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Notes/Observations

- Stocks move higher and bond yields lower as interest rate expectations are further dialed in after Fed Waller yesterday spoke about seeing case for rate cut in several months if inflation takes on course, suggesting a move in H1 2024, alongside a significant drop in German states and Spain’s CPI readings, ahead of Germany’s national reading at 08:00 ET.

- For ECB’s rate path, Stournaras provided color by noting Apr is too optimistic for a cut, but middle of 2024 is possible.

- US Q3 GDP prelim (2nd of 3 readings) at 08:30 ET and Fed Beige Book at 14:00 ET.

- Asia closed mixed with Hang Seng under-performing at -2.2%. EU indices are -0.1% to +1.0%. US futures are +0.3-0.4%. Gold -0.1%, DXY +0.1%; Commodity: Brent +1.0%, WTI +1.1%, TTF +0.2%; Crypto: BTC +3.0%, ETH +2.2%.

Asia

- Australia Oct CPI Y/Y: 4.9% v 5.2%e.

- Australia Q3 Construction Work Done: 1.3% v 0.3%e.

- Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 5.50% (as expected) for its 4th straight pause in the current tightening cycle. Statement noted Interest rates were already restrictive and needed to remain there for a sustained period. Cautioned that inflation remained too high and remained wary of persistent price pressures. Members discussed the possibility of the need for increases to the OCR.

- BOJ Adachi reiterated stance that needed to continue with easing patiently and not at stage to discuss exit strategy.

- Japan Finance Ministry said to be planning to raise assumed rate for debt servicing for the first time in 17 years in upcoming budget proposal; during the budget request stage the rate was set at 1.50%.

Americas

- Fed's Goolsbee noted that did have concerns about keeping rates too high for too long.

- Fed's Williams (voter) noted that was encouraging to see decline in inflation pressure. Long run inflation expectations have been very stable.

- Fed Discount Rate Minutes: All Fed Reserve Banks voted to hold discount rate in both Oct, Nov.

Energy

- Weekly API Crude Oil Inventories: -0.8M v +9.1M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.48% at 459.24, FTSE -0.14% at 7,445.12, DAX +0.98% at 16,149.25, CAC-40 +0.42% at 7,280.38, IBEX-35 +0.53% at 10,056.01, FTSE MIB +0.81% at 29,615.00, SMI +0.61% at 10,825.90, S&P 500 Futures +0.32%].

Market focal points/key themes: European indices opened mixed with a bias to the upside and stayed buoyant through the early part of the session; among sectors trending higher are real estate and industrials; sectors trending lower include health care and materials; oil & gas subsector supported on reports OPEC could cut production quotas; reportedly Alstom considering sale of its US and China units; earnings expected in the upcoming US session include Hormel Foods, Foot Locker and Salesforce.

Equities

- Consumer discretionary: Deliveroo [ROO.UK] +1.5% (CMD).

- Energy: Hydro [NHY.NO] -1.5% (CMD).

- Industrials: Maersk [MAERSKB.DK] +1.0% (market update), Alstom [ALO.FR] -1.0% (said to mull selling units), BMW [BMW.DE] +3.0% (analyst upgrade), Volkswagen [VOW3.DE] +1.5% (analyst downgrade).

- Technology: Siltronic [WAF.DE] +7.0% (analyst upgrade).

- Real Estate: Aroundtown [AT1.DE] -7.5% (9M results).

Speakers

- ECB's De Guindos (Spain) noted that monetary policy should not be driven by financial position of the banks or profits of the central banks.

- ECB's Stournaras (Greece) noted that an April rate cut seems optimistic. One could come in middle of year.

- ECB regulators said to plan to push easing bank payout stance.

- BOE Gov Bailey reiterated not at a place to discuss rate cuts and had to 'get on' and bring inflation down to our target.

- Sweden Central Bank (Riksbank) Jansson noted that the risks to inflation from a weak SEK currency (Crown) have not disappeared. Did not want to have a debate about when rates were going to be cut.

- Turkey Central Bank (CBRT) Gov Erkan noted that Nov CPI reading was showing ongoing improvement in monthly readings.

