• Risk aversion sentiment creeps back into markets
  • US Senate passing of Hong Kong democracy bill draws criticism from China
  • President Trump threatened to raise tariffs on Chinese goods if the two countries failed to reach a trade deal


  • Hong Kong Govt expressed regret of US Senate passing Hong Kong bill, it is ungrounded and unnecessary; bill will have negative impact on US interests
  • China Foreign Ministry stated that it opposed US Senate passing of Hong Kong Bill; reiterated would retaliate if bill was passed; urged US to take measures to stop the bill from becoming law
  • US and China said to be using the near-deal reached in May as the benchmark for decision on how far to roll back tariffs
  • Japan Oct Trade Balance post a smaller-than-expected surplus as exports registered its 11th straight decline and largest drop in 3 years (Exports YoY: -9.2% v -7.5%e)
  • Japan LDP coalition said to seek ¥10T for extra budget [in line with prior statements]. Budget aimed at offsetting the effects of the consumption tax hike and US-China trade frictions on the economy
  • China PBoC cut both 1-year and 5-year Loan Prime rates by 5bps (1-year loan prime rate (LPR) cut from 4.20% to 4.15%; cut 5-year LPR from 4.85% to 4.80%
  • Fitch affirmed China sovereign rating A+; Outlook stable


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  • PM Johnson just barely beat challenger Corbyn this evening in ITV debate. A total of 51% of respondents said Johnson performed best overall whilst 49% said Corbyn was stronger,


  • US Senate unanimously passed the ‘Hong Kong Human Rights and Democracy Act of 2019’ (as expected)
  • Commerce Sec Ross reiterated the US believes there’s hope we could get a China deal done; deal were still a work in progress; optimistic we could get something done on China
  • House of Representatives passed stopgap spending bill to extend govt funding through Dec 20th (as expected). White House senior official later stated that President Trump was expected to sign stopgap spending bill


  • Weekly API Oil Inventories: Crude: +6.0M v -0.5M v prior



  • Indices [Stoxx600 -0.74% at 402.48, FTSE -1.16% at 7,238.77, DAX -0.91% at 13,100.38, CAC-40 -0.68% at 5,869.13, IBEX-35 -0.75% at 9,190.00, FTSE MIB -0.46% at 23,222.50, SMI -0.23% at 10,342.50, S&P 500 Futures -0.31%]

Market Focal Points/Key Themes:

  • European indices trade lower following lower indices in Asia and slightly lower US futures.
  • Fevertree up 8% following solid trading update and commentary around expansion progress in US market. Mitchells & Butlers +6% following earnings results that saw the company reporting FY LFL sales +3.5% y/y and solid trading in recent weeks. Inmarsat, Bodycote, Microfocus, United Utilities and Liontrust also up slightly on earnings/trading. Kingfisher down ~7% following disappointing Q3 trading update. Babcock, Sage and SSP are also trading lower following results updates; SSP announced £100M share buyback. Rheinmetall dives 6% on slight top line guidance cut. Clipper Logistics rallying 18% after confirming preliminary takeover approach from Sun European Partners. Wirecard underperforming on news that auditor EY refused to sign off on Singapore unit audit. Swedbank down on news of investigation by US for possible violations of Russia sanctions. Aviva and Novo Nordisk up only slightly as the two companies holds CMDs.
  • Looking ahead notable earners today include Lowe’s and Target.


  • Consumer discretionary: Clipper Logistics [CLG.UK] +21% (confirms interest), Mitchells & Butlers [MAB.UK] +7% (earnings), Fevertree Drinks [FEVR.UK] +7% (trading update)


  • Financials: Swedbank [SWEDA.SE] -3% (investigation), Aviva [AV.UK] -4% (CMD)
  • Industrials: Kingfisher [KGF.UK] -7% (sales), Babcock [BAB.UK] -3% (earnings), VAT Group [VACN.CH] -2% (analyst action)
  • Technology: Wirecard [WDI.DE] -5% (audit issues)


