Source: MNI - Market News/Bloomberg
UK
FIRMS (BBG): “ Company insolvencies are surging in the UK after the Labour government reduced tax breaks and increased levies for owners. At least 1,022 companies filed to shut down in the week ended Nov. 8, a rise of 64% from a year earlier, according to notices filed to the Gazette. “
LABOUR MARKET PREVIEW (MNI): After the CPI data and possibly the PMI data, this release is still up there as one of the most important UK domestic releases of the month. We still place most emphasis on private sector regular AWE. The November latest MPR forecast looks for this metric to come in at 4.75%Y/Y in the 3-months to September (but rounding up to 4.8% to 1dp), a little below the 4.83%Y/Y forecast it made 3-months prior) and August print of 4.81%, but a little above the 4.7% MNI median.
EU
UKRAINE (POLITICO): “Speaking at the Paris Peace Forum, French Foreign Minister Jean-Noël Barrot said it remained to be seen what Trump’s return to the White House would mean for Ukraine. “Faced with speculation on what the position of a new American administration will be, I believe above all that we should not decide in advance,” Barrot said.”
RUSSIA (BBC): “The Kremlin has denied media reports that US President-elect Donald Trump held a call with Vladimir Putin, in which he is said to have warned the Russian president against escalating the war in Ukraine.”
RUSSIA (DW): “North Korea has ratified a mutual defense treaty with Russia, state media reported on Tuesday. The deal calls for each side to assist the other in case of an armed attack. The announcement comes days after Ukraine's Defense Ministry reported its forces clashed with North Korean units stationed in the Russian border region of Kursk.”
US
POLITICS (NYT): “The president-elect appears to have settled on the Florida senator to be the nation’s top diplomat. President-elect Donald J. Trump is expected to name Senator Marco Rubio of Florida as his secretary of state, three people familiar with his thinking said on Monday, as Mr. Trump moves rapidly to fill out his foreign policy and national security team.”
POLITICS (BBG): “President-elect Donald Trump picked Florida congressman Mike Waltz as his national security advisor, a person familiar with the matter said, elevating the former Army Green Beret and combat veteran to become one his closest aides.”
POLITICS (RTRS): “Data provider DDHQ projected on Monday that President-elect Donald Trump's Republican Party had won a majority in the U.S. House of Representatives, which would signal that Republicans would hold a majority in both chambers of Congress.”
MIDDLE EAST (RTRS): “The U.S. military said on Monday it had carried out strikes against nine targets associated with Iranian groups in Syria.”
OTHER
JAPAN (BBG): “Japanese Prime Minister Shigeru Ishiba pledged more than $65 billion of support for the nation’s semiconductor and artificial intelligence sector over the next decade.”
AUSTRALIA (BBG): “Australia’s consumer sentiment rose in November while business confidence jumped to the highest level since early 2023, reflecting ebbing inflation pressures that suggest the next move in interest rates will be a reduction.”
NEW ZEALAND (BBG): “New Zealand’s concrete production slipped to the lowest level in nine years, highlighting a construction slowdown in a sputtering economy.”
CHINA
PROPERTY (BBG): “China is planning to cut taxes for home purchases as the government dials up fiscal support to revive a moribund housing market, according to people familiar with the matter.”
POLICY (SHANGHAI SECURITIES NEWS): “The People’s Bank of China will improve policy tools to deal with abnormal fluctuations in the stock market and maintain a smooth operation of the financial market, Shanghai Securities News reported. In a financial work report to the National People’s Congress Standing Committee.”
MONEY SUPPLY (SECURITIES DAILY): “China’s M1 money supply decline narrowed to -6.1% in October from the previous -7.4%, as authorities began transferring fiscal funds from recent bond sales to local government agencies, according to Mingming, chief economist at CITIC Securities. A rebound in real-estate transactions after the announcement of stimulus policies further supported M1 supply as residents used funds to pay for deposits on houses.”
