US Data Deluge In Shortened Holiday Week

Notes/Observations

• More UK polls suggested that the election race was narrowing (awaiting a key Yougov poll later today)
• US data deluge ahead of Thanksgiving holiday
• Risk sentiment continued to be positive amid hopes for a limited US-China trade deal

Asia:

• China’s Oct Industrial profits saw largest decline since 2011 (YoY: -9.9% v -5.3% prior)
• BOJ Sakurai: IMF proposal to set price target was one idea but our goal was to achieve 2% inflation even if it took time; not at stage where the central bank had to move aggressively. Based on BoJ’s economic assessment, saw no need to ease policy ‘hastily’ given side effects of ultra-loose policy. If economy faced rapid and severe downturn, BOJ might need to deploy all available tools
• SP: If Australia’s fiscal stimulus involved substantial spending initiatives and changes alongside changing the trajectory of their budget, this could put downward pressure on Australia’s could place their AAA sovereign rating

Brexit:

• EU’s Barnier reportedly told MEPs in a private meeting that PM Johnson would be expected to sign up to free movement for people if the PM wanted to secure a tariff-free trade deal with the EU after Brexit. Barnier also said to have pledged to prioritize a UK trade deal post Brexit –

Americas:

• President Trump stated that he has been speaking with China PresidentXi; we’re in ‘final throes’ of reaching trade deal

Energy:

• Weekly API Oil Inventories: Crude: +3.6M v +6.0M v prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.41% at 410.16, FTSE +0.51% at 7,440.76, DAX +0.52% at 13,305.12, CAC-40 +0.26% at 5,944.91, IBEX-35 +0.51% at 9,372.00, FTSE MIB +0.26% at 23,615.50, SMI +0.25% at 10,533.50, S&P 500 Futures +0.17%]

Market Focal Points/Key Themes:

• European indices trading in the green following indices in Asia higher and slightly higher US futures. British American Tobacco up following trading update. Aroundtown Property and Grainger shares trading higher post-earnings. Knorr-Bremse, Britvic, Marston’s, Frontline and Maersk Drilling declining following earnings results. Stillfront rallying 9% as the company communicated long-term revenue and margin targets at its CMD. Likewise, Endesa affirmed FY19 profit outlook and unveiled longer term targets; the shares only moved up a tad. Metro Bank up on news that Colombian billionaire Gilinski Bacal has purchased a 4.3% stake in the company. In other news, Future PLC down following share placing of 3.1M by CEO and CFO at £14.00/shr. Notable earners today include Deere.

Equities

• Consumer staples: BATS [BATS.UK] +1.5% (trading update)
• Financials: Aroundtown Property Holdings [AT1.DE] +3% (earnings)
• Industrials: Maersk Drilling [DRLCO.DK] -2% (sales), Knorr-Bremse [KBX.DE] -2.5% (earnings), Stadler [SRAIL.CH] -0.5% (order)
• Technology: Stillfront [SF.SE] +10% (CMD), Future [FUTR.UK] -10% (placement)

Speakers

• ECB’s Lane (Ireland, chief economist): Euro Area credit growth continued to be decent
• ECB SSM chief Enria: 2020 banking sector stress test to follow current approach
• Germany Chancellor Merkel: Germany to continue to increase defense spending and would reach the NATO defense spending target after 2030
• Incoming EU Commission chief Von Der Leyen commented in EU Parliament comments ahead of her appointment vote stated that must use flexibility of EU budget rules to give time and space for economies to grow
• Denmark Central Bank financial stability report: Largest credit institutions’ results remained high, underpinned by low loan impairment charges and income from mortgage loan refinancing
• Russia Energy Min Novak: OPEC+ to have standard agenda at Dec meeting and would discuss compliance and market outlook
• Japan Chief Cabinet Sec Suga: No plans for another increase in sales tax at this time
• Japan Policy Council: Japan should continue to aim for an effective combination of growth-oriented fiscal measures combined with monetary policy and structural reforms in FY20/21 budget

Currencies/ Fixed Income

• GBP currency continued to face a few headwinds as more UK polls suggested that the election race was narrowing. Press reports circulated that Labour Party was given a boost from a surge in young voters applying to vote in the general election before the Tuesday deadline.
• AUD currency remained under pressure as numerous analysts made revisions to their outlook on rates and QE for the RBA and saw the 0.25% threshold on rates being reached to consider QE by 2021. AUD/USD trading below the 0.68 level
• Risk sentiment continued to be positive amid hopes for a limited US-China trade deal. USD/JPY holding above the 109 level and just off recent cycle highs made a few weeks ago

Economic Data

• (FI) Finland Nov Consumer Confidence: -5.0 v -6.6 prior; Business Confidence: -7 v -7 prior
• (DE) Germany Oct Import Price Index M/M: -0.1% v -0.1%e; Y/Y: -3.5% v -3.5%e
• (NO) Norway Sept AKU Unemployment Rate: 3.9% v 3.7%e
• (FR) France Nov Consumer Confidence: 106 v 103e
• (HU) Hungary Oct Unemployment Rate: 3.5% v 3.5%e
• (SE) Sweden Oct Household Lending Y/Y: 4.8% v 5.0% prior
• (SE) Sweden Oct Trade Balance (SEK): -4.0B v +2.0B prior
• (IT) Italy Nov Consumer Confidence Index: 108.5 v 111.7e; Manufacturing Confidence: 98.9 v 99.8e; Economic Sentiment: 99.1 v 98.9 prior
• (CH) Swiss Nov Credit Suisse Expectations Survey: -3.9 v -30.5 prior
• (AT) Austria Nov Manufacturing PMI: 46.0 v 45.5 prior (8th straight month of contraction)
• (IS) Iceland Nov CPI M/M: 0.1% v 0.4% prior; Y/Y: 2.7% v 2.8% prior
• (PL) Poland Oct Unemployment Rate: 5.0% v 5.1%e
• (PL) Poland Q3 Unemployment Rate: 3.1% v 3.3%e
• (ZA) South Africa Q4 BER Business Confidence: 26 v 21 prior

