- Markets reversed some of Friday’s moves, calming after the initial shock of discovering a new coronavirus variant. Evaluation of Omicron variant said to cause of only mild symptoms with hope that vaccine reformulations against it could be achieved quickly.
- Vaccine efficacy results in the coming weeks of keen interest.
- Japan Oct Retail Sales M/M: 1.1% v 1.0%e; Y/Y: 0.9% v 1.1%e.
- RBNZ Chief Economist Ha commented that the new variant of the virus would unlikely to halt Bank Rate rises.
- Japanese government said it would bar new entry of foreigners to the country.
- World Health Organization’s (WHO) issued statement on Omicron variant and noted it was not yet clear whether infection with Omicron caused more severe disease compared to infections with other variants, including Delta, but preliminary evidence suggested there may be an increased risk of reinfection with Omicron.
- UK govt to convene urgent meeting of G7 Health Ministers to discuss developments on Omicron on Monday, Nov 29th.
- Chairman on South African Ministerial Advisory Committee on Vaccines noted that the cases so far had all been mild, mild -to- moderate which was good sign, there had been no real uptick in hospitalizations.
- ECB’s Panetta (Italy; dove): ECB does not need to intervene on inflation for now, it is temporary, do not need to follow US Fed monetary policy choices.
- Fed’s Bostic (FOMC voter, hawk) noted that each successive Covid variant slowed the economy but to a lesser amount; A lot of momentum in economy right now. Looking at how fast Fed might need to reduce asset purchases to address inflation.
- Russia Dep PM Novak noted that OPEC+ Partners did not ask to review the terms of the agreement; He saw no need for emergency measures on the oil market. OPEC+ to discuss the market situation and necessary steps. JMMC was delayed to get more information on the situation and the virus.
- Indices [Stoxx600 +0.74% at 467.48, FTSE +0.74% at 7,096.12, DAX +0.38% at 15,315.40, CAC-40 +0.74% at 6,789.57, IBEX-35 +0.66% at 8,460.00, FTSE MIB +0.65% at 26,020.00, SMI +0.11% at 12,212.26, S&P 500 Futures %].
Market Focal Points/Key Themes:
- European indices open sharply higher bouncing off Friday’s sell-off but later cut off some of their gains as session progressed; sectors that are performing better include consumer discretionary, technology and energy; shares of BT Group currently trade higher 6% following speculation of interest from Indian firm Reliance; industrial firm Faurecia cut outlook once again this year and trades lower as much as 6%; Volkswagen also fell in Frankfurt following analyst downgrade; corporate events expected in the upcoming US session include earnings from Li Auto.
- Consumer discretionary: Juventus [JUVE.IT] -3% (police raids).
- Energy: Vestas Wind Systems [VWS.DK] +1.5% (update on cyber incident).
- Financials: Amigo Holdings [AMGO.UK] -25% (earnings).
- Industrials: Faurecia [EO.FR] -6% (cuts outlook again), Knorr-Bremse [KBX.DE] -1% (CMD), Volkswagen [VOW3.DE] -2% (analyst action).
- Materials: Johnson Matthey [JMAT.UK] +5% (divestment speculation).
- Telecom: BT Group [BT.A.UK] +6% (potential offer).
- ECB’s Schnabel (Germany) stated that ECB saw inflation peaking in Nov then gradually falling back to target in 2022. Would be a mistake to raise rates prematurely.
- ECB Villeroy (France) stated that the EU was clearly on its way to recovery and that the current Omicron variant of virus would not change outlook too much.
- ECB’s de Cos (Spain) reiterated Council view that current pickup in inflation was seen as transitory.
- Poland Central Bank’s Lon stated that it was not a given that Poland would continue with rate hikes.
- India Fin Min Sitharaman stated that the uptrend in inflation was due to exogenous factors. No proposal to recognize Bitcoin as currency.
- Japan PM Kishida said to to decide on “GO TO Travel” after new year’s.
- BOJ Gov Kuroda noted that addressing climate change was not a restraint for economy.
- Iran Foreign Ministry spokesperson: Window for nuclear talks will not stay open forever.
- USD steadied after Fridays decline as markets re-evaluated the Omicron variant and awaited until the impact of the variant became more clear. Some health officials noted that Omicron caused of only mild symptoms with hopes that vaccine reformulations against it could be achieved quickly.
- The greenback was weakened on Friday as the Omicron variant of the virus was seen as possibly affecting when the Fed would raise rates.
- EUR/USD steady at 1.1280 area while USD/JPY drifted higher to test above 113.30 area.
- (NL) Netherlands Nov Producer Confidence Index: 12.7 v 12.3 prior.
- (DE) Germany Nov CPI North Rhine Westphalia M/M: -0.3% v +0.4% prior; Y/Y: 5.1% v 4.5% prior.
- (FI) Finland Nov Consumer Confidence: # v 2.7 prior; Business Confidence: 24 v 22 prior.
- (TR) Turkey Oct Trade Balance: -$1.4B v -$1.5Be.
- (TR) Turkey Nov Economic Confidence: 99.3 v 101.4 prior.
- (ES) Spain Nov Preliminary CPI M/M: 0.4% v 0.3%e; Y/Y: 5.6% v 5.5%e.
- (ES) Spain Nov Preliminary CPI EU Harmonized M/M: 0.3% v 0.3%e; Y/Y: 5.6% v 5.6%e.
- (HU) Hungary Oct Unemployment Rate: 3.9% v 3.9%e.
- (SE) Sweden Q3 GDP Q/Q: 2.0% v 1.8%e; Y/Y: 4.7% v 4.2%e.
- (SE) Sweden Oct Trade Balance (SEK): 0.8B v 6.8B prior.
- (DE) Germany Nov Hesse M/M: -0.2% v +0.6% prior; Y/Y: 5.3% v 4.7% prior.
- (DE) Germany Nov CPI Bavaria M/M: -0.2% v +0.5% prior; Y/Y: 5.3% v 4.6% prior.
- (DE) Germany Nov CPI Baden Wuerttemberg M/M: -0.1 v +0.5% prior; Y/Y: 4.9% v 4.2% prior.
- (DE) Germany Nov CPI Brandenberg M/M: -0.2% v +0.3% prior; Y/Y: 5.7% v 5.0% prior.
- (CH) Swiss weekly Total Sight Deposits (CHF): 719.4B v 719.3B prior; Domestic Sight Deposits: 646.9B v 646.7B prior.
- (IT) Italy Oct PPI M/M: 9.4% v 1.9% prior; Y/Y: 25.3% v 15.6% prior.
- (UK) Oct Net Consumer Credit: £0.7B v £0.4Be; Net Lending: £1.6B v £3.5Be.
- (UK) Oct Mortgage Approvals: 67.2K v 70.0Ke.
- (UK) Oct M4 Money Supply M/M: 0.6% v 0.7% prior; Y/Y: 7.0% v 7.0% prior; M4 (ex-IOFCs) 3M Annualized: 6.7% v 5.6% prior.
- (PT) Portugal Nov Consumer Confidence Index: -13.3 v -10.9 prior; Economic Climate Indicator: 1.9 v 2.0 prior.
- (DE) Germany Nov CPI Saxony M/M: -0.2% v +0.4% prior; Y/Y: 5.0% v 4.5% prior.
- (EU) Euro Zone Nov Economic Confidence: 117.5 v 117.5e; Industrial Confidence: 14.1 v 14.0e; Services Confidence: 18.4 v 17.0e; Consumer Confidence (final): -6.8 v -6.8 advance.
Fixed income Issuance
- (DK) Denmark sold total DKK2.40B in 3-month, 6-month. 9-month and 12-month bills.
- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month Bills; Avg Yield: 0.58% v 0.43% prior; Bid-to-cover: 1.36x v 1.78x prior.
- (BE) Belgium Nov CPI M/M: No est v 1.5% prior; Y/Y: No est v 4.2% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 ((DE) Germany to sell combined €6.0B in 6-month and 9-month Bubills.
- 06:00 (IE) Ireland Oct Retail Sales Volume M/M: No est v 0.3% prior; Y/Y: No est v 0.7% prior.
- 06:00 (BR) Brazil Nov FGV Inflation IGPM M/M: 0.3%e v 0.6% prior; Y/Y: 18.2%e v 21.7% prior.
- 06:00 (IL) Israel to sell bonds.
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (MX) Mexico Oct Unemployment Rate NSA (unadj): 4.1%e v 4.2% prior.
- 07:30 (IS) Iceland to sell 3-month and 6-month Bills.
- 08:00 (DE) Germany Nov Preliminary CPI M/M: -0.4%e v +0.5% prior; Y/Y: 5.0%e v 4.5% prior.
- 08:00 (DE) Germany Nov Preliminary CPI EU Harmonized M/M: -0.2%e v +0.5% prior; Y/Y: 5.5%e v 4.6% 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 details of upcoming bond sale.
- 08:00 (SE) Sweden Central Bank (Riksbank) Dep Gov Skinglsey.
- 08:30 (CA) Canada Q3 Current Account Balance: $5.7Be v $3.6B prior.
- 08:30 (CA) Canada Oct Industrial Product Price M/M: 1.3%e v 1.0% prior; Raw Materials Price Index M/M: 3.5%e v 2.5% prior.
- 09:00 (FR) France Debt Agency (AFT) to sell €4.3-5.5B in 3-month, 6-month and 12-month bills.
- 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (3-7 years).
- 10:00 (US) Oct Pending Home Sales M/M: +0.8%e v -2.3% prior; Y/Y: No est v -7.2% prior.
- 10:30 (US) Nov Dallas Fed Manufacturing Activity Index: 17.0e v 14.6 prior.
- 15:00 (US) Fed’s Williams.
- 15:00 (US) Fed chair Powell.
- 17:05 (US) Fed’s Bowman.
- 17:05 (AU) RBA Debelle.
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 107.4 prior.
- 18:00 (KR) South Korea Oct Industrial Production M/M: No est v -0.8% prior; Y/Y: No est v -1.8% prior.
- 18:30 (JP) Japan Oct Jobless Rate: 2.8%e v 2.8% prior; Job-To-Applicant Ratio: 1.17x v 1.16 prior.
- 18:50 (JP) Japan Oct Preliminary Industrial Production M/M: +1.9%e v -5.4% prior; Y/Y: -4.4%e v -2.3% prior.
- 19:00 (NZ) New Zealand Nov Final Business Confidence: No est v -18.1 prelim; Activity Outlook: No est v 15.6 prelim.
- 19:01 (UK) Nov Lloyds Business Barometer: No est v 43 prior.
- 19:30 (AU) Australia Q3 Current Account Balance: A$30.0Be v A$20.5B prior.
- 19:30 (AU) Australia Q3 Net Exports of GDP: +1%e v -1 prior.
- 19:30 (AU) Australia Oct Building Approvals M/M: -2.0%e v -4.3% prior.
- 19:30 (AU) Australia Oct Private Sector Credit M/M: 0.6%e v 0.6% prior; Y/Y: 5.8%e v 5.3% prior.
- 20:00 (CN) China Nov Manufacturing PMI (Govt official): 49.7e v 49.2 prior; Non-manufacturing PMI: 51.4e v 52.4 prior; Composite PMI: No est v 50.8 prior.
- 21:00 (SG) Singapore Oct M2 Money Supply Y/Y: No est v 4.0% prior; M1 Money Supply Y/Y: No est v 13.4% prior.
- 22:00 (TH) Thailand Central bank to sell THB50B in 3-month bills.
- 22:30 (HK) Hong Kong to sell 3-month and 6-month Bills.
- 22:35 (JP) Japan to sell 2-Year JGB Bonds.
- 23:00 (TH) Thailand Oct ISIC Manufacturing Production Index Y/Y: +2.0%e v -1.3% prior; Capacity Utilization: No est v 62.0% prior.