A look at the day ahead from Dhara Ranasinghe.
As governments get back to business with debt issuance after the
summer break, there's something notable about this week's debt
sales in Europe -- it's green.
Germany on Wednesday will sell 10-year green bonds, a day
after Spain's debut green bond garnered an impressive 60 billion
euros of demand.
Green debt issuance globally, recently passed $1 trillion
for the first time, with 90% of sovereign issuance coming from
Europe. Britain will sell its first green bond later this month
while the European Union plans its first green issue in October.
A greenium index compiled by UniCredit, has risen to 4 basis
points, its highest level, indicating that demand for green
paper remains strong and investors are willing to pay a premium
to buy green European government debt.
Back to Germany. The benchmark euro zone debt issuer wants
to be the first to establish a green bond yield curve and
Wednesday's issuance takes it a step closer to that goal.
Another market that's seen action this week is Bitcoin. It
seems to have stabilised after a 17% plunge on
Tuesday, the day it become legal lender for the first time in a
sovereign state. However El Salvador's bitcoin adoption was
clouded by the price fall as well as technological glitches and
protests by mistrustful citizens.
Global stock markets too have stablised after Tuesday's wild
swings but growth concerns are weighing, with Asian shares down,
Europe poised to open negative and U.S. equity futures a touch
higher.
Later in the day, watch for U.S. JOLTS job openings data and
a raft of Fed speakers. And on Wall Street, GameStop, the
original 'meme stock,' releases earnings.
Key developments that should provide more direction to markets
on Wednesday:
- UK supermarket Morrisons is talking to its private
equity suitors and the UK Takeover Panel regarding an auction
to settle its future ownership.
- Deutsche Bank, Commerzbank CEOs attend Handelsblatt
conference
- Japan upgrades Q2 GDP on stronger business
spending
- PayPal heats up buy now, pay later race with $2.7 bln Japan
deal
- Interest rate meetings in Canada, Poland, Croatia.
- Fed speakers: New York President John Williams 1710 GMT;
Dallas President Robert Kaplan 2200 GMT; Boston Fed President
Eric Rosengren, Minneapolis Fed President Neel Kashkari 1800 GMT
- U.S. auctions 10-year bonds.
- US JOLTS job openings, Initial jobless claims, consumer credit
(Reporting by Dhara Ranasinghe)