Fixed Income Issuance

• (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills
• (IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 6-month bills; Avg Yield: -0.215% v -0.224% prior; Bid-to-cover: 1.51x v 1.55x prior

Looking Ahead

• 05:30 (DE) Germany to sell €3.0B in 0.00% Oct 2024 BOBL
• 05:30 (EU) ECB allotment in 3-month LTRO tender
• 06:00 (IL) Israel Oct Chain Store Sales M/M: No est v 7.1% prior
• 06:00 (RO) Romania to sell €200M in 2023 bonds
• 06:00 (CZ) Czech Republic to sell 2023 and 2033 bonds
• 06:00 (RU) Russia to sell 2024 OFZ bonds
• 07:00 (US) MBA Mortgage Applications w/e Nov 22nd: No est v -2.2% prior
• 07:00 (MX) Mexico Oct Trade Balance: -$1.9Be v -$0.1B prior
• 07:00 (MX) Mexico Oct Unemployment Rate (Seasonally Adj): 3.5%e v 3.5% prior; Unemployment Rate (unadj): 3.6%e v 3.8% prior
• 07:30 (BR) Brazil Oct Total Outstanding Loans (BRL): 3.368Te v 3.361T prior; M/M: 0.2%e v 1.0% prior; Personal Loan Default Rate: 5.0%e v 5.0% prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:30 (US) Q3 Preliminary GDP (2nd reading) Annualized Q/Q: 1.9%e v 1.9% advance; Personal Consumption: 2.8%e v 2.9% advance
• 08:30 (US) Q3 Preliminary GDP Price Index: 1.7%e v 1.7% advance; Core PCE Q/Q: 2.2%e v 2.2% advance
• 08:30 (US) Oct Preliminary Durable Goods Orders: -0.9%e v -1.2% prior; Durables (ex-transportation): +0.1%e v -0.4% prior; Capital Goods Orders (Non-defense/ex-aircraft): -0.2%e v -0.6% prior; Capital Goods Shipments (Non-defense/ex-aircraft): -0.2%e v -0.7% prior
• 08:30 (US) Initial Jobless Claims: 221Ke v 227K prior; Continuing Claims: 1.69Me v 1.695M prior
• 09:45 (US) Nov Chicago Purchasing Managers (PMI): 47.0e v 43.2 prior
• 10:00 (US) Oct Personal Income: 0.3%e v 0.3% prior; Personal Spending: 0.3%e v 0.2% prior; Real Personal Spending (PCE): 0.0%e v 0.2% prior
• 10:00 (US) Oct PCE Deflator M/M: 0.3%e v 0.0% prior; Y/Y: 1.4%e v 1.3% prior
• 10:00 (US) Oct PCE Core Deflator M/M: 0.1%e v 0.0% prior; Y/Y: 1.7%e v 1.7% prior
• 10:00 (US) Oct Pending Home Sales M/M: 0.2%e v 1.5% prior; Y/Y: 6.0%e v 6.3% prior
• 10:00 (PT) Portugal PM Costa in Parliament
• 10:30 (US) Weekly DOE Oil Inventories
• 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
• 11:30 (US) Treasury to sell 7-Year Notes
• 12:00 (US) Weekly EIA Natural Gas Inventories
• 13:00 (US) Weekly Baker Hughes Rig Count
• 13:00 (MX) Mexico Central Bank (Banxico) Quarterly Inflation Report
• 14:00 (US) Federal Reserve Beige Book
• 14:00 (AR) Argentina Sept Shop Center Sales Y/Y: No est v -6.7% prior; Supermarket Sales Y/Y: No est v -7.3% prior
• (CO) Colombia Oct Industrial Confidence: No est v 11.5 prior; Retail Confidence: No est v 27.4 prior
• 16:00 (KR) South Korea Dec Business Manufacturing Survey: No est v 72 prior; Non-Manufacturing Survey: No est v 72 prior
• 18:50 (JP) Japan Oct Retail Sales M/M: -10.4%e v 7.2% prior (revised from 7.1%); Y/Y: -3.8%e v +9.2% prior (revised from 9.1%); Dept. Store, Supermarket Sales Y/Y: -7.1%e v +10.0% prior
• 19:00 (NZ) New Zealand Nov Business Confidence: No est v -42.4 prior; Activity Outlook: No est v -3.5 prior
• 19:30 (AU) Australia Q3 Private Capital Expenditure: 0.0%e v -0.5% prior
• 20:05 (NZ) New Zealand to sell NZD250M in 2.75% Apr 2025 Bonds
• 21:00 (KR) South Korea Oct Department Store sales Y/Y: No est v -5.6% prior; Discount Store Sales Y/Y: No est v -9.6% prior
• 22:30 (FR) ECB’s Villeroy (France) in Tokyo
• 22:35 (JP Japan to sell 2-Year Bonds