German ZEW Survey Mix

Notes/Observations

• German Nov ZEW Survey mixed. Pointed that domestic recovery losing momentum as the year end approached but optimism persisted.
• German Sept Trade data showing that export sector still sputtering.
• Awaiting US inflation data and speeches from various central-bankers; dealers note that data could fuel speculation that the Fed was moving closer to raising interest rates.

Asia

• Japan Current Account Balance: ¥1.03T v ¥1.06Te.
• China Economic Daily stated that China would not follow the US Fed on tightening monetary policy.

Europe

• UK Oct BRC Sales Like-For-Like Y/Y: -0.2% v -0.4% prior.
• German Council of Economic Advisers cut 2021 GDP growth forecast from 3.1% to 2.7% citing supply shortages while raising the 2022 GDP growth from 4.1% to 4.6%.
• ECB chief Lagarde reiterated confidence that current high inflation was transitory.
• BOE Gov Bailey: Much of rise in inflation has to do with reopening after lockdowns.
• France Fin Min Le Maire proposed an automatic energy price stabilization system to protect consumers.

Americas

• President Biden said to decide on Fed Chair appointment by Thanksgiving. Fed’s Brainard (Dove) was interviewed by President Biden and said to be a contender to become Fed Chair.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.14% at 484.26, FTSE +0.12% at 7,309.23, DAX +0.24% at 16,084.40, CAC-40 +0.15% at 7,057.99, IBEX-35 +0.39% at 9,106.50, FTSE MIB -0.10% at 27,682.00, SMI +0.22% at 12,381.10, S&P 500 Futures +0.01%].
• Market Focal Points/Key Themes: European indices open modestly lower across the board but later reversed to trade marginally higher; better performing sectors include health care and industrials; sectors among those leading to the downside are consumer discretionary and utilities; focus on upcoming central banks conference; earnings expected during the upcoming US session include Clear Channel, EchoStar, DR Horton and Cardinal Health.

Equities

• Consumer discretionary: Associated British Foods [ABF.UK] +7% (earnings), Carrefour [CA.FR] +1% (strategy update), Basic-Fit [BFIT.NL] -4% (stake sale).
• Financials: Munich Re [MUV2.DE] -3% (earnings).
• Industrials: Renault [RNO.FR] +5% (Nissan results), Bayer [BAYN.DE] +2% (earnings), Rolls-Royce Holdings [RR.UK] +4% (reactors funding secured), Continental [CON.DE] +4% (large order for displays).

Speakers

• ECB’s Panetti (Italy) stated that the Digital Euro would likely to get legal tender status.
• ECB’s Enria (SSM chief) stated that European banking sector was taking action on costs. Was seeing froth in some market segments.
• France Fin Min Le Maire stated that still needed budgetary support in some sectors.
• Norway Central Bank (Norges) Financial Stability Report: Domestic financial system had weathered the pandemic well. Largest Norwegian banks could weather a sharp downturn without having to tighten lending substantially. High household debt was seen as the main weakness in the system.
• Russia Central Bank (CBR) Gov Nabiullina stated that the digital Ruble to have legal tender status and would seek to replace Crypto, not banks. She noted that Cryptocurrencies, stablecoins posed risks to financial stability.
• Poland Central Bank official Sura stated that might need to raise the Base Rate above 1.50% to tame inflation.
• Poland Central Bank’s Hardt stated that would likely to raise rates in Dec.
• Japan PM Kishida stated that looked to achieve growth and improve public finances in the medium term.
• Japan Econ Min Yamagiwa stated that PM had ordered to include public-set wage increase in the incoming economic stimulus package.
• China PBoC Gov Yi Gang stated that would test the eCNY’s impact on monetary policy and financial market. He added the E-CNY should be market-oriented.

Currencies/Fixed Income

• USD was initially softer as the session began on reports that Fed’s Brainard was interviewed by President Biden last week and said to be a contender to become Fed Chair. Such a move would suggest a more dovish Fed.
• EUR/USD at 1.1585 by mid-session after testing 1.1606 in Asia. German Nov ZEW Survey pointed domestic recovery losing momentum as the year end approached. Dealers awaiting US inflation data over the coming days which could fuel speculation that the Fed was moving closer to raising interest rates. Last week saw various central banks push back against rising rate hike expectations from markets participants.
• GBP/USD was trying to regain a foothold above the 1.36 area while USD/JPY slumped to test 112.72 during Asia.

