Awaiting US jobs report

Notes/Observations

- A surprise beat from China's Caixin manufacturing PMI; Divergence emerged between China official and private PMI Manufacturing readings

- Lagarde's begins her ECB tenure

- Focus on US payroll data; markets pondering if the Fed is actually done with its easing

Asia:

- China Oct Caixin PMI Manufacturing registered its 3rd month of expansion and highest reading since Feb 2017) (51.7 v 51.0e) (Note: The Govt official Manufacturing PMI saw its 6th straight contraction (49.3 v 49.8e)

- Japan Fin Min Aso stated that he had not received any instruction yet from PM Abe regarding economic stimulus measures, not of the view that economic measures were needed

- Japan Sept Jobless rate moved off 3-decade low ( 2.4% v 2.2%e)

- South Korea Oct Trade Balance registered a larger surplus ($5.4B v $4.8Be) but exports saw its 11th straight decline and largest drop in ~4 years (YoY: -14.7% v -13.6%e)

- South Korea Oct CPI better than expected as the YoY reading avoid a 2nd month in negative territory (YoY: 0.0% v -0.3%e)

Europe/Mideast:

- SNB's Jordan reiterated that negative rates and readiness to intervene in the FX market were still essential to easing pressure on the CHF currency (Franc)

- Minouche Shafik said to be the govt's preferred candidate for BOE Governor position (*8note: Carney term set to end in Jan 2020)

- UK official: Govt to announce successor to BOE Carney before his term ended but would not name a successor before the national election due on Dec. 12th

Brexit:

- Pres Trump stated that PM Johnson was 'prepared to do what no one else was willing to do' on Brexit. UK trade with the US could be four to five times higher than it is now in a trade deal with the US. Under some Brexit circumstances, the US would be precluded from doing trade deal with the UK

Americas:

- House of Representatives had sufficient votes to pass impeachment inquiry measure (as expected). Final vote 232-196 to begin the public phase of the Trump impeachment inquiry. White House stated the vote was 'blatantly partisan'. President Trump tweeted "The Greatest Witch Hunt In American History!"- President Trump tweeted that a new location for the signing of a "phase one" trade deal with China would be announced soon

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.39% at 398.30, FTSE +0.38% at 7,276.05, DAX +0.40% at 12,917.96, CAC-40 +0.33% at 5,748.50, IBEX-35 +0.17% at 9,273.00, FTSE MIB +0.33% at 22,769.50, SMI +0.22% at 10,242.50, S&P 500 Futures +0.19%]

Market Focal Points/Key Themes: On the earnings front Danske Bank shares decline over 4% on earnings and lowered outlook as negative rates and compliance costs weigh; Wolters Kluwer falls on a trading update, with results at the company's health division disappointing, while Lookers declines over 12% on a profit warning. Healthcare name Novo Nordisk gains on earnings, and raised outlook, with DSV another notable gainer on an earnings beat and share buyback announcement. In other news Metro shares trade higher as Daniel Kretinsky's EPGC holding raised their stake to 30%. Looking ahead notable earners include Abbvie, LyondellBasell, Colgate-Palmolive, Chevron, Exxon and Alibaba among others.

 

Equities

- Consumer discretionary: Basic-Fit [BFIT.NL] +6% (earnings), Lookers [LOOK.UK] -14% (trading update; CEO and COO to step down)

- Financials: Danske Bank [DANSKE.DK] -4% (earnings)

- Industrials: Thyssenkrupp [TKA.DE] +2.5% (US Steel earnings), DSV [DSV.DK] +8% (earnings; buyback), BBA Aviation [BBA.UK] +1.5% (name change), Yit [YIT.FI] +3% (earnings)

- Technology: ASM International [ASM.NL] +7.5% (buyback), Robit [ROBIT.FI]+11% (earnings)

 

Speakers

- German Constitutional Court said to reject motion by a group of German plaintiffs seeking an injunction against the Bundesbank's participation in QE

- Russia Central Bank (CBR) Gov Nabiullina stated that the balance of risk has shifted to disinflation factors; expected 2020 inflation between 3.5-4.0%

- China Foreign Ministry Spokesman Geng Shuang: China and US have maintained close contact on meeting of two leaders; hopes the two sides can find a trade solution. Reiterated trade consultations had gone smoothly. Noted that reports President Xi and President Trump might meet in Macau was pure speculation but China would welcome the US delegation to China International Import Expo (CIIE), which runs Nov 5-10 in Shanghai

 

Currencies/Fixed Income

- FX markets were in a pause mode awaiting the Oct jobs report from the US.

- EUR/USD trading around the 1.1160 area as Lagarde takes the helm at the ECB.

- GBP/USD inching its way back towards the 1.30 neighborhood with focus on the UK general election news. UK Oct manufacturing PMI data beat expectations but remain ed in contraction territory for the 6th straight month.

 

Economic Data

- (PE) Peru Oct CPI M/M: 0.1% v 0.1%e; Y/Y: 1.9% v 1.9%

- (RU) Russia Oct PMI Manufacturing: 47.2 v 48.0e (6th month of contraction)

- (CN) Weekly Shanghai copper inventories (SHFE): 149.9K v 143.0K tons prior

- (TR) Turkey Oct PMI Manufacturing: 49.0 v 50.0 prior (moves back into contraction)

- (CH) Swiss Oct CPI M/M: -0.2% v 0.0%e; Y/Y: -0.3% v 0.0%e; CPI Core Y/Y: 0.2% v 0.4%e

- (CH) Swiss Oct CPI EU Harmonized M/M: -0.2% v +0.1%e; Y/Y: -0.3% v +0.1%e

- (CH) Swiss Sept Real Retail Sales Y/Y: +0.9 v -1.0% prior

- (SE) Sweden Oct PMI Manufacturing: 46.0 v 47.0e

- (TH) Thailand Oct Business Sentiment Index: 48.1 v v 47.9 prior

- (NL) Netherlands Oct Manufacturing PMI: 50.3 v 51.6 prior (74th month of expansion)