CHINA MARKETS
MNI: PBOC Net Injects CNY107.2 Bln via OMO Tuesday
The People's Bank of China (PBOC) conducted CNY125.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY107.2 billion after offsetting the maturity of CNY18.3 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5874% at 09:30 am local time from the close of 1.7261% on Monday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 49 on Monday, compared with the close of 57 on Friday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1927 Tues; +1.32% Y/Y
The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1927 on Tuesday, compared with 7.1786 set on Monday. The fixing was estimated at 7.1929 by Bloomberg survey today.
MARKET DATA
AUSTRALIA NOV. WESTPAC CONSUMER CONFIDENCE +5.3% M/M; PRIOR +6.2%
AUSTRALIA NOV. WESTPAC CONSUMER CONFIDENCE 94.6; PRIOR 89.8
AUSTRALIA OCT. NAB BUSINESS CONDITIONS +7; PRIOR +7
AUSTRALIA OCT. NAB BUSINESS CONFIDENCE +5; PRIOR -2
NEW ZEALAND OCT. TOTAL CARD SPENDING +0.4% M/M; PRIOR +0.3%
NEW ZEALAND OCT. RETAIL CARD SPENDING +0.6% M/M; PRIOR +0.1%
JAPAN OCT. MONEY STOCK M2 +1.2% Y/Y; PRIOR +1.2%
JAPAN OCT. MONEY STOCK M3 +0.7% Y/Y; PRIOR +0.7%
MARKETS
US TSYS: Tsys Futures Off Earlier Highs, Curve Ber-Flattens, Fed Speakers Later
- Tsys futures are off earlier session highs, although ranges remain narrow. TU is currently +00¾ at 102-22⅛, TY is +04+ is 110-01+. There has been little in the way of drivers through the session, USD continues to edge higher making new yearly highs as investors await remarks from Fed speaker tonight and inflation data due later in the week.
- Cash tsys have reopened after a three day break, with the curve bear-flattening, yields are -1bps to +4bps, with the 3yr yield underperforming. The 2yr is +3.2bps at 4.286%, while the 10yr is +1.8bps at 4.322%. The 2s10s continues to flatten is testing recent lows, at 4bps back at October 10 levels.
- The flattening move was supported earlier after a Block 2s10s flattener, DV01 $645k
- The market is no longer pricing in a full rate cut in December, projected rate cuts into early 2025 compared to early Monday levels (*): Dec'24 cumulative -16.3bp (-17.1bp), Jan'25 -24.3bp (-25.7bp), Mar'25 -37.6bp (-38.9bp), May'25 -45.0bp (-46.9bp).
- It is another slow session for US data, Fed speakers will be the focus with Waller, Barkin, Kashkari and Harker all speaking, while attention will turn to CPI on Wednesday.
JGBS: Subdued Data-Light Session, PPI & 30Y Supply Tomorrow
JGB futures have pushed into negative territory, -6 compared to settlement levels.
- Outside of the previously outlined M2 & M3 Money Stock, there hasn't been much by way of domestic drivers to flag. Machine Tool Orders data is due soon.
- Cash US tsys are flat to 4bps cheaper in the Asia-Pac session today with a flattening bias. US tsys reopened today after being closed for the Veterans Day holiday yesterday.
- Fed futures are pricing 17bps of cuts at the December meeting with a cumulative 25.7bps of cuts priced in by the January meeting.
- Cash JGBs are little changed across benchmarks beyond the 1-year (+2bps).
- Swap rates are little changed as well.
- Tomorrow, the local calendar will see PPI data alongside 30-year supply.
AUSSIE BONDS: Slightly Mixed, Cash US Tsys Heavy, Q3 WPI Tomorrow
ACGBs (YM flat & XM +2.0) are slightly mixed after dealing in narrow ranges in today’s Sydney session.
- Outside of the previously outlined consumer and business confidence, there hasn't been much by way of domestic drivers to flag.
- Cash US tsys are flat to 4bps cheaper in the Asia-Pac session today with a flattening bias. US tsys reopened today after being closed for the Veterans Day holiday yesterday.
