Awaiting FOMC minutes – Hamas and Israel said to release details of hostage deal as soon as today

Notes/observations

- Most assets trade flat to mixed amid a session light on news.

- UK Oct public finance data was worse on all counts, ahead of financial Autumn Statement tomorrow, Nov 22nd.

- FOMC minutes to be released at 14:00 ET (19:00 GMT).

- Asia closed mixed with KOSPI out-performing at +0.8%. EU indices are -0.7% to +0.1%. US futures are -0.2%. Gold +0.5%, DXY -0.1%; Commodity: Brent -0.5%, WTI -0.6%, TTF -0.6%; Crypto: BTC +0.4%, ETH -1.3%.

Asia

- RBA Nov Minutes noted that credible case that a somewhat slower return of inflation to target did not warrant a policy response. Pause decision was influenced that inflation was continuing to decline in year-ended terms, the economy was slowing, and the geopolitical and economic outlook was highly uncertain. Staff forecasts for inflation at meeting assumed 1 or 2 more rate hikes.

- RBA Gov Bullock stated on a panel that inflation was the crucial challenge over the next 1 or 2 years.

- Japan Coast Guard: Got notice from North Korea of planned satellite rocket launch between Nov 22-Dec 1s.

Global conflict/tensions

- Hamas official noted that details of a temporary humanitarian truce in exchange for the release of hostages would be announced in coming hours.

- Israel said to release three Palestinian prisoners held in its prisons for each Israeli hostage that will be released by Hamas as part of the hostage deal.

Europe

- ECB’s Villeroy (France) noted that reliance on forward guidance probably excessive. ECB would bring inflation toward 2% by 2025. Was not fixated on 2.0% to the nearest decimal place. Would have to discontinue our PEPP reinvestments in due time, possibly earlier than end of 2024; No reason for ECB to commit order of PEPP wind-down.

- EU draft fiscal assessment places France on a fiscal watch list. Germany and Italy are deemed not fully compliant with the EU’s fiscal guidance.

Americas

- Fed’s Barkin (2024 voter) noted that was not a big time for offering forward guidance, will respond to data. Focusing on inflation to decide rate moves. Stressed that 'higher for longer' policy depended on how the economy evolved.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.14% at 455.64, FTSE -0.47% at 7,461.17, DAX +0.11% at 15,918.75, CAC-40 -0.26% at 7,228.04, IBEX-35 -0.09% at 9,830.61, FTSE MIB -0.70% at 29,335.00, SMI +0.20% at 10,761.50, S&P 500 Futures -0.09%].

Market focal points/key themes: European indices open generally in the red and remained under pressure through the early part of the session; better performing sectors include materials and technology; sectors pushing lower include financials and energy; Evolva to be acquired by Lallemand; Italian government sells stake in Banca Monte Dei Paschi; TotalEnergies completes sales of its Canadian upstream assets; CRH acquires a portfolio of concrete assets from Martin Marietta; earnings expected during the upcoming US session include Best Buy, Nvidia, Lowe’s and Abercrombie & Fitch.

Equities

- Consumer discretionary: LVMH [MC.FR] -1.5% (analyst downgrade), International Consolidated Airlines Group [IAG.UK] +1.0% (CMD; plans to reinstate dividend in future), AO World [AO.UK] -2.0% (earnings).

- Financials: Banca Monte dei Paschi di Siena [BMPS.IT] -5.5% (Italy to sell about 20% of shares).

- Technology: Teamviewer [TMV.DE] -8.0% (placement), Sonova [SOON.CH] +6.5% (earnings, cuts FY EBITA guidance).

- Materials: CRH plc [CRH.UK] +2.5% (earnings; divestment).

Speakers

- ECB Report on commercial real estate (CRE) noted that challenges in sector could amplify economic stress.

- Poland Central Bank (NBP) Janczyk saw room for significant rate cuts in 2024 and beyond.

- Czech Central Bank Vice Gov Zamrazilova noted that was waiting for more data to decide on Czech rates.

- Russia Fin Min Siluanov stressed that the country could not allow inflation to spiral.

- Russia Foreign Ministry reiterated view that Ukraine's current regime was absolutely toxic, there was no way to coexist with it; Our special military operation would end when Ukraine's regimes came to an end.

- Russia Dep PM Novak noted that domestic 2023 gas output seen down 30Bcm y/y.

- IEA Head Birol cautioned that oil was on the edge over crisis in the Middle East.

- Philippine Pres Marcos stated that US and Philippines to begin joint patrols in South China Sea.

- India Finance Ministry Monthly Economic Review noted that the decline in oil prices and continued moderation in Core CPI likely to control inflationary pressures going forward.

Currencies/fixed income

- USD continued its weak performance thus extending its selloff from last week. Focus turns to FOMC Nov minutes due out later today. The story remained the same for Monday’s update as markets continued to believe the Fed was done with rate hikes and speculated when the Fed could begin cutting rates. Currently markets saw a 30% chance the Fed could begin lowering rates as early as next March.

- EUR/USD edging closer towards the 1.10 level.

- USD/JPY at 147.70 by mid-session.

Economic data

- (FI) Finland Oct Unemployment Rate: 6.8% v 7.0% prior.

- (CH) Swiss Oct Trade Balance (CHF) 4.6B v 6.3B prior; Real Exports M/M: -7.2% v +3.8% prior; Real Imports M/M: -3.1% v -0.7% prior; Watch Exports Y/Y: 5.1% v 4.2% prior.

- (EU) EU27 Oct New Car Registrations: 14.6% v 9.2% prior.

- (UK) Oct Public Finances (PSNCR): +£13.3B v -£11.7B prior; PSNB (ex-banking groups): £14.9B v £13.7Be; Net Borrowing: £14.0B v £17.8Be; Central Govt NCR: £18.2B v £15.1B prior.

- (UK) Q3 Preliminary Output Per Hour Y/Y: -0.3% v +0.3% prior

- (SE) Sweden Q3 Industry Capacity: 90.0% v 90.5% prior.

- (ZA) South Africa Sept Leading Indicator: 111.6 v 110.9 prior.

- (FR) France Oct Retail Sales Y/Y: -2.8% v -4.5% prior.

- (CH) Swiss Oct M3 Money Supply Y/Y: -2.5% v -2.9% prior.

- (HK) Hong Kong Oct CPI Composite Y/Y: 2.7% v 2.1%e.

- (PL) Poland Oct Sold Industrial Output M/M: 4.1% v 4.1%e; Y/Y: 1.6% v 1.7%e.

- (PL) Poland Oct Employment M/M: 0.0% v 0.0%e; Y/Y: -0.1% v 0.0%e.

- (PL) Poland Oct Avg Gross Wages M/M: 2.2% v 1.5%e; Y/Y:12.8 % v 12.0%e.

- (PL) Poland Oct PPI M/M: -0.5% v -0.2%e; Y/Y: -4.1% v -3.7%e.

- (ZA) South Africa Q4 BER Business Confidence: 31 v 37e.

Fixed income issuance

- (ID) Indonesia sold total IDR9.73T vs. IDR9.0T target in Islamic bills and bonds (sukuk); Bid-to-cover: 1.91x.

- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2040, 2044 and 2048 bonds.

Looking ahead

- EU Commission opinion on the national budgets for 2024.

- (AR) Argentina Oct Budget Balance (ARS): No est v -38.1B prior.

- (CO) Colombia Oct Retail Confidence: No est v 15.1 prior; Industrial Confidence: No est v 0.8 prior.

- (MX) Mexico CitiBanamex Survey of Economists.

- 05:15 (UK) BOE Gov Baily testifies in Parliament.

- 05:15 (CH) Switzerland to sell 3-month Bills.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €3.5B in 2.4% Oct 2028 BOBL.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 06:00 (FI) Finland to sell combined €1.0B in 2033 and 2036 RFGB Bonds.

- 06:30 (EU) ESM to sell €1.1B in 6-month Bills.

- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to cut Base rate by 75bps to 11.50%.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Oct Chicago Fed National Activity Index: No est v +0.02 prior.

- 08:30 (US) Nov Philadelphia Fed Non-Manufacturing Regional Index: No est v -20.3 prior.

- 08:30 (CA) Canada Oct CPI M/M: +0.1%e v -0.1% prior; Y/Y: 3.1%e v 3.8% prior; CPI Core- Trim Y/Y: 3.6%e 3.7% prior; CPI Core- Median Y/Y: 3.6%e v 3.8% prior; Consumer Price Index 158.8e v 158.5 prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 10:00 (US) Oct Existing Home Sales: 3.90Me v 3.96M prior.

- 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills.

- 11:00 (EU) ECB chief Lagarde with Germany Fin Min Lindner in Berlin.

- 11:30 (US) Treasury to sell 2-Year FRN Reopening.

- 12:00 (EU) ECB's Schnabel (Germany).

- 12:35 (EU) Centeno (Portugal).

- 13:00 (US) Treasury to sell 10-Year TIPS Reopening.

- 14:00 (US) Nov FOMC Meeting Minutes.

- 16:30 (US) Weekly API Oil Inventories.

- 18:00 (NL) Netherlands Oct House Price Index M/M: No est v 0.6% prior; Y/Y: No est v -3.5% prior.

- 18:30 (AU) Australia Oct Westpac Leading Index M/M: No est v 0.1% prior.

- 19:00 (SG) Singapore Q3 Final GDP Q/Q: 1.1%e v 1.0% prelim; Y/Y: 0.8%e v 0.7% prelim.

- 20:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 5~10 Years and 25Years~ maturities.

- 21:35 (CN) China to sell 2024 and 2028 Bonds.

- 21:00 (AU) Australia to sell A$700M indicated in 3.50% Dec 2034 bonds.

- 22:00 (KR) South Korea Q3 Short-Term External Debt: No est v $161.9B prior.

- 22:00 (TH) Thailand to sell combined THB37B in 227 and 2043 bonds.