- (NO) Norway Oct PMI Manufacturing: 54.9 v 50.2e (3rd month of expansion)

- (RU) Russia Narrow Money Supply w/e Oct 25th (RUB): 10.57T v 10.69T prior

- (CH) Swiss Oct PMI Manufacturing: 49.4 v 45.3e (7th straight contraction)

- (CZ) Czech Republic Oct PMI Manufacturing: 45.0 v 45.0e (11th straight contraction)

- (HK) Hong Kong Sept Retail Sales Value Y/Y: -18.3% v -25.6%e; Retail Sales Volume Y/Y: -20.4% v -28.5%e

- (GR) Greece Oct Manufacturing PMI: 53.5 v 53.6 prior (29th month of expansion)

- (ZA) South Africa Oct Manufacturing PMI: 48.1 v 41.8e (6th month of contraction)

- (NO) Norway Oct Unemployment Rate: 2.1% v 2.1%e

- (UK) Oct PMI Manufacturing: 49.6 v 48.2e (6th month of contraction)

**Fixed Income Issuance**

- None seen

 

Looking Ahead

- (RU) Russia Sept Sovereign Wealth Funds: Wellbeing Fund: No est v $123.1B prior

- (IT) Italy Oct Budget Balance: No est v -€22.6B prior

- (AR) Argentina Oct Government Tax Revenue (ARS): No est v 422.0B prior

- (BR) Brazil Sept CNI Capacity Utilization: No est v 78.1% prior

- 06:00 (DK) Denmark Oct PMI Survey: No est v 50.2 prior

- 06:00 (EU) Daily Euribor Fixing

- 06:00 FR) France Debt Agency (AFT) announces upcoming issuance (bills, Oats)

- 06:00 (ZA) South Africa to sell ZAR1.04B I/ L 2029, 2038 and 2050 bonds

- (RO) Romania Oct International Reserves: No est v $40.0B prior

- 06:30 (IN) India Weekly Forex Reserve w/e Oct 25th No est v $440.8B prior

- 06:30 (IN) India to sell combined INR160B in 2024, 2031, 2043 and 2049 bonds

- 07:00 (UK) DMO to sell €6.5B in 1-month, 3-month and 6-month bills (£0.5B, £3.0B and £3.0B respectively)

- 07:45 (US) Daily Libor Fixing

- 08:00 (BR) Brazil Sept Industrial Production M/M: 0.7%e v 0.8% prior; Y/Y: +1.5%e v -2.3% prior

- 08:30 (US) Oct Change in Nonfarm Payrolls: +85Ke v +136K prior; Change in Private Payrolls: +80Ke v +114K prior; Change in Manufacturing Payrolls: -55Ke v -2K prior

- 08:30 (US) Oct Unemployment Rate: 3.6%e v 3.5% prior; Underemployment Rate: No est v 6.9% prior; Labor Force Participation Rate: 63.1%e v 63.2% prior

- 08:30 (US) Oct Average Hourly Earnings M/M: 0.3%e v 0.0% prior; Y/Y: 3.0%e v 2.9% prior; Average Weekly Hours: 34.4e v 34.4 prior

- 08:30 (CA) Canada Sept MLI Leading Indicator M/M: No est v 0.2% prior

- (ZA) South Africa Oct Naamsa Vehicle Sales Y/Y: No est v -0.9% prior

- 09:00 (CZ) Czech Oct Budget Balance (CZK): No est v -21.0B prior

- 09:00 (BR) Brazil Oct PMI Manufacturing: No est v 53.4 prior

- 09:00 (UK) Daily Baltic Dry Bulk Index

- 09:00 (IN) India announces upcoming bill issuance (held on Wed)

- 09:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance

- 09:30 (CA) Canada Oct Manufacturing PMI: No est v 51.0 prior

- 09:45 (US) Oct Final Markit Manufacturing PMI: 51.5e v 51.5 prelim

- 10:00 (US) Oct ISM Manufacturing: 49.0e v 47.8 prior; Prices Paid: 50.0e v 49.7 prior

- 10:00 (US) Sept Construction Spending M/M: 0.2%e v 0.1% prior

- 11:00 (MX) Mexico Sept Total Remittances: $3.1Be v $3.4B prior

- 11:00 (CO) Colombia Sept Exports: $3.1Be v $3.3B prior

- 11:00 (CO) Colombia Oct PMI Manufacturing: No est v 50.9 prior

- 11:00 (MX) Mexico Central Bank Economist Survey

- 11:00 (EU) Potential sovereign ratings after European close (Moody's on Estonia, Norway and South Africa sovereign d; S&P on Czech Republic sovereign debt; Fitch on Turkey sovereign debt ; Canadian rating agency DBRS on Greece sovereign debt

- 11:30 (MX) Mexico Oct PMI Manufacturing: No est v 49.1 prior

- 13:00 (US) Weekly Baker Hughes Rig Count data

- 13:00 (IT) Italy Oct New Car Registrations Y/Y: No est v 13.4% prior

- 13:00 (US) Fed's Vice Chair Clarida in NY

- 13:00 (US) Fed's Quarles

- 14:00 (MX) Mexico Oct IMEF Manufacturing Index: 47.7e v 48.1 prior; Non-Manufacturing Index: 48.0e v 48.1 prior

- 14:00 (BR) Brazil Oct Trade Balance: $1.2Be v $2.3B prior; Total Exports: $18.7Be v $18.7B prior; Total Imports: $17.6Be v $16.5B prior

- 14:30 (US) Fed's Williams, moderate, voter)