MNI EUROPEAN OPEN: Powell At Risk?

EXECUTIVE SUMMARY

• JEROME POWELL SOLD MORE THAN A MILLION DOLLARS OF STOCK AS THE MARKET WAS TANKING (PROSPECT)
• MANCHIN CASTS DOUBT ON OCT. 31 DEADLINE TO ACT ON BIDEN PLAN (BBG)
• UK PM JOHNSON: 'WE WILL FIX' BREXIT'S NORTHERN IRELAND PROTOCOL (BBG)
• CHINA ORDERS POWER PLANTS TO STOCK COAL TO FIGHT ENERGY CRISIS (BBG)
• NORTH KOREA FIRES BALLISTIC MISSILE INTO WATERS OFF JAPAN (BBC)

Fig. 1: USD/CNH

Source: MNI - Market News/Bloomberg

UK

CORONAVIRUS: The Government's booster vaccines programme is moving too slowly to protect the most vulnerable, experts warned as figures show that fewer than half of those eligible have received the jab. Estimates seen by The Telegraph show that 22 million people will be ready for their third dose by mid-December, yet at current rates the programme to vaccinate those most at risk will not be completed until the end of January. On Monday, Downing Street promised to "step up communications" as it emerged that only 3.7 million of the 8.5 million at-risk people who had a second jab at least six months ago have had their third dose. It means 4.8 million are in danger from waning immunity. Currently, people eligible for a third dose must wait until they are contacted by the NHS before booking a jab. (Telegraph)

BREXIT: U.K. Prime Minister Boris Johnson promised to find a solution to Brexit's Northern Ireland Protocol, a sign that a compromise will be reached with the European Union in a dispute that had threatened to spiral into a trade war. "Is there a problem with the Northern Irish protocol? Yes there is -- but we'll fix that," Johnson said in an interview with Bloomberg News's editor-in-chief, John Micklethwait, on Monday. "I don't think that's going to be the end of the world." (BBG)

BREXIT: Boris Johnson said the City of London will prosper outside the European Union, noting job losses and disruption to capital flows have been lower than feared. The U.K. prime minister said in an interview with Bloomberg Editor-in-Chief John Micklethwait that banks moved "far fewer" roles to other European cities than they originally threatened. He expects Britain and the EU will work together to protect their intertwined financial markets, despite ongoing rows over Northern Ireland and fishing rights that have complicated progress. "It's profoundly in the interest of our partners to ensure that we do have good relations, we do continue to see proper flow of capital and services between London and all the other parts of Europe, and I'm sure that that will continue," Johnson said. (BBG)

FISCAL: Prime Minister Boris Johnson hinted at future tax cuts for U.K. business even as his finance minister prepares to make historic rises over the next two years. "You can take it that Rishi Sunak, as indeed am I, is a staunch, low-tax Conservative, and he believes in an enterprise economy," Johnson said Monday in a television interview with Bloomberg Editor-in-Chief John Micklethwait. (BBG)

FISCAL: MNI INTERVIEW: UK Policymakers Risk Rush To Stimulus Exit

• The UK Treasury and the Bank of England, faced with higher inflation and elevated debt, appear to be rushing to exit stimulus and risk endangering the economic recovery, James Smith, Research Director at the Resolution Foundation and formerly a senior BOE economist, told MNI - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

ECONOMY: Businesses are at their most confident since 2018 even though widespread disruption to supply chains will continue to weigh on performance next year, a report has found. Since the economy emerged from lockdown, 73 per cent of businesses are confident about their growth prospects over the coming three years, according to the latest Santander Trade Barometer. Companies are pressing ahead with their investment plans and expanding recruitment. However, businesses are continuing to battle with disruption, including material and labour shortages, and more than a third said they expected the bottlenecks to persist. (The Times)

EUROPE

FISCAL: Brussels is seeking to extend its relaxation of state aid rules beyond the end of the year as it comes under pressure from businesses to keep the temporary measures introduced to help them survive the pandemic. Margrethe Vestager, the EU's competition chief, said the bloc was looking to extend the relaxation deadline, "hopefully" just one last time, but that arrangements for certain industries would remain after special exemptions were phased out. Her comments come as some governments across the EU try to extricate themselves from the costly support schemes they used to prop up businesses struggling in the face of Covid-19 lockdowns. (FT)

FISCAL: MNI SOURCES: EC SGP Talks To Stress Existing Plan Flexibility

• The EU Commission will Tuesday unveil its long-awaited consultation on the review of the fiscal rules, but sources tell MNI the paper will avoid making clear proposals for reform of the stability and growth pact and instead try and frame the future debate around key questions - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

U.S.

FED: Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million worth of stock from his personal account on October 1, 2020, according to disclosure forms reviewed by the Prospect. Powell's sale of shares from a Vanguard Total Stock Market Index Fund has not been previously reported. This sale occurred right before the Dow Jones Industrial Average suffered a significant drop. A Fed media relations spokesperson was not available for comment. We will report on any Fed statement on Powell's trades. (Prospect)

FED: Regional Federal Reserve Banks haven't presented Sen. Elizabeth Warren with a plan to ban stock trading by senior central bankers as the Democrat from Massachusetts requested last month. Ms. Warren had written to the 12 bank presidents on Sept. 16 asking for the ban, following disclosures that the leaders of the Dallas and Boston Fed banks had been trading stocks and other investments even as they helped set the nation's monetary policy. Both officials later resigned. (WSJ)

FISCAL: President Joe Biden will host separate meetings on Tuesday with moderate and progressive Democratic lawmakers who are wrangling over aspects of his infrastructure and social spending bills, the White House said on Monday. "We're encouraged ... by the accelerated pace of talks," White House spokesperson Jen Psaki told reporters. (RTRS)

FISCAL: Democratic Senator Joe Manchin said there's little chance that Congress can complete work on President Joe Biden's economic agenda by the end of the month deadline set by his party's leaders. "There is an awful lot to go, I don't know how that would happen," Manchin, whose vote is pivotal in the 50-50 Senate, told reporters Monday at the Capitol. "Once you come to a meeting of the minds, you might be able to work something out." (BBG)

FISCAL: Treasury Secretary Janet Yellen warned Congressional leaders in a letter Monday that the Treasury will take "extraordinary measures" to manage its cash and not exceed the debt limit through Dec. 3, the earliest deadline for lawmakers to once again raise the debt limit or risk a default. (Axios)

CORONAVIRUS: The Food and Drug Administration is moving to soon allow people to receive booster shots that are different from their first Covid-19 vaccine doses, people familiar with the matter said. The FDA won't recommend any booster over the others but will permit people to get a booster shot that is different from the shot they first received, one of the people familiar with the matter said. The FDA is seeking to authorize mixing and matching as soon as this week, the people familiar with the matter said. The FDA is also expected to approve Moderna Inc. and Johnson & Johnson boosters this week, according to a person familiar with the matter. (Dow Jones)

CORONAVIRUS: Some U.S. schools are starting to lift mask mandates as the latest Covid-19 wave fades, and case trends suggest others may soon follow. At least a half dozen school districts across the country have recently lifted their mandates, the first such swing away from the face coverings, according to Burbio, which tracks the developments and runs a dashboard on schools. They include Troup County in Georgia, Rogers Public Schools in Arkansas and Northside ISD in Texas, Burbio reported. (BBG)

CORONAVIRUS: With Covid-19 stressing health care, the New Mexico health department will permit hospitals to ration care as needed, the Santa Fe New Mexican newspaper reported Monday. The move comes amid a stubborn Covid-19 case rate and hospital staffing shortages, the newspaper reported. (BBG)

EQUITIES: The Securities and Exchange Commission said online brokerages, enticed to increase revenue through the controversial industry practice of payment for order flow, are turning stock-trading into a game in order to encourage activity from retail investors. Wall Street's main regulator on Monday released its highly anticipated report on the GameStop mania earlier this year. The 44-page report detailed how the trading frenzy went down and raised red flags on a number of issues, including the back-end payments that brokerages receive, gamification of trading, as well as disclosures on short sales. But it stopped short of laying blame on a single cause or entity. (CNBC)

EQUITIES: A FOX Business reporter tweeted the following on Monday: "Sources say @GaryGensler's "Meme Stock" report delayed over @SECGov infighting. Objections involve report's conclusions. Gensler to use report as basis for overhaul of US market structure including poss payment for order flow ban. GOP likely to pushback more." (MNI)

OTHER

GLOBAL TRADE: Spokeswoman Jen Psaki said the U.S. government is also addressing the logistics of energy supplies as well as possible price gouging. (RTRS)

U.S./CHINA: The White House said on Monday the United States has made clear to China its concern about its military developments after the Asian nation reported testing a hypersonic missile. White House spokeswoman Jen Psaki, speaking to reporters, would not comment on the missile launch itself. (RTRS)

UK/CHINA: Prime Minister Boris Johnson said he is not about to "pitchfork away" offers of Chinese investment despite the concerns of some of his own lawmakers. Decisions to bar Chinese companies from Britain's fifth-generation communication networks and nuclear power, and condemnation of China's human-rights record have soured relations with Beijing over the last few years, but Johnson maintains he is pro-China. "I am no Sinophobe -- very far from it," Johnson said in an interview with Bloomberg Editor-in-Chief John Micklethwait on Monday. "I'm not going to tell you that the U.K. government is going to pitchfork away every overture from China." (BBG)

GEOPOLITICS: Ten naval vessels belonging to China and Russia passed through a narrow chokepoint in the north of Japan, Tokyo's Defense Ministry said Monday. (Nikkei)

CORONAVIRUS: Moderna Inc. CEO Stephane Bancel says the world will soon be "soon be swimming" in vaccines as the supply of Covid-19 shots rises. Speaking at a health conference in Boston on Monday, Bancel recalled how the US earlier this year shifted within months from a scarcity to easily available shots in every pharmacy. "The same thing is going to happen around the world very soon, and my guess is two-to-three months," he said. In an interview with Bloomberg Television at the same conference, Bancel said that most of Moderna's vaccine output next year would go to poorer countries. But Bancel said that simply sharing the technology with other companies in developing countries wouldn't help produce vaccines faster, as mRNA is a new technology and there aren't mRNA factories lying anywhere in the world. (BBG)

RBA: MNI BRIEF: RBA Priority Is Wage Growth, Not House Prices

• The Reserve Bank of Australia recognizes that its low interest rate policies are fueling strong growth in property prices but is more concerned that tighter policies would hit employment and wage growth, according to the minutes of the October board meeting released on Tuesday - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

NEW ZEALAND: New Zealand reported 94 new community cases of Covid-19 Tuesday, with 87 in locked-down Auckland and seven in the Waikato region. "I know the highs and low of cases are particularly hard on people," Prime Minister Jacinda Ardern said. "We are not powerless. We do have the ability to help keep cases as low as we can." (BBG)

NEW ZEALAND: The Prime Minister says Aucklanders shouldn't hold off on booking Christmas trips as the Government prepares to reveal how it will deal with Covid-19 in New Zealand's largest city. Jacinda Ardern told the AM Show this morning the Government was working towards all restaurants and bars being open by Christmas. "Certainly that would be our hope based on those current trends." (NZ Herald)

NORTH KOREA: North Korea has fired at least one ballistic missile into waters off the coast of Japan, South Korea and Japan's militaries have said. It comes as South Korea, Japan and US intelligence chiefs reportedly meet in Seoul to discuss North Korea. In recent weeks, Pyongyang has embarked on a flurry of tests of what it claims to be hypersonic and long-range cruise missiles, and anti-aircraft weapons. Some of these tests violate strict international sanctions. North Korea is specifically prohibited by the United Nations from testing ballistic missiles as well as nuclear weapons. (BBC)

NORTH KOREA: US Special Representative for North Korea Policy Sung Kim will visit Seoul this week for talks on ways to restart dialogue with the reclusive North, including an end-of-war declaration, the US diplomat said Monday. Kim's trip to Seoul will follow his meeting with his South Korean and Japanese counterparts, Noh Kyu-duk and Takehiro Funakoshi, respectively, here in Washington this week. "Special Representative Noh and I also discussed the end of war proposal, and I look forward to continuing those discussions and other issues of mutual concern when I'm in Seoul later this week," the US diplomat said of his meeting with Noh at the State Department. (Korea Herald)

CANADA: Pfizer Inc. and partner BioNTech SE are seeking Canadian approval for their vaccine for children as young as 5. The country's health regulator said it will "prioritize" the review. (BBG)

TURKEY: The Foreign Ministry summoned late Tuesday the ambassadors of 10 countries over their joint statement calling for the release of jailed Turkish businessperson Osman Kavala. "It is an obligation that all diplomatic entities respect our country's sovereignty and the independence of Turkish judiciary, and that they refrain from intervening in our domestic affairs," ruling Justice and Development Party (AK Party) spokesperson Ömer Çelik said in a tweet. "We are pleased that diplomats on duty in our country are contributing to the ties between our nation and their own states," he added. "Nevertheless, we reject in the strongest terms their faulty statements concerning our country's sovereignty." (Daily Sabah)

MEXICO: Mexico's ruling party is targeting lower house approval of President Andres Manuel Lopez Obrador's electricity bill in December, a timetable that would help build momentum for returning the nation to a state-owned electricity monopoly. (BBG)

BRAZIL: Brazil's government needs to help pushing the administrative reform forward, the Lower House speaker Arthur Lira told in an interview recorded for Veja magazine. It was the Congress' decision to develop the proposed administrative reform, he added. Asked about impeachment requests filed against President Jair Bolsonaro, Lira said the move requires responsibility and lacks support among the population. The outcome of Brazil's upcoming 2022 elections will surely be respected, according to the speaker. Bill on court-mandated payments is no default, he said, noting that payments could have been left outside the spending cap when the fiscal rule was created. (BBG)

IRAN: The United States does not think talks in Brussels are necessary before the resumption of indirect negotiations with Iran on a return to the 2015 nuclear deal in Vienna, State Department spokesperson Ned Price said on Monday. (RTRS)

IRAN: Iran backs talks with six major powers that are result-oriented, Iranian hardline President Ebrahim Raisi said on Monday, as Tehran and six powers struggled to overcome snags hampering the resumption of negotiations to revive a 2015 nuclear deal. (RTRS)

IRON ORE: BHP Group, the world's biggest mining company, reported a 4% decline in September quarter iron ore shipments due to planned maintenance work and labor shortages caused by Covid-19 related border restrictions. Total iron ore sales in the three months to Sept. 30 were 70.8 million tons, BHP said Tuesday in a statement, down from 73.7 million tons in the June quarter and in line with a median forecast of 71 million tons (3 analysts). The Melbourne-based company kept its guidance for annual shipments in the upper half of a range of 278 to 288 million tons. (BBG)

ENERGY: China's central government has told local authorities that all coal-fired power plants should keep more than seven days of fuel on hand as it tries to ensure enough supply for heating homes this winter, according to people familiar with the order. Some local governments are struggling with the order amid low inventories, according to the people, who asked not to be identified because the information isn't public. City or provincial officials could face censure or punishment by the central government if the levels aren't maintained, the people said. (BBG)

OIL: The United States continues to press OPEC members on the oil supply issue as Americans grappled with rising fuel prices, the White House said on Monday. (RTRS)

CHINA

EVERGRANDE: China Evergrande has successfully sold its stake in a residential project in Hong Kong to partner VMS Group, Hong Kong Economic Times reports, citing market talk. The Vertex residential project in Cheung Sha Wan still has about 190 units remaining after selling 224 flats HKET estimates the stake sold by Evergrande, including the 30,000-sq-ft shopping mall and 30 parking spots, has a market value of HK$2.4 billion VMS declines to comment to HKET. (BBG)

HNA: China's long campaign to contain the fallout from the collapse of conglomerate HNA is facing growing opposition from disgruntled Chinese creditors, according to documents and private social media groups seen by the Financial Times. Frustrated creditors have threatened to take their complaints about state administrators handling the group's bankruptcy to the Chinese Communist party's internal oversight body, in a dispute that could threaten one of the country's most complicated and globally significant restructurings. "Our dignity cannot be trampled on! We will never give up," one claimant said. (FT)

POLICY: China should adjust its monetary and fiscal policies to help businesses with funding shortages and revive industrial production, after its reported Q3 GDP fell short of expectations, the Global Times said in an editorial. The weak indicators showed many businesses are in trouble and people's incomes have fallen, the state-run newspaper said. Private businesses' confidence in China was shaken, as they interpreted the government's slew of "macro-control" measures to be "changing course," the newspaper said. Society should be convinced that the government stays committed to speeding up economic development, it said. Infrastructure investment in Q1-Q3 grew by only 1.5% y/y, considered negative after adjusting for inflation, so the major projects during the 14th Five-Year Plan should be accelerated, the Global Times said. (MNI)

PBOC: MNI BRIEF: China Should Cut RRR By 100 Bps in Q4 - Advisor

• The PBOC should consider cutting banks' reserve requirement ratio by one percentage point in Q4 to release CNY1 trillion of liquidity to boost the economy, said Yao Jingyuan, a State Counselor in a briefing on Monday after Q3 GDP unexpectedly slowed to 4.9% - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

BONDS: The Chinese bond market turned more bearish after the PBOC last week failed to signal further easing, and that an RRR cut this year seemed less likely, the 21st Century Business Herald reported citing analysts. The PBOC said it would use MLFs and open market operations to maintain ample liquidity and will promote the launch of carbon reduction support tools, which the market expects to be some re-lending tools that exceed CNY1 trillion, the newspaper said. Though Q3 GDP unexpectedly fell below 5%, the bearish sentiment in the bond market remains unchanged as structural tools like relending aiming to boost credit may be the main measure to support the economy in the near term, instead of monetary easing, the newspaper said citing an anonymous trader at a state-owned bank in Shanghai. (MNI)

PROPERTY: China could consider piloting a property tax in Shenzhen city as well as Zhejiang and Hainan provinces while promoting the legislation of property tax law, The Paper reported citing Jia Kang, head of China Academy of New Supply-side Economics. Analysts believe the process will be accelerated after senior policymakers said in an article last week published on the CPC party-run magazine Qiushi mentioning implementing property tax pilots, the newspaper said. A property tax can promote social fairness as well as make up for the lack of land sales revenue for local governments amid a rapidly cooling housing market, the newspaper said citing Luo Zhiheng, deputy dean of Yuekai Securities Research Institute. (MNI)

OVERNIGHT DATA

AUSTRALIA ANZ ROY MORGAN WEEKLY CONSUMER CONFIDENCE 107.0; PREV. 105.6

Consumer confidence rose 1.3% nationally as greater Sydney reopened last week after more than three months in lockdown. The rise in confidence in the city over the past two weeks has been quite modest at 3.5%. This compares with the 9.2% rise over the first two weeks of reopening last year in May 2020. The difference reflects the level of confidence. Sentiment in Sydney is already above its 2021 average, while in May last year the lockdown ended with sentiment still at very depressed levels. Confidence also rose in Melbourne (5.4%) as its lockdown has been scheduled to end earlier than anticipated and is back to the level it was in mid-July. (ANZ)

CHINA MARKETS

PBOC INJECTS CNY10BN VIA OMOS, LIQUIDITY UNCHANGED

The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2% on Tuesday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information.

• The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
• The 7-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.2279% at 09:28 am local time from the close of 2.1649% on Monday.
• The CFETS-NEX money-market sentiment index closed at 57 on Monday vs 38 on Friday.

PBOC SETS YUAN CENTRAL PARITY AT 6.4307 TUES VS 6.4300

The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.4307 on Tuesday, compared with the 6.4300 set on Monday.

MARKETS