Awaiting The Fed To Ease Extraordinary Support Measures

Notes/Observations

• Focus on FOMC and the expected taper announcement. Market will look for any clarity on the timing of the first interest rate rise.
• Companies due to report during the NY morning include Broadridge Financial, BorgWarner, CDW Corp, Clean Harbors, Capri Holdings, Charles River Labs, CVS, Discovery, NOW Inc, Brinker International, Emerson Electric, Entergy, EVO Payments, Cedar Fair, Humana, Jones Lang LaSalle, LL Flooring, Marriott International, Norwegian Cruise Line, NiSource, New York Times, Office Depot, Owens & Minor, Pitney Bowes, Progressive Corp, Playtika, PROG Holdings, Radware, Steven Madden, Siteone Landscape Supply, Scotts Miracle-Gro, Spirit Aerosystems, Trane Tech, Tupperware, United Therapeutics, Wingstop.

Asia

• China Oct Caixin PMI Services registered its 2nd consecutive expansion (53.8 v 53.1e).
• New Zealand Q3 Unemployment Rate hit a 14-year low (3.4% v 3.9%e).
• RBNZ Financial Stability Review (FSR) noted that the financial system was well placed to support economic recovery.

Americas

• Republican Glenn Youngkin projected to win in the Virginia Governor’s race.
• House Ways and Means Chair Neal stated that Reconciliation bill negotiators were still struggling on the SALT state tax provisions. Reports circulated that Democrats were considering a 5-year SALT deductibility cap delay, though that plan remained tentative.

Energy

• Weekly API Crude Oil Inventories: +3.6M v +2.3M prior (6th straight weekly build.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.07% at 479.86, FTSE -0.15% at 7,263.90, DAX -0.05% at 15,946.80, CAC-40 +0.01% at 6,927.54, IBEX-35 -0.43% at 9,066.50, FTSE MIB +0.14% at 27,229.00, SMI -0.02% at 12,293.35, S&P 500 Futures +0.02%].
• Market Focal Points/Key Themes: European indices open mixed but slipped to trade with a negative bias later in the session; better performing sectors include materials and technology; while sectors leading to the downside include energy and utilities; oil and gas subsector lower following drop in crude prices; IFIS acquires NPL portfolio from Cerberus; Bouygues confirms binding offer for Engi’s Equans; focus on upcoming FOMC meeting; earnings expected during the upcoming US session include Cenovus, BorgWarner, CVS and Humana.

Equities

• Consumer discretionary: Lufthansa [LHA.DE] +4% (earnings), Next [NXT.UK] -3.0% (trading update).
• Healthcare: Novo Nordisk [NOVOB.DK] +1% (earnings).
• Industrials: BMW [BMW.DE] +1% (earnings).
• Technology: TeamViewer [TMV.DE] +7% (final results).

Speakers

• ECB Vasle (Slovenia) reiterated Council view that sees growing risk inflation will stay elevated for longer.
• Malaysia Central Bank (BNM) Policy Statement reiterated that policy stance was accommodative. Remained committed to utilize its policy levers as appropriate to enable conditions for sustainable recovery. Growth momentum to improve in 2022. Reiterated that Headline inflation would remain within the 2.0-3.0% target range.
• China PBOC Digital Currency chief Mu Changchun: 140M people have opened up a digital Yuan account.

Currencies/Fixed Income

• Focus on FOMC and taper announcement. The USD has firmed up in the days ahead of the Fed decision. Dealers noted that any further dollar strength to depend on whether the Fed hints at the timing of a first interest-rate increase.
• Recent ECB data confirmed that ECB slowed its PEPP bond buying with Oct having the central bank purchase €67.8B in assets vs. €75.0B m/m. Recent inflation data has market betting that the ECB would be forced into a swifter policy turn after ECB recently noted that any abating of inflation would take longer than previously thought.
• GBP/USD trading at 1.3615 area ahead of BOE’s rate decision on Thursday. GBP has retreated in recent days as some speculation that BOE could push back against the pricing of interest-rate increases.

Economic data

• (RU) Russia Oct PMI Services: 48.8 v 49.7e (moved back into contraction); PMI Composite: 49.5 v 50.5 prior.
• (MY) Malaysia Central Bank (BNM) left Overnight Policy Rate unchanged at 1.75% (as expected).
• (UK) Oct Nationwide House Price Index M/M: 0.7% v 0.3%e; Y/Y: 9.9% v 9.2%e.
• (TR) Turkey Oct CPI M/M: 2.4% v 2.8%e; Y/Y: 19.9% v 20.4%e; CPI Core Index Y/Y: 16.8% v 17.9%e.
• TR) Turkey Oct PPI M/M: 5.2% v 2.7%e; Y/Y: 46.3% v 41.4%e.
• (SE) Sweden Oct PMI Services: 68.0 v 69.6 prior (17th month of expansion); PMI Composite: 67.0 v 68.2 prior.
• (FR) France Sept YTD Budget Balance: -€175.1B v -€178.0B prior.
• (RU) Russia Narrow Money Supply w/e Oct 29th (RUB): 14.29T v 14.36T prior.
• (ES) Spain Oct Net Unemployment Change: -0.7K v +20.0Ke(8th straight monthly decline).
• (BR) Brazil Oct FIPE CPI (Sao Paulo) M/M: 1.0% v 1.0%e.
• (IT) Italy Sept Unemployment Rate: 9.2% v 9.3%e.
• (UK) Oct Final PMI Services: 59.1 v 58.0e (confirmed 8th month of expansion); PMI Composite: 57.8 v 56.8e.
• (UK) Oct Official Reserves Changes: -$0.1B v -$0.9B prior.

Fixed income Issuance

• (DK) Denmark sold total DKK2.45B in 2024, 2031 and 2052 DGB bonds.

Looking Ahead

• (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to raise Base Rate by 25bps to 0.75% (no set time).
• 06:00 (EU) Euro Zone Sept Unemployment Rate: 7.4%e v 7.5% prior.
• 06:00 (BE) Belgium Sept Unemployment Rate: No est v 6.4% prior.
• 06:00 (BR) Brazil Central Bank (BCB) Oct Minutes.
• 06:00 (EU) Daily Euribor Fixing.
• 06:00 (EU) ECB, BOE and SNB hold weekly 7-day USD Liquidity Tender.
• 06:00 (UK) DMO to sell £2.5B in 0.5% Jan 2029 Gilts.
• 06:15 (NL) ECB’s Elderson (Netherlands, SSM).
• 06:25 (EU) Daily ECB Liquidity Stats.
• 06:30 (DE) Germany to sell €4.0B in 0% Oct 2026 BOBL.
• 06:30 (GR) Greece Debt Agency (PDMA) to sell 13-week Bills.
• 06:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).
• 07:00 (US) MBA Mortgage Applications w/e Oct 29th: No est v 0.3% prior.
• 07:00 (IE) Ireland Oct Unemployment Rate: No est v 6.4% prior.
• 07:00 (EU) EU Commission to sell combined €3.0B in 3-month and 6-month bills.
• 07:00 (RU) Russia to sell OFZ Bonds.
• 07:55 (US) Daily Libor Fixing.
• 08:00 (MX) Mexico Sept Leading Indicators M/M: No est v 0.01 prior.
• 08:00 (UK) Weekly PM Question time in House.
• 08:15 (US) Oct ADP Employment Change: +400Ke v +568K prior.
• 09:00 (HU) Hungary Central Bank Oct Minutes.
• 09:00 (UK) Daily Baltic Dry Bulk Index.
• 09:00 (FR) ECB’s Villeroy (France).
• 09:45 (US) Oct Markit Final PMI Services: 58.2e v 58.2 prelim; PMI Composite: No est v 57.3 prelim.
• 10:00 (US) Oct ISM Services Index: 62.0e v 61.9 prior.
• 10:00 (US) Sept Factory Orders: 0.1%e v 1.2% prior; Factory Orders (ex-transportation): 0.0%e v 0.5% prior.
• 10:00 (US) Sept Final Durable Goods Orders: -0.4%e v -0.4% prelim; Durables (ex-transportation) No est v 0.4% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v 0.8% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 1.4% prelim.
• 10:30 (US) Weekly DOE Oil Inventories.
• 10:30 (NL) ECB’s Elderson (Netherlands, SSM).
• 10:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (7-20 years).
• 11:00 (MX) Mexico Weekly International Reserve data.
• 12:00 (RU) Russia Oct CPI M/M: 1.0%e v 0.6% prior; Y/Y: 8.0%e v 7.4% prior.
• 12:00 (RU) Russia Oct CPI Core M/M: 0.9%e v 0.8% prior; Y/Y: 7.9%e v 7.6% prior.
• 14:00 (US) FOMC Interest Rate Decision: Expected to leave Interest rates unchanged between 0.00%-0.25%; Expected to leave IOER unchanged at 0.15%.
• 14:00 (BR) Brazil Oct Trade Balance: $2.4Be v $4.3B prior; Total Exports: $23.0Be v $24.3B prior; Total Imports: $20.6Be v $20.0B prior.
• 14:30 (US) Fed Chair Powell post rate decision press conference.
• 20:00 (NZ) New Zealand Oct ANZ Commodity Price M/M: No est v 1.5% prior.
• 20:30 (AU) Australia Sept Trade Balance: A$12.4Be v A$15.1B prior.
• 20:30 (AU) Australia Q3 Retail Sales (ex-inflation) Q/Q: -5.0%e v +0.8% prior.
• 21:00 (PH) Philippines Sept Unemployment Rate: No est v 8.1% prior.
• 23:00(TH) Thailand Oct Consumer Confidence: No est v 41.4 prior; Economic Confidence: No est v 35.5 prior.
• 23:35 (JP) Japan to sell CPI Linked 10-Year Bonds.