what does h=sha256() do in python code example

Example: python hmac sha256

# python 2
import hmac
import hashlib

nonce = 1234
customer_id = 123232
api_key = 2342342348273482374343434
API_SECRET = 892374928347928347283473

message = '{} {} {}'.format(nonce, customer_id, api_key)
signature = hmac.new(
    str(API_SECRET),
    msg=message,
    digestmod=hashlib.sha256
).hexdigest().upper()

print signature