Notes/Observations
- More restrictions taking shape in Europe as UK. Gpvt to formally announce plans for another lockdown in England starting later this week to stem rising Covid-19 cases
- Some rays on light said to be emerging on the key Brexit issue of fisheries
- Major EU Oct Final Manufacturing PMI data revised higher (Beats: France, Germany, Euro Zone, Italy, Spain)
- Awaiting US election outcome; focus on whether a clear winner emerges and any potential legal challenges
Asia:
- China Oct Manufacturing PMI (Govt official) registered its 8th month of expansion (51.4 v 51.3e)
- China Oct Caixin Manufacturing PMI registered its 6th consecutive month of expansion and highest since Jan 2011 (53.6 v 52.8e)
- Australia Oct Final PMI Manufacturing confirmed its 5th consecutive month of expansion (54.2 v 54.2 prior)
- Japan Oct Final PMI Manufacturing confirmed its 18th month of contraction but highest since January)
- 48.7 v 48.0 prelim
- South Korea Oct PMI Manufacturing registered its 1st expansion in 10 months and highest reading since Sept 2018 (51.2 v 49.8 prior)
Coronaviurs:
- Total global cases 46.5M (+3.3% vs. Fri); total deaths: 1.20M (+1.6% vs. Fri)
- More restrictions announced in Europe (UK, Portugal, Greece and Austria being the latest (Reminder: France and Germany announced measures last week)
Europe:
- PM Johnson to announce a second national lockdown effective from Thursday, Nov 5th and lasting until Dec 2nd. Action necessary to prevent a “medical and moral disaster” for the National Health Service. PM to tell House of Commons that he had no choice but to impose a 2nd national lockdown as virus deaths could be twice as high as they were in the 1st wave. Under the new restrictions: pubs, bars, restaurants and non-essential retail across the nation will close.
- Senior minister Gove: stated that was possible that it lockdown could be extended beyond Dec 2nd
- UK ministers said to have warned the lockdown could last into the New Year with a brief relaxation of measures over Christmas. Believe that would be very difficult to end the lockdown if deaths and hospital admissions were still rising
- Portugal PM Costa announced new lockdown restrictions for most of the country effective from Wed, Nov 4th. Measures included stay at home order except for going to work, school or shopping. Businesses to use remote working. New measures cover 121 municipalities, including Lisbon and Porto, accounting for about 70% of the population
- Greece PM announced new measures to curb spread of the coronavirus. Announced partial lockdown for most of the country from Thursday Nov 4th. Measures to cover 70% of the population
- Austria Chancellor Kurz announced it would implement a second lockdown starting Tuesday, Nov 3rd. Included curfew from 8pm to 6am and closing restaurants except for takeaway service. Hotels would be closed to everyone but business travelers
- Canadian ratings agency DBRS affirms Italy sovereign rating at BBB (high), trend Negative
Americas:
- Democratic challenger Joe Biden lead President Trump in a number of polls out on Sunday; Biden leads nationally and in battleground states but some state races are very close
- Reports circulated that President Trump planned to declare a victory ‘even if Electoral College outcome of election still hinged on large numbers of uncounted votes’ (Note: Trump denied the reports)
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.92% at 345.52, FTSE +0.64% at 5,612.85, DAX +1.60% at 11,741.05, CAC-40 +1.40% at 4,658.34, IBEX-35 +0.80% at 6,504.00, FTSE MIB +1.41% at 18,177.50, SMI +0.96% at 9,679.00, S&P 500 Futures +1.19%]
