– China closed as part of ‘Golden Week’ holiday.
– European indices trade lower amid a collection of weak manufacturing PMI’s that saw 14 contractions, 2 expansions and 1 flat. (Beats: Italy, Swiss) (Misses: UK, Euro Zone, Germany, France, Czech, Spain).
– Cable (GBP/USD) continues to experience volatility as major push to the upside was seen following UK Govts reversal of the planned scrapping of 45% tax rate, originally announced in the ‘mini fiscal event’.
– As the first trading day of the last 3 months of the year begins, comments circulate on the 80-year record of the S&P500 performance following the US mid-term elections (Nov 8th), which sees an average return of 15%.
– Attention now turns towards US manufacturing PMI later in the session as well as geopolitical news out of Russia/Ukraine amid elevated tensions.
– Asia closed lower with NZX50 underperforming at -1.0%. EU indices are -0.9 to -1.5%, with bond yields higher. US futures are mixed to flat. Gold -0.1%, DXY 0.0%; Commodity: Brent +4.3%, WTI +4.5%, UK Nat Gas -6.3%; Crypto: BTC -0.6%, ETH -1.6%.
– BOJ Summary of Opinions (SOMP) reiterated stance that challenges remained to achieve BOJ’s 2% inflation target as yet to confirm japan would see sustained wage rises.
– Japan PM Kishida stated that wanted to use the weak JPY currency (yen) in strengthening its economic structure.
– Japan Q3 Tankan Large Manufacturer Index 8 v 10e; Outlook Survey: 9 v 11e.
– Japan Sept Final PMI Manufacturing: 50.8 v 51.0 prelim (confirms 20th month of expansion).
– Australia Sept Final PMI Manufacturing: 53.5 v 53.9 prelim (confirms 29th month of expansion).
– UK PM Truss stated that she did accept to have laid the ground better on the recent budget but stood by the fiscal package that was announced. Would not publish OBR forecasts early and wanted to work with OBR.
– Press reports circulated that PM Truss would delay the vote on cutting top rate of tax after a growing rebellion among Tory MPs. Any vote would come after MPs have learnt about funding in the Chancellor’s medium-term plan on Nov 23rd.
– SNB President Jordan stated that the CHF currency (Franc) was no longer ‘clearly’ elevated despite nominal rise, SNB would not comment on every move.
– S&P revises UK outlook to Negative from Stable; Affirm AA sovereign rating.
– S&P cut Turkey sovereign rating one notch to B from B+; Outlook Stable.
– Brazil Electoral Authority confirms President Bolsonaro and Former President Lula to face each other in an Oct 30th runoff election.
– OPEC+ said to consider production cut of more than 1Mbpd on Oct 5th; To hold in-person meeting (first since early 2020).
– Energy Intel’s Bakr tweeted that lots of ranges for the cuts are flying around with, from 500K to 1.5Mbpd. The final decision would be made when the ministers meet on the 5th of Oct in Vienna in person.
Indices [Stoxx600 -1.32% at 382.74, FTSE -1.16% at 6,814.10, DAX -1.24% at 11,964.69, CAC-40 -1.39% at 5,682.26, IBEX-35 -0.67% at 7,317.08, FTSE MIB -0.89% at 20,466.00, SMI -1.28% at 10,135.95, S&P 500 Futures +0.04%].
Market Focal Points/Key Themes: European indices open down across the board and stayed lower through the morning; all sectors start the day trading in the red, barring energy; better performing sectors include energy and utilities; while technology and financial sectors among the leaders to the downside; reports of major bank is “on the brink” riled financial sector, with BOE reportedly “monitoring” Credit Suisse; oil & gas subsector supported on rumors OPEC+ may cut production by as much as a million bbl/d; Essentra divests its filter unit; Quinetiq sells its Space unit to Redwire; Lamprell requests to suspension after not being able to complete review process; focus on speech by UK Chancellor at Tory conference; no major earnings expected during the upcoming US session.
– Consumer staples: Eurofins [ERF.FR] -2% (buyback; project).
– Materials: Essentra [ESNT.UK] +12% (new CEO; divestment).
– Financials: Credit Suisse [CSGN.CH] -9% (CEO memo to staff; Bank of England (BOE) ‘monitors’ Credit Suisse amid market turbulence).
– Healthcare: Novartis [NOVN.CH] -1% (court decision).
