- Markets remains focused on supply-chain issues and energy shortages (commodities, crude prices rose more than 1% to test 2018 highs); sentiment driving interest rates higher.

- Central banks trying to note market expectations are not that consistent with guidance.

- China Q3 GDP slows and concerns that Q4 could slow even more due to govt crackdown on the property sector and power shortage.

- Corporate earnings reports to pick up pace this week.


- (CN) China Q3 GDP Q/Q: 0.2% v 0.4%e; Y/Y: 4.9% v 5.0%e.

- (CN) China Sept Retail Sales Y/Y: 4.4% v 3.5%e.

- (CN) China Sept Industrial Production Y/Y: 3.1% v 3.8%e.

- New Zealand Q3 CPI data registered its 2nd consecutive reading above target, fastest in 10 years (Q/Q: 2.2% v 1.5%e; Y/Y 4.9% v 4.2%e.

- China PBOC Gov Yi Gang stated that the domestic economy was "doing well", but faced challenges such as default risks for certain firms due to "mismanagement"; authorities were keeping a close eye "so they did not become systematic risks".

- China National Bureau of Stats (NBS) stated it sought to ensure achieving annual economic targets, Reiterated govt stance that domestic recovery was unsolid and unbalanced , saw major economic data in reasonable range for Q1 to Q3.

- China has tested its first hypersonic missile with nuclear capabilities in August.

- Japan PM Kishida stated that had no plans to change consumption tax, could deliver cash handouts in a quick manner. Increasing corporate tax rate must be carefully considered.


- BOE Gov Bailey stated that had already signaled that we would have to act to fight inflation; Action to come in our monetary policy meetings.

- ECB chief Lagarde reiterated stance ECB would continue supporting the economy in order to durably stabilize inflation at 2% inflation target over the medium term. Reiterated Council view that current spike in inflation seen as transitory and unlikely to last. ECB was paying very close attention to wage negotiations and other potential 2nd round effects that could push prices permanently higher.

- ECB said to be looking at possibilities of raising its limit on purchases of EU-issued bonds. Move would be seen as enhancing flexibility in asset-buying schemes and boost the status of the bloc’s joint debt program launched this year.

- ECB's Knot (Netherlands) reiterated ECB stance that current rise in inflation was seen as mostly transitory but need to determine whether inflation spike was temporary and whether it became a risk that has secondary effects. He also noted that he saw interest rates edge up once central banks begin unwinding their stimulus programs during H1 2022.

- UK Treasury said to be speeding up preparations for a new e-commerce tax, still considering details and final decision on implementation, final decision not expected to spring.

Speakers/Fixed income/FX/Commodities/Erratum


Indices [Stoxx600 -0.40% at 467.52, FTSE -0.18% at 7,220.86, DAX -0.49% at 15,510.40, CAC-40 -0.76% at 6,676.63, IBEX-35 -0.09% at 8,988.50, FTSE MIB -0.68% at 26,309.00, SMI +0.04% at 11,966.43, S&P 500 Futures -0.37%].

Market Focal Points/Key Themes: European indices open lower across the board but retraced some of the losses as the session progressed; sectors among those trending higher include energy and materials; while laggard sectors include consumer discretionary and real estate; Gazit-Globe to acquire Atrium European Real Estate; Siemens to spin off it's large drive applicators division; Playtech recieves takeover offer from Aristocrat; AstraZeneca recoments against “mini-tender” from TRC; reportedly Richemont looking to sell Yoox-Net-A-Porter; earnings expected during the upcoming US session include State Street, Apple and Steel Dynamics.


- Consumer discretionary: Stellantis [STLA.IT] -1% (JV on lithium).

- Healthcare: Valneva [VLA.FR] +32% (positive vaccine data) , Benchmark Holdings [BMK.UK] +14% (trading update), Koninklijke Philips [PHIA.NL] -1% (earnings).

- Materials: Umicore [UMI.BE] -5% (cuts outlook).

- Technology: Playtech [PLAY.UK] +58% (to be acquired).

- Utilities: National Grid [NG.UK] +1% (trading update).


- ECB's Visco (Italy) stated that certainty were price pressures at this time coming from bottlenecks and energy but reiterated ECB view that rise seen as transitory but would take time. Reiterated ECB Council view that 2nd round effects were not seen as relevant at this time. Reiterated ECB policy to remain accommodative. ECB could end up raising limits for international bonds but not currently being discussed. Noted that market expectations were not that consistent with ECB guidance (**Note: markets currently pricing 10bps hike by ECB in Nov 2022).

