Notes/Observations
- Several polls suggested that Conservatives’ lead was narrowing before the Dec 12th UK election.
- Market still expecting a phase one deal that removes the threat of any further escalation in the trade war.
Asia:
- China Vice Premier Liu He and USTR Lighthizer said to have reached consensus on solving issues and agreed to keep in contact regarding Phase 1 trade deal (via phone call on Monday, Nov 26th) USTR confirmed the call with China but declined to comment on specifics
- Hong Kong Chief Exec Carrie Lam stated that would seriously reflect on views reflected by voters; stood by previous stance on protester’s demands; will set up committee to identify causes of unrest
Europe/Mideast:
- Catalan separatist party members reportedly support a plan to form a Spanish govt in exchange for discussions over ‘political conflict’. Separatist said to be demanding a negotiation over the issue of secession
Brexit:
- ICM UK General election poll: Conservative Party 41% (-1), Labour 34% (+2), Lib Dems 13% (unch), Brexit Party 4% (-1) Americas:
- Fed Chair Powell stated that policy appropriately provided and was supporting decisive return to 2% inflation and Fed goals; Reiterated stance that if outlook changed materially, policy would change as well
- House Intelligence Chairman Adam Schiff said his committee will send a report on its impeachment investigation of President Donald Trump to the Judiciary Committee soon after this week’s Thanksgiving recess
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -0.12% at 407.58, FTSE +0.02% at 7,397.95, DAX -0.26% at 13,212.33, CAC-40 -0.12% at 5,917.56, IBEX-35 -0.21% at 9,300.00, FTSE MIB -0.10% at 23,430.50, SMI +0.36% at 10,506.50, S&P 500 Futures -0.07%]
- Market Focal Points/Key Themes: European indices trading in the red following indices in Asia higher and slightly lower US futures. Enel raised its FY20-21 profit outlook but the market was not impressed; shares down slightly. Faurecia up on unveiling longer term revenue targets at its CMD today. De la Rue shares dive 23% after the company reported weak results and suspended dividend payments. Other decliners on earnings include Compass, UDG, Shaftesbury, Topps Tiles and Greencore, which also announced the COO stepping down next spring. Pets at Home jumps 8% following strong H1 results and other risers following earnings include Cranswick, CRH, KWS, BW Offshore and Renew Holdings. In other news, Europcar up ~7% on press news yesterday that the company has received interest from PE firms, as the company considers a sale. Looking ahead notable earners include Abercrombie & Fitch, Best Buy, Cracker Barrel, Chico’s, Dick’s Sporting Goods, Dollar Tree, Hormel Foods, PVH and Tech Data Corp.
Equities
- Consumer discretionary: Pets at Home [PETS.UK] +9% (earnings), Europcar [EUCAR.FR] +6.5% (PE interest), Greencore [GNC.UK] -6% (earnings; COO steps down), Topps Tiles [TPT.UK] -3.5% (earnings), Compass Group [CPG.UK] -2% (earnings)
- Materials: CRH [CRH.UK] +2% (earnings)
- Industrials: Faurecia [EO.FR] +1% (CMD), Victoria [VCP.UK] -5% (earnings)
- Technology: De La Rue [DLAR.UK] -21% (earnings; suspends div)
- Utilities: Enel [ENEL.IT] -1% (outlook)
Speakers
- ECB’s Villeroy (France) reiterates stance that low rates would continue to support the economy. Germany and Netherlands should use their fiscal space to support the region
- German Fin Min Scholz: 2020 budget is very expansionary (**Reminder: IMF, OECD and other EU officials have stressed that German should use its fiscal space to support the region’s economy)
- France Fin Min Le Maire: France wanted a minimum global tax rate of 12.5%
- Sweden Central Bank (Riksbank) Dep Gov Skingsley stated that recent data was in line with expectations and was reasonable to maintain current rate hike plan (**Reminder: Riksbank forward guidance sees the next rate hike in December)
- Thailand Fin Min Uttama Savanayana: Cabinet has approved more stimulus; to add THB80B in ‘money circulation’ short-term and THB20-30B in medium term; New stimulus package was aimed at boosting the economy in both 2019 and 2020
- Philippines Central Bank (BSP) Gov Diokno: Interest rate cut is possible as early as next month if inflation remains low (**Note: Previously BSP indicated that monetary easing was done for 2019)
- RBA Gov Lowe reiterated view that negative rates are ‘extraordinarily’ unlikely; Threshold for using QE had not been reach. Still expected the domestic economy to gradually move in the right direction
- China PBoC and banking regulator CBIRC reportedly issued draft plans for systemically important banks
- IEA Chief Birol: US shale production growth to slow down this year and next due to financial difficulties of shale producers but added there would still be lots of oil in the market