- Thailand Central Bank Policy Statement noted that the decision to keep policy steady was unanimous. Current rate was appropriate for long-term growth. Saw inflation entering target range. Policy direction to depend on growth and inflation outlook.

- Thailand Central Bank Staff Projections cut the 2023 GDP growth forecast from 2.8% to 2.4% and cut 2024 GDP growth forecast from 3.8% to 3.2%. Projections also cut the 2023 CPI forecast from 1.6% to 1.3% and cut 2024 CPI forecast from 2.6% to 2.0%.

- Japan Parliament passed extra budget to fund stimulus (as expected).

- No new delay to tomorrow's OPEC+ meeting expected.

Currencies/fixed income

- USD continued to face headwinds as market participants saw growing evidence that the Fed had likely finished raising interest rates. Dealers observed some perceived dovish Fed remarks over the past day. Particularly Fed's Goolsbee who expressed concerns about keeping rates too high for too long.

- EUR/USD hovering just below the 1.10 level. Euro was slightly softer in the session as EU Nov Preliminary CPI data was making great strides toward the ECB’s 2% target. Market pricing in over 100bps of ECB rate cuts during 2024. ECB's Stournaras (Greece) noted the process could begin by mid-2024.

- USD/JPY tested an uptrend line just under 147 area during the Asian session. Pair at 147.50 by mid-session.

Economic data

- (NL) Netherlands Nov Producer Confidence: -0.5 v -1.8 prior.

- (ZA) South Africa Oct M3 Money Supply Y/Y: 6.1% v 7.1%e; Private Sector Credit Y/Y: 3.9% v 4.3%e.

- (FI) Finland Oct House Price Index M/M: -0.8% v -0.7% prior; Y/Y: -6.5% v -7.0% prior.

- (FR) France Q3 Final Private Sector Payrolls Q/Q: +0.1e v -0.1% prelim; Q3 Total Payrolls: 0.1% v 0.1% prior.

- (DE) Germany Nov CPI North Rhine Westphalia M/M: -0.3% v -0.1% prior; Y/Y: 3.0% v 3.1% prior- (TH) Thailand Central Bank (BoT) left Interest Rate unchanged at 2.50% (as expected) for its 1st pause in the current tightening cycle.

- (DE) Germany Oct Import Price Index M/M: +0.3% v -0.2%e; Y/Y: -13.0% v -13.2%e.

- (FI) Finland Sept Final Trade Balance: €0.4B v €0.4B prelim.

- (SE) Sweden Q3 GDP Q/Q: -0.3% v 0.0.%e; Y/Y: -1.4% v -1.3%e.

- (SE) Sweden Oct Trade Balance (SEK): 8.9B v 2.3B prior.

- (SE) Sweden Oct Retail Sales M/M: +1.4% v -1.4% prior; Y/Y: -1.0% v -3.8% prior.

- (TR) Turkey Nov Economic Confidence: 95.3 v 96.5 prior.

- (TR) Turkey Oct Final Trade Balance: -$6.5B v -$6.7Be.

- (ES) Spain Nov Preliminary CPI M/M: -0.4% v +0.1%e; Y/Y: 3.2% v 3.6%e.

- (ES) Spain Nov Preliminary CPI EU Harmonized M/M: -0.6% v -0.1%e; Y/Y: 3.2% v 3.7%e; CPI Core Y/Y: 4.5% v 5.0%e.

- (ES) Spain Oct Adjusted Retail Sales Y/Y: 5.0% v 6.3% prior; Retail Sales (unadj) Y/Y: 4.5% v 6.1% prior.

- (SE) Sweden Nov Consumer Confidence: 72.8 v 70.6 prior; Manufacturing Confidence: 99.1 v 99.6 prior; Economic Tendency Survey: 84.6 v 84.9 prior.

- (DE) Germany Nov CPI Hesse M/M: -0.4% v -0.1% prior; Y/Y: 2.9% v 3.6% prior.

- (DE) Germany Nov CPI Bavaria M/M:-0.4 % v 0.0% prior; Y/Y: 2.8% v 3.7% prior.

- (DE) Germany Nov CPI Brandenburg M/M: 0.3% v 0.0% prior; Y/Y: 4.1% v 4.6% prior.

