Mon, Nov 29, 2021 @ 11:55 GMT
HomeContributorsFundamental AnalysisOPEC+ Expected To Keep Production Increase Steady At 400Kbpd At Monthly Meeting

OPEC+ Expected To Keep Production Increase Steady At 400Kbpd At Monthly Meeting

Notes/Observations

  • Markets continue to monitor energy crunch and China Evergrande Group’s debt crisis.
  • Brexit jitters on reports the UK was planning to issue a threat and prepared to trigger Article 16 unless the EU agreed to replace the Northern Ireland Protocol.
  • OPEC JMMC and Ministers meet today; OPEC+ likely to maintain its existing deal to add 400K bpd to its output for November.
  • US Jobs report on Friday, expected to cement the November taper by the Fed.

Asia

  • China said to have sent over 6 dozen warplanes into Taiwan defense zone over the past 2 days.
  • US State Department spokesperson said to be concerned with China’s rising military activity near Taiwan. Urges Beijing to cease its military, diplomatic, and economic pressure and coercion against Taiwan.
  • Japan parliament officially elects Kishida as PM (as expected).
  • Japan PM Kishida said to plan Oct 31st as the date for Japan’s General Election.
  • Japan LDP Sec Gen Amari said government will immediately compile a large extra budget after the general elections.

Europe

  • UK Govt has drawn up proposal to permanently replace agreement with the EU that’s in place to maintain an open border between Ireland and Northern Ireland.
  • UK Brexit Min Frost said to be planning to issue a threat that the UK was prepared to trigger Article 16 unless the EU agreed to replace the Northern Ireland Protocol.
  • Ireland Foreign Min Coveney: Not expecting Britain to trigger Article 16 Clause over Northern Ireland trade.
  • PM Johnson said to refuse to rule out raising taxes again just three weeks before Chancellor Sunak announces his annual Budget.

Americas

  • US Trade Rep Tai set to unveil China trade policy Monday (Oct 4th) after concluding top to bottom review of last administration’s trade policy. US said to be expected to declare that China was not complying with the Phase 1 trade deal reached under Trump.
  • House Speaker Pelosi said to have given her party one more month to pass a $1.2T infrastructure bill.
  • Democrats said to be looking into two different approaches to reduce the cost of the bill: eliminating proposed programs entirely or cutting their duration.

Energy

  • OPEC+ holds technical and ministerial meetings.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

  • Indices [Stoxx600 -0.08% at 452.52, FTSE +0.11% at 7,034.55, DAX -0.14% at 15,134.65, CAC-40 -0.10% at 6,511.47, IBEX-35 -0.02% at 8,797.50, FTSE MIB -0.32% at 25,534.00, SMI +0.27% at 11,606.76, S&P 500 Futures -0.30%].
  • Market Focal Points/Key Themes: European indices open with a bias to the downside and drifted further into the red (IBEX notable exception trading marginally in the green); better performing sectors include energy and utilities; underperforming sectors include financials and consumer discretionary; Spanish stocks performing better following employment data; Cosmo Pharmaceuticals to acquire Cassipea; CDR final winner in bidding for Morrison’s; reportedly Sky looking to invest with Virgin Media on broadband in the UK; reportedly Fortress still interested in acquiring Sainsbury’s; focus on OPEC+ meting later in the day; no major earnings scheduled for the upcoming US session.

Equities

  • Consumer discretionary: French Connection [FCCN.UK] +16% (confirms deal), Ryanair [RYA.UK] +2% (traffic), Aryzta AG [ARYN.CH] -10% (earnings).
  • Consumer staples: WM Morrison [MRW.UK] -4% (final offer).
  • Financials: Plus500 [PLUS.UK] +2% (trading update).
  • Healthcare: AstraZeneca [AZN.UK] +1% (breakthrough therapy designation in US).
  • Telecom: BT Group [BT.A.UK] -5% (Sky-Virgin Media O2 deal).

Speakers

  • ECB’s De Guindos (Spain) reiterated view that expected to see strong growth in Q3; Delta variant of virus had not had the expected impact. Forward looking indicators showing that expansion had lost some momentum due to supply constraints, higher energy costs and bottlenecks. Reiterated Council view that pick-up in inflation due to temporary and technical factor and that factors pushing up inflation to fade in 2022. Would be vigilant to 2nd effects of price gains; monetary policy response is not the same if increase in inflation is permanent.
  • UK Chancellor of the Exchequer (Fin Min) Sunak stated that was working with industry to fix supply chain issues and looking at other measures that could be done. Did not want to do more tax increases.
  • UK Brexit Min Frost stated that the Northern Ireland protocol was not working and needed to change; Could not wait forever; Triggering Article 16 might be only way to protect UK (in line with speculation).
  • German FDP’s General Secretary Wissing stated that the FDP would not break its promise not to raise taxes.
  • Poland MPC Member Ancyparowicz stated that monetary policy would be slowly normalizing as pandemic impact faded.
  • Japan PM Kishida appointed his Cabinet with Suzuki being appointed Finance Minister (replaces Aso) and Yamagiwa appointed Economy Minister. Motegi remained as Foreign Min and Matsuno appointed chief Cabinet Sec (as speculated).
  • US official noted thatTrade Rep Tai to start engagement with Chinese counterpart and use all available tools to enforce deal.

Currencies/Fixed Income

  • USD continued to pause in its current uptrend in a quiet session.
  • EUR/USD off recent lows and back above the 1.16 level. ECB members continue to play down the spike up in recent inflation data.
  • GBP/USD trying to retest its pivotal 1.36 resistance level after last week’s decline. Brexit jitters continue to simmer as UK Brexit Min Frost threatened to Trigger Article 16 to protect UK.
  • USD/JPY at 111.15 as the new Japanese PM and Cabinet talk of need for more stimulus.

Economic data

  • (CH) Swiss Sept CPI M/M: 0.0% v 0.2%e; Y/Y: 0.9% v 1.1%e v 0.9% prior; CPI Core Y/Y: 0.5% v 0.4% prior.
  • (CH) Swiss Sept CPI EU Harmonized M/M: 0.0% v 0.2% prior; Y/Y: -0.8% v 1.1%e.
  • (CH) Swiss Aug Real Retail Sales Y/Y: +0.5% v -2.3% prior.
  • (ES) Spain Sept Unemployment Change: -76.1 v -82.6K prior (7th straight monthly decline).
  • (TR) Turkey Sept CPI M/M: 1.3% v 1.3%e; Y/Y: 19.6% v 19.7%e; CPI Core Index Y/Y: 17.0% v 16.7%e.
  • (TR) Turkey Sept PPI M/M: 1.6% v 2.1%e; Y/Y: 44.0% v 44.7%e.
  • (CH) Swiss weekly Total Sight Deposits (CHF): 714.2B v 714.5B prior; Domestic Sight Deposits: 637.1B v 636.0B prior.
  • (BR) Brazil Sept FIPE CPI (Sao Paulo) M/M: 1.1% v 1.1%e.
  • (EU) Euro Zone Oct Sentix Investor Confidence: 16.9 v 18.6e.
  • (NG) Nigeria Sept Manufacturing PMI: 52.3 v 52.2 prior.

Fixed income Issuance

  • (EU) ESM opened its book to sell EUR-denominated 3-year notes via syndicate; guidance seen -11bps to mid-swaps.
  • (AE) UAE to sell USD-denominated 10-year, 20-year and 40-year bonds.
  • (NO) Norway sold NOK2.0B vs. NOK2.0B indicated n 3-month Bills; Avg Yield: 0.24% v 0.18% prior; Bid-to-cover: 1.78x v 2.44x prior.

Looking Ahead

  • OPEC+ monthly meeting.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 ((DE) Germany to sell combined €6.0B in 3-month and 9-month BuBills.
  • 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €3.0-5.0B in 3-month and 6-month bills.
  • 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (MX) Mexico Sept Consumer Confidence: No est v 42.7 prior.
  • 07:00 (MX) Mexico Aug Leading Indicators M/M: No est v 0.12 prior.
  • 07:00 (MX) Mexico Sept Domestic Vehicle Sales: No est v 78.2K prior.
  • 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
  • 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) size announcement on upcoming issuance (bill and bonds).
  • 08:00 (UK) BOE’s Ramsden.
  • 08:30 (CA) Canada Aug Building Permits M/M: +3.4%e v -3.9% prior.
  • 09:00 (SG) Singapore Sept Purchasing Managers Index (PMI): 50.7e v 50.9 prior; Electronics Sector: No est v 51.0 prior.
  • 09:00 (FR) France Debt Agency (AFT) to sell €5.6-6.8B in 3-month, 6-month and 12-month bills.
  • 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (3-7 years).
  • 10:00 (US) Aug Factory Orders: 1.0%e v 0.4% prior; Factory Orders (ex-transportation): 0.4%e v 0.8% prior.
  • 10:00 (US) Aug Final Durable Goods Orders: 1.8%e v 1.8% prelim; Durables (ex-transportation) No est v 0.2% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v 0.5% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 0.7% prelim.
  • 11:00 (DK) Denmark Sept Foreign Reserves (DKK): No est v 483.4B prior.
  • 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
  • 16:00 (US) Weekly Crop Progress Report.
  • 17:00 (KR) South Korea Sept Foreign Reserves: No est v $463.9B prior.
  • 18:00 (CO) Colombia Central Bank Minutes.
  • 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 103.7 prior.
  • 19:00 (AU) Australia Sept Final PMI Services: No est v 44.9 prelim; PMI Composite: No est v 46.0 prelim.
  • 19:00 (KR) South Korea Sept CPI M/M: 0.4%e v 0.6% prior; Y/Y: 2.4%e v 2.6% prior; CPI Core Y/Y: 1.8%ev 1.8% prior.
  • 19:30 (JP) Japan Sept Tokyo CPI Y/Y: -0.1%e v -0.4% prior; CPI Ex-Fresh Food Y/Y: 0.2%e v 0.0% prior; CPI Ex-Fresh Food/Energy Y/Y: -0.1%e v -0.1% prior.
  • 20:00 (NZ) New Zealand Sept Commodity Price Index: No est v 1.3% prior.
  • 20:00 (CO) Colombia Sept CPI M/M: 0.3%e v 0.5% prior; Y/Y: 4.4%e v 4.4% prior.
  • 20:00 (CO) Colombia Sept CPI Core M/M: No est v 0.3% prior; Y/Y: No est v 3.1% prior.
  • 20:01 (IE) Ireland Sept PMI Services: No est v 63.7 prior; PMI Composite: No est v 62.6 prior.
  • 20:30 (AU) Australia Sept ANZ Job Advertisements M/M: No est v % prior.
  • 20:30 (JP) Japan Sept Final PMI Services: No est v 47.4 prelim; PMI Composite: No est v 47.7 prelim.
  • 20:30 (SG) Singapore Sept PMI (whole economy): No est v 52.1 prior.
  • 20:30 (AU) Australia Aug Trade Balance: A$10.0Be v A$12.1B prior; Exports M/M: -3%e v 5% prior; Imports M/M: 1% v 3% prior.
  • 21:00 (PH) Philippines Sept CPI Y/Y: 5.1%e v 4.9% prior.
  • 23:30 (AU) RBA Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 0.10% and maintained 3-year Yield Target at 0.10%.
  • 23:30 (TH) Thailand Sept CPI M/M: 0.5%e v -0.2% prior; Y/Y: 0.5%e v 0.0% prior; CPI Core Y/Y: No est v 0.1% prior.
  • 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.

 

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