UK Retail Sales Due Later Today

Nov 19 21, 06:22 GMT

General trend

EUR/USD trades slightly lower after prior gain.
Copper FUTs rise over 1%.
US equity FUTs rise after mixed session on Wall St.
US Fed Chair announcement in focus.
Nikkei has traded modestly higher, little reaction seen to stimulus confirmation; Index heavyweights lag [Fast Retailing and Softbank Group].
Hang Seng TECH index has dropped >2% after earnings/guidance from Alibaba; Alibaba drops over 10%.
Shanghai Composite ended morning trading slightly higher (+0.3%).
S&P ASX 200 has also seen a slight gain.
Companies due to report during the NY morning include Buckle, Foot Locker, Tuniu Corp.

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened flat.
(AU) Australia reappoints Carol Schwartz as Reserve Bank of Australia (RBA) Board Member for additional 5-year term [has been RBA board member since 2017].
(AU) Former Australia PM Rudd: Australia not responding well with China, President Xi is more assertive than predecessors.
(AU) Australia sells A$1.0B v A$1.0B indicated in 0.25% Nov 2024 bonds, Avg Yield: 0.9588%, bid to cover 4.74x.
(NZ) New Zealand Oct Credit Card Spending M/M: +8.4% v -3.3% prior; Y/Y: -5.6% v -12.9% prior.
(NZ) Markets are pricing in 36bps rate hike at next Wed’s [Nov 24th] Reserve Bank of New Zealand (RBNZ) policy meeting [implies some probability of a 50bps rate hike] – US financial press.

Japan

Nikkei 225 opened +0.1%.
(JP) JAPAN OCT NATIONAL CPI Y/Y: 0.1% V 0.2%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.1% V 0.1%E.
(JP) Japan Final Stimulus Draft confirms spending of ~¥55.7T.
(JP) Japan PM Kishida: Have compiled a strong economic package with ¥56T spending and ¥79T overall size [in line], put together economic measures for post coronavirus.
(JP) Bank of Japan (BOJ) Release of “Final Report on the Results of the Public Consultation on the Treatment of Tough Legacy Contracts in Japan” (the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks).

Korea

Kospi opened +0.1%.
(KR) South Korea Oct PPI M/M: 0.8% v 0.2% prior; Y/Y: 8.9% v 7.5% prior (fastest annual pace since 2008).
(KR) Bank of Korea (BOK) expected to raise inflation forecasts at next week’s policy meeting, expected to affirm GDP forecasts; cites analyst; the article notes the BOK is widely expected to hike rates by 25bps to 1.00% – financial press.

China/Hong Kong

Hang Seng opened -1.5%; Shanghai Composite opened flat.
(CN) China Daily: China said to be considering measures to cut taxes and fees by up to CNY500B in order to support small and medium-sized cos.
(CN) China Securities Journal: Local Govts need to increase bond sales to meet targets.
(CN) Property Developer Zhongliang [2772.HK] notes remittance of funds to cancel $99.5M of its Nov 2021 notes, $100.5M in notes due Nov 2021 remain outstanding.
(CN) China PBOC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v CNY50B prior; Net drain CNY50B v Net drain CNY50B prior.
(CN) China PBOC sets Yuan reference rate: 6.3825 v 6.3803 prior.
(HK) China PBOC sells CNY25B in 3-month and 12-month bills in Hong Kong.
(CN) China Ministry of Finance (MOF) Sells 3-month and 6-month bills.
(CN) China Central Bank (PBOC) Body: Financial institutions should actively provide exchange rate hedging services; Should NOT help companies speculate [from Nov 18th].
(CN) China Banking and Insurance Regulatory Commission (CBIRC) said to ease requirement related to insurers’ investments in bonds – US financial press.

North America

(US) Said that Senator Manchin (D-WV) has sought meetings with current Fed Chair Powell and with potential nominee Brainard (Dove) – Press.
(US) CBO statement: Pres Biden tax enforcement element of reconciliation bill would reduce US budget deficit by $127B over 10 years.
(US) Fed’s Daly (non-voter, dove): A low unemployment rate does not mean everyone who wants a job can get one.
(CA) Canada PM Trudeau has raised concerns on the US Proposed Electric Vehicle (EV) Tax credits [follows meeting with Biden].
(US) Federal Reserve issues new rule that US banks must report hacking incidents within 36 hours; Compliance required by May 1st.
(US) WEEKLY EIA NATURAL GAS INVENTORIES: +26 BCF VS. +24 BCF TO +26 BCF INDICATED RANGE.
(US) OCT LEADING INDEX: 0.9% V 0.8%E.
(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 39.0 V 24.0E 39.0 (highest since April >50, which was a 48-year high).
(US) INITIAL JOBLESS CLAIMS: 268K V 260KE; CONTINUING CLAIMS: 2.08M V 2.120ME.
(US) US Govt identified several vials on Nov 15h and sent the frozen vials labelled smallpox to the CDC on Nov 18th; CDC confirms no trace of Variola virus in vials.
(US) White House: ‘Build Back Better’ would reduce deficit by $112B over the next 10 years based on its new analysis.
(CA) Canada PM Trudeau: Confirms raising concerns on US Tax credits for EVs and Buy America.

Europe

(UK) Compromise between UK and Europe on EU judges is reportedly within reach in Northern Ireland talks – UK press.
(UK) Nov GfK consumer Confidence: -14 v -18e.
(RU) Russia Pres Putin: Talks on settling Ukraine crisis are headed to a dead end; US and its allies are not taking Russia’s ‘red lines’ seriously.

Levels as of 00:20 ET

Nikkei 225, +0.4%, ASX 200 +0.2% , Hang Seng -1.7%; Shanghai Composite +0.3% ; Kospi +0.6%.
Equity S&P500 Futures: +0.4%; Nasdaq100 +0.5%, Dax +0.3%; FTSE100 +0.3%.
EUR 1.1374-1.1352 ; JPY 114.39-114.22 ; AUD 0.7283-0.7266 ;NZD 0.7049-0.7016.
Gold +0.2% at $1,864/oz; Crude Oil +0.8% at $79.01/brl; Copper +1.7% at $4.3740/lb.