German ZEW survey paints the picture the worst is behind on the country in terms of economic performance

EU mid-market update: German ZEW survey paints the picture the worst is behind on the country in terms of economic performance; UK wage data mixed.

Notes/observations

- Slight risk on tones ahead of US Oct CPI later with equities holding in the green and US dollar dipping. Release is highly anticipated, as traders see a high reading bringing a hike back on the table for Fed, while a lower reading cementing terminal rate at current level. Expecting US Oct Retail Sales on Wed as another key indicator of state of US economy and consumer health.

- UK employment and wage data took focus in EU morning trade, showing slowing employment growth while wage growth remained high. Analysts noted data did little to change market expectations of Bank of England rate path in 2024.

- Asia closed mixed with KOSPI outperforming at +1.2%. EU indices are -0.3% to +0.4%. US futures are +0.1-0.3%. Gold +0.1%, DXY -0.1%; Commodity: Brent 0.0%, WTI 0.0%, TTF -3.1%; Crypto: BTC -1.3%, ETH -0.3%.

Asia

- Australia Nov Westpac Consumer Confidence: 79.9 v 82.0 prior.

- Australia Oct NAB Business Confidence: -2 v +1 prior; Business Conditions: 13 v 11 prior.

- China Fin Min Lan Foan reiterated that expected domestic economy to maintain upward trend in Q4.

- BOJ Dir General of Monetary Affairs Dept Masaki stated that did not see long-term interest rates greatly exceeding 1.00% even with rising pressure.

- BOJ Uchida declined to comment on FX levels; Wanted to continue to support economic. Reiterated key is whether wages rise to support consumer spending.

- Japan Fin Min Suzuki reiterated stance that excessive FX moves were undesirable.

- Japan's govt was said to be considering tax breaks for firms that granted 8% wage increases.

Americas

- Treasury Sec Yellen stated that she had productive meetings with China Fin Min Lan Foan this week; She noted that she disagreed with Moody's decision to lower the US sovereign outlook to negative.

- House to vote on stopgap funding bill on Tues [Nov 14th].

Energy

- DOE to buy 1.2M barrels of oil from 2 companies for SPR; average purchase price of $77.57/barrel.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.23% at 447.64, FTSE -0.22% at 7,409.32, DAX +0.43% at 15,410.45, CAC-40 +0.19% at 7,100.34, IBEX-35 +0.50% at 9,509.24, FTSE MIB +0.45% at 29,056.00, SMI +0.52% at 10,645.90, S&P 500 Futures +0.20%].

Market focal points/key themes: European indices open higher across the board and remained largely in postive territory through the early part of the session; better performing sectors include materials and utilities; sectors under pressure include telecom and financial services; Teck Resources confirms divestment of its steelmaking coal unit to Glencore and Nippon Steel; focus on US CPI to be released later in the day; earnings expected in the upcoming US session include Home Depot and Vipshop.

Equities

- Consumer discretionary: Delivery Hero [DHER.DE] +4.5% (earnings).

- Consumer staples: Imperial Brands [IMB.UK] -0.5% (earnings).

- Telecom: Vodafone [VOD.UK] -2.0% (earnings).

- Financials: Deutsche Bank [DBK.DE] +1.5% (Q4 trends).

- Utilities: RWE [RWE.DE] +2.5% (earnings).

- Industrials: Airbus [AIR.FR] +0.5% (DHL is considering a large, long-term order; Emirates Pres: Not ordering with Airbus until A350 engine fixed).

- Technology: Infineon [IFX.DE] +1.0% (Foxconn guidance), Wise [WISE.UK] -0.5% (earnings).

- Materials: Glencore [GLEN.UK] +3.0% (Teck confirms sale of steelmaking coal business to Glencore and Nippon Steel for $9.0B).

Speakers

- SNB Pres Jordan reiterated stance that would not hesitate to tighten monetary policy further, if required.

- German ZEW Economists noted that observations supported the impression that domestic economic development had bottomed out.

- China govt said to be mulling CNY1.0T (~$137B) of new funding to boost housing market (**Reminder: On Oct 23rd, China reportedly planned to issue >CNY1.0T additional sovereign debt in Nov; Debt was said to be among the measures the Chinese government was taking to shore up the economy during down cycles.

- IEA Monthly Oil Report raised the 2023 global oil demand growth from 2.3M to 2,4M bpd and also raised the 2024 global oil demand growth from 880K to 930K bpd. It did not see any material impact on supply from Israel-Hamas war.

Currencies/fixed income

- USD price action was lackluster ahead of the US CPI data due out later in the session. Dealers noted that a sufficient fall in inflation would cement expectations that the Fed rate-hiking cycle was over; while a higher-than-expected reading could make another rate increase likely.