Currencies/Fixed Income
- Overall the trading environment was one of optimism over a potential trade deal and this continued to provide some tailwinds for risk-on sentiment
- GBP/USD was softer after several polls showed the Conservative Party lead in the upcoming election had slipped a bit. Cable off approx. 0.2% to test 1.2865 area
Economic Data
- (FI) Finland Oct Unemployment Rate: 6.2% v 5.9% prior
- (FI) Finland Oct Preliminary Retail Sales Volume Y/Y: 2.5% v 4.1% prior
- (DE) Germany Dec GfK Consumer Confidence: 9.7 v 9.6e
- (DE) Denmark Oct Retail Sales M/M: -0.2% v 0.0% prior; Y/Y: 1.2% v 0.1% prior
- (ZA) South Africa Sept Leading Indicator: 103.2 v 104.0e
- (SE) Sweden Oct PPI M/M: 0.4% v 0.0% prior; Y/Y: 0.9% v 0.3% prior
- (HK) Hong Kong Oct Trade Balance (HKD): -30.6B v -33.0Be; Exports Y/Y: -9.2% v -8.4%e; Imports Y/Y: -11.5% v -10.6%e
- (IL) Israel Oct Leading ‘S’ Indicator M/M: 0.3% v 0.3% prior
- (RO) Romania Oct M3 Money Supply Y/Y: 9.8% v 9.3% prior
- (UK) Oct BBA Finance Loans for Housing: 41.2K v 42.2Ke
Fixed Income Issuance
- (ID) Indonesia sold IDR7.9T vs. IDR7.0T indicated in 6-month Islamic Bills and 2-year, 4-year, 15-year and 30-year Bonds
- (ZA) South Africa sold total ZAR4.53B vs. ZAR4.53B indicated in 2026, 2037 and 2044 bonds
- (IT) Italy Debt Agency (Tesoro) sold €1.75B vs. €1.25-1.75B indicated range in new Zero Coupon Nov 2021 CTZ; Avg Yield: -0.033% v -0.112% prior; Bid-to-cover: 1.82x v 1.47x prior
- (IT) Italy Debt Agency (Tesoro) sold €660M vs. €250-750M indicated range in 2.55% Sept 2041 I/L bonds (BTPei); Avg Yield: 1.02% v 0.67% prior; Bid-to-cover: 1.47x v 1.98x prior
Looking Ahead
- (NG) Nigeria Central Bank Interest Rate Decision: expected to leave Interest Rates unchanged at 13.50% (no set time)
- (IT) ECB’s Lane (Ireland, chief economist) in Luxembourg
- 05:30 (UK) Weekly John Lewis LFL Sales data
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
- 05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills
- 05:30 (UK) DMO to sell £3.0B in Conventional 0.625% Jun 2025 Gilts
- 06:00 (BR) Brazil Nov FGV Construction Costs M/M: 0.3%e v 0.1% prior
- 06:10 (SE) Sweden Central Bank (Riksbank) Dep Gov Ohlsson
- 06:45 (US) Daily Libor Fixing
- 07:00 (RU) Russia announces upcoming OFZ Bond issuance
- 07:00 (MX) Mexico Sept Retail Sales M/M: No est v 0.3% prior; Y/Y: 1.3%e v 2.6% prior
- 07:45 (US) Goldman Economist Chain Store Sales
- 08:00 (PL) Poland Oct M3 Money Supply M/M: 0.7%e v 0.4% prior; Y/Y: 9.0%e v 9.4% prior
- 08:00 (BR) Brazil Oct Total Federal Debt (BRL): No est v 4.156T prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:30 (US) Oct Advance Goods Trade Balance: -$71.2Be v -$70.4B prior
- 08:30 (US) Oct Preliminary Wholesale Inventories M/M: +0.1%e v -0.4% prior; Retail Inventories M/M: 0.2%e v 0.2% prior (revised from 0.3%)
- 08:55 (US) Weekly Redbook LFL Sales data
- 09:00 (US) Sept S&P/Case-Shiller 20-City M/M: +0.30%e v -0.16% prior; Y/Y: 2.01%e v 2.03% prior; House Price Index (HPI): No est v 218.14 prior
- 09:00 (US) Sept S&P/Case-Shiller Overall House Price Index Y/Y: 3.30%e v 3.17% prior; HPI NSA Index: No est v 212.06 prior
- 09:00 (US) Sept FHFA House Price Index M/M: 0.3%e v 0.2% prior; Q/Q: No est v 1.0% prior
- 09:00 (EU) Weekly ECB Forex Reserves
- 10:00 (US) Oct New Home Sales: 708Ke v 701K prior
- 10:00 (US) Nov Consumer Confidence: 127.0e v 125.9 prior
- 10:00 (US) Nov Richmond Fed Manufacturing Index: 6e v 8 prior
- 10:00 (MX) Mexico Weekly International Reserve data
- 13:00 (US) Fed’s Brainard (voter, dove)
- 13:30 (FR) ECB’s Coeure (France) in Brussels
- 13:00 (US) Treasury to sell 2-Year FRNs Reopening
- 13:00 (US) Treasury to sell 5-Year Notes
- 14:00 (AR) Argentina Sept Economic Activity Index (Monthly GDP) M/M: No est v -1.0% prior; Y/Y: -2.4%e v -3.8% prior
- 15:00 (NZ) New Zealand Central Bank (RBNZ) Financial Stability Report
- 16:00 (SK) South Korea Consumer Confidence: No est v 98.6 prior
- 16:30 (US) Weekly API Oil Inventories
- 16:45 (NZ) New Zealand Oct Trade Balance (NZD): -1.0Be v -1.2B prior; Exports: 5.0Be v 4.5B prior; Imports: 6.0Be v 5.7B prior
- 17:00 (NZ) New Zealand Central Bank (RBNZ) Gov Orr press conference
- 19:01 (UK) Nov BRC Shop Price Index Y/Y: No est v -0.4% prior
- 19:30 (AU) Australia Q3 Construction Work Done: -1.0%e v -3.8% prior
- 20:10 (JP) BOJ Outright Bond Purchase operation; to buy 5~10 Years maturities
- 20:30 (CN) China Oct Industrial Profits Y/Y: No est v -5.3% prior
- 20:30 (JP) BOJ Board Member Sakurai speech
- 22:00 (TH) Thailand to sell THB25B in 2024 Bonds
- 22:30 (TH) Thailand Oct Manufacturing Production Index: -5.2%e v -4.7% prior; Capacity Utilization: No est v 63.9% prior