  • ECB Financial Stability Review noted that the top risks included weak bank profitability, increased risk taking among shadow banks. Low interest rates were supportive but had side effects. Further increases of countercyclical buffers merited in several countries. Renewed QE could cause collateral shortages in repo market. ossibility of a contraction by mid-2020 seen around 20%
  • ECB’s De Guindos (Spain) Not close to the reversal rate but side effects of monetary policy is becoming more evident
  • ECB’s Lane (Ireland, chief economist): reiterates Council stance of not seeing a recession in region. Reiterated Council stance that central bank was not at the limit of monetary policy. Lower interest rate environment should be used to lower debt costs.
  • Sweden Central Bank (Riksbank) Financial Stability Report noted that risks had increased slightly. Household debt had made the financial system sensitive. Money laundering affectsed confidence in banking sector
  • Russia Central Bank (CBR) Gov Nabiullina: Budget policy now becoming supportive of economic growth as fiscal policy was becoming stimulative
  • US Sec Def Esper: China’s conduct infringed on sovereign rights in the region. US strategy aligned with ASEAN Indo-Pacific outlook; US was resolved to uphold international order in the region; to take steps to deter aggression in region. To keep routine military presence in South Korea
  • China Commerce Ministry (MOFCOM) spokesperson Gao Feng: China, US maintaining close communications on trade
  • China Global Times Editor-in-chief Hu Xijin: “Few Chinese believe that China and the US can reach a deal soon. Given current poor China policy of the US, people tend to believe the significance of a trade deal, if reached, will be limited. China wants a deal but is prepared for the worst-case scenario, a prolonged trade war.“

Currencies/ Fixed Income

Economic Data

  • (DE) Germany Oct PPI M/M: -0.2% v 0.0%e; Y/Y: -0.6% v -0.4%e
  • (ZA) South Africa Oct CPI M/M: 0.0% v 0.2%e; Y/Y: 3.7% v 3.9%e
  • ZA) South Africa Oct CPI Core M/M: 0.1% v 0.1%e; Y/Y: 4.0% v 4.0%e
  • (TW) Taiwan Oct Export Orders Y/Y: -3.5% v -4.5%e
  • (TW) Taiwan Q3 Current Account Balance: $12.5B v $17.5B prior
  • (SE) Sweden Q3 Industry Capacity: 91.4% v 90.9% prior

Fixed Income Issuance

  • (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills
  • (DK) Denmark sold total DKK2.90B in 2022 and 2029 DGB bonds
  • (SE) Sweden sold total SEK1.5B vs. SEK1.5B indicated to sell 2025 and 2029 Bonds

Looking Ahead

  • 05:30 (DE) Germany to sell €1.5B in 0% Aug 2050 Buxel bonds
  • 06:00 (FI) Finland to sell €1.0B in 3-month and 6-month bills (priors were both held on Aug 20th 2019)
  • 06:00 (RU) Russia to sell OFZ bonds
  • (PT) Portugal Sept Current Account Balance: No est v €1.5B prior
  • 07:00 (US) MBA Mortgage Applications w/e Nov 15th: No est v 9.6% prior
  • 07:00 (UK) Parliament weekly PM Q&A in Commons
  • 08:00 (RU) Russia Oct Unemployment Rate: 4.6%e v 4.5% prior
  • 08:00 (RU) Russia Sept Real Wages Y/Y: 2.9%e v 2.4% prior (revised from 3.0%)
  • 08:00 (RU) Russia Oct Real Retail Sales Y/Y: 1.0%e v 0.70% prior
  • 08:00 (BR) Brazil Nov CNI Industrial Confidence: no est v 59.3 prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (CA) Canada Oct CPI M/M: 0.3%e v -0.4% prior; Y/Y: 1.9%e v 1.9% prior; Consumer Price Index: 136.6e v 136.2 prior; CPI Core- Median Y/Y: 2.2%e v 2.2% prior; CPI Core- Common Y/Y: 1.9%e v 1.9% prior; CPI Core- Trim Y/Y: 2.1%e v 2.1% prior
  • 10:30 (US) Weekly DOE Oil Inventories
  • 12:00 (IE) ECB’s Lane (Ireland, chief economist) in Milan
  • 14:00 (US) FOMC Oct Minutes
  • (CO) Colombia Oct Consumer Confidence Index : -11.1e v -10.7 prior
  • (MX) Citibanamex Survey of Economists
  • 19:00 (SG) Singapore Q3 Final GDP Q/Q: 1.2%e v 0.6% advance; Y/Y: 0.35e v 0.1% advance
  • 19:00 (KR) South Korea Nov 20-days MTD Exports Y/Y: No est v -19.5% prior; Imports Y/Y: No est v -20.1% prior
  • 20:05 (NZ) New Zealand to sell NZD150M in 2.75% 2037 Bonds
  • 21:00 (NZ) New Zealand Oct Credit Card Spending M/M: No est v -0.1% prior; Y/Y: No est v 4.8% prior
  • 22:00 (KR) South Korea Q3 Household Credit (KRW): No est v 1.556T prior
  • 22:00 (TH) Thailand Central bank to sell THB30B in 2021 Bonds
  • 22:30 (TH) Thailand Oct Customs Trade Balance: $0.4Be v $1.3B prior; Customs Exports Y/Y: -3.6%e v -1.4% prior; Customs Imports Y/Y-5.9%e v -4.2% prior
  • 23:30 (JP) Japan Sept All Industry Activity Index M/M: 1.5%e v 0.0% prior
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