– Industrials: ABB [ABBN.CH] -1.5% (unit IPO).
– Technology: Prosus [PRX.NL] -1% (terminates deal).
– Utilities: Utility Warehouse [TEP.UK] +17% (trading update).
– UK Chancellor of the Exchequer (Fin Min) Kwarteng confirmed govt was not going ahead with the scrapping of the 45% tax rate.
– UK PM Truss stated that the govt focus was now on building a high growth economy.
– GBP began the session on former footing to test 1.1280 after reports circulated that UK govt would reverse a plan to scrap the UK’s highest rate of income tax.
– USD/JPY pair was back above the 145 level for the first time in over a week after the Japanese government intervened to prop up the currency..
– Both the AUD and NZD currencies were firmer ahead of expected rate hikes by their central banks during the week..
– (RU) Russia Sept Manufacturing PMI: 52.0 v 51.7 prior (5th straight expansion and highest since Mar 2019).
– (SE) Sweden Sept PMI Manufacturing: 49.2 v 50.2 prior (1st contraction in 28 months).
– (CH) Swiss Sept CPI M/M: -0.2% v +0.1%e; Y/Y: 3.3% v 3.6%e; CPI Core Y/Y: 2.0% v 2.0% prior.
– (CH) Swiss Sept CPI EU Harmonized M/M: -0.2% v +0.3% prior; Y/Y: 3.2% v 3.3% prior.
– (NL) Netherlands Sept Manufacturing PMI: 49.0 v 52.6 prior (1st contraction in 26 months).
– (TR) Turkey Sept Manufacturing PMI: 46.9 v 47.4 prior (7th straight contraction).
– (PL) Poland Sept Manufacturing: 43.0 v 40.2e (5th straight contraction).
– (HU) Hungary Sept Manufacturing PMI: # v 57.8 prior.
– (TR) Turkey Sept CPI M/M: 3.1% v 3.2%e; Y/Y: 83.5% v 83.5%e (highest annual pace since 1998); CPI Core Index Y/Y: % v 68.6%e.
– (TR) Turkey Sept PPI M/M: 4.8% v 2.4% prior; Y/Y: 151.5% v 143.8% prior.
– (HU) Hungary July Final Trade Balance: -€1.3B v -€1.2B prelim.
– (ES) Spain Sept Manufacturing PM: 49.0 v 49.4e (3rd consecutive contraction).
– (CH) Swiss Sept PMI Manufacturing: 57.1 v 54.6e (26th month of expansion).
– (CZ) Czech Republic Sept PMI Manufacturing: 44.7 v 45.6e (4th straight contraction).
– (TH) Thailand Sept Business Sentiment Index: 49.6 v 49.6 prior.
– (IT) Italy Sept Manufacturing PMI: 48.3 v 47.5e (3rd month of contraction).
– (FR) France Sept Final Manufacturing PMI: 47.7 v 48.3 prelim (confirmed move back into contraction).
– (DE) Germany Sept Final Manufacturing PMI: 47.8 v 48.3 prelim (confirmed 3rd straight contraction).
– (EU) Euro Zone Sept Final Manufacturing PMI: 48.4 v 48.5 prelim (confirmed 3rd straight contraction).
– (GR) Greece Sept Manufacturing PMI: 49.7 v 48.8 prior (3rd straight contraction).
– (NO) Norway Sept PMI Manufacturing: 50.0 v 51.9 prior (25th month of expansion).
– (CH) Swiss weekly Total Sight Deposits (CHF): 669.6B v 747.1B prior; Domestic Sight Deposits: 563.7B v 626.6B prior.
– (UK) Sept Final Manufacturing PMI: 48.4 v 48.5e (confirmed 2nd straight contraction).
– (DK) Denmark Sept PMI Survey: 49.8 v 47.9 prior (3rd month of contraction).
– (ZA) South Africa Sept Manufacturing PMI: 48.2 v 52.1 prior (moves back into contraction).
Fixed income issuance
– None seen.
– (EU) European Finance Ministers (Eurogroup) meeting attended by ECB’s Lagarde.
– (FR) France Aug YTD Budget Balance: -€B v -€131.2B prior.
– (US) Monthly Global Total Vehicle Sales data in session.
– (RO) Romania Sept International Reserves: No est v $48.6B prior.
– (ZA) South Africa Sept Naamsa Vehicle Sales /Y: No est v 14.2% prior.
– (CN) China PBOC highlights Sept liquidity operations.
– 05:25 (EU) Daily ECB Liquidity Stats.
– 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-3.0B in 3-month and 6-month bills.
– 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
– 06:00 (PT) Portugal Aug Industrial Production M/M: No est v -0.4% prior; Y/Y: No est v -0.1% prior.
– 06:00 (IL) Israel to sell bonds.
– 06:00 (RO) Romania to sell RON300M in 3.5% 2025 bonds.
– 06:00 (SE) Sweden Central Bank (Riksbank) Floden speech.
– 06:45 (US) Daily Libor Fixing.
– 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).
– 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
– 07:30 (CL) Chile Aug Economic Activity Index (Monthly GDP) M/M: -0.7%e v -1.1% prior; Y/Y: -1.5%e v 1.0% prior.
– 08:00 (CZ) Czech Sept Budget Balance (CZK): No est v -231.1B prior.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 09:00 (FR) France Debt Agency (AFT) to sell €5.0-6.2B in 3-month, 6-month and 12-month bills.
– 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision: Expected to raise the Base Rate by 75bps to 2.75%.
– 09:00 (SG) Singapore Sept Purchasing Managers Index (PMI): No est v 50.0 prior; Electronics Sector Index: No est v 49.6 prior.
– 09:00 (BR) Brazil Sept Manufacturing PMI: No est v 51.9 prior.
– 09:05 (US) Fed’s Bostic gives Opening Remarks at Technology Conference.
– 09:30 (CA) Canada Sept Manufacturing PMI: No est v 48.7 prior.
– 09:45 (US) Sept Final Manufacturing PMI: 51.8e v 51.8 prelim.
– 09:45 (UK) BOE buyback operation.
– 10:00 (US) Sept ISM Manufacturing: 52.1e v 52.8 prior; Prices Paid: 52.0e v 52.5 prior.
– 10:00 (US) Aug Construction Spending M/M: -0.3%e v -0.4% prior.
– 10:00 (MX) Mexico Aug Total Remittances: No est v $5.3B prior.
– 10:00 (MX) Mexico Central Bank Economist Survey.
– 10:30 (MX) Mexico Sept Manufacturing PMI : No est v 48.5 prior.
– 11:00 (CO) Colombia Sept PMI Manufacturing: No est v 52.4 prior.
– 11:00 (CO) Colombia Aug Exports $4.6Be v $5.9B prior.
– 11:00 (UK Conservative Party conference.
– 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
– 12:00 (IT) Italy Sept New Car Registrations Y/Y: No est v 9.9% prior.
– (IT) Italy Sept Budget Balance: No est v €0.7B prior.
– 13:00 (MX) Mexico Sept IMEF Manufacturing Index: No est v 49.4 prior; Non-Manufacturing Index: No est v 51.9 prior.
– 14:00 (BR) Brazil Sept Trade Balance: $4.8Be v $4.1B prior (revised from $4.2B); Total Exports: $30.5Be v $30.8B prior; Total Imports: $25.5Be v $26.7B prior.
– 15:10 (US) Fed’s Williams at conference.
– 16:00 (US) Weekly Crop Progress Report.
– 17:00 (NZ) New Zealand NZIER Shadow Board Business Opinion Survey.
– 19:30 (JP) Japan Sept Tokyo CPI Y/Y: 2.8%e v 2.9% prior; Tokyo CPI (ex-fresh food) Y/Y: 2.8%e v 2.6% prior; Tokyo CPI (ex-fresh food/energy) Y/Y: 1.6%e v 1.4% prior.
– 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 2.1% prior.
– 19:50 (JP) Japan End-Sept Monetary Base: No est v ¥645.0T prior.
– 20:30 (KR) South Korea PMI Manufacturing: No est v 47.6 prior.
– 20:30 (AU) Australia Sept Job Advertisements M/M: No est v 2.0% prior.
– 20:30 (AU) Australia Aug Private Sector Houses M/M: No est v 0.7% prior; Home Loans Value M/M: -3.0%e v -8.5% prior.
– 20:30 (AU) Australia Aug Building Approvals M/M: +10.0%e v -17.2% prior.
– 23:30 (AU) RBA Interest Rate Decision: Expected to raise Cash Rate Target by 50bps to 2.85%.
– 23:35 (JP) Japan to sell 10-Year JGB Bonds.