Traders look to upcoming jobs report for additional clarity on US economy

EU mid-market update: Traders look to upcoming jobs report for additional clarity on US economy; Awaiting Hezbollah leader announcement as Israel on 'very very high alert'.

Notes/observations

- Focus on US jobs data after a positive start for European indices this morning following a collection of key central bank decisions this week which saw BoJ, Fed and BoE leave policy unchanged.

- Apple results weigh on Nasdaq futures after Nasdaq yesterday had its best day since Apr.

- For the Middle East, US Sec of State Blinken landed in Israel again, while we expect an announcement by militant group Hezbollah (Iran backed) in Lebanon at approx. 09:00 ET.

- Relatively quiet session for news flow with Japan markets closed.

- Expecting to hear from Fed’s Barr, Barkin and Kashkari.

- EU Earnings Recap: Maersk top line miss, bottom line beat, trimmed FY23 guidance, announces 10K job cuts and notes 2024 buyback under review; BMW Q3 showed upbeat margins and sees robust US and EU markets; Raiffeisen beats on top line but cuts FY23 and suspends mid-term guidance; Soc Gen figures missed estimates, lowered cost of risk outlook.

- Asia closed higher with Hang Seng out-performing at +2.6%. EU indices are +0.0-0.2%. US futures are -0.4% to +0.1%. Gold +0.2%, DXY 0.0%; Commodity: Brent +0.1%, WTI +0.2%, TTF +1.3%; Crypto: BTC -2.6%, ETH -2.1%.

Asia

- China Oct Caixin PMI Services: 50.4 v 51.0e; PMI Composite: 50.0 v 50.9 prior.

- Australia Q3 Retail Sales Q/Q: +0.2% v -0.3%e.

-Final New Zealand Election Results: National Party loses 2 seats to 48; the party needs Act and New Zealand First parties in order to form a majority government.

-Indonesia Central Bank (BI): Will strengthen Rupiah (IDR) stabilization measures to be in line with currency fundamentals.

-Taiwan said to consider removing ban on group tours to China in 2024- Taiwan press.

-China Foreign Min Wang Wenbin: Hope to enhance mutual trust with Australia.

-Reportedly South Korea is gathering local banks to help Poland finance $22B worth of South Korean weapons in its largest arms sale – press.

-South Korea govt reportedly mulls new temporary ban on stock short selling until system improvement is completed - Korean press.

-Taiwan Central Bank FX Head Tsai: Foreign outflows dropped m/m.

Global conflict/tensions

- US has intelligence said to show Russia's Wagner Group planned to supply SA-22 air defense systems to Lebanon's Hezbollah.

- White House Kirby noted that the US was concerned about strikes on Israeli forces in North. had not seen evidence that Hezbollah is ready to go full force.

- Israel military spokesperson: Israeli military on 'very very high alert' on Israel's Northern border with Lebanon; Will respond to every even along Northern border today and in days to come.

-Reminder: Hezbollah Secretary General Hasan Nasrallah to give first public speech since Israel-Gaza war started today, Nov 3rd around 09:00 ET (13:00GMT).

Europe

- Swiss regulators said to be considering ways to prevent bank runs. Measures implemented could include 'staggering' withdrawals and imposing exit fees.

- Hungary said to tweak extraordinary retail tax rates - press.

- UK BOE's Hauser stated need to ensure banks' liquidity insurance remains appropriate as tech change increases the risk of larger and faster deposit run - text.

Americas

- Treasury Sec Yellen noted that a complete separation of US and China economies was simply not practical and would have disastrous effects globally.

- Sam Bankman-Fried (SBF) found guilty on 7 count charges regarding defrauding FTX customers by NY jury, facing up to 115 years of prison sentence.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.24% at 444.56, FTSE +0.40% at 7,476.29, DAX +0.47% at 15,215.15, CAC-40 +0.36% at 7,086.39, IBEX-35 +0.29% at 9,287.47, FTSE MIB +0.62% at 28,657.00, SMI +0.50% at 10,645.40, S&P 500 Futures -0.12%].