- Market Focal Points/Key Themes: European indices opened modestly higher (Stoxx600 opening later due to technical issues) and advanced further in the green as the session progressed; better performing sectors include energy and financials ; consumer discretionary and health care sectors among underperformers; UK likely to impose new lockdown starting on Thursday, Austria latest to impose restrictions; Daimler and Volvo enter partnership on fuel cells for trucks; reportedly Brexit negotiators advance on fisheries issue; Sanofi offers to acquire Kiadis; Ocado announces to acquisitions; earnings expected in the upcoming US session include Estee Lauder, Mondelez, Mosaic and PayPal
Equities
- Consumer discretionary: Ocado Group [OCDO.UK] +6% (acquisitions; trading update), AB Foods [ABF.UK] -1.5%, GVC Holdings [GVC.UK] -1.5% (COVID-19 update on closures), Ryanair [RYA.UK] +1.5% (earnings; new lockdowns), EasyJet [EZJ.UK] -3% (looking at options to boost finances including state aid)
- Healthcare: Kiadis Pharma [KDS.NL] +246% (offered to be acquired by Sanofi), Horizon Discovery Group [HZD.UK] +111% (to be acquired)
- Materials: Unibail-Rodamco-Westfield [URW.NL] -2.5% (9M update)
Speakers
- Chancellor of the Exchequer Sunak (Fin Min) stated that the virus was spreading faster than the reasonable worst case scenario; regrettably clear action was required to contain the outbreak. Reiterated PM stance that NHS would have been overwhelmed if govt did not act. Lockdown measures to legally expire on Dec 2nd with govt to seek a tiered approach at the end of the month-long lockdown. Wage support program (furlough plan) extended for simplicity and extension of grants to self-employed
- France Fin Min LeMaire stated that some shops might be allowed to reopen in 10 days if virus spread rate decreased (**Reminder: On Oct 28th President Macron announced a new national lockdown to begin on Friday, Oct 30th, restrictions to end on Dec 1st)
- German Bundesbank on Brexit: Banks to move additional €397B to Germany at transition period end; no serious turmoil expected
- German DIW Institute forecasted German Q4 GDP likely to contract by 1.0%
- Germany said to have drafted an aid package for automotive transformation
Currencies/Fixed Income
- USD was firmer against most major and emerging market currencies as the trading week began. Awaiting US election outcome; focus on whether a clear winner emerged and if any potential legal challenges arose.
- EUR/USD was off by almost 0.5% at one point as more virus restrictions taking shape in Europe. Price action ignored that major EU Oct Final Manufacturing PMI data being revised higher (beats included France, Germany, Euro Zone, Italy, Spain). Pair trading at 1.1640 by mid-session. The 1.1500 level seen as key support.
- GBP/USD was lower by 0.5% as the UK Govt was poised to formally announce plans for another lockdown in England starting later this week to stem rising Covid-19 cases. GBP brush off some rays on light which were said to be emerging on the key Brexit issue of fisheries. pair holding just above the 1.29 level by mid-session. Some analysts are revising their call for the upcoming BOE decision and forecasting additional increase in Asset Purchases from the current level of £745B
Economic Data
- (RU) Russia Oct Manufacturing PMI: 46.9 v 49.1e (2nd straight contraction)
- (TR) Turkey Oct Manufacturing PMI: 53.9 v 52.8 prior (5th straight expansion)
- (TH) Thailand Oct Business Sentiment Index: 45.4t v 47.5 prior
- (SE) Sweden Oct PMI Manufacturing: 58.2 v 55.9 prior (4th month of expansion)
- (NL) Netherlands Oct Manufacturing PMI: 50.4 v 52.5 prior (3rd straight expansion)
- (HU) Hungary Oct Manufacturing PMI: 50.1 v 49.0e (moves back into expansion)
- (PL) Poland Oct PMI Manufacturing: 50.8 v 51.0e (4th straight expansion)
- (HU) Hungary Sept PPI M/M: M/M: 2.8% v 0.7% prior; Y/Y: 5.2% v 3.6% prior
- (ES) Spain Oct Manufacturing: 52.5 v 51.0e (2nd month of expansion)
