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 Good morning! Here's what you need to know: - The week has begun with a rout on the Nikkei. Japan's main stock index closed down -3.3%, as the dollar moved back below 98 against the yen. Korea's Kospi also closed down, losing -0.5%. Australia's ASX 200 closed slightly higher at +0.09%.
- There was more upbeat data out of Europe, with June UK home loan values rising at the greatest rate in a year, the Wall Street Journal's Alex Brittain and Ilona Billington report, suggesting home prices will continue to gain. Meanwhile, Italy's manufacturing survey increased for the fourth-straight month, according to Econoday.
- China has ordered an audit into how big the country's debt load really is. It's another sign the Party's options to cushion the country's landing may be limited, the Wall Street Journal's Paul Mozur and Tom Orlick write. "China's government has taken on a heavy and growing burden of debt as public investment has replaced exports as a key driver of growth. Economists say high debt hobbles the government's efforts to provide further stimulus to a slowing economy."
- Our week of mega-data prints kicks off today with pending home sales from the National Association of Realtors at 10 am, followed by manufacturing data from the Dallas Fed at 10:30. You'll also want to stay tuned for a raft of data from Japan this evening: household spending, industrial production and a look at the unemployment rate.
- Something curious will happen to Wednesday's GDP revisions, the FT's Robin Harding observes: they will appear to have grown by 3%. That's because for the first time, the government will start including R&D spending, along with gains from copyrights, and finally pension deficits, to come in line with a new standard of international accounting. This will also impact more politically sensitive parts of the print, he says. "At a time when Republicans argue the growth of federal government is out of control, the revisions are likely to lower federal spending as a share of GDP by half a percentage point. They should also lower federal debt as a share of GDP by about 2 percentage points from 73 per cent in 2012."
- House Republicans are poised to go back to the mat to fight over the debt ceiling, according to the Washington Post. Bill McBride warns us again today about the dangers of doing so: consumer sentiment tends to plummet.
- On that note, Goldman Sachs' David Kostin writes that even in the depths of earnings season, clients are fixated on fiscal and monetary policy. They're also seeking confirmation that "the Great Rotation" from bonds to stocks is still the right move, he says.
- It's getting ugly in Egypt again. At least 74 people dead and hundreds more injured at a Muslim Brotherhood demonstration, the Wall Steet Journal's Adam Entous reports, as the military fired on Brotherhood backers. The Obama administration was sent warnings to the new administration about repressing the Brotherhood lest it take up arms, Entous writes.
- Two of the world's biggest ad agencies merged this weekend. French group Publicis and U.S. firm Omnicom announced a $35.1 billion partnership, which the Wall Street Journal's Suzanne Vranica and Ruth Bender say is an attempt to rebalance agencies' clout against the likes of Google and Facebook.
- Don't miss our Josh Barro's column on why Anthony Weiner must quit the mayor's race. Best line: "...he couldn't stop sexting even when he was planning a comeback from a sexting scandal that forced his resignation from Congress."
SEE ALSO: Our Full Preview For This Week's Mega Data Drop | | | | | | | |
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