MNI EUROPEAN OPEN: Dollar Lightly Bid In Asia

EXECUTIVE SUMMARY

• CHINA HAILS NEW 'HISTORICAL STARTING POINT' AFTER XI RESOLUTION (BBG)
• FORMER PBOC ADVISER: PROBLEMS LIKE EVERGRANDE 'CONTROLLABLE' (BBG)
• PROBE INTO EVERGRANDE'S LINKS TO REGIONAL BANK POSES NEW THREAT (FT)
• WE WANT A DEAL ON N IRELAND PROTOCOL, FROST TELLS EU IN BID TO CALM TENSION (THE TIMES)

Fig.1: U.S. Dollar Index (DXY)

Source: MNI - Market News/Bloomberg

UK

BREXIT: Ministers will tomorrow attempt to de-escalate tensions with the European Union over Northern Ireland and assure Brussels that Boris Johnson does not want to trigger Article 16. Lord Frost, the Brexit minister, will signal to Maros Sefcovic, the EU's chief negotiator, that the government will renew efforts to get a deal on the controversial Northern Ireland protocol and enter intensive talks over the next few weeks. Sources said that Frost was keen to emphasise to Sefcovic that while the UK had reservations about the commission's proposals to reduce checks on goods crossing between Britain and Northern Ireland, they could, with changes, form the basis of an agreement. (The Times)

ECONOMY: The British Chambers of Commerce said 80% of U.K. businesses are feeling the effects of higher prices as well as shortages of goods and workers, a finding that adds to concerns about inflation. The lobby group said its survey of 1,000 companies showed 80% saw an increase in their prices in the past year and almost half said those gains were significant. The figures add to evidence that inflation is picking up, which the Bank of England has said is likely to result in higher interest rates in the coming months. (BBG)

BOE: MNI INTERVIEW: New Fiscal Rules Ease Political Pressure On BOE

• The exclusion of Bank of England operations from new UK public-sector borrowing rules should give the Treasury more control over meeting its targets and ease political pressure on BOE policy making, an analyst at influential think-tank the Institute for Fiscal Studies told MNI - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

RATINGS: Potential sovereign rating reviews of note scheduled for after-hours on Friday include:

• DBRS Morningstar on the United Kingdom (current rating: AA (high), Stable Trend)

EUROPE

SNB: The Swiss franc continues to be in demand as a safe haven investment as market uncertainties remain elevated due to the ongoing COVID-19 pandemic, Swiss National Bank governing board member Andrea Maechler said on Thursday. (RTRS)

RATINGS: Potential sovereign rating reviews of note scheduled for after-hours on Friday include:

• Fitch on Portugal (current rating: BBB; Outlook Stable)
• Moody's on Latvia (current rating: A3; Outlook Stable)
• S&P on the Netherlands (current rating: AAA; Outlook Stable)
• DBRS Morningstar on the United Kingdom (current rating: AA (high), Stable Trend)

U.S.

FED: Nearing a decision on who should lead the Federal Reserve, President Biden brought two contenders into the White House last week: the current chair, Jerome H. Powell, and Fed governor Lael Brainard. White House officials have stayed in touch with Brainard since her meeting with Biden, and the administration emphasizes that no final decision has been made. But the conversations underscore how the White House could be looking to make a change by picking Brainard for one of the world's most powerful policymaking roles, despite Powell's popularity and his record steering the economy out of the pandemic recession. (Washington Post)

FED: Top White House officials don't believe that Federal Reserve Chair Jerome Powell's sale of shares in a stock index fund last year disqualifies him from being appointed to a second term, according to people familiar with the matter. Several key officials working on the nomination saw no reason for concern over Powell's trading, according to people familiar with the deliberations. No one has brought up Powell's trades in the meetings among a tight circle of advisers on the Fed chair search, two of the people said. (BBG)

CORONAVIRUS: Only 44% of Americans support requiring Covid-19 vaccines for schoolchildren aged 5 to 11, who became eligible for the shots last week, according to a Monmouth University poll. The survey, conducted by phone Nov. 4-8, also found that around 59% supported school-based vaccine mandates for teachers and staff. Around 53% backed the requirements for kids 12 and older. The survey's margin of error was plus or minus 3.5 percentage points. (BBG)

CORONAVIRUS: The union representing Los Angeles Police Department officers failed to win a court order blocking a mandate that all city workers be vaccinated against Covid-19. California Superior Court Judge Mitchell L. Beckloff on Wednesday denied the union's request for a temporary restraining order on the mandate, which sets a Dec. 18 deadline for vaccination. (BBG)

POLITICS: Republican Jack Ciattarelli plans to concede the New Jersey governor's race to incumbent Phil Murphy on Friday, more than a week after the Nov. 2 election. The former state lawmaker will hold a press conference at 1 p.m. local time announcing the concession, according to a person with knowledge of the matter. Ciattarelli trailed by about 1 percentage point, or 29,000 votes, when the Associated Press called the race for Murphy on Nov. 3. Since then, a flood of mail-in and early ballots have been counted. As of Nov. 11, Murphy was ahead by more than 73,000 votes, according to the AP. (BBG)

OTHER

U.S./CHINA: U.S. President Joe Biden on Thursday signed legislation to prevent companies like Huawei Technologies Co or ZTE Corp that are deemed security threats from receiving new equipment licenses from U.S. regulators. The Secure Equipment Act, the latest effort by the U.S. government to crack down on Chinese telecom and tech companies, was approved unanimously by the U.S. Senate on Oct. 28 and earlier in the month by the U.S. House on a 420-4 vote. (RTRS)

CHINA/TAIWAN: The Taipei Prosecutors Office decided not to prosecute Chairman of Hong Kong-based China Innovation, Xiang Xin, and alternate director Kung Ching over suspected violations of national security law due to insufficient evidence, according to a statement from Taipei District Prosecutors Office. Prosecutors have charged the couple over suspected violations of money laundering control act in April, pending court's decision. The couple has been barred from leaving Taiwan since end-2019. (BBG)

JAPAN: The Japanese government plans to expand a subsidy program to encourage local travel within the year, Nikkei reports, without saying where it got the information. Discounts of 50% of travel costs, capped at 5,000 yen/night, would apply to travel to surrounding prefectures in addition to prefecture of residence. It aims to gradually boost travel demand beginning locally before it resumes its "Go To" travel program. This will be incorporated into an economic package set to be announced on Nov. 19. (BBG)

JAPAN: Japan's government and Liberal Democratic Party-led ruling coalition are considering convening an extraordinary session of the Diet, the country's parliament, Dec. 6, a senior ruling bloc official said Friday. They hope to have the session run for about two weeks, chiefly for discussions on and enactment of a planned fiscal 2021 supplementary budget to finance fresh economic stimulus measures including 100,000-yen benefits per person for people aged 18 or under. At the extra session, Prime Minister Fumio Kishida, also LDP president, is slated to deliver a policy speech, which will be followed by question-and-answer sessions at plenary meetings of both Diet chambers, to be attended by representatives of the ruling and opposition parties. (Jiji)

JAPAN: Policies to prevent the surge in fuel prices hurting businesses and households will be included in an economic stimulus package to be unveiled next week, Chief Cabinet Secretary Hirokazu Matsuno said Friday. Matsuno chaired a cabinet-level meeting on tackling fuel price rises earlier in the day. Concrete support for industries including fishing and freight being considered, Matsuno said. Matsuno said the government would keep a close eye on the economy and respond actively to issues including inflation. (BBG)

NEW ZEALAND: MNI BRIEF: NZ Govt To Issue Green Bonds In Late 2022

• The New Zealand Government announced plans on Friday to issue sovereign green bonds next year, with the funds used to support progress towards the country's net zero carbon target. Finance Minister Grant Robertson said there was a "substantial and growing investor demand for sovereign green bonds." The issue will be managed through NZ Debt Management at the Treasury, with the inaugural issuance planned for late 2022 - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

