– France bulks the trend of weaker economic data across the Euro Zone as France’s Industrial Production and Services PMI beats and retains expansion. Elsewhere, weak Services PMI out of Italy, Germany, Eurozone, as well as a miss in German Factory Orders.
– China was in focus during the session as Asia equities caught a bid following further speculation of pandemic measures being eased, as well as US auditors, who were auditing Chinese companies, completing their work early. Markets took the early ending as positive for US-listed Chinese stocks such as Alibaba. German Chancellor Scholz conducted press briefings in Asia following his meeting with high-level officials. Scholz confirms China will use BioNTech vaccine for ex-pats.
– Asia closed higher with Hang Seng outperforming at +5.4%. EU indices are 0.4-1.4% higher. US futures are 0.5% to 0.7% higher. Gold +1.4%, DXY -0.4%; Commodity: Brent +2.5%, WTI +2.9%, UK Nat Gas -5.1%; Crypto: BTC +1.3%, ETH +2.4%.
– Looking ahead, focus on upcoming US Nonfarm Payrolls and premarket earnings from the likes of AXL, CAH, D, DUK, FLR, HSY, HUN, PPL, QRTEA, and TU.
– RBA Statement on Monetary Policy (SOMP) reiterated its stance that was not on a set path and would use larger rate hikes if needed. SOMP raised end-2023 core inflation from 3.25% to 3.75% and set 2024 Core inflation at 3.0%. RBA cut the end-2023 GDP growth forecast from 2.0% to 1.75% and set the end-2024 GDP growth at 1.75%.
– Japan Oct Final PMI Services confirmed its move back into expansion (53.2 v 53.0 prelims).
– Australia Q3 Retail Sales (ex-inflation) Q/Q: 0.2% v 0.4%e.
– US Auditors said to have finished on-site China inspections early (**Reminder: Previously reports circulated that US PCAOB and China have reached an agreement on audit inspections).
– More unverified chatters in Chinese social networks that China’s COVID policy might soon see a substantial change; Reportedly China National Health Commission’s CDC Chief Scientist Zeng Guang said domestic economic development would be prioritized over COVID prevention.
– ECB chief Lagarde reiterated stance that Inflation was way too high and still had a way to go on rates. Wanted a want a rate that delivered on the 2% medium-term inflation target.
– Italy govt said to be looking at €15B+ package to ease the impacts of higher energy costs as part of the 2023 budget.
– Canada Fin Min Freeland said to set out billions in new spending to support low-income workers and make student loans interest-free.
– Moody’s affirmed Canada’s sovereign rating at AAA; outlook stable.
– G7 said to have agreed to set a fixed price for Russian oil.
Indices [Stoxx600 +0.68% at 412.34, FTSE +0.91% at 7,254.25, DAX +0.70% at 13,222.50, CAC-40 +0.94% at 6,302.09, IBEX-35 -0.19% at 6,302.09, FTSE MIB +0.13% at 22,735.00, SMI +0.28% at 10,740.40, S&P 500 Futures +0.47%].
Market Focal Points/Key Themes: European indices open higher across the board and advanced into the green through the early part of the session (Spain’s notable exception following industrial production and Services PMI data); consumer discretionary and financial sectors among those leading to the upside; lagging sectors include utilities and financials; earnings expected during the upcoming US session include Magna, Cardinal Health, Intesa SanPaolo, and Huntsman.
– Consumer discretionary: 4imprint [FOUR.UK] +5% (trading update), DFS Furniture [DFS.UK] +1.5% (AGM update).
– Financials: Societe Generale [GLE.FR] +5% (earnings).
– Healthcare: Laboratorios Farmaceuticos Rovi [ROVI.ES] -7% (earnings).
– Industrials: GEA Group [G1A.DE] +5% (earnings).
– Telecom: Telefonica [TEF.ES] +2% (earnings).
– ECB chief Lagarde reiterated that would raise rates to a level that delivers on achieving the 2% inflation target. Must not let inflation become entrenched.
– ECB’s De Guindos (Spain) stated that inflation is to be above target for an extended period. Continuing upward pressures to the inflation energy component. The reiterated stance that future rate moves to be data-dependent.
– BOE’s Pill (chief economist) stated that more to do to control domestic inflation; policy needed to ensure that it did not overshoot. Reiterates MPC stance that pricing of Bank Rate had gone a little too far. The slowdown in the economy was what was needed to contain domestic inflation pressures.
– Spain Econ Min Calvino stated that the govt was going ahead with a tax on banks and added that such a move would be temporary. Govt had already assessed concerns raised by the ECB about the levy.
– Japan is said to be urging the US to relax rules on EV purchase initiative. To ask the US to be more flexible on EV purchase benefits for non-US manufacturers.
– China is said to be working on a plan to scrap COVID flight suspensions in order to normalize air travel.
– USD is slightly softer ahead of the Oct US jobs report. Some risk appetite found some tailwinds as hopes that China may ease covid measures.
– EUR/USD at 0.9785 area with GBP/USD at 1.1240 area.
– Various Far East currencies rallied against the USD as numerous Chinese rumors on covid and audit reports spark some risk appetite.
