TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Rising US dollar bears down on equities throughout Asia and EU sessions while pressure on bond yields continued to ease.
- China gold holdings rose for the 12 straight month.
- Germany Oct Construction PMI registered its lowest reading since Apr 2020 (38.3 v 39.3 prior).
- UK Oct Halifax House Price Index registered its 1st M/M rise in 7 months.
- EU Earnings Recap: UBS (bank) higher after Q3 results, with focus on underlying figures and accelerated planned expense reductions; ABF (packaged foods) buyback and special div highlights strong FY results; Persimmon (homebuilder) adjusts FY completions upwards as ASP falls slightly and use of incentives increase.
- Asia closed lower with KOSPI under-performing at -2.3%. EU indices are -0.1% to -0.4%. US futures are -0.3%. Gold -0.5%, DXY +0.4%; Commodity: Brent -2.0%, WTI -2.0%, TTF +4.4%; Crypto: BTC -1.3%, ETH -1.3%.
Asia
- RBA raised the Cash Rate Target by 25bps to 4.35% (as expected) to resume its tightening after 3 pauses. Future decisions to be data dependent.
- China Oct Trade Balance: $56.5B v $82.0Be; Exports Y/Y: -6.4% v -3.5%e; Imports Y/Y: +3.0% v -5.0%e.
- Japan Sept Labor Cash Earnings Y/Y:1.2% v 1.0%e; Real Cash Earnings Y/Y: —2.4% v 2.4%e.
- Japan Sept Household Spending Y/Y: -2.8% v -2.7%e.
Europe
- UK Oct BRC LFL Sales Y/Y: 2.6% v 2.8% prior.
Americas
-Fed's Kashkari (voter) stated that was not convinced that rate tightening was over; Would err on the side of doing more rather than failing to do enough.
- Fed's Cook (voter) stated that remained determined to reached the 2% inflation target; Fed trying to balance two sided risks in hope of soft landing.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 -0.18% at 442.70, FTSE -0.06% at 7,413.61, DAX -0.14% at 15,114.76, CAC-40 -0.28% at 6,993.94, IBEX-35 +0.17% at 9,257.25, FTSE MIB +0.12% at 28,625.00, SMI +0.15% at 10,592.80, S&P 500 Futures -0.19%].
Market Focal Points/Key Themes: European indices opened mixed with a bias to the downside and remained inclined lower through the early part of the session; better performing sectors include technology and consumer discretionary; sectors dragging to the downside include energy and telecom; oil & gas subsector under pressure after Brent fell below $85/bbl; Wheel Topco confirms won’t make an offer for Restaurant Group; Vistry signs partnership with Leaf Living and Sage Homes for home deliveries; focus on release of US trade balance later in the day; earnings expected in the upcoming Americas session include Air Products, DR Horton, Gilead and Uber.
Equities
- Consumer discretionary: Ryanair [RYA.IE] +2.0% (analyst action), 4Imprint [FOUR.UK] -4.0% (notes in recent weeks saw some evidence of softening demand patterns), Persimmon [PSN.UK] +1.5% (earnings; Halifax data).
- Consumer staples: Associated British Foods [ABF.UK] +6.5% (earnings; executives comments), Asos [ASC.UK] +4.5% (AB Foods results and outlook; analyst action).
- Energy: Engie [ENGI.FR] +1.5% (earnings).
- Financials: UBS [UBSG.CH] +4.5% (earnings; executives comments).
- Industrials: Daimler Truck [DTG.DE] -3.5% (earnings).
- Technology: Capgemini [CAP.FR] -0.5% (earnings).
- Telecom: Telefonica Deutschland [O2D.DE] +40.5% (earnings; offer for stake).
Speakers
- ECB's De Guindos (Spain): Low growth or even an economic standstill expected to continue in Q4 for the region.
- France Fin Min Le Maire stated that the inflationary crisis was behind us.
- IMF raised China 2023 and 2024 GDP growth forecast. It raised the 2023 GDP growth forecast from 5.0% to 5.4% and 2024 GDP growth forecast from 4.2% to 4.6%.
