com/7JhuhgehHe

— Christophe Barraud (@C_Barraud) August 31, 2020

The combined market capitalization of the Wilshire 5000 Index now exceeds 190% of the $19.4 trillion value of U.S. GDP (2Q) – Bloomberg
*The ratio eclipses the previous high of 167% reached in March 2000. pic.twitter.com/EvgcXmq93D

— Christophe Barraud (@C_Barraud) August 31, 2020

… ain't over till the fat lady sings pic.twitter.com/oYbY3icZOS

— Teis Knuthsen (@TeisKnuthsen) August 31, 2020

Pandemic sends real yields (nominal yields-inflation) on corporate debt into negative territory: Low interest rates & mon stimulus drag down yields of high-quality bonds. Some fund managers will now seek out higher returns in riskier assets https://t.co/5G9m01mo9M HT @macrocredit pic.twitter.com/pmfNLjwUq5

— Holger Zschaepitz (@Schuldensuehner) August 31, 2020

$DXY momentum could be stabilizing – new lows are being accumulated with quick upside reversals.

Sellers seem unable to maintain control, and the wedge suggests time is running out.

Watching this closely as September begins – could have significant implications for Equities. pic.twitter.com/7sN3rbyFQ2

— Macro Charts (@MacroCharts) August 31, 2020

On Tuesday, Eurostat will release the first estimate of Eurozone HICP (Harmonised Index of Consumer Prices) for August. According to the Bloomberg consensus, on a YoY basis, Eurozone HICP is expected to slow to +0.2%e (v +0.4% in July). Regional surveys and my proxies suggest that the consensus remains optimistic.


1/ Most of regional surveys were already released and showed that HICP contracted or slowed significantly YoY in August:

Germany HICP YoY: -0.1% v 0.0% prior

Spain HICP YoY: -0.6% v -0.7% prior

Italy HICP YoY: -0.5% v +0.8% prior

Portugal HICP YoY: -0.2% v -0.1% prior

France HICP YoY: +0.2% v +0.9% prior


2/ A detailed analysis of the July inflation report suggests that Eurozone HICP was boosted by a delay in promotional sales for categories such as “clothing and footwear” (which added 0.34 ppt to the headline). My proxies point to a downward normalization in August for this category and ongoing pressure in services linked to “passengers transport” as the coronavirus pandemic kept on weighing on airline fares.


Source: Eurostat


All in all, the August HICP report is likely to confirm that, on a YoY basis, July acceleration (+0.4% v +0.3% in June) was supported by transitory factors (which reversed immediately) and that the coronavirus shock has been deflationary in the short term. As a matter of fact, we can’t exclude a negative figure but even a 0.0% YoY print would be the lowest since May 2016. Lastly, it’s interesting to note that this downward surprise would come a few days before next ECB meeting (September 10th), where the central bank will unveil its new forecasts.