Market focal points/key themes: European indices open higher across the board; sectors leading the way into the green include real estate and industrials; lagging sectors include financials and consumer discretionary; Vonovia shares supporting the real estate sector after better results and news Apollo was taking a minority stake; automotive subsector supported following better than expected results from BMW; focus on release of US jobs figures later in the day; reportedly Siemens Healthineers looking at options for its in-vitro diagnostics unit; earnings expected in the upcoming US session include Magna International, Telus, Fluor and Cardinal Health.

Equities

- Consumer discretionary: AP Moller Maersk [MAERSKB.DK] -9.0% (earnings, top line miss, bottom line beat, to cut 10K jobs, 2024 buyback under review, trims FY23 guidance), Brunel [BRNL.NL] -11.0% (earnings).

- Energy: Spie [SPIE.FR] +3.5% (earnings).

- Financials: Raiffeisen Bank [RBIT.AT] +4.5% (earnings), Swiss Re [SREN.CH] -0.5% (earnings).

- Healthcare: Siemens Healthineers [SHL.DE] +3.5% (considering options for the unit), Solvay [SOLB.BE] -0.5% (earnings).

- Industrials: BMW [BMW.DE] +2.5% (earnings).

- Technology: ams OSRAM [AMS.CH] +6.5% (Apple earnings and guidance).

Speakers

-ECB Schnabel (Germany) said cannot close the door to further rate hikes; progress on inflation seen so far is encouraging but cannot declare victory too early against inflation.

-Thailand Central Bank Gov Sethaput said THB (Baht) volatility at 8-9% higher than in the past.

Currencies/fixed income

- US dollar little changed after weakening overnight and then paring losses as EU markets opened. Market digesting week of policy decisions and ahead of US jobs data later.

- GBP/USD little below 1.22 handle at 1.2190.

- EUR/USD at 1.0630.

- USD/JPY holds above 150 after starting week below, latest at 150.40.

Economic data

-01:00 (SG) Singapore Sept Retail Sales M/M: -1.6% v +1.9% prior; Y/Y: 0.6% v 1.6%e; Retail Sales (-ex-auto) Y/Y: 0.5% v 4.0% prior.

-01:00 (IN) India Oct PMI Services: 58.4 v 61.0 prior (27th straight expansion but lowest Mar 2023); PMI Composite: 58.4 v 61.0 prior.

- 02:00 (RU) Russia Oct Services PMI: 53.6 v 55.4 prior; Composite PMI: 53.6 v 54.7 prior.

- 03:00 (DE) Germany Sept Trade Balance: €16.5B v €16.3Be; Exports M/M: -2.4% v -2.0%e; Imports M/M: -1.7% v -0.1%e.

- 03:00 (TR) Turkey Oct CPI M/M: 3.4% v 4.1%e; Y/Y: 61.4% v 62.5%e ; CPI Core Index Y/Y: 69.8% v 70.9%e.

- 03:00 (TR) Turkey Oct PPI M/M: 1.9% v 3.4% prior; Y/Y: 39.4% v 47.4% prior.

- 03:15 (ZA) South Africa Oct PMI (whole economy): 48.9 v 49.9 prior.

- 03:30 (SE) Sweden Oct PMI Services: 48.5 v 47.0e; PMI Composite: 47.7 v 45.4 prior.

- 03:30 (TH) Thailand Oct Foreign Reserves w/e Oct 27th: $211.2B v $210.7B prior.

- 03:30 (CN) Weekly Shanghai copper inventories (SHFE): 40.5K v 36.5K tons prior.

- 03:45 (FR) France Sept Industrial Production M/M: -0.5% v 0.0%e; Y/Y: -0.1% v 0.0%e.

- 03:45 (FR) France Sept Manufacturing Production M/M: -0.4% v 0.1%e; Y/Y: -0.9% v -1.1% prior.

- 03:45 (FR) France Q3 Preliminary Private Sector Payrolls Q/Q: -0.1% v 0.1% prior.

- 04:00 (ES) Spain Oct Net Unemployment Change: +36.9K v +19.8K prior.

- 04:00 (RU) Russia Narrow Money Supply w/e Oct 27th (RUB): 18.47T v 18.59T prior.

