Notes/Observations
- German ZEW Survey misses expectations; noted concern over a possible double-dip recession
- Global risk asset rally still trying to find fresh legs to build upon
Asia:
- China Oct CPI registered its slowest annual pace since Oct 2009 (Y/Y: 0.5% v 0.8%e)
- Japan Econ Min Nishimura confirmed that PM Suga had instructed completion of fresh economic package (3rd extra budget), nothing had been decided on size yet
Coronaviurs:
- Total global cases 50.88M9 (+1.0% y/y); total deaths: 1.26M (+0.6% d/d)
Europe:
- House of Lords votes against UK govt on proposed Internal Market bill that would grant ministers the power to override the EU exit treaty (as speculated). Vote: 433 to 165 to strip out the clauses which would allow the UK to go against its obligations in the Withdrawal Agreement
Americas:
- Fed’s Kaplan (FOMC dissenter): US economy is in the midst of a rebound out of deep contraction; risk is that a resurgence of COVID could overhelm hospitals and lead to lockdowns
- Fed’s Quarles (hawk, voter): Fed remains committed to using full range of tools to support economy as long as needed – prepared Congressional testimony
- Fed bi-annual Financial Stability Report: In the near term, risks associated with the course of COVID-19 and its effects on the U.S. and global economies remain high
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.35% at 382.30, FTSE +1.31% at 6,267.35, DAX -0.29% at 13,058.15, CAC-40 +1.10% at 5,395.17, IBEX-35 +2.41% at 7,639.00, FTSE MIB +0.45% at 20,843.50, SMI -0.57% at 10,358.78, S&P 500 Futures +0.02%]
- Market Focal Points/Key Themes: European indices open mixed and later turned modestly in the green; market said to be affected by profit taking after breakout yesterday; better performing sectors lead by real estate and materials; underperformers include technology and telecom;French state could raise stake in Air France-KLM; Norway considering divesting some stakes in Aker companies; Saint Gobain negotiating sale of Mutares; Leonardo reportedly considering spinning off DRS unit; earnings expected in upcoming US session include Alstom, Lyft, BioNTech and Telecom Italia
Equities
- Consumer discretionary: Cineworld [CINE.UK] +13% (vaccine news), Lufthansa [LHA.DE] +6% (selling convertibles), Adidas [ADS.DE] -5% (earnings), Deutsche Post [DPW.DE] +3% (earnings), Codemasters [CDM.UK] -6% (to be acquired by Take-Two)
- Industrials: Persimmon [PSN.UK] -4.5% (trading update)
- Materials: Unibail-Rodamco-Westfield [URW.NL] +32% (rights issue)
Speakers
- German Council of Economic Advisors said to have raise 2020 GDP from 6.5% to -5.1%
- German ZEW Economists commented that financial experts were concerned about the economic impact of a 2nd wave of coronavirus and what it might entail. Also expressed concern that German economy could slip back into recession
- Bank of Italy (BOI) Monthly Report `Money and Banks’ for Sept: Bad Loans (NPLs) at €65.1B v €65.0B m/m
- Norway Central Bank (Norges) Bank Financial Stability Report noted that the outlook has therefore weakened somewhat. Considerable uncertainty regarding the future path of the pandemic and the consequences for the economy and financial markets,
- Turkey President Erdogan reiterated view that interest and FX rates were shackles to inflation; would not back down from free market economy. Stressed that the country did not have a debt relationship with IMF anymore and Turkey would overcome political obstacles
- BOJ announced Supplementary Explanation for the Outline of “Special Deposit Facility to Enhance the Resilience of the Regional Financial System”; the move aims to strengthen the foundations of regional banks
Currencies/Fixed Income
- Dealers were assessing the current environment for risk appetite and noted that several conditions required for such a positive scenario have developed over the past week. Dealers believe that calmer foreign and trade policy; control over the pandemic, a resolution of Brexit and a global upswing in 2021 would favor flows to all corners of the earth (aka “risk-on”). Today’s price action was tempered as thoughts that a Biden White House and a Republican controlled Senate would put off the table an up-sized fiscal package from the US.
- EUR/USD saw its early gains evaporate was retesting the 1.1800 level at mid-session.
- GBP/USD was higher by over 0.5% to test above 1.3250 in the session for its highest level in over two months. The 1.3600 remains the pivotal resistance in the wake of Brexit negotiations.
