Source: MNI - Market News/Bloomberg
UK
BUSINESS (BBC): “Ford UK has called on the government to introduce incentives to encourage drivers to buy electric vehicles (EVs) as an industry backlash grows over sales targets. Lisa Brankin, Ford UK's chair and managing director, told the BBC that without demand, a government mandate to produce and sell more EVs "just doesn't work".”
M&A (BBG): “Direct Line Insurance Group Plc rejected a £3.3 billion ($4.2 billion) takeover bid from Aviva Plc, rebuffing the second suitor this year. London-listed Aviva submitted a non-binding proposal valuing Direct Line at about 250 pence per share, it said in a statement Wednesday that confirmed an earlier Bloomberg News report. The price represents a 58% premium to Direct Line’s Wednesday close.”
EU
UKRAINE (RTRS): “U.S. President Joe Biden's administration is preparing a $725 million weapons package for Ukraine, two U.S. officials said on Wednesday, as the outgoing president seeks to bolster the government in Kyiv before leaving office in January.”
FRANCE (POLITICO): “French Prime Minister Michel Barnier is running out of options. The French Socialist Party confirmed on Wednesday that it plans to vote to topple the government following an hour-long meeting with Barnier.”
RUSSIA (DW): “The Kremlin expelled two German reporters on Wednesday in response to Berlin recently barring two Russians. Broadcaster ARD called Wednesday's move a "low point" in Moscow's pressuring of Western journalists.”
RUSSIA (RTRS): “The U.S. decision to allow Ukraine to fire American weapons deeper into Russia has not increased the risk of a nuclear attack, which is unlikely, despite Russian President Vladimir Putin's increasingly bellicose statements, five sources familiar with U.S. intelligence told Reuters.”
FRANCE (BBG): “ France’s banking stocks slid as a potential government collapse and deepening political crisis unsettled investors.”
US
US/MEXICO (NYT): “The discussion between President Claudia Sheinbaum of Mexico and the president-elect came after Mr. Trump threatened tariffs unless Mexican authorities stopped migrants and drugs from coming across the border. Mexico’s president, Claudia Sheinbaum, spoke to President-elect Donald J. Trump on Wednesday afternoon, and both later characterized their discussion as positive while providing different descriptions of what Mexico is doing to stave off a potential tariff war.”
US/CHINA (BBG): “The Biden administration is weighing additional curbs on sales of semiconductor equipment and AI memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions but stop short of some stricter measures previously considered, according to people familiar with the matter.”
CORPORATE (BBG/FT): “BlackRock Inc. is close to an agreement to buy private credit group HPS Investment Partners, as the world’s largest asset manager tries to compete in the fast-growing alternatives space, the Financial Times reported.”
CORPORATE (BBG): “The US Federal Trade Commission has opened an antitrust investigation of Microsoft Corp., drilling into everything from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products.”
POLITICS (BBG): “Donald Trump had dinner with Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg at the president-elect’s Mar-a-Lago estate in Florida on Wednesday.”
INFLATION (MNI BRIEF): The Federal Reserve's preferred measure of inflation, the PCE price index, was 0.238% in October and 0.273% excluding food and energy prices, in line with analyst expectations. From a year ago, inflation was 2.3% in October and core inflation was 2.8%, the Bureau of Economic Analysis said Friday. Personal income rose 0.6% in the month and spending grew 0.4%.
OTHER
SOUTH KOREA (MNI BRIEF): “The Bank of Korea on Thursday decided to lower its policy interest rate to 3.00% from 3.25% due to its concerns over the slower economy based on weak domestic demand, Wowkorea reported.”
BRAZIL (MNI BRIEF): Brazilian Finance Minister Fernando Haddad on Wednesday announced BRL 70 billion of spending cuts over the next two years, the kind of move some investors expected to head off the risk of higher inflation and interest rates due to other expansionary fiscal policies.
NEW ZEALAND (BBG): “The New Zealand central bank’s latest projections imply it will slow the pace of easing and likely incorporate pauses into the cycle after a third straight half-percentage point cut in February, Assistant Governor Karen Silk said.”
AUSTRALIA (BBG): “Australia’s plans to overhaul the Reserve Bank, including splitting the board in two, are almost certain to become law as Prime Minister Anthony Albanese’s government pushes dozens of bills through the Senate in the final 24 hours of sitting this year.”
CHINA
PROPERTY (BBG): " China’s multiyear property crisis is set to drag on in 2025 as prices and sales remain weak despite the government’s stimulus push to spur demand, according to Fitch Ratings."