- 04:00 (BR) Brazil Oct FIPE CPI (Sao Paulo) M/M: 0.3% v 0.2%e.

- 04:20 (TW) Taiwan Oct Foreign Reserves: $561.1B v $564.0B prior.

- 05:00 (IT) Italy Sept Unemployment Rate: 7.4% v 7.4%e.

- 05:00 (NO) Norway Oct Unemployment Rate: 1.8% v 1.8%e.

- 05:00 (UN) FAO Oct World Food Price Index: 120.6 v 121.5 prior.

- 05:00 (CN) China Q3 Preliminary Current Account: $62.6B v $64.7B prior.

Fixed income issuance

-Taiwan sells NT$140B of 1-year Certificates of Deposit: Avg Yield: 1.195%; bid-to-cover: 1.37x.

-India sells total INR300B vs. INR300B indicated in 2028, 2033 and 2073 bonds.

Looking ahead

- 05:30 (UK) Oct Final Services PMI: 49.2e v 49.2 prelim (confirmed 3rd straight contraction); Composite PMI: 48.6e v 48.6 prelim.

- 05:30 (UK) Oct Official Reserves Changes: No est v -$1.8B prior.

- 06:00 (EU) Euro Zone Sept Unemployment Rate: 6.4%e v 6.4% prior.

- 06:00 (GR) Greece Sept Unemployment Rate: No est v 10.9% prior.

- 06:00 (BE) Belgium Sept Unemployment Rate: No est v 5.5% prior.

- 06:00 (EU) Daily Euribor Fixing.

- 06:00 (FR) France Debt Agency (AFT) announcements on upcoming issuance.

- 06:30 (EU) ECB Centeno.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 07:00 (EU) ECB De Cos.

- 07:00 (UK) DMO to sell £5.5B in 1-month, 3-month and 6-month bills.

- 07:00 (BE) Belgium Debt Agency (BDA) to sell Bonds through Ori Auction.

- 07:30 (IN) India Weekly Forex Reserve w/e Oct 27th: No est v $583.5B prior.

- 07:30 (IS) Iceland to sell 2028 and 2037 Bonds.

- 08:00 (US) Fed Barr.

- 08:00 (IN) India announces upcoming bill issuance (held on Wed).

- 08:00 (MX) Mexico Sept Leading Indicators M/M: No est v 0.08 prior.

- 08:00 (MX) Mexico Aug Gross Fixed Investment M/M: 1.2%e v 0.5% prior; Y/Y: 27.6%e v 29.1% prior; Private Consumption Y/Y: No est v 4.0% prior.

- 08:00 (MX) Mexico Oct Vehicle Domestic Sales: No est v 118.1K prior.

- 08:15 (UK) BOE Pill (Chief Economist).

- 08:30 (US) Oct Change in NonFarm Payrolls: +180Ke v +336K prior; Change in Private Payrolls: No est v +263K prior; Change in Manufacturing Payrolls: No est v +17K prior.

- 08:30 (US) Oct Unemployment Rate: No est v 3.8% prior; Underemployment Rate: No est v 7.0% prior; Labor Force Participation Rate: No est v 62.8% prior.

- 08:30 (US) Oct Average Hourly Earnings M/M: No est v 0.2% prior; Y/Y: No est v 4.2% prior; Average Weekly Hours: No est v 34.4 prior.

- 08:30 (CA) Canada Oct Net Change in Employment: +25.0Ke v +63.8K prior; Unemployment Rate: 5.6%e v 5.5% prior; Full Time Employment Change: No est v +15.8K prior; Part Time Employment Change: No est v +47.9K prior; Participation Rate: No est v 65.6% prior; Hourly Wage Rate M/M: No est v 5.3%.

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

- 09:45 (US) Oct Final S&P Services PMI: 50.9e v 50.9 prelim; Composite PMI: No est v 51.0 prelim.

- 10:00 (US) Fed Barkin.

- 10:00 (US) Oct ISM Services Index: No est v 53.6 prior.

- 12:00 (UK) BOE Haskel.

- 12:45 (US) Fed Kashkari.

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

- 15:30 (US) Fed Barr.

- 18:00 (CO) Colombia Central Bank Oct Meeting Minutes.