Good morning, welcome to July! Here’s what you need to know.
BNP Paribas Shares Pop. The firm’s stock opened up 3.4% higher in Paris after it announced it had sufficient funding to pay for its record $US8.9 billion settlement over U.S. fraud charges, and that it would still be able to support its dividend of $US1.50. We documented some of the howlers contained in the New York Department of Financial Services’ consent order against the firm. Moody’s kept its credit rating unchanged but noted its internal controls need work.
China PMI Expands For The First Time In Six Months. The purchasing manager’s index reading from HSBC/Markit came in at 50.7, a bit below the preliminary reading but rising above 50 for the first time since December. “The economy continues to show more signs of recovery, and this momentum will likely continue over the next few months, supported by stronger infrastructure investments,” said Qu Hongbin, chief economist for China at HSBC. “However there are still downside risks from a slowdown in the property market, which will continue to put pressure on growth in the second half of the year. We expect both fiscal and monetary policy to remain accommodative until the recovery is sustained.”
Two Manufacturing Readings. At 9:45 a.m. we get Markit’s purchasing manager’s index for manufacturing. And at 10 a.m. we get ISM’s manufacturing reading. Consensus is for an increase to 55.6 from 55.4 in May. In May the employment index was at 52.8%, and the new orders index was at 56.9%. “An array of survey evidence, along with the latest hard production data, indicates that the manufacturing sector is recovering quite strongly,” Pantheon Macro’s Ian Shepherdson writes in a note Monday. “The weather hit over the winter was much less severe than in some of the other data, and output rose at a 6.3% annualized rate in the three months to May, compared to the previous three months. We see no reason for these favourable trends to weaken in the near-term, but we are wary too that the next few months’ ISM surveys will overstate the pace of the rebound.”
A Better Siri. Apple is beefing up hiring in its Siri division to improve the speech recognition service. “Apple is not hiring only in the managerial level, but hiring also people on the team-leading level and the researcher level,” Abdel-rahman Mohamed, a postdoctoral researcher at the University of Toronto, who was courted by Apple, told Wired. “They’re building a very strong team for speech recognition research.”
Auto Sales. All day, we get auto sales data for June. Analysts are expecting a reading of 16.4 million, down slightly from 16.7 million.
Construction Spending. Also at 10 a.m. we get construction spending data from the Census. Consensus is for a 0.5% increase.
Eurozone Unemployment Goes Nowhere. The reading for May held at 11.6%. German unemployment was 5.1%, while Italy’s was 12.6% and Spain’s was 25.1%.
UK Pound At Highs. The British sovereign hit its highest level since 2008, trading at $1.7147. The move came as UK PMI hit 57.5, topping expectations and signaling that a rate hike could come before the end of the year.
Markets. U.S. futures were higher. Stocks in Asia were mixed. European stocks were up across the board.
Bitcoin Auctions Results Still Unknown. Prices climbed to multi-week highs on word from major institutions that they’d been outbid at the U.S. Marshals’ auction of nearly 30,000 Bitcoins from the Silk Road case Monday, but the service itself hasn’t announced anything yet. Some have their own theories about what may have happened…