ASIA/RATINGS: Economic growth rates in Asia-Pacific are broadly rebounding and debt burdens stabilizing, giving rise to a stable outlook for sovereign creditworthiness in 2022. Still, the pace of recovery differs vastly, and some economies will experience deep economic scarring, according to a new report by Moody's Investors Service. "About half of APAC economies will undergo a growth rebound in the year ahead, but differing degrees of exposure to vulnerable sectors and disparate approaches to reopening will result in a multispeed recovery. This will shape sovereigns' fiscal and debt dynamics," says Anushka Shah, a Moody's Vice President and Senior Analyst. Debt burdens will peak in 2022 and stabilize for most APAC economies, at higher levels than before the pandemic. The scope for further debt reduction will be limited, with deficits unlikely to decline significantly as spending pressures persist, leaving some sovereigns weakly positioned to respond to future shocks. (Moody's)

TURKEY: Turkey agreed with the European Union that it would monitor flights headed to Belarus in an effort to prevent them from being used to ferry migrants toward the Polish border, an EU official said Thursday. Under the plan, Turkey will take several steps, including suspending the sale of one-way tickets to Minsk from Turkish territory. Turkish Airlines agreed to restrict the sale of tickets from Istanbul to Minsk for citizens of countries that have been among the primary ones involved in migrant flows, particularly Iraq, Syria and Yemen. Turkey will also prevent Turkish airliners' Middle East networks from being used by Belavia, the Belarus national airline, to purchase code-sharing flights to funnel passengers to Istanbul so they can catch Belavia flights to Minsk, the official said. (BBG)

MEXICO: The Bank of Mexico raised its benchmark interest rate by 25 basis points for the fourth straight policy meeting on Thursday, taking it to 5.00%, in a 4-to-1 vote by its governing board, as markets looked forward to more hikes down the pike. The decision was in line with a Reuters poll of analysts and comes as annual inflation accelerated to 6.24% in the year through October, more than double the central bank's target of 3%, plus or minus one percentage point. (RTRS)

MEXICO: Mexico's central bank upcoming monetary policy decisions will be data driven and depend on any additional price shocks, Governor Alejandro Diaz de Leon said, signaling that policy makers aren't committed to an established path for interest rates. "We're not pointing in any direction nor ruling out any direction," Diaz de Leon said in a telephone interview. "We're signaling that everything will be a function of how information is identified as well as additional shocks that we could identify." (BBG)

MEXICO: Mexico's inflation is high but "definitely not out of control," central bank Governor Alejandro Diaz de Leon said during an interview with W Radio on Thursday. Banxico acted to ensure inflation expectations don't deteriorate: Diaz de Leon. Pressure on prices have begun to diminish at the margins, but not yet clear we've reached peak inflation. Diaz de Leon said external demand is a significant motor of Mexico growth, as is the reduction of virus contagion in Mexico due to vaccines. (BBG)

RUSSIA: The U.S. is raising the alarm with European Union allies that Russia may be weighing a potential invasion of Ukraine as tensions flare between Moscow and the bloc over migrants and energy supplies. With Washington closely monitoring a buildup of Russian forces near the Ukrainian border, U.S. officials have briefed EU counterparts on their concerns over a possible military operation, according to multiple people familiar with the matter. The assessments are believed to be based on information the U.S. hasn't yet shared with European governments, which would have to happen before any decision is made on a collective response, the people said. They're backed up by publicly-available evidence, according to officials familiar with the administration's thinking. A White House official said Thursday evening that the U.S. was consulting with allies over the buildup, considered Ukraine a partner and denounced any and all aggressive acts by Russia. (BBG)

SOUTH AFRICA: Key South African government ministers have reached a broad agreement to sell some of the state power utility's coal-fired power plants to help reduce its debt burden, Finance Minister Enoch Godongwana said. The accord comes two years after the plan was first raised in a National Treasury policy paper, which suggested the facilities could bring in as much as 450 billion rand ($29.5 billion). Eskom Holdings SOC Ltd.'s total debt stood at 402 billion rand at the end of March. "There's general agreement to sell some of the coal plants," Godongwana said in an interview in Cape Town on Thursday after presenting the medium-term budget policy statement. "Broadly we're agreed in government on that strategy." (BBG)

SOUTH AFRICA: Good news from Eskom for a change: Load shedding has been suspended, but there is no word yet from the power utility as to when South Africans should brace for another round of outages. Stage 2 of came to an end on Friday morning, 12 November 2021 at exactly 05:00, having been reduced from stage 3 the previous at noon, as announced by the power utility's CEO Andre De Ruyter. (The South African)

IRAN: Iran is demanding the U.S. guarantee that it won't again quit the 2015 nuclear deal as the two countries prepare to resume indirect negotiations over reviving the embattled accord, its deputy foreign minister said. (BBG)

CHINA

PROPERTY: China's policymakers have been "fine-tuning" the real estate market, and while some marginal easing has been given, investors should not expect a large-scale loosening or see the adjustments as "bailing out the property market", the 21st Century Business Herald reported citing analysts. Some real estate stocks rose by the daily limit on Thursday, while the previously sagging developer bonds also jumped by double digits on a series of unconfirmed news, including rumors of a substantial regulatory loosening in the city of Shenyang, the newspaper said. Regulators have not given a clear signal of relaxation, and policies may not ease further should the housing and land markets stabilize after the already enhanced credit environment for home buyers, the newspaper cited analysts as saying. (MNI)

PROPERTY: Problems of institutions like Evergrande are controllable, Yu Yongding, former PBOC adviser, says at Caixin summit. International markets' concerns over China's capital market are over exaggerated. Overseas investors don't need to worry too much about China's capital market. China has very "strong macro adjustment capabilities" and the country's finance remains stable. (BBG)

PROPERTY: Hong Kong's banking system does not have a high credit exposure in high-risk property firms in China, local broadcaster Cable TV reports, citing Hong Kong Monetary Authority Chief Executive Eddie Yue in an interview. The risk to the city's banking system is still controllable. HKMA has increased monitoring and will maintain communications with banks as usual. (BBG)

EVERGRANDE: China's top banking regulator is set to complete an investigation into the relationship between Evergrande and a little-known Chinese regional bank, which could pose a new threat to the world's most indebted property group and its billionaire founder Hui Ka Yan. Chinese media reported in May that the China Banking and Insurance Regulatory Commission (CBIRC), the country's top banking regulator, was examining more than Rmb100bn ($15.6bn) of transactions involving the Shenzhen-headquartered developer and Shengjing Bank, a Hong Kong-listed lender it part-owned. The probe is nearing its final stages, according to two people familiar with the matter. (FT)

ECONOMY: Development will remain the top priority for China，and the country will workto achieve common prosperity by advancing high-quality growth, an official said on Friday. During a press briefing held by the 19th Central Committee of the Communist Party of China (CPC) on introducing the guiding principles of the sixth plenary session, which concluded on Thursday, Han Wenxiu, an official with the CPC Central Committee for Financial and Economic Affairs , said that development will be the key measure for China to realize common prosperity. "While the issue of distribution is critical, our goal for common prosperity shall not rely merely on distribution," he said. (China Daily)

ECONOMY: MNI REALITY CHECK: China Oct Holiday Sales Hit By Virus Cases

• China's October retail sales likely slowed from a moderate recovery the previous month as outbreaks of Covid-19 cases spread through over 10 provinces and overshadowed consumer spending during a normally brisk holiday period, industry insiders and analysts told MNI - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

ECONOMY: Alibaba Group Holding Ltd.'s Singles' Day shopping festival posted record sales of 540.3 billion yuan ($84.5 billion), offering China's largest e-commerce firm a much-needed boost following a year of heightened regulatory scrutiny. Sales at the end of Nov. 11 surpassed the 498.2 billion yuan official tally for 2020. The strong performance could ease concerns among investors grappling with a 30% slump in Alibaba's shares this year, which has seen the company hit with a record $2.8 billion antitrust fine and report its first revenue miss in two years. Alibaba's U.S.-traded shares rose 3.3%. (BBG)

