Notes/Observations

- Risk aversion theme percolates as variant found of virus in South Africa might spread worldwide and thwart the global recovery.

- Bets on US rate hikes dwindle over concerns of new covid variant (pushed back from July to Sept 2022).

- Germany Oct Import Price Index registered its highest annual pace since Jan 1980 (Y/Y: 21.7% v 19.6%e).

Asia

- Japan Nov Tokyo CPI Y/Y: 0.5% v 0.4%e ; CPI (ex-fresh food) Y/Y: 0.3% v 0.3%e.

- Australia Oct Retail Sales M/M: 4.9% v 2.2%e.

- BOJ Board member Nakagawa reiterated stance to maintain ultra-loose monetary policy to reach 2% inflation target, said 'weak' yen had both positives and negatives.

- Japan PM Kishida confirmed that sought 3% wage hikes at a minimum during spring labor talks.

- Moody's affirmed Japan’s A1 sovereign rating, outlook stable.

Coronavirus

- UK issued a temporary flight ban on six African countries, including South Africa. New variant found in Botswana, Hong Kong and Israel in travelers from South Africa.

Europe

- BOE Gov Bailey reiterated supply problems were causing inflation should be temporary; the risk was inflation expectations became embedded, noted the UK labor market was very tight.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 -2.60% at 469.20, FTSE -2.86% at 7,100.96, DAX -2.84% at 15,465.95, CAC-40 -3.61% at 6,820.65, IBEX-35 -3.54% at 8,527.50, FTSE MIB -3.08% at 26,263.00, SMI -1.66% at 12,243.52, S&P 500 Futures -1.99%].

Market Focal Points/Key Themes:

Equities

European indices open sharply lower across the board and remained deep in the red as the session progressed amid growing concerns regarding new COVID-19 variant which said to be named Nu by WHO and first detected in South Africa, carrying more mutations than any other variant in past; sectors leading to the downside include energy, industrials and financials as traders reprice their rate hikes expectations across the globe; on corporate front, shares of Airbus and many almost all European airlines down over 10%; Royal Dutch Shell trades down in Amsterdam as much as 5% as oil prices tumble; German tech firm Software AG trade higher on potential acquisition talks speculation; earnings expected in the upcoming US session include Pinduoduo.

- Consumer discretionary: Airbus [AIR.FR] -10%, Lufthansa [LHA.DE] -10%, Air France [AF.FR] -9%, IAG [IAG.UK] -10% (travel bans to South Africa following new variant concerns), ScS Group [SCS.UK] -14% (trading update).

- Energy: Royal Dutch Shell [RDSA.NL] -5% (oil down on variant concerns).

- Healthcare: Novacyt [ALNOV.FR] +12% (test approval in UK).

- Technology: Software AG [SOW.DE] +6% (considers sale).

Speakers

- ECB’s Visco (Italy) stated that the EU region's health situation was once again a source of concern and the consequences were hard to predict. Exit from pandemic measures needed to be gradual.

- EU Commission President Von Der Leyen stated that would propose to activate the emergency brake to stop air travel from the southern African region due to the variant of concern B.1.1.529.

- Sweden Central Bank (Riksbank) Dep Gov Ohlsson expressed confidence with its current inflation forecast. New Repo Rate Path was an obvious signal of direction.

- German Health Min Spahn reiterated govt stance that current virus situation was more serious compared to past; State leaders to meet in the coming weeks. Current wave to hit all of Germany; number of contacts between people must be reduced.

- German Greens official Baerbock stated that did not rule out a lockdown in Germany.

- France Fisherman Union said to be planning to block Channel tunnel and ports to protest the lack of UK issued licenses.

Currencies/Fixed Income

- Safe-haven flows dominated the session as concerns where heightened about the discovery of a new coronavirus variant that could resist current vaccines.

- USD was softer as some Fed rate hike bets were recalibrated. Dealers noted that the covid trends in Europe and US had gotten increased attention lately and the reports of a new variant that with an ability to evade vaccine immunity heightened uncertainty of the global recovery. Bets on US rate hikes dwindle over concerns of new covid variant (pushed back from July to Sept 2022).

- EUR/USD rebounded after a recent multi-week sell-off. Pair probing 1.1270 after testing below 1.12 earlier in the week.

- JPY currency was the main beneficiary of the safe-haven flows with USD/JPY testing 113.65 during the session.

Economic data

- (DE) Germany Oct Import Price Index M/M: 3.8% v 1.9%e; Y/Y: 21.7% v 19.6%e.

- (NO) Norway Oct Retail Sales M/M: 1.0% v 0.3%e.