- (HK) Hong Kong Sept Retail Sales Value Y/Y: -12.9% v -12.3%; Retail Sales Volume Y/Y: -13.4% v -13.5%e
- (CH) Swiss Oct PMI Manufacturing: 52.3 v 53.5e (3rd straight expansion)
- (CZ) Czech Republic Oct PMI Manufacturing: 51.9 v 51.3e (2nd straight expansion and highest since Oct 2018)
- (IT) Italy Oct Manufacturing PMI: 53.8 v 53.7e (4thd month of expansion and highest since Mar 2018))
- (FR) France Oct Final Manufacturing PMI: 51.3 v 51.0e (confirmed 2nd month of expansion)
- (DE) Germany Oct Final Manufacturing PMI: 58.2 v 58.0e (confirmed 4th straight expansion and highest reading since Apr 2018)
- (EU) Euro Zone Oct Final Manufacturing PMI: 54.8 v 54.4e (confirmed 4th month of expansion and highest reading since Aug 2018)
- (GR) Greece Oct Manufacturing PMI: 48.7 v 50.0 prior (moves back into contraction territory)
- (NO) Norway Oct PMI Manufacturing: 53.4 v 50.5e (2nd straight expansion)
- (ZA) South Africa Oct Manufacturing PMI: 60.9 v 58.5 prior (6th month of expansion)
- (CH) Swiss weekly Total Sight Deposits (CHF): 707.6B v 706.9B prior; Domestic Sight Deposits: 636.0B v 634.7B prior
- (UK) Oct Final Manufacturing PMI: 53.7 v 53.3e (confirmed its 5th straight expansion)
- (DK) Denmark Oct PMI Survey: 61.7 v 55.1 prior (6th month of expansion)
Fixed Income Issuance
- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3-month Bills; Avg Yield: 0.04% v 0.07% prior; bid-to-cover: 3.76x v 1.73x prior
Looking Ahead
- (ZA) South Africa Oct Naamsa Vehicle Sales Y/Y: -21.5%e v -23.9% prior
- (UR Ukraine Central Bank Oct Minutes
- (RO) Romania Oct International Reserves: No est v $38.0B prior
- (IT) Italy Oct Budget Balance: No est v -€21.9B prior
- (RU) Russia Central Bank (CBR) quarterly monetary report
- 05:30 (DE) Germany to sell €1.5B in 6-month BuBills
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.0-3.0B in 3-month and 9-month Bills
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
- 06:00 (IL) Israel Sept Chain Store sales M/M: No est v 0.7% prior
- 06:00 (PT) Portugal Sept Industrial Production M/M: No est v 10.0% prior; Y/Y: No est v 3.0% prior
- 06:00 (IL) Israel to sell combined ILS2.4B in 2023, 2029, 2030, 2037 and 2047 bonds
- 06:30 (CL) Chile Sept Economic Activity Index (Monthly GDP) M/M: 4.7%e v 2.8% prior; Y/Y: -6.5%e v -11.3% prior; Economic Activity (ex-mining) Y/Y: No est v -12.2% prior
- 06:45 (US) Daily Libor Fixing
- 08:00 (CZ) Czech Oct Budget Balance (CZK): No est v -252.7B prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 08:00 (ES) Spain Debt Agency (Tesoro) announces size details of upcoming bond sale
- 08:30 (CA) Canada Sept MLI Leading Indicator M/M: No est v 2.7% prior
- 09:00 (FR) France Debt Agency (AFT) to sell 3-month, 6-month and 12-month bills
- 09:30 (CA) Canada Oct Manufacturing PMI: No est v 56.0 prior
- 09:45 (US) Oct Final Markit Manufacturing PMI: 53.3e v 53.3 prelim
- 09:45 (EU) ECB weekly QE bond buying update
- 10:00 (US) Oct ISM Manufacturing: 55.8e v 55.4 prior; Prices Paid: 60.5e v 62.8 prior
- 10:00 (US) Sept Construction Spending M/M: 1.0%e v 1.4% prior
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills
- 12:00 (IT) Italy Oct New Car Registrations Y/Y: No est v 9.5% prior
- 13:00 (MX) Mexico Oct IMEF Manufacturing Index: 48.5e.4 prior; Non-Manufacturing Index: 49.7e v 49.3 prior
- 16:00 (US) Weekly Crop Progress Report
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 99.7 prior
- 18:00 (KR) South Korea Oct CPI M/M: 0.0%e v 0.7% prior; Y/Y: 0.8%e v 1.0% prior; CPI Core Y/Y: 0.7%e v 0.6% prior
- 19:30 (PH) Philippines Oct Manufacturing PMI: No est v 50.1 prior
- 22:30 (AU) Australia Central Bank (RBA) Interest Rate Decision: Expected to cut Cash Rate Target by 15bps to 0.10%; To lower 3-Year Yield Target by 15bps to 0.10%
- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills
