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The economics of the FIFA Women's World Cup



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STOXX Europe 600 up 0.4%

UK inflation slows sharply

Real estate, UK domestics rally

ASML beats Q2 expectations

U.S. futures inch higher

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THE ECONOMICS OF THE FIFA WOMEN'S WORLD CUP (1006 GMT)

The ninth FIFA Women's World Cup hosted by Australia and New Zealand kicks off on July 20.

With more than one million tickets sold as of June, the tournament was already on track to become the most-attended stand-alone women's sporting event ever.

"Heading into the tournament, FIFA estimates 2 billion people will watch matches. If these estimates are accurate... this year's tournament could overtake both the Summer and Winter Olympics in terms of viewership," Wells Fargo economists say in a note.

Around 1.12 billion viewers tuned into the 2019 Women's World Cup in France across all platforms, FIFA said.

Despite expectations of record viewership, offers for broadcast rights were low this year.

FIFA said broadcasters initially offered only $1-10 million for the rights for this year's women's tournament, compared to $100 million-$200 million for the men's World Cup.

Wells Fargo economists highlighted FIFA estimates the women's tournament eventually generated some $300 million in broadcast fees, compared to the $3 billion FIFA received for the rights to broadcast men's World Cup matches.

The wage gap also remains wide.

Economists said professional women football players across the globe earn, on average, about $14,000 annually compared to roughly $60,000 per year earned by men football players, according to FIFA, largely due to less opportunity to play professionally.

While ticket sales have been strong in Australia, FIFA last week said it would give away 20,000 free tickets for games in Auckland, Hamilton, Wellington and Dunedin amid concerns about the slow pace of sales in New Zealand.

FIFA President Gianni Infantino said on Tuesday women's football has experienced incredible growth over the last 10 years and is confident the World Cup will win over anyone who remains skeptical about the merits of the women's game.

As for winners, Wells Fargo predicts United States is most likely to win this year's tournament, which would potentially be their fifth Women's World Cup title.

(Medha Singh)

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WANT A RISK-ON EUROPE? ASK CHINA'S POLITBURO (0950 GMT)

Disinflation and a weakening dollar have surely been bullish for risk assets, and while that has been particularly true for Wall Street and emerging markets it's been less so for Europe.

"Europe needs more," says Barclays strategists Emmanuel Cau, stressing once again how China, in the form of stimulus measures, holds the key for a risk-on turn in the old continent.

"A weaker USD adds to the disinflation tailwind for U.S. equities, as it boosts earnings and may help the broadening of the rally out of tech.... On the other hand, Europe is a relative loser, as stronger EUR and GBP vs. USD are more due to higher rates than better growth vs. the US," he says.

Europe is much more exposed to China than the other regions, Barclays notes, so China's Politburo meeting late July is key.

"Absent much improvement in non-US growth and a decisive turn lower in inflation, Europe may thus continue to lag the U.S.. The outcome of the Politburo meeting in China will need to surprise positively for growth sentiment on Europe to improve".


(Danilo Masoni)

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REAL (ESTATE) PARTY AT THE OPEN (0757 GMT)

Real estate is on fire today and the party-like mood for this rate-sensitive sector boils down to the positive surprise from UK inflation that is bringing much-needed relief and a paring in bets on many more rate hikes from the Bank of England.

The FTSE 350 homebuilders index .FTNMX402020 soared over 7% at one point, briefly set for its biggest one-day jump since 2008, a quite telling milestone on its own. It was last up 5.3%.

Europe's real estate index .SX86P jumped 3%, leading sectoral gainers in Europe by a big margin. The sector is the No.1 underweight among investors in the region, according to BofA.

London was a standout gainer among benchmark indices. A weaker pound pushed the FTSE 100 .FTSE up over 1%, but the real mover across country indices was the domestically focused FTSE 250 .FTMC index, up as much as 3.1%.

The region-wide STOXX Europe 600 .STOXX was up 0.2%

Here is your opening snapshot:

(Danilo Masoni)

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EUROPEAN FUTURES RISE ON UK INFLATION SURPRISE (0634 GMT)

A positive surprise from the latest inflation print in the UK is set to give a nice boost to FTSE 100 today, with futures on the internationally exposed index up as much as 0.8% to a 10-day high before the opening bell.

British annual consumer price inflation fell to a lower-than-expected 7.9% in June cheered investors and lifted futures on other global indices. EuroSTOXX 50 futures gained 0.6% and S&P 500 futures moved above parity.

In earnings, the focus later today will likely be on Tesla and Goldman Sachs, but there's something to digest in Europe too.

Dutch semiconductor equipment maker ASML reported a second-quarter net profit of 1.9 billion euros ($2.13 billion) that beat analyst expectations, and increased its full-year sales forecasts.

Good-looking updates also from bank Handelsbanken and truck maker AB Volvo in Sweden. Renault was also eyed after Reuters reported Nissan and the French carmaker will make an announcement in the coming days on their restructured alliance.

Chemical makers might see some fresh pressure after Wacker cut its outlook and Evonik got downgraded by Morgan Stanley.


(Danilo Masoni)

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BRITAIN'S CPI THE NEXT FRONTIER (0557 GMT)

British inflation data this morning could be the toast of trading desks if it follows updates from the U.S. and Canada and surprises on the downside.

A tentative rally in gilts is poised to extend and sterling could probably say goodbye to the strong side of $1.30.

Forecasts put Britain's annual CPI falling to 8.2% in June and core holding at 7.1%. Those are eye-watering levels so a return to surprises on the high side would be unpleasant.

Markets have already priced another 100 basis points of Bank of England rate rises this year, and following dovish remarks from the European Central Bank's Klass Knot it's possible the BoE would find itself hiking all alone and rather quickly.

New Zealand sounded a warning in the Asia session, with food prices keeping annual headline inflation higher than expected at 6%. Traders reckoned it meant NZ interest rates would need to stay higher for longer and briefly lifted the kiwi.

Under the hood in Canada, an average of the Bank of Canada's two core inflation measures has also hardly budged at 3.8%.

Elsewhere, China's slowing economy is casting a bit of shade over encouraging data and corporate earnings in the U.S.

The Hang Seng .HSI shed another 1% on Wednesday and is down about 5% for the year. Netflix NFLX.O, Tesla TSLA.O and Goldman Sachs GS.N report results later in the day.

On Tuesday markets welcomed better-than-expected profits at Morgan Stanley MS.N and other big banks as well as Microsoft MSFT.O flexing its AI muscles by announcing new fees for features within its office software, sending shares up 4%.

Key developments that could influence markets on Wednesday:

Data: British CPI, Euro zone final CPI, U.S. housing starts

Speakers: Bank of England's Dave Ramsden

Earnings: Netflix, Tesla, Goldman Sachs


(Tom Westbrook)

*****



($1 = 0.8920 euros)


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