Yields rise with focus on FOMC and BOE decisions later in the week

Notes/Observations

- European equities started flat to mixed with US futures taking a sharp hit following rally on Friday. Risk sentiment turned sour following Ukraine/Russia events where Putin over weekend halted grain shipments, despite UN-brokered deal, in retaliation for a damaged vessel. Accordingly, Russia has ramped up missile strikes in Ukraine this morning.

- Big miss in Hong Kong Q3 Advance GDP reading QoQ -2.6% and YoY -4.5%. Conversely, Italian Q3 Prelim GDP beats at QoQ 0.5% and YoY 2.6%. Portugal Q3 prelim also beats QoQ 0.4% and YoY 4.9%. Austria Oct prelim CPI hits all time high since records began in 1958 at 11.0% YoY.

- Markets digesting Brazil political results after leftist party leader Lula wins to resume office after a very close election. Macro attention to turn to rate decisions from FOMC (Wed) and BOE (Thurs).

- Several European markets to be closed tomorrow for All Saint's Day (Croatia, Hungary, Poland, Slovakia, Slovenia). Company earnings and economic data shifted around to accommodate.

- Asia closed mixed with NZX50 outperforming at +1.9%. EU indices are -0.2% to +0.3% lower. US futures are -0.5% to -0.7%. Gold -0.2%, DXY +0.3%; Commodity: Brent -0.7%, WTI -0.8%, UK Nat Gas +8.0%; Crypto: BTC -0.8%, ETH -0.6%.

Asia

- China Oct Manufacturing PMI (Govt Official) moves back into contraction (49.2 v 49.8e).

- Japan Sept Retail Sales beat consensus (M/M: 1.1% v 0.8%e; Y/Y: 4.5% v 4.1%e.

- Japan Sept Industrial Production misses consensus (M/M: -1.6% v -0.8%e; Y/Y: 9.8% v 10.5%e).

- South Korea Sept Industrial Production misses consensus (M/M: -1.8% v -0.8%e; Y/Y: 0.8% v 1.0%e).

- China President X stated that Russia and China had deepened cooperation in many areas.

- US State Dept: US Sec of State Blinken spoke with China State Councilor and the Foreign Min on managing responsibly the US-China relationship.

Europe

- Oct Lloyds Business Barometer: 15 v 16 prior (lowest since Mar 2021).

- UK Govt denied suggestion that it was considering windfall tax on banks as one means of closing budget hole.

- US said to suggest EU to also consider using export controls to target China.

Americas

- Brazil President Elections Results has Lula being elected for a 3rd term with 50.8% of the vote - Electoral Court.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.18% at 410.02, FTSE -0.01% at 7,046.95, DAX -0.03% at 13,239.30, CAC-40 -0.39% at 6,248.74, IBEX-35 -0.16% at 7,903.79, FTSE MIB -0.01% at 22,528.00, SMI -0.21% at 10,749.40, S&P 500 Futures -0.66%].

Market Focal Points/Key Themes: European indices open mixed and drifted lower through the early part of the session; many markets open in Europe but with reduced activity due to non-bank holiday; Hungary and Slovenia closed for holiday; better performing sectors include technology and health care; sectors among those trending lower are materials and energy; oil & gas subsector underperforming after Brent falls bellow $95/bbl; earnings expected in the upcoming US session include Stryker, Marriott and Avis Budget.

Equities

- Consumer discretionary: International Distributions Services [IDS.UK] +7% (stake sale approved).

- Financials: Barclays [BARC.UK] +1%, Natwest [NWG.UK] +3% (UK govt denies suggestion that its considering windfall tax on banks as one means of closing budget hole), Credit Suisse [CSGN.CH] +3% (rights issue terms), Unicredit [UCG.IT] +1.5% (ECB changes update).

- Healthcare: Fresenius [FRE.DE] +3.5% (earnings; cut outlook).

- Industrials: EasyJet [EZJ.UK] +5% (merger speculation).

- Materials: Glencore [GLEN.UK] -2% (reportedly held talks with Tesla on stake sale).

Speakers

- China Foreign Min spokesperson Zhao Lijian stated that US plan for bombers in Australia might trigger arms race; Reiterated that had no information on possible Xi-Biden meeting.

- China President Xi to visit APEC Summit to be held in Bangkok, Thailand on Nov 18-19th after G20 summit in Bali, Indonesia on Nov 15-16th.