- Bank of Korea (BOK) Oct Minutes had some members’ note it needed to watch Mid-East war, oil prices and FX. Saw upside risk in CPI due to uncertainties.
Currencies/fixed income
- USD recovered from its multi-day sell-off as several Fed speakers hinted that it likely had more work ahead of it to control inflation.
- USD/JPY back above the 150 level as market participants remain on the lookout for signs of Japanese FX intervention.
- AUD/USD was softer after the RBA rate decision. Market took the statement as a ‘dovish hike’ as the language turned to more data-dependent on future decisions. Expectations percolating that RBA rate hikes were nearing an end.
Economic data
- (NL) Netherlands Oct CPI M/M: +0.4 % v -0.4% prior; Y/Y (final): -0.4% v -0.4% prelim.
- (NL) Netherlands Oct Final CPI EU Harmonized (final) M/M: 0.6% v 0.6% prelim; Y/Y: -1.0% v -1.0% prelim.
- (ZA) South Africa Oct Gross Reserves: $61.0B v $61.7Be; Net Reserves: $55.5B v $55.6Be.
- (CH) Swiss Oct Unemployment Rate: 2.0% v 2.1%e; Unemployment Rate (seasonally adj): 2.1% v 2.1%e.
- (DE) Germany Sept Industrial Production M/M: -1.4% v -0.1%e; Y/Y: -3.7% v -2.7%e.
- (UK) Oct Halifax House Price Index M/M: 1.1% v 0.4% prior (biggest M/M rise in 7 months); Y/Y: -3.2% v -4.7% prior.
- (SE) Sweden Oct Budget Balance (SEK): -0.7B v -6.3B prior.
- (NO) Norway Sept Industrial Production M/M: -8.6% v -1.0% prior; Y/Y: -20.1% v -8.7% prior.
- (NO) Norway Sept Manufacturing Production M/M: -1.3% v +1.4% prior; Y/Y: -1.5% v +1.4% prior.
- (DK) Denmark Sept Industrial Production M/M: 0.3% v 0.3% prior.
- (FI) Finland Sept Preliminary Trade Balance: €0.4B v €0.0B prior.
- (MY) Malaysia end-Oct Foreign Reserves: $108.5B v $108.9B prior.
- (HU) Hungary Sept Industrial Production M/M: +1.2% v -2.4% prior; Y/Y: -5.8% v -6.4%e.
- (ES) Spain Sept Industrial Production M/M: 1.1% v 0.4%e; Y/Y: -1.4% v -2.4%e; Industrial Output NSA (unadj) Y/Y: -4.1% v -3.7% prior.
- (CH) Swiss Oct Foreign Currency Reserves (CHF): 657.8B v 678.3B prior.
- (AT) Austria Oct Wholesale Price Index M/M: -1.1% v 1.2% prior; Y/Y: -6.5% v -2.5% prior.
- (CZ) Czech Sept Retail Sales (ex-auto) Y/Y: -4.0% v -3.7%e.
- (TW) Taiwan Oct CPI Y/Y: 3.1% v 2.8%e; CPI Core Y/Y: 2.5% v 2.5% prior; PPI Y/Y: -0.3% v +0.2% prior.
- (TW) Taiwan Oct Trade Balance: $5.8B v $8.9Be; Exports Y/Y: -4.5% v 0.0%e; Imports Y/Y: -12.3% v -15.2%e.
- (CN) China Oct Foreign Reserves: $3.101T v $3.102Te; Gold reserves: 71.2M v 70.46M troy oz prior (12th straight rise).
- (DE) Germany Oct Construction PMI: 38.3 v 39.3 prior.
- (IS) Iceland Oct Preliminary Trade Balance (ISK): B v -19.8B prior.
- (CZ) Czech Oct International Reserves: $136.9B v $138.4B prior.
- (SG) Singapore Oct Foreign Reserves: $338.2B v $337.4B prior.