- UK unemployment and wage data were the focus for the GBP. Dealers noted that UK slower wage growth increased the chances the Bank of England might cut rates in the first half of 2024. Markets currently pricing just a one-in-five chance of a further rate hike this cycle, while continuing to see the first 25bp cut in Aug next year.

- EUR/USD drifted above the 1.07 level as German ZEW Survey painted a picture that the worst was behind the country in terms of economic performance.

- USD/JPY staying below the 152 level for the time being. Dealers note that BOJ’s ultra-easy monetary policy settings remained at odds with the prospect of higher-for-longer rates elsewhere. There remains concerns over Japanese FX intervention by numerous govt officials won’t comment on current levels. Dealers keenly aware that back in October 2022 the BOJ did intervene to cap yen currency weakness just under the 132 level.

Economic data

- (SE) Sweden Oct PES Unemployment Rate: 3.2% v 3.2% prior.

- (NO) Norway Q4 Consumer Confidence: -33.5 v -31.7 prior.

- (FI) Finland Oct CPI M/M: 0.3% v 0.7% prior; Y/Y: 4.9% v 5.5% prior.

- (FI) Finland Sept GDP Indicator Y/Y: -0.2% v +0.3% prior.

- (FI) Finland Sept Final Retail Sales Volume Y/Y: -3.5% v -3.3% prelim.

- (IN) India Oct Wholesale Prices (WPI) Y/Y: -0.5% v -0.4%e.

- (UK) Oct Jobless Claims Change: +17.8K v +9.0K prior; Claimant Count Rate: 4.0% v 4.0% prior.

- (UK) Sept Average Weekly Earnings 3M/Y: 7.9% v 7.3%e; Weekly Earnings (ex-bonus) 3M/Y: 7.7% v 7.7%e.

- (UK) Q3 ONS Unemployment Rate: 4.2% (experimental data).

- (SE) Sweden Oct CPI M/M: 0.2% v 0.4%e; Y/Y: 6.5% v 6.6%e; CPI Level: 409.07 v 409.7e.

- (SE) Sweden Oct CPIF M/M: 0.1% v 0.3%e; Y/Y: 4.2% v 4.4%e.

- (SE) Sweden Oct CPIF (ex-energy) M/M: 0.1% v 0.3%e; Y/Y: 6.1% v 6.3%e.

- (DK) Denmark Q3 GDP Indicator Q/Q: -0.3% v _0.2% prior.

- (RO) Romania Q3 Advance GDP Q/Q: 0.4% v 0.4%e; Y/Y: 0.2% v 2.3%e.

- (CH) Swiss Oct Producer & Import Prices M/M: +0.2% v -0.1% prior; Y/Y: -0.9% v 1.0% prior.

- (HU) Hungary Q3 Preliminary GDP Q/Q: 0.9% v 0.5%e; Y/Y: -0.4% v -0.5%e.

- (ES) Spain Oct Final CPI M/M: 0.3% v 0.3% prelim; Y/Y: 3.5% v 3.5% prelim.

- (ES) Spain Oct Final CPI EU Harmonized M/M: 0.3% v 0.3% prelim; Y/Y: 3.5% v 3.5% prelim.

- (ES) Spain Oct Final CPI Core M/M: +0.4% v -0.1% prior; Y/Y: 5.2% v 5.2% prelim.

- (NL) Netherlands Q3 Preliminary GDP Q/Q: -0.2% v -0.1%e; Y/Y: -0.6% v -0.2% prior.

- (NL) Netherlands Sept Trade Balance: €13.3B v €6.3B prior; Exports Y/Y: -4.8% v +0.5% prior; Imports Y/Y:-7.2 % v -6.2% prior.

- (NL) Netherlands Sept Consumer Spending Y/Y: -1.9% v +0.5% prior.

- (PL) Poland Q3 Preliminary GDP Q/Q:1.4 % v 1.9%e; Y/Y: 0.4% v 0.4%e.

- (ZA) South Africa Q3 Unemployment Rate: 31.9% v 32.5%e.

- (EU) Euro Zone Q3 Preliminary GDP (2nd of 3 readings) Q/Q: -0.1% v -0.1% advance; Y/Y: 0.1% v 0.1% advance.

- (EU) Euro Zone Q3 Preliminary Employment Q/Q: 0.3% v 0.1% prior; Y/Y: 1.4% v 1.3% prior.

- (EU) Euro Zone Nov ZEW Survey Expectations: 13.8 v 2.3 prior.

- (DE) Germany Nov ZEW Current Situation Survey: -79.8 v -76.8e; Expectations Survey: 9.8 v 5.0e.

- (CY) Cyprus Q3 Preliminary GDP Q/Q: +1.1% v -0.4% prior; Y/Y: 2.5% v 2.2% prior.

Fixed income issuance

- (EU) European Union opened its book to sell EUR-denominated 5-year and 25-year notes via syndicate.

- (ID) Indonesia sold total IDR19.0T vs. IDR19.0T target in bills and bonds.

- (ES) Spain Debt Agency (Tesoro) sold total €1.97B vs. €1.5-2.5B indicated range in 3-month and 9-month bills.

- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2031, 2044 and 2053 bonds.

Looking ahead

- (CO) Colombia Oct Consumer Confidence: No est v -17.9 prior.

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

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

- 05:30 (DE) Germany to sell €5.0B in 3.10% Dec 2025 Schatz.

- 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 (US) Oct NFIB Small Business Optimism Index: 90.5e v 90.8 prior.

- 06:00 (PT) Portugal Q3 Labour Costs Y/Y: No est v 3.5% prior.

- 06:00 (FI) Finland to sell 6-month and 9-month bills.

- 06:30 (CL) Chile Central Bank (BCCh) Oct Minutes.

- 07:00 (BR) Brazil Sept IBGE Services Volume M/M: 0.4%e v -0.9% prior; Y/Y: 0.5%e v 0.9% prior.

- 07:00 (UK) BOE’s Dhingra.

- 07:30 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

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

- 08:30 (US) Oct CPI M/M: 0.1%e v 0.4% prior; Y/Y: 3.3%e v 3.7% prior.

- 08:30 (US) Oct CPI (ex-food/energy) M/M: 0.3%e v 0.3% prior; Y/Y: 4.1%e v 4.1% prior.

- 08:30 (US) Oct CPI Index NSA: 307.857e v 307.789 prior; CPI Core (seasonally adj): 311.666e v 310.661 prior.

- 08:30 (US) Oct Real Avg Hourly Earning Y/Y: No est v 0.5% prior; Avg Weekly Earnings Y/Y: No est v -0.1% prior

- 08:45 (UK) BOE’s Pill (chief economist).

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

- 10:00 (CO) Colombia Sept Manufacturing Production Y/Y: -7.5%e v -8.6% prior; Industrial Production Y/Y: -3.6%e v -4.6% prior.

- 10:00 (CO) Colombia Sept Retail Sales Y/Y: -8.5%e v -10.0% prior.

- 12:00 (FR) ECB’s Villeroy (France).

- 12:45 (US) Fed’s Goolsbee.

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

- 16:45 (NZ) New Zealand Oct Total Card Spending M/M: No est v -0.1% prior; Retail Card Spending M/M: No est v -0.8% prior.

- 16:45 (NZ) New Zealand Sept Net Migration: No est v 10.0K prior.

- 18:00 (KR) South Korea Oct Unemployment Rate: 2.7%e v 2.6% prior.

- 18:50 (JP) Japan Q3 Preliminary GDP Q/Q: -0.1%e v +1.2% prior; Annualized Q/Q: -0.4%e v 4.8% prior; GDP Nominal Q/Q: 0.6%e v 2.7% prior.

- 18:50 (JP) Japan Q3 Preliminary GDP Deflator Y/Y: 4.8%e v 3.5% prior; GDP Private Consumption Q/Q: +0.3%e v -0.6% prior; GDP Business Spending Q/Q: +0.1%e v -1.0% prior; Inventory Contribution % GDP: -0.1%e v -0.2% prior.

- 19:30 (AU) Australia Q3 Wage Price Index Q/Q: 1.3%e v 0.8% prior; Y/Y: 3.9%e v 3.6% prior.

- 20:20 (CN) China PBOC Monthly Loan Prime Rate (LPR) Setting: Expected to leave rate unchanged at 2.50%.

- 21:00 (CN) China Oct Industrial Production Y/Y: 4.1%e v 4.5% prior; YTD Y/Y: 4.1%e v 4.0% prior.

- 21:00 (CN) China Oct Retail Sales Y/Y: 7.0%e v 5.5% prior; YTD Y/Y: 6.9%e v 6.8% prior.

- 21:00 (CN) China Oct YTD Fixed Urban Assets Y/Y: 3.1%e v 3.1% prior.

- 21:00 (CN) China Oct YTD Property Investment Y/Y: -9.1%e v -9.1% prior; Residential Property Sales Y/Y: No est v -3.2% prior.

- 21:00 (CN) China Oct Surveyed Jobless Rate: 5.0%e v 5.0% prior.

- 21:10 (JP) BOJ bond buying operation.

- 23:00 (ID) Indonesia Oct Trade Balance: $2.9Be v $3.4B prior; Exports Y/Y: -16.5%e v -16.2% prior; Imports Y/Y: -7.6%e v -12.5% prior.

- 23:30 (JP) Japan Sept Final Industrial Production M/M: No est v 0.2% prelim; Y/Y: No est v -4.6% prelim; Capacity Utilization M/M: No est v 0.5% prior.