MNI: FRANCE SEP CONSUMER SENTIMENT 83

MNI (London) - The CSI 300 has given back more of its early session gains as we move towards the close of mainland equity trade in China.

• The index now sits ~1% higher on the day after rising ~5.5% early in the session.
• Sharp initial gains surrounding policy support for the equity sphere faded sharply, with worry re: China's economy remaining evident.

Bund futures +5.

• The contract saw a small gap lower overnight, likely linked to firmer Chinese equities, before a bid in U.S. Tsys and a move off best levels for Chinese equities lent fresh support.
• Friday’s Jackson Hole messaging, while not groundbreaking, reaffirmed the higher for longer narrative, allowing the German curve to flatten on the day.
• As a reminder, ECB President Lagarde underscored the idea that interest rate levels will move as high as necessary to bring inflation back to target.
• Elsewhere, Governing Council member Kazaks noted he would err on the side of tighter monetary policy vs. allowing the risk of the re-acceleration of inflation. Meanwhile, Governing Council hawk Holzmann suggested that rates will have to move “somewhat higher.”
• Monday will see liquidity thinned by the observance of a UK public holiday.
• Eurozone money supply headlines a thin regional data docket, while comments from ECB hawks Nagel & Holzmann are eyed.
• Lastly, the EU will come to market with a 3/18-year EU-bond auction: Up to E1.5bln of the on-the-run 3-year 2.75% Oct-26 EU-bond (ISIN: EU000A3K4D82) and up to E1.5bln of the 0.45% Jul-41 EU-bond (ISIN: EU000A3KT6B1).

Sovereign credit rating reviews of note from after hours on Friday included:

• Fitch affirmed Austria at AA+; Outlook changed to Stable from Negative
• Fitch affirmed Czech Republic at AA-; Outlook Negative
• S&P affirmed Austria at AA+; Outlook Stable
• DBRS Morningstar confirmed Slovakia at A, Stable Trend