- (DE) Germany Nov CPI Baden Wuerttemberg M/M: -0.3% v 0.0% prior; Y/Y: 3.4% v 4.4% prior.

- (DE) Germany Nov CPI Saxony M/M: -0.3% v 0.1% prior; Y/Y: 3.9% v 4.5% prior.

- (CH) Swiss Nov Expectations Survey: -29.6 v -37.8 prior.

- (IT) Italy Nov Consumer Confidence: 103.6 v 102.0e; Manufacturing Confidence: 96.6 v 95.9e; Economic Sentiment: 103.4 v 103.9 prior.

- (IS) Iceland Nov CPI M/M: 0.4% v 0.6% prior; Y/Y: 8.0% v 7.9% prior.

- (UK) Oct Net Consumer Credit: £1.3B v £1.5Be; Net Lending: -£0.1B v -£0.5Be.

- (UK) Oct Mortgage Approvals: 47.4K v 45.3Ke.

- (UK) Oct M4 Money Supply M/M: +0.3% v -1.1% prior; Y/Y: -3.8% v -3.9% prior; M4 (ex-IOFCs) 3-month annualized: -3.3% v -5.6% prior.

- (PT) Portugal Nov Consumer Confidence: -28.2 v -25.1 prior; Economic Climate Indicator: 1.0 v 1.0 prior.

- (EU) Euro Zone Nov Economic Confidence: 93.8 v 93.6e; Industrial Confidence: -9.5 v -9.0e; Services Confidence: 4.9 v 4.4e; Consumer Confidence (final): -17.9 v -17.9 advance.

- (IT) Italy Oct PPI M/M: 2.2% v 0.8% prior; Y/Y: -12.4% v -18.3% prior.

Fixed income issuance

- (IN) India sold total INR240B vs. INR240B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK1.98B in 3-month and 6-month Bills.

- (UK) DMO sold £4.25B in 3.5% Oct 2025 Gilts; Avg Yield: 4.554% v 4.964% prior; bid-to-cover: 2.36x v 2.61x prior; Tail: 2.0bps v 1.1bps prior.

- (SE) Sweden sold total EK20.0B vs. SEK20.0B indicated in 3-month and 12-month Bills.

- (IT) Italy Debt Agency (Tesoro) sold total €6.5B vs. €5.5-6.5B indicated range in 5-year and 10-year BTP Bonds.

- Sold €3.0B vs. €2.5-3.0B indicated range in 4.10% Feb 2029 BTP bonds; Avg Yield: 3.61% v 4.12% prior; Bid-to-cover: 1.45x v 1.45x prior (Oct 31st 2023).

- Sold €3.5B vs. €3.0-3.5B indicated range in 4.20% Mar 2034 BTP bonds; Avg Yield: 4.17% v 4.76% prior; bid-to-cover: 1.45x v 1.33x prior.

- (IT) Italy Debt Agency (Tesoro) sold €1.0B vs. €0.75-1.0B indicated range in Apr 2026 CCTeu (floating rate notes); Real Yield: 4.43% v 4.12% prior; Bid-to-cover: 1.99x v 2.00x prior.

Looking ahead

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

- 05:30 - (BE) Belgium Nov CPI M/M: No est v 0.3% prior; Y/Y: No est v 0.4% prior.

- 05:30 (DE) Germany to sell €3.5B in 2.60% Aug 2033 Bunds.

- 05:30 (GR) Greece Debt Agency (PDMA) to sell €625M in 6-month Bills.

- 05:30 (EU) ECB allotment in 3-month LTRO tender.

- 06:00 (IT) Italy Sept Industrial Sales M/M: No est v -0.4% prior; Y/Y: No est v -5.0% prior.

- 06:00 (PT) Portugal Oct Retail Sales M/M: No est v -0.3% prior; Y/Y: No est v 1.2% prior.

- 06:00 (BR) Brazil Nov FGV Inflation IGPM M/M: 0.6%e v 0.5% prior; Y/Y: -3.5%e v -4.6% prior.

- 06:00 (IE) Ireland Nov Preliminary CPI EU Harmonized Y/Y: No est v 3.6% prior.

- 06:00 (RU) Russia to sell OFZ Bonds.

- 07:00 (US) MBA Mortgage Applications w/e Nov 24th: No est v 3.0% prior.

