US CREDIT OPEN-Futures fall, focus turns to Fed watch

By Natalie Harrison

NEW YORK, Aug 19 (IFR) - Summary of overnight events and Friday's main headlines:

Dow Futures: -50, S&P Futures: -5.75, Nasdaq Futures: -13.25

CDX IG.26: 0.5831 wider, CDX HY.26: 0.05375 point lower

10-yr UST yield: 1.5526% +0.017bp, 30-yr UST yield: 2.2753% +0.015bp

EUR/USD: 1.1323 -0.26%

USD/JPY: 100.18 +0.31%

WTI Oil: $48.25 +0.06%

HEADLINES

Futures dip; earnings season ends, rate hike timing in focus

U.S (Other OTC: UBGXF - news) . stock index futures were lower on Friday after a week of choppy trading as the corporate earnings season winds down and investors again focus on the timing of the Federal Reserve's next interest rate hike.

Fed's Dudley stays upbeat, says US labor market improving

Strong employment and a long-awaited return of middle-wage jobs suggest the labor market is tightening and the broader U.S. economy is on track, an influential Federal Reserve policymaker said on Thursday, appearing to reinforce his more confident message on a possible interest-rate hike.

Japan's economic woes deepen as manufacturers' mood hits 3-yr low

Japanese manufacturers' mood soured in August to its lowest since 2013 when the central bank embarked on aggressive monetary easing, a Reuters poll showed on Friday, highlighting the weakness in an economy facing declining exports and sluggish consumer spending.

European shares, oil ease as markets return to Fed-watching

European shares were poised to post their biggest weekly loss in two months on Friday while crude oil snapped its winning streak after a weaker dollar and hopes of production cuts had lifted prices to eight-week highs.

Moody's deals fresh blow to Australia's 'Big Four' banks

An outlook downgrade from Moody's Investors Service heaped more pressure on Australia's highly profitable banks on Friday, after a U.S. lawsuit over alleged rate rigging sparked fresh calls for a judicial inquiry into the country's financial sector.

OVERNIGHT TREASURIES

* T-note futures post minor losses after rally Thursday fades

* Something of a range between recent highs and lows between 132-15+ and 132-02+

* Volume on low side at 104k as at 05:56 EST

* Curve slightly flatter as short end underperforms

* 2s/30s 1.3bp flatter but within range

* 10yr US/Germany up 1bp after holding 161bp this week

* 10-year cash trades in 1.551% to 1.536% range

* USTs underperforming Germany by 0.9bp in the 10-year maturity compared to the previous London close

GLOBAL MACRO

* Market opens risk-off on profit taking after yesterday's dovish FOMC minutes

* Brent Crude holds above US$50 continued expectations that producers may tackle oversupply problem

* Shanghai Composite gains 0.15% as financials bounce on renewed stimulus hopes

* German July Producer Prices 0.2% m/m (exp 0.1%, prev 0.4%) and -2.0% y/y (exp -2.1%, prev -2.2%)

* UK July PSNB Ex Banks GBP -1.472bn m/m (exp GBP -1.629bn, prev GBP 8.001bn)

* UK July PSNB GBP -1.472bn m/m (exp GBP 1.2bn, prev GBP7.506bn)

* UK PSNCR GBP -2.098bn m/m (prev GBP 13.503bn)

EVENTS

* 11:15 FRB New York Staff Nowcast for Q3 GDP growth (prev +2.4% q/q AR)

* 11:45 FedTrade operation 30-year Ginnie Mae (max $1.325 bn)

USD HIGH-GRADE SUMMARY

Number of deals priced on Thursday: 0

Weekly issuance: US$7.775bn

Monthly issuance: US$94.85bn

Quarterly issuance: US$189.450bn

2016 year to date issuance: US$902.817bn

2015 year to date issuance: US$900.202bn

2015 full year issuance: US$1.269trn

LIPPER FLOWS

For the week ended August 17 Lipper US Fund Flows reported the following:

- INVESTMENT-GRADE FUNDS NET INFLOW: US$2.161bn

- IG YTD NET INFLOW: US$27.951bn

USD HIGH-GRADE ACTIVE DEALS

none

USD HIGH-GRADE PIPELINE

Woori Bank (KSE: 000030.KS - news) , A2/A-, hired Bank of America (Swiss: BAC.SW - news) /Merrill Lynch, Citigroup (NYSE: C - news) , Commerzbank (Xetra: CBK100 - news) , Credit Agricole CIB, HSBC and Nomura to arrange fixed-income investor meetings that took place in the US, Europe and Asia from July 11 to July 20. (Reporting by Natalie Harrison; Editing by Paul Kilby; Editing by Paul Kilby)