– Quiet day so far for economic data and macro news catalysts; US midterm results continued to come in steadily over the weekend. This morning, Biden landed in Bali before meeting Chinese President Xi; both leaders stressed the need for cooperation.
– The FTSE100 outperformed the European indices ahead of the UK CPI on Wednesday and the highly anticipated autumn budget statement on Thursday.
– US stocks pull back from last week’s historic 2-day bull rally as USD consolidates lower after last week’s fresher than expected CPI weakening.
– Asia closed mostly lower with Nikkei225 underperforming at -1.1%. The EU indices are slightly higher by 0.3%. US futures are -0.3% to -0.7%. Gold -0.6%, DXY +0.6%; Commodities: Brent -0.6%, WTI -0.8%, UK Nat Gas +11.6%; Crypto: BTC +1.2%, ETH +2.4%.
– BOJ Governor Kuroda reiterated his overall economic assessment that the national economy is recovering and that the BOJ should pursue appropriate policy by monitoring.
– China‘s PBOC and insurance regulator have reportedly asked financial firms to extend their financial support to real estate companies.
– President Biden and Chinese President Xi will meet in Bali on the sidelines of the G20.
– The UK’s Office of Budget Responsibility (OBR) said it was likely to present a similar recession picture to that presented by the BoE last week.
– UK Nov Rightmove House Prices M/M: -1.1% vs. +0.9% before; Y/Y: 7.2% vs. 7.8% before.
– Czech Central Bank (CNB) Gov Michl: calls for wage growth cap in 2023 at ~5.0%.
– Waller (voter) from the Fed noted that given the level of inflation, rates were not that high; The CPI report was “just a data point” and the markets were “ahead”; Rates wouldn’t fall until there was “clear and solid evidence” that inflation was falling; the market overreacted to a CPI data point; looking at a possible next meeting of 50 basis points.
– The Democrats maintain control of the US Senate, to have at least 50 seats after the victory in Nevada.
– US Treasury Secretary Yellen: Working with France on setting a ceiling on Russian oil prices.
clues [Stoxx600 +0.19% at 433.10, FTSE +0.60% at 7,361.95, DAX +0.31% at 14,269.44, CAC-40 +0.32% at 6,615.68, IBEX-35 +0.42% at 8,131.94, FTSE MIB +0.44% at 24,562.00, SMI -0.45% at 11,075.70, S&P 500 Futures -0.45%].
Market Focal Points/Key Themes: European indices generally open higher and remained positive early in the session; sectors leading up include financials and industrials; lagging sectors include real estate and consumer discretionary; Indivior to Acquire Opiant Pharma; Caisse des Dépôts is considering taking a stake in Orpea; MacGregor Unit spin-off Cargotec; focus on speeches from the G20 meeting starting overnight in Bali, Indonesia; top earnings expected in the upcoming US session include Aecom and Tyson Foods.
– Consumer Discretionary: Informa [INF.UK] +5% (trade update).
– Health: Roche [ROG.CH] -4%, MorphoSys [MOR.DE] -29% (test data), Hutchmed [HCM.UK] +15% (study results), Merck KGaA [MRK.DE] +6% (analyst buff). Individual [INDV.UK] +1.5% (acquisition).
– Technology: Sonova [SOON.CH] -1% (earnings).
– Telecom: Tremor International [TRMR.UK] -21.5% (earnings).
– ECB Panetta (Italy) said it was necessary to tighten monetary policy to ensure that inflation does not take root but does not overreact. Monetary policy cannot ignore the risk of excessive tightening.
– ECB Herodotus (Cyprus) said it saw further rate hikes, the extent of which will depend on the data.
– European Commission President Von der Leyen said he could count on Russian oil prices to cap by the end of 2022 because the EU was basically ready to go. She added that a price for the Russian oil price cap has not yet been decided.
– Germany Foreign Affairs Min Baebock said that new EU sanctions against Iran to target the funding mechanism.
– Central Bank of Romania (NBR) Gov Isarescu declared that inflation was reaching a plateau.
– German VCI (Chemical Industry Association) maintains its 2022 production outlook at -5.5%.
– Min Lavrov of Russian Foreign Affairs was reportedly taken to hospital after landing in Bali for the G20 (**Note: denied by Russia).
– PBOC China would have allowed Chinese small businesses affected by COVID restrictions to delay loan payment until June 2023.
– President Biden said the United States and China should play a key role in overcoming challenges and managing differences without conflict.
– Chinese President Xi said he looked forward to working with Biden to get the relationship back on track. Need to work with all nations for more peace in the world.
– The USD remained stable but held on to its recent losses despite some Fed members noting it was softening its fight against inflation. Last week’s US CPI figure raises hopes that the potential spike in inflation means less aggressive rate hikes from the Fed.
– The GBP/USD was above the 1.18 level ahead of this week’s key events. UK inflation data is due on Wednesday and the UK’s autumn statement on Thursday. Markets believe UK Fin Min Hunt will implement tax hikes and spending cuts.
– USD/JPY initially started the session below the 140 level ahead of Japan’s GDP release on Tuesday. BOJ Gov Kuroda reiterated his stance that the national economy is recovering and the BOJ should pursue proper policy by monitoring risks.
– (FI) Finland October CPI M/M: 0.9% vs. 0.8% before; Y/Y: 8.3% vs. 8.1% before.
– (FI) Finland Final volume of retail sales in September Y/Y -2.4% v -3.6% prelim.
– (IN) India October wholesale price (WPI) Y/Y: 8.4% vs. 8.5%e.
– (CH) Swiss producer and import prices in October M/M: 0.0 vs. 0.2% before; Y/Y: 4.9% vs. 5.4% before.
– (CZ) Czech current account balance in September (CZK): -55.8 B-22.0 Be.
– (EU) Sept. eurozone industrial production M/M: 0.9% vs. 0.5%e; Y/Y: 4.9% versus 3.0%e.
Issuance of fixed income securities
– (NOPE) Norway sold NOK2.0B against NOK2.0B shown in 6 month invoices; Average return: 3.11% compared to 2.84% before; Bid to cover: 2.28xv 1.00x before.
– OPEC monthly oil report.
– 05:25 (EU) Daily ECB liquidity statistics.
– 05:30 ((DE) Germany will sell a combined €5.0 billion of 3- and 6-month BuBills.
– 05:30 (ZA) South Africa announces details of the upcoming I/L bond sale (held on Friday).
– 06:00 (PT) Portugal Q3 Labor Costs Y/Y: No east against 5.7% before.
– 06:00 (RO) Romania will sell 400 million RON in 2028 bonds at 8.75%; Average yield: %; bid to cover: x.
– 06:00 (IL) Israel will sell combined bonds of 950 million ILS in 2025, 2028, 2030 and 2032.
– 06:45 (US) Libor daily fixing.
– 07:00 (IN) India announces details of upcoming bond sale (held on Friday).
– 07:00 (BR) Brazil September Economic Activity Index (Monthly GDP) M/M: +0.2%ev -1.1% before; Y/Y: 4.1%ev 4.9% before.
– 07:00 (PL) Quarterly Inflation Report of the Central Bank of Poland (NBP).
– 07:00 (IN) India Oct CPI Y/Y: 6.7%ev 7.4% before.
– 07:25 (BR) Weekly survey of economists from the Central Bank of Brazil.
– 08:00 (PL) Poland Sep Current account balance: -€3.1 vs. -€4.0bn before; Trade balance: -2.2 billion euros against -2.9 billion euros previously; Exports: 2,765 billion euros against 25.4 billion euros previously; Imports: 29.6 billion euros against 28.3 billion euros previously.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 08:00 (ES) Announcement of the size of the Spanish Debt Agency (Tesoro) on the upcoming show.
– 09:00 (FR) The French Debt Agency (AFT) will sell 4.9 to 5.1 billion euros in 3-month, 6-month and 12-month bonds.
– 11:30 a.m. (US) The Treasury will sell 13-week and 26-week bills.
– 11:15 (ES) ECB’s from Guindos (Spain) to Frankfurt.
– 11:30 a.m. (US) Fed Brainard.
– 11:30 a.m. (CH) Chairman of the SNB Jordan.
– 16:00 (KR) Oct. Export Price Index of South Korea Y/Y: no east v 15.2% before; Y/Y import price index: No is v 24.1% before; M/M export price: no est v 3.2% before; M/M import price: no est v 3.3% before.
– 4:00 p.m. (US) Weekly crop progress report.
– 4:45 p.m. (NZ) Net migration in September in New Zealand: no east v 47 ahead.
– 6:30 PM (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v # prior.
– 6:50 p.m. (JP) Japan Q3 Preliminary Q/Q GDP: 0.3%ev 0.9% before; GDP Q/Q annualized: 1.2%ev 3.5% before; Nominal GDP Q/Q: 0.2%ev 0.6% before.
– 7:30 p.m. (AU) Reserve Bank of Australia (RBA) November Minutes.
– 9:00 p.m. (CN) Industrial production in October in China Y/Y: 5.2%ev 6.3% before; YTD Y/Y: 4.0%ev 3.9% forward.
– 9:00 p.m. (CN) China October retail sales Y/Y: 0.7%ev 2.5% before; YTD Y/Y: 0.8%ev 0.7% forward.
– 9:00 p.m. (CN) China Oct. Urban fixed assets YTD Y/Y: 5.9%ev 5.9% before.
– 21:00 (CN) China Oct YTD Property Investment Y/Y: No is v -8.0% aging.
– 9:00 PM (CN) October YTD residential property sales in China: no east against -28.6% prior.
– 9:00 p.m. (CN) Unemployment rate surveyed in October in China: 5.5% against 5.5% before.
– 10:00 p.m. (KR) South Korea Sept M2 Money Supply M/M: No est v 0.7% ahead; “L” Money supply M/M: No est v 0.6% before.
– 22:00 (TH) The Central Bank of Thailand will sell 55 billion THB in 3-month bills.
– 22:00 (TH) Thailand will sell combined THB36B bonds in 2026 and 2052.
– 22:35 (JP) Japan will sell 5-year JGB bonds.
– 11:00 PM (ID) October trade balance in Indonesia: $4.5 billion vs. $4.99 billion previously; Exports Y/Y: 13.5%ev 20.3% before; Y/Y imports: 24.8% vs. 22.0% before.
– 23:30 (JP) Japan Sep Final industrial production M/M: No est v -1.6% prelim; Y/Y: no est v 9.8% preliminary; M/M Ability Utilization: No est v 1.2% before.
– 11:30 PM (TW) Taiwan to sell NT$25 billion in 5-year bonds.