– (DE) Germany Sept Factory Orders M/M: -4.0% v -0.5%e; Y/Y: -10.8% v -7.2%e.
– (TH) Thailand Foreign Reserves end-Oct: $202.9B v $197.8B prior.
– (CN) Weekly Shanghai copper inventories (SHFE): 59.1K v 63.4K tons prior.
– (FR) France Sept Industrial Production M/M: -0.8% v -1.0%e; Y/Y: 1.8% v 1.2%e.
– (FR) France Sept Manufacturing Production M/M: -0.4% v -1.3%e; Y/Y: 4.3% v 3.4% prior.
– (RU) Russia Narrow Money Supply w/e Oct 28th (RUB): 15.61T v 15.67T prior.
– (ES) Spain Sept Industrial Production M/M: -0.3% v -0.3%e; Y/Y: 3.6% v 3.7%e; Industrial Output NSA (unadj) Y/Y: 3.3% v 5.6% prior.
– (ES) Spain Oct Services PMI: 49.7 v 48.3e (2nd straight contraction); Composite PMI: 48.0 v 48.1e.
– (TW) Taiwan Oct Foreign Reserves: $542.8B v $541.1B prior.
– (IT) Italy Oct Services PMI: 46.4 v 48.5e (2nd straight contraction); Composite PMI: 45.8 v 47.4e.
– (FR) France Oct Final Services PMI: 51.7 v 51.3 prelim (confirmed 19th straight expansion); Composite PMI: 50.2e v 50.0 prelim.
– (DE) Germany Oct Final Services PMI: 46.5 v 44.9 prelim (confirmed 4th straight contraction); Composite PMI: 45.1e v 44.1 prelim.
– (EU) Euro Zone Oct Final Services PMI: 48.6 v 48.2 prelim (confirmed 3rd straight contraction); Composite PMI: 47.3e v 47.1 prelim.
– (UK) Oct New Car Registrations Y/Y: 26.4% v 4.6% prior.
– (UN) FAO Sept World Food Price Index: 135.9 v 136.0 prior.
– (CN) China Q3 Preliminary Current Account:$144.0B v $77.5B prior.
– (UK) Oct Construction PMI: # v 50.3e (2nd straight expansion).
Fixed income issuance
– (IN) India sold a total of INR300B vs. INR300B indicated in 2024, 2029, 2036, and 2062 bonds.
– 06:00 (EU) Euro Zone Sept PPI M/M: 1.6%e v 5.0% prior; Y/Y: 41.9e v 43.3% prior.
– 06:00 (EU) Daily Euribor Fixing.
– 06:00 (FR) France Debt Agency (AFT) announcements on upcoming issuance.
– 06:25 (EU) Daily ECB Liquidity Stats.
– 06:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2029, 2033, and 2046 Bonds.
– 07:00 (UK) DMO to sell £4.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.5B respectively).
– 07:00 (BE) Belgium Debt Agency (BDA) to sell Bonds.
– 08:00 (IN) India announces upcoming bill issuance (held on Wed.
– 07:30 (TR) Turkey Oct Real Effective Exchange Rate (REER): No est v 54.51 prior.
– 07:30 (IN) India Weekly Forex Reserve w/e Oct 28th: No est v $524.5B prior.
– 07:45 (US) Daily Libor Fixing.
– 08:15 (UK) BOE’s Pill ( (chief economist).
– 08:30 (US) Oct Change in Nonfarm Payrolls: +196Ke v +263K prior; Change in Private Payrolls: +200Ke v +288K prior; Change in Manufacturing Payrolls: +14Ke v +22K prior.
– 08:30 (US) Oct Unemployment Rate: 3.6%e v 3.5% prior; Underemployment Rate: No est v 6.7% prior; Labor Force Participation Rate: 62.3%e v 62.3% prior.
– 08:30 (US) Oct Average Hourly Earnings M/M: 0.3%e v 0.3% prior; Y/Y: 4.7%e v 5.0% prior; Average Weekly Hours: 34.5e v 34.5 prior.
– 08:30 (CA) Canada Oct Net Change in Employment: +10.0Ke v +21.1K prior; Unemployment Rate: 5.3%e v 5.2% prior; Full Time Employment Change: No est v 5.7K prior; Part Time Employment Change: No est v 15.4K prior; Participation Rate: 64.7%e v 64.7% prior; Hourly Wage Rate Y/Y: 5.1%e v 5.2% prior.
– 09:00 (BR) Brazil Oct Services PMI: No est v 51.9 prior; Composite PMI: No est v 51.9 prior.
– 09:00 (UK) Daily Baltic Dry Bulk Index.
– 10:00 (CA) Canada Oct Ivey Purchasing Managers Index (seasonally adj): No est v 59.5 prior.
– 10:00 (US) Fed’s Collins.
– 12:00 (EU) Potential sovereign ratings after European close (Moody’s on Ireland, Fitch on France).
– 13:00 (US) Weekly Baker Hughes Rig Count.
– (CO) Colombia Oct CPI M/M: 0.6%e v 0.9% prior; Y/Y: 12.1%e v 11.4% prior.