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Daily digest market movers: Gearing up from the start

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  • Markets are in panic mode on Monday after Japanese indices closed down by over 12%. Traders even priced in a 60% chance for an emergency rate cut in August at one point, Bloomberg reported.
  • At 13:45 GMT, the final readings of the S&P Global Purchasing Managers Index (PMI) for July will be released:
    • Services PMI is expected to come at 56.
    • The Composite number is expected to remain stable at 55.
  • At 14:00 GMT, the Institute for Supply Management (ISM) will release its numbers for July:
    • The Services Employment Index is expected to head to 46.5 from 46.1.
    • Services New Orders Index was at 47.3 previously, with no forecast available.
    • The Services PMI should head out of contraction to 51 from 48.8.
    • Services Paid Index should ease a touch to 55.8 from 56.3.
  • Equity markets are falling out of bed on Monday, with the Japanese Nikkei facing its worst performance since 1987. US equities are down with the Nasdaq leading the charge with a 4% decline. European equities are facing milder losses, down 2.5% on average.
  • The CME Fedwatch Tool shows a 96.5% chance of a 50 basis points (bps) interest rate cut by the Federal Reserve  in September.  Another 50 bps cut is expected in November by 78.6%, while a 20.6% chance of just a 25 bps cut is priced in that month. 
  •  The US 10-year benchmark rate trades at a new 52-week low at 3.73%.   

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