- ECB Vasle (Slovenia): Reiterates ECB council stance that high inflation results from temporary factors.

- France Fin Min Le Maire commented that higher energy prices could affect growth and tax revenues.

- Austria Debt Agency (AFFA) cuts planned 2021 issuance from €45B to €40B.

- EU Foreign Policy Chief Borrell stated that no confirmation of talks with Iran on Thursday, Oct 21st but was optimistic on preparatory meetings in the days ahead.

- EU’s financial services chief McGuinness said to have pledged to avoid market instability or a “cliff edge” over a decision on European banks’ ability to access UK clearing houses.

- Russia Fin Min Siluanov stated that fiscal normalization would ease inflation pressures.

Currencies/Fixed Income

- Yields continued to be the focus in FX with the debate raging whether or not the recent surge was temporary.

- GBP/USD was former and holding above 1.37 after BOE Gov Bailey stated over the weekend that the central bank would "have to act" to curb price pressures despite the uptick in inflation likely being temporary. UK 2-year govt bond yield higher by over 15bps towards 0.75% area (biggest surge since 2010) while the 10-year Gilt yields higher by over 5bps to approach 1.16%. Focus on UK CPI data to be released mid-week (Wed).

- EUR/USD edging back towards the 1.16 level as various ECB members try to play down the pick-up in the recent inflation data. Money markets pricing in a 10bps ECB hike in Sept 2022. ECB’s Visco noted that market expectations were not that consistent with ECB guidance.

Economic data

- (CZ) Czech Sept PPI Industrial M/M: 0.7% v 0.7%e; Y/Y: 9.9% v 9.9%e (highest annual pace since Mar 1993).

- (CH) Swiss weekly Total Sight Deposits (CHF): 714.3B v 714.1B prior; Domestic Sight Deposits: 640.2B v 638.4B prior.

Fixed income

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month Bills; Avg Yield: 0.37% v 0.21% prior; Bid-to-cover: 2.13x v 3.01x prior.

Looking ahead

- (SK) Slovakia Debt Agency (Ardal) to sell 2024, 2030, and 2036 bonds.

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

- 05:30 (DE) Germany to sell combined 6.0B in 6-month and 12-month BuBills.

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €3.0-5.0B in 3-month and 6-month bills.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 06:00 (IL) Israel to sell combined ILS1.2B in 2024, 2026, 2032, and 2051 bonds.

- 06:45 (US) Daily Libor Fixing.

- 06:00 (RO) Romania to sell 2029 and 2030 bonds.

- 07:00 (TR) Turkey to sell Zero 2022 Bonds.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (PL) Poland Sept CPI Core M/M: 0.6%e v 0.2% prior; Y/Y: 4.1%e v 3.9% prior.

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

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance.

- 08:15 (CA) Canada Sept Annualized Housing Starts: 256.5Ke v 260.2K prior.

- 08:30 (CA) Canada Aug Int'l Securities Transactions (CAD): No est v 14.2B prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.6-6.8B in 3-month, 6-month and 12-month bills.

- 09:15 (US) Sept Industrial Production M/M: 0.2%e v 0.4% prior; Capacity Utilization: 76.5%e v 76.4% prior; Manufacturing Production: 0.1%e v 0.2% prior.

- 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (3-7 years).

- 10:00 (US) Oct NAHB Housing Market Index: 75e v 76 prior.

- 10:30 (CA) Bank of Canada (BoC) Q3 Overall Business Outlook Survey: No est v 4.2 prior; Business Outlook Future Sales: No est v 47 prior.

- 10:30 (UK) BOE Cunliffe.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 14:15 (US) Fed’s Kashkari.

- 15:00 (AR) Argentina Aug Capacity Utilization: No est v 64.1% prior.

- 16:00 (US) Aug Total Net TIC Flows: No est v $126.0B prior; Net Long-term TIC Flows: No est v $2.0B prior.

- 16:00 (US) Weekly Crop Progress Report.

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 105.6 prior.

- 20:30 (AU) RBA Oct Minutes.

- 23:00 (TH) Thailand Central Bank to sell THB50B in 3-month Bills.

- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.

- 23:30 (JP) Japan to sell 12-Month Bills.

- 23:30 (JP) Japan to sell 20-year JGB bonds.

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