10 Things You Need To Know This Morning

Mamta Badkar

 Sep. 4, 2012,

Adam Pretty/Getty Images

Good morning. Here's what you need to know.

• Asian markets were mostly lower in overnight trading with the Shanghai Composite down 0.75 percent, as investors were disappointed by lack of policy action to support growth. Europe is selling off, and U.S. futures are modestly higher.

• European Central Bank president Mario Draghi said he is comfortable buying three-year government bonds to help European nations. This caused yields on the Spanish two-year to decline to a record low. The ECB could announce its bond-buying program as early as Thursday. 

• Moody's has cut the outlook for the European Union to negative. The downgrade reflects the "negative outlooks" assigned to Germany, France, the UK and the Netherlands which "account for 45 percent of the EU's budget revenue".

• Over the holiday weekend, we saw manufacturing PMI numbers from around the world. Chinese manufacturing PMI came in worse than expected falling to 49.2. In Europe, German PMI climbed to 44.7, but stayed below the contractionary reading of 50.

• The Democratic National Convention begins in Charlotte, North Carolina. All eyes are on first lady Michelle Obama's speech.

• ISM manufacturing index for August and construction spending for July will be released at 10 a.m. ET. Consensus is for a 0.4 percent month-over-month increase in a construction spending, and for a rise in the ISM manufacturing index to 50. 

• In M&A news, Valeant Pharmaceuticals has agreed to buy Medicis Pharmaceutical Corp. for $2.6 billion. Ericsson is vying to acquire the business support systems unit of Nokia Siemens 

• The Reserve Bank of Australia kept its benchmark interest rate at 3.5 percent. The central bank said the slowdown in China was hurting the economy. 

• The Swiss economy unexpectedly contracted 0.1 percent in the second quarter from a revised 0.5 percent gain in the first quarter.

• Motor vehicle sales for August will be out through the day. Meanwhile, U.S. PMI for August will be out at 9 a.m. ET.