Remarks / Observations
- Focus on upcoming central bank meetings and debate policy in the face of rising yields.
- The corporate earnings season is heating up. Companies that need to report this morning in New York include Asbury Automotive, Archer-Daniels Midland, Arch Resources, Armstrong World Industries, Centene, Dana, Ecolab, GE, Corning, Hasbro, JetBlue, Eli Lilly, Lockheed Martin , 3M, Paccar, PulteGroup, Polaris, Pentair, Raytheon, Sherwin-Williams, S&P Global, UPS, Waste Management, Xerox.
- South Korea Q3 Preliminary GDP Q / Q: 0.3% vs. 0.6% e; Y / Y: 4.0% vs. 4.3% e.
- Chinese Developer Modern Land [11107.HK] missed payment on a bond denominated in USD.
- China PBOC Open Market Operation (OMO) injected CNY 200 billion in 7-day reverse repurchase agreements against CNY 200 billion previously; Net injection remained at CNY190B.
- China Securities Journal (CSJ): PBOC cash injections showed less prospect of RRR reduction [in line].
- China State Planner (NDRC) envisioned floating coal prices based on benchmark prices; Study a mechanism for stabilizing coal prices over the long term.
- Chinese Vice Premier Liu He and Secretary of the US Treasury Yellen held talks on Tuesday (October 26th) on the economy and bilateral and global cooperation.
- A recent poll, Prime Minister Kishida’s ruling Liberal Democratic Party, said it would likely retain more than half of the seats in parliament in this weekend’s general election.
- The Biden administration will allow international travelers to enter the United States as long as they receive a WHO-authorized vaccine from November 8.
- New Zealand Prime Minister Ardern reiterated the country’s position to continue with closures until vaccination targets (90% of the population) are met.
- France will use the ‘go slow’ strategy for customs checks on UK trucks as the Christmas season approaches in retaliation for the fishing dispute.
- UK Chancellor of the Exchequer Sunak (Fin Min), who is expected to announce a pay hike next year for public sector workers, will also raise the national living wage from Â£ 8.91 to Â£ 9.50 / hr.
- Sen Manchin (D-WV) saw the conclusion of a âframework agreementâ for the economic agenda this week; Still working on the topline figure for expenses with his remaining topline at $ 1.5T.
- The SEC said it had convinced other regulators and would get the green light to take action to crack down on the stablecoins market.
- Russia Energy Min Novak said he expected OPEC + to increase oil production by 400,000 barrels per day in November (as previously agreed.
Speakers / Fixed income / FX / Commodities / Erratum
- Indices [Stoxx600 +0.64% at 475.24, FTSE +0.79% at 7,279.91, DAX +1.10% at 15,770.40, CAC-40 +0.83% at 6,768.27, IBEX-35 +0.91% at 9,002.50, FTSE MIB +0.77% at 27,021.00, SMI +0.54% at 12,128.22, S&P 500 Futures +0.42%].
- Market Focal Points / Key Themes: European indices are opening slightly higher overall and moving in the green as the session progresses; rising sectors include consumer discretionary and industrials; sectors that are lagging behind include finance and telecoms; DAX index supported by the outperformance of the automotive sub-sector; the oil and gas sub-sector under pressure following the fall in crude prices and Novak declaring that OPEC + should maintain the increase in production at the next meeting; Austria closed for holidays; River & Mercantile to sell its Solutions business; earnings expected in the next US session include Alphabet, Twitter, ASM International and SEB.
- Consumer discretionary: Michelin [ML.FR] -1% (gains).
- Energy: Norsk Hydro [NHY.NO] -1.5% (gains).
- Finance: UBS [UBSG.CH] + 1.5% (gains).
- Health: Novartis [NOVN.CH] + 1% (gains), Reckitt [RKT.UK] + 5.5% (gains).
- Industrial: Thales [HO.FR] + 1% (result), Faurecia [EO.FR] -2.5% (gains).
- Telecom: Orange [ORA.FR] -3% (gains).
- De Cos (Spain) from the ECB noted that policies to promote the transition to a carbon neutral economy are likely to affect the volatility of headline inflation.
- The ECB’s third-quarter lending survey noted that credit standards remained broadly unchanged for businesses and tightened for home loans. Business and household demand for credit continued to increase.
- Germany’s Econ Ministry has announced that it will reduce the GDP forecast for 2021 while raising the outlook for 2022. Reduce the GDP growth forecast for 2021 from 3.5% to 2.6%. Raise the GDP growth forecast for 2022 from 3.6% to 4.1%.
- European Commissioner Breton said he was in favor of the Nord Stream 2 pipeline. Believed that Poland would never leave the EU.
- France Fin Min Le Maire noted that nuclear energy would be considered green in the EU taxonomy.
- Turkish President Erdogan said he had flip-flopped on his threat to expel Western ambassadors.
Currency / Fixed Income
- Trade calm as markets await various decisions from central banks this week (Canada, BOJ and ECB are the main ones). Dealers noted that the greenback could resume its recent rally next week, as the FOMC meeting approaches and the reality of the start of the Fed cut.
- Dealers note that the ECB should keep a close eye on current high inflation rates. Lagarde would likely deflect questions on asset purchases in the face of higher yields until the December meeting. EUR / USD hovering around the 1.16 level during the session.
- The currency TRY (Lira) rebounded from record lows after President Erdogan abandoned his request to expel 10 Western ambassadors from the country.
- (FI) Finland Seven Unemployment rate: 7.0% against 6.5% previously.
- (FI) Finland Sept Y / Y preliminary retail sales volume: 0.6% vs. 3.4% previously.
- (ES) Spain Seven PPI M / M: 5.2% against 1.8% previously; Y / Y: 23.6% against 17.9% previously (highest annual increase since December 1977).
- (ZA) South Africa’s August leading indicator: 127.9 vs. 127.0 previously.
- (SE) Sweden Seven PPI M / M: 1.5% vs. 2.0% previously; Y / Y: 17.2% against 15.8% previously.
- (HK) Hong Kong trade balance in September (HKD): -42.4B vs. -27.0Be; Y / Y exports: 16.5% against 20.6% e; Y / Y imports: 23.5% against 21.9% e.
Issue of fixed income securities
- (ID) Indonesia sold a total of IDR8.0T against target IDR8.0T in bills and bonds.
- (NL) The Dutch Debt Agency (DSTA) sold 2.49 billion euros against a stated range of 1.5-2.5 billion euros in 0% bonds of July 2031; Average return: + 0.14% against -0.53% previously.
- (UK) DMO sold Â£ 2.75 billion at 0.375% in Oct 2026 Gilts; Average return: 0.789% against 0.429% previously; cover offer: 2.16xv 2.67x front; Tail: 1.0bps vs. 0.2bps previously.
- (IT) Italy Debt Agency (Tesoro) sold 2.25 billion euros against an indicated range of 1.75 to 2.25 billion euros in BTP bonds of 0.00% January 2024; Average return: -0.23% against -0.19% previously; bid-to-cover: 1.65xv 1.45x front.
- (IT) Italy Debt Agency (Tesoro) sold â¬ 750m against â¬ 500-750m in the range indicated in 0.15% May 2051 Inflation-linked Bonds (BTPei); Real return: -0.16% against + 0.47% previously; bid-to-cover: 1.34xv 1.30x front.
- 05:15 (CH) Switzerland will sell 3-month Bills.
- 5:25 am (EU) ECB daily liquidity statistics.
- 05:30 (HU) The Hungarian Debt Agency (AKK) sells 3-month bonds.
- 05:30 (DE) Germany will sell 3.0 billion euros in Bunds at 0.25% from November 2028.
- 5:30 a.m. (EU) ECB award under the 7-day Main Refinancing Invitation to Tender (MRO).
- 5:30 a.m. (ZA) South Africa will sell ZAR 3.9 billion in 2032, 2044 and 2048 bonds.
- 6:00 am (UK) Oct Sales reported by CBI Retailing: 13th v 11 before; Total distribution of declared sales: 20th against 21 before.
- 6:45 am (US) Daily Libor correction.
- 07h00 (BR) Brazil Oct. FGV construction costs M / M: 0.4% ev 0.6% before.
- 08h00 (BR) Brazil mid-October IBGE Inflation IPCA-15 M / M: 1.0% ev 1.1% before; Y / Y: 10.1% compared to 10.1% before.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 8:00 am (UK) Announcement from Russia on the next OFZ bond issue (held on Wednesday).
- 08:55 (US) Weekly sales data for the Redbook LFL.
- 9:00 am (United States) August FHFA House Price Index M / M: 1.5% ev 1.4% before.
- 9:00 am (US) August S&P Case-shiller (20-City) Home Price Index M / M: 1.50% ev 1.55% forward; Y / Y: 20.00% ev 19.95% before.
- 9:00 a.m. (US) Aug S&P Case-shiller Home Price Index (global) Y / Y: not estimated vs. 19.70% previously.
- 09h00 (BR) Brazil Sept. Total creation of formal jobs: +355.0 K against 372.3 K previously.
- 9:00 a.m. (EU) ECB weekly foreign exchange reserves.
- 9:00 a.m. (EU) Weekly update of the ECB’s QE bond purchase.
- 9.45am (UK) BOE buys Â£ 1.47bn in a deal to buy gilt APF (20+).
- 10:00 a.m. (US) New home sales in September: 759Ke v 740K before.
- 10:00 am (US) Oct. Consumer Confidence: 108.3 ev 109.3 before.
- 10:00 a.m. (United States) October Richmond Fed manufacturing index: + 5th vs. -3 before.
- 10:00 am (MX) Mexico Weekly data from the international reserve.
- 11:45 a.m. (FR) BCE Villeroy (France).
- 1:00 p.m. (US) The Treasury will sell 2-year notes.
- 2:30 p.m. (BR) Brazil Seven Tax Collections (BRL): 147.6Be v 146.5B before.
- 3:00 p.m. (AR) Argentina August Sales of Y / Y supermarkets: no estimate compared to 4.2% before; Y / Y Mall Sales: No is v 285.7% forward.
- 4:30 p.m. (US) Weekly API oil inventories.
- 5:00 PM (KR) South Korea Oct Consumer confidence: no est v 103.8 before.
- 5:45 p.m. (NZ) New Zealand trade balance in September (NZD): no east v -2.1B before.
- 7:01 pm (UK) Oct BRC Y / Y Store Price Index: none is v -0.5% before.
- 8:00 PM (NZ) New Zealand Oct Final Trade Confidence: no est v -8.6 preliminary; Business outlook: No est v 26.2 prelim.
- 8:30 p.m. (AU) Australia Q3 CPI Q / Q: 0.8% ev 0.8% before; Y / Y: 3.1% ev 3.8% before.
- 21:30 (CN) China Sept Industrial Profits Y / Y: No estimate against 10.1% before.
- 11:00 p.m. (CN) China will sell 1-year and 10-year revalued bonds.
- 11:35 p.m. (JP) Japan will sell 2-year JGB bonds.