Economic Data
- (FI) Finland Sept Industrial Production M/M: -2.1% v +1.8% prior; Y/Y: -6.0% v -2.8% prior
- (FR) France Q3 ILO Unemployment Rate: 9.0% v 7.5%e; Mainland Unemployment Rate: 8.8% v 7.5%e
- (UK) Oct Jobless Claims Change: -29.8K v -40.2K prior; Claimant Count Rate: 7.3% v 7.4% prior
- (UK) Sept Average Weekly Earnings 3M/Y: 1.3% v 1.1%e; Weekly Earnings (ex-bonus) 3M/Y: 1.9% v 1.5%e
- (UK) Sept ILO Unemployment Rate: 4.8% v 4.8%e ; Employment Change 3M/3M: -164K v -150Ke
- (DK) Denmark Oct CPI M/M: +0.2% v -0.1% prior; Y/Y: 0.4% v 0.6% prior
- (DK) Denmark Oct CPI EU Harmonized M/M: +0.3% v -0.2% prior; Y/Y: 0.3% v 0.5% prior
- (NO) Norway Oct CPI M/M: 0.3% v 0.3%e; Y/Y: 1.7% v 1.6%e
- (NO) Norway Oct CPI Underlying MM: 0.1% v 0.2%e; Y/Y: 3.4% v 3.4%e
- (NO) Norway Oct PPI M/M: 4.1% v 2.8% prior; Y/Y: -6.0% v -9.6% prior
- (TR) Turkey Aug Unemployment Rate: 13.2% v 13.4% prior
- (FR) France Sept Industrial Production M/M: 1.4% v 0.7%e; Y/Y: -6.0% v -5.5%e
- (FR) France Sept Manufacturing Production M/M: 2.2% v 1.5%e; Y/Y: -6.3% v -7.2% prior
- (CZ) Czech Oct CPI M/M: 0.2% v 0.2%e; Y/Y: 2.9% v 3.0%e
- (CZ) Czech Sept Export Price Index Y/Y: +0.9% v -0.5% prior; Import Price Index Y/Y: -1.3% v -2.9% prior
- (HU) Hungary Oct CPI M/M: 0.2% v 0.2%e; Y/Y: 3.0% v 3.1%e
- (SE) Sweden Sept Household Consumption M/M: 0.6% v 0.4% prior; Y/Y: -3.8% v -3.7% prior
- 04:00 (IT) Italy Sept Industrial Production M/M: % v -2.0%e; Y/Y: % v -1.8%e; Industrial Production NSA (unadj) Y/Y: % v -1.2%e
- (DE) Germany Nov ZEW Current Situation Survey: -64.3 v -63.5e; Expectations Survey: 39.0 v 44.3e
- (EU) Euro Zone Nov ZEW Expectations Survey: 32.8 v 52.3 prior
- (GR) Greece Oct CPI Y/Y: -1.8% v -2.0% prior; CPI EU Harmonized Y/Y: -2.0% v -2.3% prior
Fixed income Issuance
- (ID) Indonesia sold total IDR10.0T vs. IDR10.0T target in Islamic bills and bonds (sukuk auction)
- (EU) European Union opened its book to sell EUR-denominated 5-year and 30-year SURE bonds
- (ZA) South Africa sold total ZAR6.6B vs. ZAR6.6B indicated in 2026, 2032 and 2048 bonds
- (ES) Spain Debt Agency (Tesoro) sold total €2.511B vs. €2.0-3.0B indicated range in 6-month and 12-month bills
Looking Ahead
- (MX) Mexico Oct Nominal Wages: No est v 4.1% prior
- (VN) Vietnam to sell combined VNM16T in 5-year, 7-year, 10-year and 15-year bonds
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
- 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month and 12-month Bills
- 06:00 (IL) Israel Oct Consumer Confidence: No est v 56 prior
- 06:00 (US) Oct NFIB Small Business Optimism: 104.4e v 104.0 prior
- 06:00 (ZA) South Africa Sept Manufacturing Production M/M: 1.7%e v 3.6% prior; Y/Y: -7.7%e v -10.8% prior
- 06:00 (BR) Brazil Nov IGP-M Inflation (1st Preview): 2.8%e v 2.0% prior
- 06:00 (FI) Finland to sell combined €2.0B in 6-month and 9-month bills
- 06:30 (CL) Chile Central Bank Economists Survey
- 06:30 (EU) ESM to sell €1.5B in 12-month Bills
- 07:00 (CZ) Czech Central Bank comments on CPI data
- 07:00 (TR) Turkey to sell 2022 and 2025 Bonds
- 08:00 (PL) Poland Central Bank (NBP) Nov Minutes
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:55 (US) Weekly Redbook LFL Sales data
- 09:00 (EU) Weekly ECB Forex Reserves
- 09:00 (EU) ECB’s Knot (Netherlands) at UBS European Virtual Conference
- 10:00 (US) Sept JOLTS Job Openings: 6.500Me v 6.493M prior
- 10:00 (MX) Mexico Weekly International Reserve data
- 10:00 (US) Fed’s Quarles at Senate Banking Panel
- 10:00 (US) Fed’s Rosengren on Financial Stability
- 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills
- 11:30 (US) Treasury to sell 52-Week Bills
- 12:00 (US) Fed’s Kaplan
- 16:00 (US) Fed’s Rosengren on Financial Stability
- 16:30 (US) Weekly API Oil Inventories
- 18:00 (KR) South Korea Oct Unemployment Rate: 3.8%e v 3.9% prior
- 18:30 (AU) Australia Nov Consumer Confidence: No est v 105.0 prior; M/M: No est v 11.9% prior
- 18:50 (JP) Japan Oct M2 Money Stock Y/Y: 9.1%e v 9.0% prior; M3 Money Stock Y/Y: 7.6%e v 7.4% prior
- 19:00 (AU) Australia to sell A$2.5B in 1% 2031 Bonds
- 20:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate (OCR) unchanged at 0.25%
- 20:10 (JP) BOJ Outright Bond Purchase 1~3 Years; 3~5 Years and 5~10 Years
- 21:00 (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr post rate decision press conference
- 22:00 (CN) China to sell 2-year and 5-year Upsized Government bond
- 22:00 (TH) Thailand to sell combined THB25B in 2024 and 2049 Bonds
- 23:30 (TW) Taiwan to sell TWD40B in 2-Year Certificate of Deposits (NCD)