- 07:00 (CL) Chile Oct Unemployment Rate: 8.9%e v 8.9% prior.

- 08:00 (DE) Germany Nov Preliminary CPI M/M: -0.1%e v 0.0% prior; Y/Y: 3.5%e v 3.8% prior.

- 08:00 (DE) Germany Nov Preliminary CPI EU Harmonized M/M: -0.5%e v -0.2% prior; Y/Y: 2.5%e v 3.0% prior.

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

- 08:30 (US) Q3 Preliminary GDP Annualized (2nd reading) Q/Q: 5.0%e v 4.9% prior; Personal Consumption: 4.0%e v 4.0% prior.

- 08:30 (US) Q3 Preliminary GDP Price Index (2nd reading): 3.5%e v 3.5% prior; Core PCE Q/Q: 2.4%e v 2.4% prior.

- 08:30 (US) Oct Advance Goods Trade Balance: -$86.5Be v -$86.8B prior (revised from -$85.8B).

- 08:30 (US) Oct Preliminary Wholesale Inventories M/M: 0.2%e v 0.2% prior; Retail Inventories M/M: 0.6%e v 0.9% prior.

- 08:30 (CA) Canada Q3 Current Account Balance: No est v -$6.6B prior.

- 10:05 (UK) BOE Gov Bailey.

- 10:15 (UK) BOE’s Hauser.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:00 (RU) Russia Oct Industrial Production Y/Y: 5.3%e v 5.6% prior.

- 11:00 (RU) Russia Oct Unemployment Rate: 3.1%e v 3.0% prior; Sept Real Wages Y/Y: 9.0%e v 9.5% prior.

- 11:00 (RU) Russia Oct Real Retail Sales Y/Y: 11.7%e v 12.2% prior.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (CA) Canada to sell 10 Year Bonds.

- 13:30 (MX) Mexico Central Bank (Banxico) Inflation Report.

- 13:45 (US) Fed’s Mester.

- 14:00 (US) Federal Reserve Releases Beige Book.

- 16:45 (NZ) New Zealand Oct Building Permits M/M: No est v -4.7% prior.

- 18:00 (KR) South Korea Oct Industrial Production M/M: 0.4%e v 1.8% prior; Y/Y: 4.5%e v 3.0% prior; Cyclical Leading Index Change: No est v 0.1% prior.

- 18:50 (JP) Japan Oct Retail Sales M/M: 0.4%e v 0.4% prior (revised from -0.1%); Y/Y: 6.0%e v 6.3% prior (revised from 5.8%); Dept. Store, Supermarket Sales Y/Y: No est v 4.5% prior.

- 18:50 (JP) Japan Oct Preliminary Industrial Production M/M: 0.8%e v 0.5% prior; Y/Y: +0.4%e v -4.4% prior.

- 19:00 (NZ) New Zealand Nov ANZ Business Confidence: No est v 23.4 prior; Activity Outlook: No est v 23.1 prior.

- 19:01 (UK) Nov Lloyds Business Barometer: 35e v 39 prior.

- 19:30 (AU) Australia Oct Building Approvals M/M: +1.4%e v -4.6% prior.

- 19:30 (AU) Australia Oct Private Sector Credit M/M: 0.4%e v 0.5% prior; Y/Y: No est v 4.9% prior.

- 20:30 (CN) China Nov Manufacturing PMI (Govt Official): 49.8e v 49.5 prior; Non-Manufacturing PMI: 50.9e v 50.6 prior; Composite PMI: No est v 50.7 prior.

- 20:30 (JP) BOJ Board member Nakamura.

- 21:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Expected to leave 7-day Repo Rate unchanged at 3.50%.

- 21:00 (SG) Singapore Oct M2 Money Supply Y/Y: No est v 4.1% prior; M1 Money Supply Y/Y: No est v -3.6% prior.

- 21:00 (NZ) New Zealand to sell combined NZ$500M in 2030, 2032 and 2051 bonds.

- 22:35 (JP) Japan to sell 2-Year JGB Bonds.

- 23:00 (TH) Thailand Oct ISIC Manufacturing Production Y/Y: -1.6%e v -6.1% prior; Capacity Utilization: No est v 58.0% prior.

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