Economic data

• (FR) Bank of France Oct Industrial (Business) Sentiment: 102 v 100e.
• (DE) Germany Sept Current Account Balance: €19.6B v €17.0Be; Trade Balance: €16.2B v €16.0Be; Exports M/M: -0.7% v 0.0%e; Imports M/M: 0.1% v 0.5%e.
• (DK) Denmark Sept Current Account Balance (DKK): 16.1B v 15.1B prior; Trade Balance: 12.8B v 1.1B prior.
• (NO) Norway Q3 Average Monthly Earnings Y/Y: 3.2% v 2.1% prior.
• (FR) France Sept Trade Balance: -€6.8B v -€7.1Be; Current Account Balance: -€2.7B v -€1.4B prior.
• (HU) Hungary Oct CPI M/M: 1.1% v 0.8%e; Y/Y: 6.5% v 6.2%e (7th month above target range and highest in almost a decade).
• (SE) Sweden Sept Private Sector Production M/M: +1.9% v -3.9% prior; Y/Y: 6.0% v 4.1% prior.
• (SE) Sweden Sept Industrial Orders M/M: -2.0% v -2.9% prior; Y/Y: 0.9% v 2.2% prior.
• (SE) Sweden Sept Industry Production Value Y/Y: 3.9% v 1.2% prior; Service Production Value Y/Y: 7.0% v 5.9% prior.
• (SE) Sweden Sept Household Consumption M/M: +0.1% v -0.4% prior; Y/Y: 4.4% v 4.8% prior.
• (CZ) Czech Oct International Reserves: $171.6B v $169.2B prior.
• (DE) Germany Nov ZEW Current Situation Survey: 12.5 v 20.0e; Expectations Survey: 31.7 v 18.0e.
• (EU) Euro Zone Nov ZEW Expectations Survey: 25.9 v 21.0 prior.
• (HU) Hungary Oct YTD Budget Balance (HUF): -2.922T v -2.292T prior.

Fixed income Issuance

• (PE) Peru to sell EUR-denominated 15-year social bond via syndicate.
• (NL) Netherlands Debt Agency (DSTA) sold €1.835B vs. €1.5-2.5B in 0% Jan 2038 DSL Bonds; Avg Yield: 0.118% v 0.188% prior (syndicated on Apr 13th 2021).
• (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2035, 2040 and 2048 bonds.

Looking Ahead

• (RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to raise Interest Rate by 50bps to 2.00%.
• 05:15 (CH) Switzerland to sell 3-month Bills.
• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
• 05;30 (DE) Germany to sell €6.0B in0% Sept 2023 Schatz.
• 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month and 12-month bills.
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
• 06:00 (US) Oct NFIB Small Business Optimism Index: 99.5e v 99.1 prior.
• 06:00 (FI) Finland to sell combined €1.0B in 6-month and 9-month Bills.
• 06:30 (EU) ESM to sell €1.1B in 12-month Bills.
• 06:55 (US) Daily Libor Fixing.
• 07:00 (MX) Mexico Oct CPI M/M: 0.8%e v 0.6% prior; Y/Y: 6.2%e v 6.0% prior; CPI Core M/M: 0.5%e v 0.5% prior.
• 07:00 (TR) Turkey to sell bonds.
• 08:00 (RU) Russia Oct Official Reserve Assets: $623.0Be v $614.1B prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (EU) ECB chief Lagarde.
• 08:30 (US) Oct PPI Final Demand M/M: 0.6%e v 0.5% prior; Y/Y: 8.6%e v 8.6% prior.
• 08:30 (US) Oct PPI (ex-food/energy) M/M: 0.5%e v 0.2% prior; Y/Y: 6.8%e v 6.8% prior.
• 08:30 (US) Oct PPI (ex-food/energy/trade) M/M: 0.2%e v 0.1% prior; Y/Y: No est v 5.9% prior.
• 08:30 (UR) Ukraine Oct CPI M/M: 0.9%e v 1.2% prior; Y/Y: 11.08%e v 11.0% prior.
• 08:55 (US) Weekly Redbook LFL Sales data.
• 09:00 (EU) Weekly ECB Forex Reserves.
• 09:00 (US) Fed Chief Powell.
• 10:00 (MX) Mexico Weekly International Reserve data.
• 13:00 (US) Treasury to sell U.S. To Sell 10-Year Notes.
• 14:00 (AR) Argentina Sept Industrial Production Y/Y: No est v 13.8% prior; Construction Activity Y/Y: No est v 22.7% prior.
• 16:30 (US) Weekly API Oil Inventories.
• 18:00 (KR) South Korea Oct Unemployment Rate: 3.1%e v 3.0% prior.
• 18:30 (AU) Australia Nov Consumer Confidence Index: No est v 104.6 prior.
• 18:50 (JP) Japan Oct M2 Money Supply Y/Y: 4.0%e v 4.2% prior; M3 Money Supply Y/Y: 3.7%e v 3.8% prior.
• 20:30 (CN) China Oct CPI Y/Y: 1.4%e v 1.2% prior; PPI Y/Y: 12.3%e v 10.7% prior.
• 22:00 (KR) South Korea Oct Total Bank Lending To Household (KRW): No est v 1,053T prior- 22:00 (CN) China to sell 2-year Upsize and 5-year Bonds.