- UAE Energy Min stated that OPEC+ has mechanism to get together if requirements are there.

Currencies/fixed income

- USD on firmer footing as the week began. Focus on key central bank meetings during the week (Fed on Wed, BOE on Thurs) with fighting inflation taking priority over supporting the economy. Some recent strong US data putting any potential pivot on the backburner.

- EUR/USD at 0.9920.

- GBP/USD at 1.1560 with focus on BOE rate decision on Thursday with another rate hike expected despite the recent political drama and delay in QT.

- USD/JPY back above 148 after last week’s dovish BOJ decision and press conference. Rate divergence continuing to be the dominate theme.

Economic data

- (NL) Netherlands Sept Retail Sales Y/Y: 5.9% v 4.1% prior.

- (NL) Netherlands Oct Preliminary CPI EU Harmonized M/M: 1.3% v 2.8% prior; Y/Y: 16.8% v 16.5%e.

- (ZA) South Africa Sept M3 Money Supply Y/Y: 8.8% v 8.3%e v 8.2% prior; Private Sector Credit Y/Y: 9.7% v 8.3%e.

- (DE) Germany Sept Retail Sales M/M: +0.9% v -0.5%e; Y/Y: -0.6% v -3.4%e.

- (SE) Sweden Aug Non-Manual Workers’ Wages Y/Y: 3.0% v 3.1% prior.

- (NO) Norway Sept Credit Indicator Growth Y/Y: 5.1% v 5.3% prior.

- (DK) Denmark Sept Unemployment Rate: 2.2% v 2.2% prior; Gross Unemployment Rate: 2.5% v 2.6% prior.

- (FI) Finland Aug Final Trade Balance: -€1.3B v -€1.3B prelim.

- (TH) Thailand Sept Current Account: +$0.6B v -$1.3Be; Overall Balance of Payments (BOP): -$5.9B v $0.4B prior; Trade Account Balance: +$1.6B v -$1.0B prior; Exports Y/Y: 8.4% v 8.2% prior; Imports Y/Y: 20.5% v 23.8% prior.

- (CH) Swiss Sept Real Retail Sales YoY: 3.2% v 2.1% prior.

- (ES) Spain Sept Adjusted Retail Sales Y/Y: 0.1% v 0.1% prior; Retail Sales (unadj) Y/Y: 0.5% v 0.8% prior.

- (AT) Austria Oct Preliminary CPI M/M: 1.0% v 1.6% prior; Y/Y: 11.0% v 10.5% prior.

- (HK) Hong Kong Q3 Advance GDP Q/Q: -2.6% v +1.3%e; Y/Y: -4.5% v -0.8%e.

- (IT) Italy Q3 Preliminary GDP Q/Q: 0.5% v 0.0%e; Y/Y:2.6 % v 2.0%e.

- (ES) Spain Aug Current Account: -€0.1B v +€1.3B prior.

- (CH) Swiss weekly Total Sight Deposits (CHF): 581.7B v 597.6B prior; Domestic Sight Deposits: 539.6B v 541.7B prior.

- (NO) Norway Central Bank (Norges) Nov Daily FX Purchases (NOK): 3.7B v 4.3Be.

- (PL) Poland Oct Preliminary CPI M/M: 1.8% v 1.6%e; Y/Y: 17.9% v 17.8%e.

- (CZ) Czech Sept M2 Money Supply Y/Y: 5.5% v 5.3% prior.

- (IS) Iceland Sept Final Trade Balance (ISK): -43.8B v -43.5B prelim.

- (UK) Sept Net Consumer Credit: £0.7B v £1.0Be; Net Lending:£6.1B v £5.2Be.

- (UK) Sept Mortgage Approvals: 66.8K v 63.7Ke.

- (UK) Sept M4 Money Supply M/M: +2.1% v -0.1% prior; Y/Y: 5.4% v 3.9 % prior; M4 (ex IOFCs) 3-Month Annualized: 14.7% v 2.3% prior.

- (PT) Portugal Q3 Preliminary GDP Q/Q: 0.4% v 0.1%e; Y/Y: 4.9% v 7.1% prior.

Fixed income issuance

- None seen.

Looking ahead

- (UR) Ukraine Central Bank (NBU) Oct Minutes.

- (HK) Hong Kong Sept Budget Balance (HKD) No est v -48.6B prior.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 06:30 (IN) India Sept Fiscal Deficit (INR): No est v 200.8B prior.

