Written Commentary
ADM Exceeds 5M Regenerative Agriculture Acreage Gal
September 9, 2025
Flash PMIs and other surveys dominate data run, US New Home Sales and Goods Trade Balance also on tap, as German GfK Consumer Confidence jumps; Bank of Canada rate decision, Fed and ECB speakers, further busy run of Europe and US corporate earnings; UK I-L 30-yr, German 10-yr & US 5-yr
PMIs: India very robust, Japan mixed, Eurozone Manufacturing in disarray, Services mixed, UK and US seen maintaining modest expansion
US: New Home Sales seen posting dead cat bounce after ominous Existing Home Sales; Goods Trade Balance deficit expected to narrow, but signal drag on Q2 GDP
Canada: rate cut largely discounted following CPI dip, weak Employment, scope for disappointment, even if further cuts likely to be signalled
EVENTS PREVIEW
A much busier day awaits in statistical terms, with G7, Australia & India ‘flash’ PMIs dominating the schedule, while German GfK Consumer Confidence (jumping on the back of hosting Euro 2024) is digested ahead of the US Goods Trade Balance and New Home Sales. On the central bank front, all eyes will be on the Bank of Canada policy meeting, and there are some ECB and Fed speakers. Another busy day for corporate earnings has a number of larger banks reporting (BNP Paribas, Santander and Unicredit) in Europe, along with Equinor, Iberdrola, Michelin, Orange, Renault, Repsol and Saipem. Over in the US Ford Motor, IBM, Newmont and NextEra Energy are likely to be among the headline makers, and follow better than expected results from Alphabet, while Tesla on the other hand missed estimates for a fourth consecutive quarter. Govt debt sales take the form of UK I-L 30-yr, German 10-yr, US 5-yr and FRN 2-yr.
** G7/India – July ‘flash’ PMIs **
– The sharp jump in Japan’s Services PMI had been flagged by the better than expected pick up in the Economy Watchers Survey but contrasted with a renewed setback in Manufacturing (49.2 vs. Jun 50.0). India’s PMIs continued to signal a robust expansion, improving on the months (Manufacturing prior 58.5, Services 61.1), with a rise in the Employment sub-index to the best since 2006 the most notable aspect, though the RBI will be wary of the evidence of greater pricing power as Prices Charged roses to an 11-yr high. Eurozone Manufacturing PMIs are likely to paint a now very familiar picture of contraction, even if marginally higher at 46.1 from 45.8, while Services PMIs are expected to show the bulk of the Eurozone still expanding at 53.0, though France is expected to remain weak at 49.8. In the UK a modest improvement is seen for both Manufacturing (51.1 vs. 50.9) and Services (52.5 vs. 52.1), while in the US Services are expected to give back some of the June strength, slipping to a solid 54.8, while Manufacturing holds at 51.7.
– U.S.A.: June New Home Sales & Goods Trade Balance **
– New Home Sales are expected to post a dead cat bounce of 3.4% m/m, following a sharp -11.3% drop in May, and following a much sharper than anticipated -5.4% m/m fall in Existing Home Sales, which saw unsold inventories rising to 4.1, having been as low as 2.9 as recently as February. The latter imparts downside risks for the drag from Residential Investment on tomorrow’s Q2 advance GDP. The Advance Goods Trade Balance will also likely prompt some last-minute adjustments to GDP forecasts, with a slightly narrower, but still very wide gap of $-98.0 Bln expected.
** Canada – BoC rate decision **
– Lower than expected June CPI (though still trending sideways) and an unexpected 1.4K drop in Employment (though Wages jumped way more than expected to 5.6% from 5.2% y/y) has prompted markets to discount a 90% probability that the Bank of Canada will cut a further 25 bps to 4.50%. But the decision will be finally balanced, given that ‘weak’ Employment growth in June still left the Q2 3-mth average at a robust 38.6K, wage growth remains sticky and the scope for the BoC to diverge from the Fed in rate terms is always limited, above all due to the potentially negative impact on the CAD. Per se, it may rather err on the side of caution, while leaving the door to further rate cuts firmly open.
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