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News & Views: Monday, September 8


What you need to know for today's trading day.

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Pound Tumbles on Scots Poll as BOE Bets Pared, FTSE Drops (Bloomberg)

U.S. air strikes target insurgents near Iraq's Haditha Dam (Reuters)

IMF's Lagarde urges Germany to spend more, aid recovery (Reuters)

Alibaba Seeks to Raise Up to $21.1 Billion in U.S. IPO (Bloomberg)

The Outlook: Services Sector Gauge Finally Gets Its Due (WSJ)

The 3.5 sigma move in the GBPUSD is a clear talking point this morning. The sentiment for Scotland to separate from the broader UK has increased. A month ago opinion polls showed that staying with the UK had a 20 point lead. Two weeks later is was only 10 points. A week after that it was two. Today the polls (via YouGov) are two points in favor of independence. The move is also pushing out the rate normalization process by the Bank of England (BoE) due to the potential loss of economic activity. The referendum vote is scheduled for Sep 18 and has caused the UK government to put together a fiscal stimulus package over the weekend for Scotland.

China's trade surplus rose to a single month record thanks to a drop in imports - so it's not exactly an extremely positive movement. Exports rose to the US and Europe inline with expectations. Iron ore imports was the largest culprit for the decline with tonnage falling to 74.88mln from 82.52mln, although the market effect is not readily seen due to Chinese markets being closed for a holiday. Keep an eye on BHP Billiton (BHP) and Vale (VALE) this morning.

Japan's second quarter GDP was revised lower in the final estimate by one tenth of a percent due to an additional drop in both business and consumer spending. That undoubtedly will raise troubling signs for the government and BoJ to be more aggressive with stimulus measures on the monetary and fiscal front.

And to wrap things up, the weekend cartoon from the FT sure hits the nail on the head regarding the elephant in the room in Europe.

Overnight Data:
- Japan GDP (2Q final) annualized QoQ lowered to -7.1% vs -7.0% expected, prior -6.8%
-- Consumer spending QoQ -5.3% vs -5.0% exp, prior -5.2%
-- Business spending QoQ - 5.1% vs -3.4% exp, prior -2.5%
- Japan trade balance up to 416.7B Yen vs 444.2B exp, prior -399.1B
- China trade balance (Aug) up to $49.84B vs $40B exp, prior $47.3B
-- Exports YoY up 9.4% vs 9.0% exp, prior 14.5%
-- Imports YoY down -2.4% vs 3.0% exp, prior -1.6%
- German trade balance (Jul) up to 23.4B EUR vs 16.8B exp, prior 16.6B
-- Exports MoM up 4.7% vs 0.6% exp, prior 0.9%
-- Imports MoM down -1.8% vs 0.2% exp, prior 4.5%
- Swiss unemployment rate (Aug) unchanged at 3.2% vs 3.2% exp
- Swiss CPI (Aug) YoY up to 0.1% vs 0.0% exp, prior 0.0%
-- MoM unchanged at 0.0% vs -0.1% exp, prior -0.4%

US Economics (Time Zone: EDT)
3:00 Consumer Credit (Jul) - expected $17.3B, prior $17.25B
11:00 Fed buying $950M-$1.15b Treasuries in 25 to 30-year range
11:30 Treasury to sell $26b 3-month bills, $23b 6-month bills
FuelCell Energy (FUEL)
Campbell Soup (CPB)

Twitter: @MichaelSedacca

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