- (EU) Euro Zone Sept PPI M/M: 0.5% v 0.5%e; Y/Y: -12.5% v -12.5%e.
Fixed income issuance
- (ID) Indonesia sold total IDR2.24T vs. IDR9.0T target in Islamic bills and bonds (sukuk).
- (DK) Denmark opened its book to sell USD-denominated 2-year notes; guidance seen +11bps to Treasuries.
- (ES) Spain Debt Agency (Tesoro) sold total €4.27B vs. €4.0-5.0B indicated range in 6-month and 12-month bills.
- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2035, 2040 and 2048 bonds.
- (UK) DMO sold £3.75B in 4.625% Jan 2034 Gilts; Avg Yield: 4.405% v 4.444% prior; bid-to-cover: 2.90x v 3.12x prior; Tail: 0.4bps v 0.5bps prior.
- (AT) Austria Debt Agency (AFFA) sold total €1.27B vs. €1.27B indicated in 2028 and 2033 bonds.
Looking ahead
- (RU) Russia Oct Vehicle Sales Y/Y: No est v 120.5% prior.
- (UR) Ukraine Oct Official Reserve Assets: No est v $39.7B prior.
- (IL) Israel Oct Foreign Currency Balance: No est v $198.6B prior.
- (MX) Mexico CitiBanamex Survey of Economists.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (CH) Switzerland to sell 6-month Bills.
- 05:30 (DE) Germany cancelled planned auction of I/L bonds (Bundei).
- 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.0B in 3-Month Bills.
- 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 (BR) Brazil Central Bank (BCB) Nov Minutes.
- 06:30 (CL) Chile Oct Trade Balance: $1.0Be v $1.0B prior; Exports: No est v $7.3B prior; Imports: No est v $6.4B prior; Copper Exports: No est v $3.9B prior.
- 06:30 (CL) Chile Oct International Reserves: No est v $41.4B prior.
- 06:30 (BR) Brazil Sept Total Outstanding Loans (BRL): No est v 5.524T prior; M/M: No est v +1.1% prior; Personal Loan Default Rate: No est v 6.1% prior.
- 06:30 (UK) King’s Speech in Parliament.
- 06:30 (EU) ESM to sell €1.1B in 3-month Bills.
- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
- 07:00 (MX) Mexico Oct Vehicle Production: No est v 338.9K prior; Vehicle Exports: No est v 301.3K prior.
- 07:00 (CL) Chile Sept Nominal Wage Y/Y: No est v 8.0% prior.
- 08:00 (PL) Poland Oct Official Reserves: No est v $180.1B prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Sept Trade Balance: -$60.0Be v -$58.3B prior.
- 08:30 (CA) Canada Sept Int'l Merchandise Trade (CAD): 1.0Be v 0.7B prior.
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:15 (US) Fed’s Barr.
- 09:30 (TR) Turkey Oct Cash Budget Balance (TRY): No est v -69.1B prior.
- 09:50 (US) Fed’s Schmid.
- 10:00 (US) Fed’s Waller.
- 12:00 (US) Fed’s Barr.
- 13:00 (US) Treasury to sell 3-Year Notes.
- 13:30 (US) Fed's Logan.
- 14:00 (AR) Argentina Sept Industrial Production Y/Y: No est v -3.1% prior; Construction Activity Y/Y: No est v -3.0% prior.
- 14:30 (DE) ECB’s Nagel (Germany).
- 15:00 (US) Sept Consumer Credit: +$9.0Be v -$15.6B prior.
- 16:30 (US) Weekly API Oil Inventories.
- 18:00 (KR) South Korea Sept Current Account Balance: No est v $4.8B prior; Balance of Goods (BoP): No est v $5.1B prior.
- 20:00 (PH) Philippines Sept Unemployment Rate: No est v 4.4% prior.
- 21:00 (NZ) New Zealand Q4 Inflation Expectation Survey: No est v 2.8% prior.
- 21:35 (CN) China to sell 1-month, 2-month and 3-month bills.
- 21:35 (CN) China to sell 2Y Upsized Bond.
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.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.