SHARES (CSJ): "A total of 161 companies received CNY37.39 billion in support from the central bank’s CNY300 billion re-lending facility to help listed firms and major shareholders buy back or increase shares as of Nov 27, China Securities Journal reported."
FISCAL (CHINA ECONOMIST FORUM): "China’s central government plans to balance the implementation of CNY10 trillion bonds to alleviate local government debt over three-to-five years was at odds with the economy’s need for greater short-term relief, according to Lian Ping, chairman of the China Chief Economist Forum."
PMIS (MNI): China economists discuss their PMI outlook.
CHINA MARKETS
MNI: PBOC Net Drains CNY279.8 Bln via OMO Thursday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY190.3 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY279.8 billion after offsetting the maturity of CNY470.1 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5600% at 09:24 am local time from the close of 1.7169% on Wednesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 47 on Wednesday, compared with the close of 44 on Tuesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1894 Thurs; -1.38% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1894 on Thursday, compared with 7.1982 set on Wednesday. The fixing was estimated at 7.2501 by Bloomberg survey today.
MARKET DATA
AUSTRALIA Q3 BUSINESS INVESTMENT +1.1% Q/Q; EST. +1.0%; PRIOR -2.2%
AUSTRALIA Q3 BUILDINGS, STRUCTURES INVESTMENT +1.1% Q/Q; PRIOR -3.3%
AUSTRALIA 3Q EQUIPMENT, PLANT, MACHINERY INVEST +1.1% Q/Q; PRIOR -1.0
NEW ZEALAND OCT. FILLED JOBS -0.1% M/M; PRIOR -0.1%
NEW ZEALAND ANZ NOV. BUSINESS ACTIVITY OUTLOOK INDEX 48; PRIOR 45.9
NEW ZEALAND ANZ NOV. BUSINESS CONFIDENCE INDEX 64.9; PRIOR 65.7
MARKETS
US TSYS: Tsys Futures Edges Slightly Lower, Long-End Underperforming
- There is too isn't much happening in Tsys futures today, however the late move heading into the NY close overnight has somewhat continued, with longer-end contracts underperforming. TU is -00⅝ at 102-23⅞, while the TY is -03 at 110-20+, while WN is -12 at 125-27
- Cash tsys trading is closed today for Thanksgiving. Overnight the 10yr briefly traded through 4.25%, before closing the session at 4.26%. The 10yr has seen a 24bps tightening since it reached cycle highs of 4.50% on Nov 15th.
- The 2s10s inverted on Monday, before the curve steepened slightly, last 3.209, it has spent the three months trading between flat and 20bps.
- Option flows have been skewed towards downside protection, betting on a deeper sell-off in tsys, with a notable flow a 14,000 10yr February 107.50 puts bought at 12. Open interest in the strike sits at 51,702 and follows buying of the same option on Monday in 39,500 at 12 for a premium of $7.5 million with the strike targets approximately 4.75% yield.
- Fed fund futures are pricing in 15.5bps of cuts at the December meeting, 21.8bps of cumulative cuts by Jan, before a full rate cut is priced in for March.
JGBS: Slightly Richer, Focus On Extra Budget, Heavy Local Calendar Tomorrow
JGB futures are holding richer, +22 compared to settlement levels, ahead of tomorrow’s heavy data drop.
- “Japan will lean heavily on extra tax revenue in a ¥13.9 trillion additional budget to finance Prime Minister Shigeru Ishiba’s stimulus package, according to NHK.” (per BBG)
- “Japan is to issue more than 6trn Yen in JGBs to fund extra budget, sources say.” (per RTRS)
- Cash US tsys are closed today ahead of the Thanksgiving holiday.
- Cash JGBs are slightly mixed across benchmarks, with yields 2bps lower to 1bp higher. The benchmark 10-year yield is 1.2bps lower at 1.059% versus the cycle high of 1.108%.
- The swaps curve has twist-steepened, with rates 1bp lower to 4bps higher.
- OIS pricing has firmed across meetings following the BOJ's widely anticipated decision to hold rates steady at its October meeting. Since the decision, pricing has risen by 4–19bps, with September 2025 leading the gains.
- Market expectations currently indicate: a 51% probability of a 25bp hike in December; a cumulative 73% chance by January; and a full 25bp increase is not fully priced in until May 2025.
- Tomorrow, the local calendar will see Tokyo CPI, Jobless Rate, Job-To-Applicant Ratio, Retail Sales, Housing Starts and Industrial Production data alongside 2-year supply.
AUSSIE BONDS: Richer & At Session Bests Ahead Of RBA Gov. Bullock Speech
ACGBs (YM +6.0 & XM +5.0) are richer and at Sydney session highs.
- Outside of the previously outlined private capital expenditure, there hasn't been much by way of domestic drivers to flag.
- Private GFCF should post a positive quarterly result on December 4’s Q3 national accounts. Inventory, net exports and government spending inputs are released on December 2 and 3.
- The local calendar will also see a speech from RBA Governor Bullock at the CEDA Conference aftermarket.
- Cash US tsys are closed today ahead of the Thanksgiving holiday, with no data out until next week.
- Cash ACGBs are 5-6bps richer.
- Swap rates are 5-6bps lower.
- The bills strip has twist-flattened, with pricing -1 to +8.
- RBA-dated OIS pricing is flat to 6bps richer across meetings. A 25bps rate cut is not fully priced until May.
- Tomorrow, the local calendar will see Private Sector Credit alongside AOFM’s planned sale of A$700mn of the 1.50% 21 June 2031 bond.
BONDS: NZGBS: Richer, RBNZ Suggests Slower Easing Pace After February
NZGBs closed 1-6bps richer, ending the session at their best levels. Compared to pre-RBNZ decision levels yesterday, NZGBs are mixed. The 2-year yield is up 5bps while the 10-year is down 2.5bps.
- The NZ-AU 10-year yield differential has widened slightly to +3bps, now 13bps above the early November low.
- The RBNZ’s latest projections suggest a slower pace of easing ahead, with potential pauses in the rate-cutting cycle following a third consecutive 50bps cut in February, according to Assistant Governor Karen Silk.
- “There could be pauses built in, but it is definitely a slower track after February,” Silk told Bloomberg News in an interview Thursday in Wellington. With inflation projected to pick up to 2.5% next year, monetary policy needs to remain mildly restrictive to “keep some pressure” on price-setting, she said. (per BBG)
- Swap rates closed 3-7bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed slightly softer across meetings today. Nevertheless, pricing remains 4-9bps firmer than yesterday’s pre-RBNZ decision levels. 42bps of easing is priced for February, with 97bps by November 2025.
- Tomorrow, the local calendar will see ANZ Consumer Confidence data.
FOREX: USD Consolidates After Sharp Wed Drop, MXN Up As Trump & Sheinbaum Speak
After a sharp pull back on Wednesday, USD sentiment has stabilized somewhat in the first part of Thursday trade. The BBDXY was last near 1280, little changed for the session. Yen is the weakest performer in the G10 space at the margins, off a little over 0.30%.
- FX sentiment has been impacted by various headlines. MXN rallied after incoming US President Trump stated on Truth Social he had a successful phone call with Mexican President Sheinbaum. The border issue and controlling drug flows were discussed. USD/MXN fell to lows of 20.3824, but sits back near 20.42 in latest dealings (up nearly 0.90% for the session.
- The NYT noted there were differing interpretations around migration details from the call. Still, the market will see anything that reduces tariff chances as a positive.
- USD/CAD is down slightly, last near 1.4020.
- USD/JPY sits up near 151.60. After being up 2.4% in the first sessions for the week, today has seen a modest pullback. Earlier lows in the pair were at 150.93. US equity futures are also a touch higher. US Tsy futures are down slightly, although there is no cash trading given the US Thanksgiving holiday. USD/CHF is up around 0.20% to 0.8835.
- AUD/USD is down slightly, last near 0.6485/90. Q3 capex trends were mixed, but didn't impact sentiment. China equities are down, amid potentially further US curbs on China chips, although the BBG story stated the curbs weren't as bad as feared.
- NZD/USD is also quite steady, last near 0.5890. Jobs filled data was lower, but the ANZ survey measure saw an improved outlook.
- Looking ahead, the US is closed for Thanksgiving. ECB’s Lane and Elderson speak. On the data front, there are preliminary Spanish/German November CPIs, November Euro Commission survey and October euro area M3/lending.
ASIA STOCKS: Equities Mixed, As US Curbs On China Weigh On Stocks
Asian stocks traded in a narrow range as investors weighed potential new US curbs on chip sales to China and awaited possible stimulus measures from Beijing. Mainland China and Hong Kong equities declined after a recent rally, while Japanese stocks rose on gains in chip-related shares and a weaker yen. Korean shares fluctuated following a surprise interest rate cut by the central bank. Meanwhile, US equities slipped overnight as an acceleration in the Fed's preferred inflation measure supported a cautious stance on rate cuts, the NASDAQ led losses overnight with Dell and HP plunging nearly 12% after reporting disappointing sales
- Japanese stocks fluctuated as tech-heavy Nikkei trading down 0.3% at one point before rallying on the new of US curbs on China, Tokyo Electron was up as much as 10% at one point, while Kokusai jumped over 20%. The wider TOPIX is 0.90% higher while the Nikkei trades 0.80% higher.
- Australian equities are on track for another day of gains, with healthcare & Financials trading higher, the ASX is currently up 0.65%
- South Korea's KOSPI opened lower this morning before rallying following a surprise BOK rate cut, however we now trades unchanged for the day. Economists overwhelming expected the bank to hold, however the BOK cut citing slowing growth forecasts and external risks such as potential US trade tariffs, while many also expected the bank to protect the currency, bank officials stated most of the recent weakness in the KRW was largely due to USD strength. Foreign investors have so far this morning continued selling local stocks with a net outflow of $100m, $75m of that from tech stocks
- Taiwan's TAIEX has erased earlier gains and now trades 0.4% lower. There have been some heavy outflows in the region recently with $2b leaving the market in the past two sessions, taking yearly outflows to -$18b.
EQUITIES: Chinese Equities Fall Following US Curbs On Chip Suppliers
Chinese equities declined sharply due to concerns over potential additional US curbs on chip supplies to China, undermining recent optimism about the resilience of mainland stocks under trade tensions. While speculation about economic stimulus in December had fueled a surge in the CSI 300 on Wednesday, the possibility of actual restrictions or tariffs is weighing heavily on market sentiment. Investors fear that without new stimulus from Beijing, the market could face further pressure. Additionally, Beijing’s potential stimulus measures remain a key focal point, with urgency growing due to both domestic economic challenges and external threats like US trade policies under a second Trump presidency.
- The CSI 300 is trading 0.80% lower, consumer discretionary is the worst performing sector, trading 2% lower, led by a 5.5% drop for SAIC Motors, followed by a 3% drop in BYD. SAIC has joined HYD in calling for a 10% price cut from suppliers. Hong Kong listed equities are underperforming mainland equities, with the HSI last down 1.30%, Mainland Property Index trades 1.70% lower, while the HSTech now trades 1.30% lower.
- Over 161 listed companies in China have secured loans exceeding 37.39b yuan ($5.16b) for share buybacks or stake increases, with maturities typically spanning 12 to 36 months. Notable recipients include Muyuan Foods, Wens Foodstuff, and COSCO Shipping Energy, each obtaining over 1 billion yuan. This initiative aims to stabilize the capital market, boost vitality, and lower corporate financing costs, per China Securities Journal.
- The Biden administration is preparing to impose new restrictions on semiconductor equipment and AI memory chip sales to China, potentially targeting Huawei suppliers and over 100 Chinese firms involved in chip manufacturing equipment. While the curbs aim to tighten US control over China’s tech ambitions, they exempt allies like Japan and the Netherlands, whose firms could gain a competitive edge over affected American chipmakers. This news pushed Japanese semiconductor names up with the likes of Tokyo Electron up as much as 10%, while Kokusai jumped over 20%.
OIL: Crude Down Slightly On Light Trading With Focus On OPEC Meeting
Oil prices are moderately lower today after being little changed on Wednesday as trading is light going into the Thanksgiving holiday. WTI is down 0.2% to $68.56/bbl, close to the intraday low, after a high of $68.86 early in the session. Brent is 0.2% lower at $72.68/bbl, also close to the trough. With a number of factors currently influencing markets, oil prices have been range trading and have found little support from the softer US dollar. The USD index is little changed today.
- The focus for oil markets is now firmly on the weekend’s OPEC meeting. It has already delayed its planned reduction in output cuts twice and is expected to do so again given the forecast market surplus and strong non-OPEC output in 2025. The group is likely to put a timeframe on another delay rather than leaving it open ended, a scenario that would support prices.
- The impact of the Trump administration on the US’ and Iran’s oil supply is also highly uncertain. The soft demand outlook for China remains a concern.
- The US is closed for Thanksgiving. ECB’s Lane and Elderson speak. On the data front, there are preliminary Spanish/German November CPIs, November Euro Commission survey and October euro area M3/lending.
GOLD: Little Changed But Still ~3.5% Below Monday’s High
Gold is slightly weaker in today’s Asia-Pac session, after closing little changed at $2636.02 on Wednesday, ahead of the US Thanksgiving Holiday. Nevertheless, the yellow metal remains around 3% below Monday’s high.
