TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Unwinding of safe-haven assets occurs in session (equities and bond yields higher while USD and Yen retreat) as stagflation fears eased coupled by better corporate earnings.
Asia
- China said to ease banks mortgage limits through end of 2021. Regulators told some banks to accelerate loan approvals and renewals of RMBS applications (Note: Move seen as way to offset contagion concerns over Evergrande).
- China PBoC conducted CNY500B in 1-year Medium Term Lending Facility (MLF) at 2.95% (rate unchanged from prior operation; China rolls over maturing medium-term loans).
- BOJ said to be considering cutting CPI and GDP forecasts for FY21/22, to consider raising GDP Forecast for FY22-23 (Note: To be updated after BOJ rate decision on Oct 28th).
Europe
- Leading EU member States said to be pressing Brussels to put together retaliatory measures should the UK suspend trading arrangements for Northern Ireland.
- UK govt spokesperson stated that there was still a substantial gap between EU and UK current Brexit positions; Brexit Min Frost to meet EU's Sefcovic in Brussels on Friday, Oct 15th (today).
- European leaders could approve emergency measures by member states to blunt impact of the energy crisis on the most affected consumers and companies at next week's meeting (week of Oct 18th).
- Spain PM Sanchez: The idea of centralized European purchases of gas was gaining ground in Brussels. The current inflation trend was dangerous.
Americas
- President Biden signed bill related to short-term US debt limit increase (as expected).
- Fed’s Harker (non-voter) reiterated that did not expect rate hikes until late 2022, early 2023; It was soon time to slowly taper asset purchases; Expected GDP growth around 5.5% in 2021.
- Bank of Canada (BOC) Gov Macklem stated that slack remained in the domestic labor market; supply chain disruptions likely to be more persistent than expected.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 +0.32% at 467.42, FTSE +0.20% at 7,222.20, DAX +0.20% at 15,493.90, CAC-40 +0.37% at 6,709.85, IBEX-35 +0.43% at 8,963.50, FTSE MIB +0.55% at 26,422.00, SMI +0.31% at 11,929.60, S&P 500 Futures +0.26%].
Market Focal Points/Key Themes: European indices openned higher across the board and generally stayed in the green as the session progresed; sectors leading to the upside include financials and consumer discretionary; while more sluggish sectors include real estate and healthcare; Telefonica divests its El Salvador unit; Pearson to sell it’s texbook publishing unit; earnings expected during the upcoming US session include PNC Financial Services and Goldman Sachs.
Equities
- Consumer discretionary: Hugo Boss [BOSS.DE] +2% (sales), Pearson [PSON.UK] -4% (trading update).
- Energy: Subsea 7 [SUBC.NO] +3% (confirms major contract).
- Technology: Devoteam [DBT.FR] +22% (receives increased offer).
- Materials: Rio Tinto [RIO.UK] -2% (production; outlook cut).
Speakers
- ECB's Wunsch (Belgium) reiterated Council view that inflation spike was temporary in nature; some uncertainty over 2nd round effects. ECB was not at its inflation target yet. Regional economy moving in the right direction.
- BOJ Dep Gov Amamiya reiterated overall assessment that domestic economy was recovering as a trend. Recovery should become clearer as pandemic effects faded with consumption picking up due to pent-up demand . Domestic price trend remained solid.
- China President Xi stated that govt to coordinate development of property sector with economy. To also speed up reforms in monopoly industries.
- China's PBOC listed 19 Chinese banks as systematically important banks.
Currencies/Fixed Income
- USD was ending the week on a softer note after 6 weeks of gains. The safe-haven aspect of the greenback ebbed as an improved market sentiment has helped to lift global stocks, commodity prices and bond yields.
- The JPY currency (yen) bucked the trend and weakened to fresh 3-year lows against the USD with unwinding of safe-haven flows cited as a factor.
Economic data
- (FI) Finland Aug GDP Indicator Y/Y: 4.6 v 5.3% prior.
- (EU) EU27 Sept New Car Registrations: -23.1 v -19.1% prior.
- (DK) Denmark Sept PPI M/M: 5.1% v 1.7% prior; Y/Y: 19.0% v 12.8% prior.
- (NO) Norway Sept Trade Balance (NOK): 53.7B v 42.0B prior.
- (FR) France Sept Final CPI M/M: -0.2% v -0.2% prelim; Y/Y: 2.2% v 2.1% prelim; CPI (ex-tobacco Index): 105.97 v 105.95e.
- (FR) France Sept Final CPI EU Harmonized M/M: -0.2% v -0.2% prelim; Y/Y: 2.7% v 2.7% prelim.
- (TR) Turkey Central Bank Oct TCMB Expected Inflation Survey: Next 12-Month Outlook: 13.9% v 12.9% prior.
- (CN) Weekly Shanghai copper inventories (SHFE): 41.7K v 50.1K tons prior.
- (IT) Italy Sept Final CPI M/M: -0.2% v -0.1% prelim; Y/Y: 2.5% v 2.6% prelim; CPI Index (ex-tobacco): 104.5 v 104.7 prior.
- (IT) Italy Sept Final CPI EU Harmonized M/M: 1.3% v 1.4% prelim; Y/Y: 2.9% v 3.0%e.
- (RU) Russia Narrow Money Supply w/e Oct 8th (RUB): 14.39T v 14.34T prior.
- (PL) Poland Sept Final CPI M/M: 0.7% v 0.6% prelim; Y/Y: 5.9% v 5.8% prelim.
- (TR) Turkey Sept Central Gov't Budget Balance (TRY): -23.6B v 40.8B prior.
- (IT) Italy Aug General Government Debt: €2.734T v €2.726T prior.
- (EU) Euro Zone Aug Trade Balance (seasonally adj): €11.1B v €14.2Be; Trade Balance NSA (unadj): €4.8B v €20.7B prior.
- (IT) Italy Aug Total Trade Balance: €1.3B v €8.8B prior; Trade Balance EU: -€0.3B v +€1.9B prior.
Fixed income Issuance
- None seen.
Looking Ahead
- (NG) Nigeria Sept CPI Y/Y: 16.5%e v 17.0% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2025, 2033 and 2046 Bonds.
- 06:00 (IE) Ireland Aug Trade Balance: No est v €5.1B prior.
- 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).
- 06:45 (US) Daily Libor Fixing.
- 07:00 (IL) Israel Sept CPI M/M: 0.2%e v 0.3% prior; Y/Y: 2.5%e v 2.2% prior.
- 07:00 (BR) Brazil Oct FGV Inflation IGP-10 M/M: -0.4%e v -0.4% prior.
- 07:30 (IN) India Weekly Forex Reserve w/e Oct 8th: No est v $637.5B prior.
- 08:00 (BR) Brazil Aug Economic Activity Index (Monthly GDP) M/M: -0.1%e v +0.6% prior;, Y/Y: 4.9%e v 5.5% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
-08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming upcoming bond issuance.
- 08:30 (US) Oct Empire Manufacturing: 25.0e v 34.3 prior.
- 08:30 (US) Sept Advance Retail Sales M/M: -0.2%e v +0.7% prior; Retail Sales (ex-auto) M/M: 0.5%e v 1.8% prior; Retail Sales (ex-auto/gas): 0.4%e v 2.0% prior; Retail Sales (Control Group): 0.5%e v 2.5% prior.
- 08:30 (US) Sept Import Price Index M/M: +0.6%e v -0.3% prior; Y/Y: 9.4%e v 9.0% prior; Import Price Index (ex-petroleum) M/M: +0.2%e v -0.1% prior.
- 08:30 (US) Sept Export Price Index M/M: 0.7%e v 0.4% prior; Y/Y: No est v 16.8% prior.
- 08:30 (CA) Canada Aug Wholesale Trade Sales M/M: +0.5%e v -2.1% prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 09:00 (CA) Canada Sept Existing Home Sales M/M: No est v -0.5% prior.
- 10:00 (US) Oct Preliminary University of Michigan Confidence: 73.1e v 72.8 prior.
- 10:00 (US) Aug Business Inventories: 0.6%e v 0.5% prior.
- 11:00 (CO) Colombia Aug Manufacturing Production Y/Y: 18.5%e v 20.1% prior.
- 11:00 (PE) Peru Sept Unemployment Rate: No est v 9.5% prior.
- 11:00 (CO) Colombia Aug Retail Sales Y/Y: 26.4%e v 26.9% prior.
- 11:00 (CO) Colombia Aug Industrial Production Y/Y: No est v 13.5% prior.
- 11:00 (EU) Potential sovereign ratings after European close.
- 12:20 (US) Fed’s Williams participates on monetary policy panel.
- 13:00 (US) Weekly Baker Hughes Rig Count.
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