ECONOMY: Chinese online e-commerce company JD.com says consumers have placed a record 349.1 billion yuan of orders accumulated during this year's Singles' Day shopping festival in a Weibo post. (BBG)

POLICY: China has reached a new "historical starting point" led by Xi Jinping Thought, senior Communist Party officials said, after top leaders paved the way for him to rule indefinitely by signing off on the first historical resolution in 40 years. Xi's new doctrine on party history didn't focus on past "wrongs" because these had been settled in previous documents, officials said at a briefing Friday morning in Beijing. Instead, it summarized the party's achievements to unite the will and action of the party, officials said. The full text of the resolution hasn't been released yet. (BBG)

MARKETS: China's security regulators are planning to launch measures to further expand the opening of its capital market in line with national strategies, the Securities Times reported. China will continue to fully improve the depth and liquidity of the market, enrich products and supporting systems for cross-border investment and strengthen regulations for overseas listings, the newspaper said. The entries of foreign financial institutions will inevitably challenge domestic companies, pushing them to improve and adapt while quickening overseas expansion, the newspaper said. (MNI)

CORONAVIRUS: China should wait for the global mortality rate from Covid-19 to fall further before fully opening its borders, the 21st Century Business Herald reported citing the country's leading expert Zhong Nanshan, who spoke to a forum of global mayors on Thursday. Currently, the global death rate is over 1% among reported cases, and it needs to come down further, Zhong was cited as saying. The transmission coefficient also needs to come down before returning to normal life, Zhong said. China must maintain the "strict controls" it has adopted, though they should not be made more severe to allow the economy to restart, said Zhong. China should also start giving third doses of vaccines, Zhong said. China sees the current anti-pandemic situations as "severe and complicated," with more than 1,000 cases since Oct. 17, and they could be traced to imported cases, the newspaper said. (MNI)

OVERNIGHT DATA

NEW ZEALAND OCT BUSINESSNZ MANUFACTURING PMI 54.3; SEP 51.6

New Zealand's manufacturing sector saw further steps into expansion for October, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for October was 54.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.7 points higher than September. BusinessNZ's Director, Advocacy Catherine Beard said that the increased activity for October was fairly evenly spread across the sub index values. "The key sub-indices of Production (54.0) and New Orders (53.9) were both in positive territory for the first time since July. Like the last national lockdown, Deliveries (59.9) led the way towards catching up on activity, although Employment (52.1) fell back to its lowest result since February." "In addition, the proportion of negative comments from respondents dropped to 55.4% for October, compared with 71% in September and 78% in August." BNZ Senior Economist, Doug Steel stated that "even though October's reading is above average, we'd classify it more in the realm of some recovery from a large hit rather than an indication of outright strength." (BNZ)

SOUTH KOREA OCT EXPORT PRICE INDEX +25.3% Y/Y; SEP +20.4%
SOUTH KOREA OCT EXPORT PRICE INDEX +1.6% M/M; SEP +1.2%
SOUTH KOREA OCT IMPORT PRICE INDEX +35.8% Y/Y; SEP +26.6%
SOUTH KOREA OCT IMPORT PRICE INDEX +4.8% M/M; SEP +2.3%

CHINA MARKETS

PBOC INJECTS CNY100 BILLION VIA OMOS, LIQUIDITY UNCHANGED

The People's Bank of China (PBOC) injected CNY100 billion via 7-day reverse repos with the rate unchanged at 2.2% on Friday. This keeps the liquidity unchanged after offsetting the maturity of CNY100 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 2.1646% at 09:28 am local time from the close of 2.0980% on Thursday.
• The CFETS-NEX money-market sentiment index closed at 40 on Thursday, flat from the close on Wednesday.

PBOC SETS YUAN CENTRAL PARITY AT 6.4065 FRI. VS 6.4145 THURS

The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 6.4065 on Friday, compared with the 6.4145 set on Thursday.

MARKETS

UP TODAY (Times GMT/Local)