Quiet start to shortened trading week

Notes/Observations

- Quiet start to trade shorten Thanksgiving week.

- Awaiting Biden announcement on Fed chair.

Policy divergence between Fed and ECB and BOJ remain in focus.

Asia

- China Foreign Exchange Market Self-Discipline Mechanism [PBOC led group] said to comment on the FX proprietary trading of domestic banks, said to ask banks to cap the size of proprietary trading accounts related to FX.

- China PBoC Monthly Loan Rate Setting Operation left both the 1-year and 5-year rates unchanged for the 19th consecutive month of steady rates.

Coronavirus

- German govt officials said to be debating making vaccinations compulsory. Several members of Chancellor Merkel’s Conservative bloc said that Federal and State govts should introduce them soon (On Fri, Nov 19th German Foreign Min Haas said to rule out national general lockdown amid rise in COVID case)
- Netherlands saw a 2nd night of riots as people took to streets to protest against new lockdown rules.

Europe

- EU said to be planning to increase restrictions on banks' use of cross border permissions [method used by non Euro Zone banks to sell certain activities in the EU].

- UK Brexit Min Frost confirmed that talks with EU's Sefcovic to continue into week of Nov 22nd; Talks had been intensive and constructive. So far the solutions the EU have provided fail to deal with the problems. We need more ambition and more urgency if we are to sustain the peace process and protect the Good Friday Agreement.

- France President Macron: Fishing and Brexit negotiations are progressing too slowly and without enough firmness.

- BOE Gov Bailey reiterated stance that If the economy evolved in the way the forecasts and reports suggest, we’ll have to raise rates. Not the bank’s job to fix supply chain issues hampering economies around the world which cause inflation to rise.

Americas

- US President Biden said to be prepared to make announcement on Fed Chair before he leaves for his holiday trip during the evening on Tuesday. Nov 23rd.

Energy

- Oil prices lower as reports of coordinated reserves release rises (Japan said to prepares oil-reserve sale as current level of supply deemed excessive).

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.19% at 487.02, FTSE +0.26% at 7,242.11, DAX +0.03% at 16,165.25, CAC-40 +0.21% at 7,127.12, IBEX-35 +0.58% at 8,803.95, FTSE MIB -0.11% at 27,307.00 , SMI +0.06% at 12,552.10, S&P 500 Futures +0.34%].

Market Focal Points/Key Themes:

Equities

European indices opened slightly higher on Monday’s morning; sector among those outperforming others is telecom on potential KKR’s acquisition of Telecom Italia which trades higher over 20%; while sectors trending lower include real estate and materials; UK retailer Marks and Spencer trades 3% higher in London following over-the-weekend speculation of Apollo’s acquisition interest; Ericsson announced to acquire US firm Vonage Holdings in $6.2B deal and trades lower 4%; Frontier Developments stock trade fell sharply on trading update and outlook cut; earnings during the upcoming US session include Twist Biosciences and Spire.

- Consumer discretionary: Marks & Spencer [MKS.UK] +3% (Apollo's interest).

- Financials: Julius Baer [BAER.CH] -3% (trading update).

- Materials: Hochschild Mining [HOC.UK] -48% (response to Peru events).

- Real Estate: Vonovia [VNA.DE] -1% (capital raise).

- Technology: - Frontier Developments [FDEV.UK] -31% (trading update; outlook cut).

- Telecom: Telecom Italia [TIT.IT] +22%, Vivendi [VIV.FR] +3% (KKR offer for Telecom Italia), Ericsson [ERICB.SE] -4% (acquires Vonage Holdings).

Speakers

- ECB noted that the banking sector was not close to meeting expectations on climate risk.

- Germany new govt Cabinet said to include FDP leader Lindner as Finance Minister with Habeck as Economy Minister.

- Romania new ruling parties said to agree on PM.

Currencies/Fixed Income

- USD maintained its firm tone on perceive divergence in central bank policies.

- EUR/USD below the 1.1280 area with the pair softening over concerns regarding the economic impact of renewed restrictions in Europe to contain rising coronavirus cases.

- China said to move to limit financial institutions' speculation on the yuan. Dealers note China policymakers seemed to have grown increasingly uncomfortable with the CNY currency (Yuan) recent rally.

Economic data

- (NL) Netherlands Nov Consumer Confidence: -19 v -10 prior.

- (DK) Denmark Nov Consumer Confidence Indicator: -2.0 v +3.3 prior.

- (TR) Turkey Nov Consumer Confidence: 71.1 v 76.8 prior.

- (MY) Malaysia mid-Nov Foreign Reserves: $116.5B v $116.1B prior.

- (CH) Swiss Oct M3 Money Supply Y/Y: 2.5% v 3.3% prior.

- (TR) Turkey Oct Foreign Tourist Arrivals Y/Y: 99.3% v 59.5% prior.

- (TW) Taiwan Oct Export Orders Y/Y: 14.6% v 22.9%e (20th straight month of growth).

- (TW) Taiwan Oct Unemployment Rate: 3.8% v 3.8%e.

- (HK) Hong Kong Oct CPI Composite Y/Y: 1.7% v 1.8%e.

- (ES) Spain Sept Trade Balance: -€2.4B v -€3.9B prior.

- (CH) Swiss weekly Total Sight Deposits (CHF): 719.3B v 719.2B prior; Domestic Sight Deposits: 646.7B v 644.1B prior.

- (PL) Poland Oct Sold Industrial Output M/M: +2.3% v -0.5%e; Y/Y: 7.8% v 5.3%e.

- (PL) Poland Oct Construction Output Y/Y: % v 3.4%e.

- (PL) Poland Oct PPI M/M: 1.8% v 1.3%e; Y/Y: 11.8% v 11.0%e.

- (BE) Belgium Nov Consumer Confidence Index: 1 v 4 prior.

Fixed income Issuance

- None seen.

Looking Ahead

- (AR) Argentina Oct Budget Balance (ARS): No est v 291.4B prior.

- (MX) Citibanamex Survey of Economists.

- (CO) Colombia Oct Industrial Confidence: No est v 20.4 prior; Retail Confidence: No est v 40.3 prio.

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

- 05:30 ((DE) Germany to sell €3.0B in 12-month BuBills; Avg Yield: % v -0.7424% prior; bid-to-cover: x v 2.70x prior (Nov 15th 2021).

- 06:00 (IE) Ireland Oct PPI M/M: No est v 0.0% prior; Y/Y: No est v -1.9% prior.

- 06:00 (IL) Israel Sept Manufacturing Production M/M: No est v -2.4% prior.

- 06:00 (IL) Israel Oct Unemployment Rate: No est v 5.2% prior; Unemployment Rate (including Covid Effect): No est v 7.9% prior.

- 06:00 (DE) Belgium Debt Agency (BDA) to sell €2.4-3.2B in 2031, 2040 and 2071 OLO Bonds.

- 06:00 (RO) Romania to sell 2027 and 2036 bonds.

- 06:00 (IL) Israel to sell 2024, 2026, 2032, 2051 bonds (5 tranches).

- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 06:30 (EU) EU Commission to sell Bonds.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 07:00 (TR) Turkey to sell Fixed Rate Bonds.

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

- 08:30 (US) Oct Chicago Fed National Activity Index: +0.10e v -0.13 prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €4.4-5.6B in 3-month, 6-month and 12-month bills.

- 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision: Expected to leave Base Rate unchanged at 0.10%.

- 09:00 (AT) ECB's Holzmann (Austria) with members, Kazaks (Latvia), Kazimir (Slovakia), Czech Central bank Gov Rusnok in Vienna.

- 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (3-7 years).

- 10:00 (US) Oct Existing Home Sales: 6.18Me v 6.29M prior.

- 10:00 (EU) Euro Zone Nov Advance Consumer Confidence: -5.3e v -4.8 prior.

- 12:30 (ES) ECB's De Guindos (Spain).

- 16:00 (KR) South Korea Nov Consumer Confidence: No est v 106.8 prior.

- 16:45 (NZ) New Zealand Q3 Retail Sales Q/Q: -10.5%e v +3.3% prior.

- 17:00 (AU) Australia Nov Preliminary PMI Manufacturing: No est v 58.2 prior; PMI Services: No est v 51.8 prior; PMI Composite: No est v 52.1 prior.

- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 106.0 prior.

- 18:01 (NL) Netherlands Oct House Price Index M/M: No est v 1.6% prior; Y/Y: No est v 18.5% prior.

- 20:05 (AU) RBA's Kohler at virtual conference.

- 21:30 (KR) South Korea to sell KRW400B in 20-year Bonds.

- 22:00 (TH) Thailand Central Bank to sell THB50B in 3-month bills.

- 22:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month Bills.

- 22:30 (TH) Thailand Oct Customs Trade Balance: $0.1Be v $0.6B prior; Exports Y/Y: 16.5%e v 17.1% prior; Imports Y/Y: 29.6%e v 30.3% priora.