- Yesterday’s US data deluge was mixed but ultimately quite close to consensus. Still, it offered a reminder that core PCE inflation remains on track to overshoot median FOMC projections for Q4, while super core PCE inflation has stabilised at rates still uncomfortably above the 2% target.
- Fed Funds implied rates were little changed yesterday. Cumulative cuts from 4.58% effective: 16bp Dec, 22bp Jan, 35bp Mar and 52bp June.
- Lower rates are typically positive for gold, which doesn’t pay interest.
- According to MNI’s technicals team, Monday’s move lower is - for now - considered corrective, despite it being a very sharp pullback. Resistance to watch is $2,721.4, Monday’s high, while key support to monitor is $2,536.9, the Nov 14 low.
- Silver underperformed yesterday, around 1.5% lower. As a result, the gold-silver ratio has risen to its highest level since Sept 12. The corrective cycle in silver that started on Oct 23 remains in play, with focus on $28.446, a Fibonacci retracement.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 28/11/2024 | 0800/0900 | *** |  ES | HICP (p) |
| 28/11/2024 | 0800/0900 | ** |  SE | Economic Tendency Indicator |
| 28/11/2024 | 0900/1000 | ** |  EU | M3 |
| 28/11/2024 | 0900/1000 | ** |  IT | ISTAT Business Confidence |
| 28/11/2024 | 0900/1000 | ** | IT | ISTAT Consumer Confidence |
| 28/11/2024 | 0900/1000 | ** | IT | PPI |
| 28/11/2024 | 0900/1000 | *** |  DE | North Rhine Westphalia CPI |
| 28/11/2024 | 0900/1000 | *** | DE | Bavaria CPI |
| 28/11/2024 | 1000/1100 | ** | EU | EZ Economic Sentiment Indicator |
| 28/11/2024 | 1000/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 28/11/2024 | 1300/1400 | *** | DE | HICP (p) |
| 28/11/2024 | 1330/0830 | * |  CA | Current account |
| 28/11/2024 | 1330/0830 | * | CA | Payroll employment |
| 28/11/2024 | 1700/1800 | EU | ECB's Lane speech at the 25th anniversary of Euro 50 Group at Banque de France | |
| 29/11/2024 | 2330/0830 | ** |  JP | Tokyo CPI |
| 29/11/2024 | 2330/0830 | * | JP | Labor Force Survey |
| 29/11/2024 | 2350/0850 | * | JP | Retail Sales (p) |
| 29/11/2024 | 2350/0850 | ** | JP | Industrial Production |
| 29/11/2024 | 0700/0800 | ** | DE | Retail Sales |
| 29/11/2024 | 0700/0800 | ** | DE | Import/Export Prices |
| 29/11/2024 | 0700/0800 | ** | SE | Retail Sales |
| 29/11/2024 | 0700/0800 | *** | SE | GDP |
| 29/11/2024 | 0745/0845 | *** |  FR | HICP (p) |
| 29/11/2024 | 0745/0845 | ** | FR | Consumer Spending |
| 29/11/2024 | 0745/0845 | *** | FR | GDP (f) |
| 29/11/2024 | 0745/0845 | ** | FR | PPI |
| 29/11/2024 | 0800/0900 | ** |  CH | KOF Economic Barometer |
| 29/11/2024 | 0800/0900 | *** | CH | GDP |
| 29/11/2024 | 0855/0955 | ** | DE | Unemployment |
| 29/11/2024 | 0900/1000 | ** | EU | ECB Consumer Expectations Survey |
| 29/11/2024 | 0930/0930 | ** |  GB | BOE M4 |
| 29/11/2024 | 0930/0930 | ** | GB | BOE Lending to Individuals |
| 29/11/2024 | 1000/1100 | *** | EU | HICP (p) |
| 29/11/2024 | 1000/1100 | *** | IT | HICP (p) |
| 29/11/2024 | 1030/1030 | GB | Financial Policy Summary and Record and Financial Stability Report | |
| 29/11/2024 | 1130/1230 | EU | ECB's de Guindos speaking at the "Encuentro de Economia" in Barcelona | |
| 29/11/2024 | 1330/0830 | *** | CA | GDP - Canadian Economic Accounts |
| 29/11/2024 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |
| 29/11/2024 | 1330/0830 | *** | CA | CA GDP by Industry and GDP Canadian Economic Accounts Combined |
| 29/11/2024 | 1330/0830 | ** |  US | WASDE Weekly Import/Export |
| 29/11/2024 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |