Ten Stories Moving the Market

Ten Stories Moving the Market:

The United States and China are ​set to make some ‌announcements on agriculture and non-tariff barriers during a ​visit by Chinese President ​Xi Jinping to Washington ⁠this month, according to U.S. ​Trade Representative Jamieson Greer; he said the U.S. is not looking for a comprehensive trade deal but instead seeks to manage the relationship – Reuters. (Why you should care – the White House is likely trying to strike some sort of deal heading into the November mid-term elections)

Japanese households cut spending for an eight consecutive month as rising costs for daily necessities prompt consumers to pare discretionary purchases; household outlays adjusted for inflation fell 3.6% in July from a year earlier, according to the Ministry of Internal Affairs and Communications – Bloomberg. (Why you should care – the data is likely to support Bank of Japan rate hikes to keep a lid on inflation growth)

Canadian Prime Minister Mark Carney said his government ​is ready to sign a trade deal with the U.S. that benefits ‌both countries, adding any agreement would need to have stability and credibility; Carney said his side is ready to sit down and strike a deal when the U.S. is ready – Reuters. (Why you should care – the two sides could be moving closer to reaching an agreement as the September 8 deadline for tariff increases approaches)

Federal Reserve Governor Christopher Waller said his next decision on interest rates will be “heavily influenced” by August inflation data due next week; Waller said he said he expected the inflation data would come in at a “reasonable” level – Bloomberg. (Why you should care – Waller, who is policy neutral, is suggesting he’s prepared to leave rates unchanged if the inflation outcome is as he anticipates)

Europe is entering winter with its lowest natural gas stores on record, leaving it without a buffer if the weather turns colder than expected at a time when prices are surging – FT. (Why you should care – a drop in temperatures is likely to boost heating and energy demand, driving up natural gas prices)

Lululemon lowered its full-year outlook for a second straight quarter, with sales now projected to be in a range of $10.35 billion to $10.5 billion in the current fiscal year that ends in early 2027 – Bloomberg. (Why you should care – same store sales experienced their first contraction since the COVID pandemic)

Nvidia said Lenovo and Acer will launch the first Windows PCs ​powered by its RTX Spark chip in ‌October, as the chip giant pushes to bring AI capabilities directly to laptops and desktop computers; tech ​giants are increasingly pushing for on-device ​AI to cut the cost of cloud-based ⁠services, while improving privacy and responsiveness by ​processing tasks locally on users' devices – Reuters. (Why you should care – moving more AI functions onto desktops will help to free up data center compute capacity as well as ease any latency issues)

OpenAI is releasing a new generation of its technology called GPT-6 that the company is positioning as a key milestone in its decade-long push to build so-called artificial general intelligence; the startup said Thursday that it has rolled out GPT-6 Astra to business users that are in its Daybreak program, which lets approved testers use its most capable models – Bloomberg. (Why you should care – the new model is likely to heighten the need for cybersecurity products to limit potential hacking by bad actors)

Bank of England Chief Economist Huw Pill said it should raise its key interest rate to limit the risk that inflation will stay above its target for a prolonged period, even though the course of the war in the Middle East remains highly uncertain – WSJ. (Why you should care – the statement goes against those recently made by Governor Andrew Bailey

A recent rise in Treasury yields in part reflects growing investor bets that the neutral rate, a theoretical rate consistent with stable growth and inflation, is moving higher; analysts estimate it has risen as the U.S. ‌economy absorbs a strong mix of capital spending tied to artificial intelligence and heavy government borrowing – Reuters. (Why you should care – a higher neutral rate would mean the Fed will be less inclined to lower rates when the current inflation cycle eases)

Economic Calendar:

Germany - Factory Orders for July (2 a.m.)

BoE's Bailey (Governor) Speaks (4:50 a.m.)

ECB's Lane (Chief Economist) Speaks (5 a.m.)

Eurozone - Retail Sales for July (5 a.m.)

U.S. - Nonfarm, Manufacturing, Private Payrolls for August (8:30 a.m.)

U.S. - Unemployment Rate for August (8:30 a.m.)

U.S. - Average Hourly Earnings for August (8:30 a.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - CFTC’s Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)