- 06:30 ((DE) Germany to sell combined €5.0B in 3-month and 9-month BuBills.

- 06:30 (NL) Netherlands Debt Agency (DSTA) to sell 6-month bills; Avg Yield: % v 1.630% prior; Bid-to-cover: x v 1.33x prior (Oct 17th 2022).

- 06:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 07:00 (PT) Portugal Sept Industrial Production M/M: No est v 3.0% prior; Y/Y: No est v 4.9% prior.

- 07:00 (PT) Portugal Sept Retail Sales M/M: No est v 1.0% prior; Y/Y: No est v 5.4% prior.

- 07:00 (IL) Israel Aug Manufacturing Production M/M: No est v -2.8% prior.

- 07:00 (IL) Israel Sept Chain Store Sales Y/Y: No est v -2.3% prior.

- 07:00 (IL) Israel to sell combined ILS950M in 2024, 2028, 2030 and 2032 bonds.

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

- 07:30 (IN) India Sept Eight Infrastructure (key) Industries: No est v 3.3% prior.

- 07:45 (US) Daily Libor Fixing.

- 08:00 (MX) Mexico Aug Gold Production: No est v 6.2K kilograms prior; Silver Production: No est v 348.4K kilograms prior; Copper Production: No est v 39.1K tons prior.

- 08:00 (MX) Mexico Q3 Preliminary GDP Q/Q: 0.8%e v 0.9% prior; Y/Y: 3.3%e v 2.0% prior.

- 08:30 (BR) Brazil Sept Nominal Budget Balance (BRL): -60.0Be v -65.9B prior; Primary Budget Balance: +11.0Be v -30.3B prior; Net Debt to GDP Ratio: No est v 58.2% prior.

- 09:00 (ZA) South Africa Sept Trade Balance (ZAR): 6.2Be v 7.2B prior.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 09:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 09:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming bond issuance.

- 09:45 (US) Oct Chicago Purchase Manager’s Index (PMI): 47.0e v 45.7 prior.

- 10:00 (FR) France Debt Agency (AFT) to sell €4.4-5.6B in 3-month, 6-month and 12-month bills.

- 10:30 (US) Oct Dallas Fed Manufacturing Activity -18.5e v -17.2 prior.

- 11:00 (MX) Mexico Sept Net Outstanding Loans (MXN): No est v 5.22T prior.

- 11:00 (CO) Colombia Sept National Unemployment Rate: No est v 10.6% prior; Urban Unemployment Rate: 10.7%e v 10.8% prior.

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

- 12:00 (CA) Canada to sell 2 Year Bonds.

- 14:00 (AU) Australia Oct Corelogic House Price Index M/M: No est v -1.4% prior.

- 15:00 (AR) Argentina Aug Wages M/M: No est v 5.5% prior.

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

- 17:45 (NZ) New Zealand Sept Building Permits M/M: No est v -1.6% prior.

- 18:00 (AU) Australia Oct Final PMI Manufacturing: No est v 52.8 prelim.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v -2.8% prior.

- 20:00 (KR) South Korea Oct Trade Balance: -$3.7Be v -$3.8B prior; Exports Y/Y: -1.0%e v +2.7% prior; Imports Y/Y: 9.0%e v 18.6% prior.

- 20:30 (JP) Japan Oct Final PMI Manufacturing: No est v 50.7 prelim.

- 20:30 (KR) South Korea Oct PMI Manufacturing: No est v 47.3 prior.

- 20:30 (TW) Taiwan Oct PMI Manufacturing: No est v 42.2 prior.

- 20:30 (ID) Indonesia Oct PMI Manufacturing: No est v 53.7 prior.

- 20:30 (TH) Thailand Oct PMI Manufacturing: No est v 55.7 prior.

- 20:30 (MY) Malaysia Oct PMI Manufacturing: No est v 49.1 prior.

- 20:30 (VN) Vietnam Oct PMI Manufacturing: No est v 52.5 prior.

- 21:01 (IE) Ireland Oct PMI Manufacturing: No est v 51.5 prior.

- 21:45 (CN) China Oct Caixin PMI Manufacturing: 48.5e v 48.1 prior.

- 23:30 (AU) Reserve Bank of Australia (RBA) Interest Rate Decision: Expected to raise Cash Rate Target by 25bps to 2.85%.

- 23:35 (JP) Japan to sell 10.