- (CN) Weekly Shanghai copper inventories (SHFE): 41.9K v 34.9K tons prior.

- (FR) France Nov Consumer Confidence: 99 v 98e.

- (CH) Swiss Q3 GDP Q/Q: 1.7% v 1.6%e; Y/Y: 4.1% v 2.9%e.

- (SE) Sweden Nov Consumer Confidence: 99.7 v 102.0e; Manufacturing Confidence: 126.6 v 128.4 prior; Economic Tendency Survey: 118.0 v 119.9 prior.

- (RU) Russia Narrow Money Supply w/e Nov 19th (RUB): 14.35T v 14.33T prior.

- (TW) Taiwan Oct Monitoring Indicator: 39 v 38 prior.

- (TW) Taiwan Q3 Final GDP Y/Y: 3.7% v 3.8%e.

- (SE) Sweden Oct Retail Sales M/M: +0.4% v -0.2% prior; Y/Y: 5.2% v 4.9% prior.

- (EU) Euro Zone Oct M3 Money Supply Y/Y: 7.7% v 7.4%e.

- (AT) Austria Nov Manufacturing PMI: 58.1 v 60.6 prior (17th straight expansion).

- (IT) Italy Nov Consumer Confidence Index: 117.5 v 117.0e; Manufacturing Confidence: 116.0 v 114.0e; Economic Sentiment: 115.1 v 115.1 prior.

Fixed income Issuanceme

- (IN) India sold total INR240B vs. INR240B indicated in 2023, 2026, 2035 and 2051 bonds.

- (ZA) South Africa sold total ZAR vs. ZAR1.2B indicated in I/L 2033, 2046 and 2050 Bonds.

- (IT) Italy Debt Agency (Tesoro) sold €5.0B vs. €5.0B indicated in 6-month bills; Avg Yield: -0.563% v -0.550%; Bid-to-cover: 1.43x v 1.27x prior.

Looking ahead

- (BR) Brazil Oct Total Formal Job Creation: +260.0Ke v 313.9K prior.

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

- 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).

- 06:30 (IN) India Weekly Forex Reserve w/e Nov 19th: No est v $640.1B prior.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (IN) India announces upcoming bill issuance (held on Wed).

- 07:00 (MX) Mexico Oct Trade balance: -$2.0Be v -$2.4B prior.

- 07:30 (BR) Brazil Oct Total Outstanding Loans (BRL): 4.491Te v 4.429T prior; M/M: 1.4%e v 2.0% prior; Personal Loan Default Rate: No est v 4.2% prior.

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

- 08:00 (UK) BOE’s Pill (chief economist).

- 08:30 (IE) ECB’s Lane (Ireland, chief economist).

- 08:30 (US) Weekly USDA Net Export Sales.

- 10:15 (ES) ECB's De Guindos (Spain).

- 10:15 (ES) ECB's de Cos (Spain).

- 11:00 (EU) Potential sovereign ratings after European close (Moody's on Belgium and Switzerland; S&P on Ireland sovereign rating; DBRS on Poland sovereign rating ).

- 20:30 (CN) China Oct Industrial Profits Y/Y: No est v 16.3% prior.

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD holds above 1.0700 after US inflation data

EUR/USD holds above 1.0700 after US inflation data

EUR/USD stays in the lower half of its daily range but continues to trade above 1.0700 in the early American session on Friday. The data from the US showed that the annual Core PCE Price Index declined to 4.9% in April as expected, making it difficult for the dollar to gather strength.

EUR/USD News

GBP/USD trades above 1.2600 as dollar struggles to find demand

GBP/USD trades above 1.2600 as dollar struggles to find demand

GBP/USD clings to daily gains above 1.2600 and remains on track to end the week in positive territory. The greenback struggles to attract investors after the data from the US showed that PCE inflation softened in April. 

GBP/USD News

Gold pulls away from daily highs, holds above $1,850

Gold pulls away from daily highs, holds above $1,850

Gold has lost its traction in the second half of the day on Friday and declined toward the $1,850 area. The benchmark 10-year US Treasury bond yield staged a modest rebound on the US PCE inflation data, not allowing XAU/USD to preserve its bullish momentum.

Gold News

Terra’s LUNA 2.0 support expands with Binance and Kraken welcoming the airdrop, here’s how you need to prepare

Terra’s LUNA 2.0 support expands with Binance and Kraken welcoming the airdrop, here’s how you need to prepare

Terra’s LUNA fork proposal has passed with 65.5% votes, Revival Plan 2 in action without algorithmic stablecoin UST. LUNA price could wipe out losses incurred by holders in the colossal crash of LUNC and UST. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures