Sat, Nov 27, 2021 @ 11:44 GMT
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German ZEW Survey Misses Expectations As Bottleneck Hamper Outlook


  • German ZEW Survey slumps citing persistent bottleneck of raw material and intermediate products.
  • UK jobs data signaled that inflation might be less transitory than initially thought (Reminder: BOE Gov Bailey had already acknowledged that inflation would be less transient than the BOE had initially predicted).
  • Bank of Korea seems poised to hike again in Nov after pause in Oct.
  • US markets return from extended weekend holiday.


  • Bank of Korea (BoK) left Repo Rate unchanged at 0.75% (as expected).
  • BOK Gov Lee post rate decision press conference: noted that the majority did favor rate hike if situation remained unchanged and would decide at Nov meeting if hike is needed.
  • Japan Sept PPI (CGPI) registered its largest annualized rise since Sept 2008 (Y/Y: 6.3% v 5.8%e).
  • Most coal mines in Shanxi that were shut by flooding said to have resumed operations (Note: Price of thermal coal in China had reached a record high due to recent flooding in the country’s largest coal producing province of Shanxi).
  • Evergrande looks set to miss its 3rd round of bond payments as markets stay on edge over contagion fears that other property developers face large debt repayments soon (Note: Have yet to get any public comments out of Evergrande).
  • China PBOC seen cutting the RRR rate during Q4 [in line], may also conduct ‘large’ MLF and reverse repo operations.


  • ECB’s Stournaras (Greece) reiterated view that inflation would fall below 2% in 2022 despite increasing energy prices. Reiterated Council stance that ECB did not expect a significant pickup in inflation in the medium-term.
  • Sept BRC Sales LFL Y/Y: -0.6% v +1.5% prior; BRC noted it saw signs consumer confidence has been hit by fuel shortages and wetter weather.
  • Brexit Min Frost said to warn EU that it will be making a historic misjudgment if EU did not offer new concessions on the Northern Ireland Protocol. To urge the EU to bend rules and accept that ECJ involvement must end.
  • Business Secretary has submitted formal bid for assistance for industries hit by high energy prices (as speculated). Proposals could involve loans worth hundreds of millions of pounds and expected to be back by PM Johnson.
  • France Central Bank cut its Q3 growth estimate from 2.5% to 2.3%.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -0.33% at 456.02, FTSE -0.60% at 7,103.65, DAX -0.57% at 15,112.25, CAC-40 -0.57% at 6,532.99, IBEX-35 -0.15% at 8,885.50, FTSE MIB -0.29% at 25,854.00, SMI -0.07% at 11,762.91, S&P 500 Futures -0.05%].
  • Market Focal Points/Key Themes: European indices open lower across the board but later moved to trade mixed; less negative sectors include consumer discretionary and technology; sectors leading to the downside include materials and financials; travel and leisure subsector supported following easyjet trading update; earnings expected during the upcoming US session include LVMH.


  • Consumer discretionary: Givaudan [GIVN.CH] -1.5% (earnings), EasyJet [EZJ.UK] -2% (trading update), Entain [ENT.UK] -1% (earnings).
  • Financials: Societe Generale [GLE.FR] -1.5% (to merge its Retail units).
  • Healthcare: GenSight Biologics [SIGHT.FR] +3.5% (FDA’s Fast Track Designation).
  • Industrials: Stagecoach [SGC.UK] -1.5% (trading update).


  • EU Energy Commissioner Simson stated that gas prices to remain high throughout winter.
  • German ZEW Economists commented that the assessment of domestic situation had worsened due to persisting bottlenecks for raw materials and intermediate products.
  • Russia Economy Ministry raised its 2021 CPI forecast from 5.8% to 7.4% while maintaining 2022 CPI at 4.0%. Inflation was seen nearing its peak but unlikely to fall due to poor harvest. No talk of introducing new export duties or curbing the upper price limits with retailers.
  • Japan PM Kishida stated in Parliament that must deploy fiscal stimulus flexibly but dids not suggest any problem with raising debt balance indefinitely. Must avoid the possibility of any emerging JGB default risk and would not hesitate on fiscal spending for emergencies. Watching impact of FX moves on companies. Weak JPY currency (yen) should help increase exports and increase corporate costs by pushing up import prices.

Currencies/Fixed income

  • USD maintains its firm tone against the major pairs as market participants continue to see the Fed implementing its taper plans in Nov despite the recent weak US payroll report. Most currencies weaken against USD amid growing inflation concerns. Recent strength in commodities prices coupled with wage increases appear to be fueling more persistent price pressures thus challenging central banks expectations.
  • EUR/USD at 1.1565 area. Inflation and raw material bottlenecks appear to be another headwind for any upward momentum.
  • GBP/USD back below the 1.36 level despite decent UK jobs data. Dealers noted the data signaled that inflation might be less transitory than initially thought (**Reminder: BOE Gov Bailey had already acknowledged that inflation would be less transient than the BOE had initially predicted). Most analysts continue to bring forward their call for the 1st BOE rate hike before Feb 2022.
  • Higher US yield advantage continued to push the JPY currency to 3-year lows with USD/JPY firmly above the 113 level.

Economic data

  • (SE) Sweden Sept PES Unemployment Rate: 3.7 v 3.8% prior.
  • (NL) Netherlands Aug Trade Balance: €4.5B v €5.8B prior.
  • (DE) Germany Sept Wholesale Price Index M/M: 0.8% v 0.5% prior; Y/Y: 13.2% v 12.3% prior.
  • (UK) Sept Jobless Claims Change: -51.1K v -88.0K prior; Claimant Count Rate: 5.2% v 5.4% prior.
  • (UK) Aug Average Weekly Earnings 3M/Y: 7.2% v 7.0%e; Earnings (ex-bonus) 3M/Y: 6.0% v 6.0%e.
  • (UK) Aug ILO Unemployment Rate: 4.5% v 4.5%e; Employment Change 3M/3M: +235K v +250Ke.
  • (NO) Norway Q3 House Price Index Q/Q: 1.1% v 2.6% prior.
  • (RO) Romania Sept CPI M/M: 0.8% v 0.2% prior; Y/Y:6.3 % v 5.8%e.
  • (FR) Bank of France Sept Industrial (Business) Sentiment: 100 v 103e.
  • (TR) Turkey Aug Industrial Production M/M: 5.4% v 3.7%e; Y/Y: 13.8% v 10.5%e.
  • (DE) Germany Oct ZEW Current Situation Survey: # v 28.0e; Expectations Survey: # v 24.0e.
  • (EU) Euro Zone Oct ZEW Expectations Survey: # v 31.1 prior.

Fixed income issuance

  • (EU) European Union opened its book to sell EUR-denominated 15-year green Nextgeneration bond (NGEU); guidance seen -5bps to mid-swaps.
  • (ID) Indonesia sold total IDR8.0T vs. IDR8.0T target in bills and bonds.
  • (NL) Netherlands Debt Agency (DSTA) sold €1.75B vs. €1.0-2.0B indicated range in of 2.75% Jan 2047 DSL Bonds; Avg Yield: 0.357% v 0.403% prior.
  • (UK) DMO sold £1.25B in 0.5% Oct 2061Gilts; Avg Yield: 1.414% v 1.127% prior; bid-to-cover: 2.52x v 2.39x prior; Tail: 0.2bps v 0.2bps prior.
  • (IT) Italy Debt Agency (Tesoro) sold €6.0B vs. €6.0B indicated range in 12-month Bills; Avg Yield: -0.474% v -0.477% prior; Bid-to-cover: 1.30x v 1.42x prior.

Looking ahead

  • 05:15 (CH) Switzerland to sell 3-month Bills.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (ZA) South Africa Aug Total Mining Production M/M: 0.5%e v 4.1% prior; Y/Y: 3.1%e v 10.3% prior; Gold Production Y/Y: No est v 13.4% prior; Platinum Production Y/Y: No est v 10.3% prior.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
  • 05:30 (DE) Germany to sell €5.0B in 0% Sept 2023 Schatz.
  • 05:30 (BE) Belgium Debt Agency (BDA) to sell €0.6-1.0B in 3-month and 12-month bills.
  • 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
  • 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2030,2040 and 2048 bonds.
  • 06:00 (IL) Israel Sept Consumer Confidence: No est v 93 prior.
  • 06:00 (US) Sept NFIB Small Business Optimism Index: 99.5e v 100.1 prior.
  • 06:00 (FI) Finland to sell €1.0B in 9-month and 12-month bills.
  • 06:30 (EU) ESM to sell €1.1B in 12-month Bills.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (ZA) South Africa Aug Manufacturing Production M/M: +6.1%e v -8.0% prior; Y/Y: +0.2%e v -4.1% prior.
  • 07:00 (MX) Mexico Aug Industrial Production M/M: -0.6%e v +1.1% prior; Y/Y: 4.2%e v 7.3% prior; Manufacturing Production Y/Y: 4.4%e v 6.2% prior.
  • 07:45 (FR) ECB’s Villeroy (France).
  • 08:00 (IN) India Sept CPI Y/Y: 4.5%e v 5.3% prior.
  • 08:00 (IN) India Aug Industrial Production Y/Y: 11.7%e v 11.5% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (IE) ECB’s Lane (Ireland, chief economist).
  • 08:55 (US) Weekly Redbook LFL Sales data.
  • 09:00 IMF updates its World Economic Outlook (WEO): 2021 Global Growth Forecast currently at 6.0%.
  • 09:00 (RU) Russia Aug Trade Balance: $16.4Be v $23.2B prior; Exports: $46.5Be v $49.5B prior; Imports: $27.3Be v $26.3B prior.
  • 09:00 (EU) Weekly ECB Forex Reserves.
  • 09:00 (NL) ECB’s Elderson (Netherlands, SSM member).
  • 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
  • 09:00 (EU) ECB weekly QE bond buying update.
  • 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (20+ years).
  • 10:00 (US) Aug JOLTS Job Openings: 10.938Me v 10.934M prior.
  • 10:00 (MX) Mexico Weekly International Reserve data.
  • 10:30 (CA) Canada to sell in 3-month, 6-month and 12-month bills.
  • 11:30 (US) Treasury to sell 13-week and 26-week bills.
  • 11:30 (US) Treasury to sell 3-Year Notes.
  • 12:30 (US) Fed’s Bostic on inflation at Peterson Institute.
  • 13:00 (MX) Mexico Sept Total Formal Job Creation: No est v +128.9K prior.
  • 13:00 (US) Treasury to sell 10-Year Notes Reopening.
  • 16:30 (US) Weekly API Oil Inventories.
  • 17:45 (NZ) New Zealand Sept Food Prices M/M: No est v 0.3% prior.
  • 19:00 (KR) South Korea Sept Unemployment Rate: 3.0%e v 2.8% prior.
  • 19:30 (AU) Australia Oct Consumer Confidence Index: No est v 106.2 prior.
  • 19:50 (JP) Japan Sept M2 Money Supply Y/Y: 4.3%e v 4.7% prior; M3 Money Supply Y/Y: 3.9%e v 4.2% prior.
  • 19:50 (JP) Japan Aug Core Machine Orders M/M: 1.4%e v 0.9% prior; Y/Y: 13.9%e v 11.1% prior.
  • 20:00 (NZ) New Zealand Oct Preliminary Business Confidence: No est v -7.2 prior; Activity Outlook: No est v 18.2 prior.
  • 20:00 (AU) Australia to sell A$1.0B in 1.25% 2032 Bonds.
  • 21:10 (JP) BOJ Outright Bond Purchase Operation; to buy 1~3 Years and 5~10 Years maturities.
  • 22:30 (KR) South Korea to sell KRW800B in 2-year Bonds.
  • 23:00 (KR) South Korea Sept Total Bank Lending To Household (KRW): Nio est v 1046.3T prior.
  • 23:00 (KR) South Korea Aug M2 Money Supply M/M: No est v 0.9% prior; “L” Money Supply M/M: No est v 0.9% prior.
  • 23:00 (CN) China to sell 3-year and 7-year Bonds.


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