- Cash ACGBs are flat to 2bps richer after trading 1-2bps cheaper early. The AU-US 10-year yield differential is at +24bps.
- Swap rates are 2bps lower to 1bp higher, with a flatter 3s10s curve.
- The bills strip is slightly cheaper, with pricing flat to -2.
- RBA-dated OIS pricing is little changed across meetings. There is no easing priced by year-end. A 25bps rate cut is not fully priced until August.
- Tomorrow, the local calendar will see the Q3 Wage Price Index, ahead of the Employment Report for October on Thursday.
- This week, AOFM plans to sell A$800mn of the 2.50% 21 May 2030 bond tomorrow and A$700mn of the 4.75% 21 April 2027 bond on Friday.
- Today’s sale of A$150mn of the Nov-32 inflation-linked bond showed a cover ratio of 3.77x.
NZGBS: Closed Cheaper, H/H Spending Up Again
NZGBs closed 1-3bps cheaper across benchmarks, aligning with cash US tsys, which are also flat to 3bps cheaper in the Asia-Pac session today with a flattening bias. US tsys reopened today after being closed for the Veterans Day holiday yesterday.
- NZ retail card spending posted a third consecutive monthly rise in October up 0.6% m/m after 0.1%. Total spending rose 0.4% m/m after 0.3% and is now slightly positive on a year ago. The start of easing in August appears to have allowed households to begin to spend again.
- Westpac sees the October data as “encouraging” and that there should be further rises once past and future rate cuts are fully felt. Westpac observes that “most mortgages have not come up for refixing yet. In addition, further cuts from the RBNZ are expected over the coming months (we’re forecasting another 50bp cut at the upcoming November meeting).”
- Swap rates closed 1-3bps higher, with a flattening bias.
- RBNZ dated OIS pricing closed 3-8bps firmer across 2025 meetings. A cumulative 89bps of easing is priced by February, with 52bps by year-end.
- Tomorrow, the local calendar will see Net Migration data, ahead of REINZ House Sales and Food Prices on Thursday.
FOREX: USD Mostly Higher, A$ Weaker On Yuan Loss Spillover
The USD is tracking higher against all the major currencies, with the exception of the yen, as the first part of Tuesday trade unfolds. The BBDXY index was last near 1275.5, not too far off Monday intra-session highs (1276.43).
- AUD/USD is the weakest performer, last near 0.6555 and off close to 0.35%. Post election lows in the pair (0.6513) remain intact. Spill over from the break higher in USD/CNH, which is threatening a test of 7.2500, is weighing on the AUD.
- Earlier we had brief respite on BBG headlines that China is considering reducing property taxes to aid the sector, but the positive follow through provided short lived. At the break the CSI 300 is up modestly, the Shanghai Composite close to flat.
- Reports from the NYT and WSJ suggest foreign policy hawks could fill key Trump administration positions (Marco Rubio for Secretary of State and former veteran Republican Mike Waltz for National Security Adviser) is likely also in focus.
- US Tsy yields have resumed trading, with a curve flattening bias. The 2yr is up to 4.28%, +3bps, the 10yr sits off earlier highs, last near 4.32%. US equity futures are down slightly, while regional equity sentiment has seen some negative tech spill over.
- USD/JPY spiked above 154.00 earlier, but now sits back at 153.50/55, slightly firmer in yen terms for the session.
- Earlier data showed both consumer and business confidence in Australia rising, but the market impact was negligible. NZ spending data pointed to some improvement in consumer spending trends.
- Looking ahead, the Fed’s Waller, Barkin, Kashkari and Harker speak and the Senior Loan Officer Survey is published. US October small business optimism and NY Fed 1-yr inflation expectations plus UK labour market data and euro area November ZEW print. ECB’s Cipollone and BoE’s Pill appear.
ASIA STOCKS: Asian Equities Mostly Lower As Semiconductors Struggle
Asian equities are mostly lower today. Japanese equities have given back session gains to now trade mixed with tech stocks underperforming. Hong Kong listed equities have seen a sharp drop due to concerns about domestic macroeconomic conditions and rising geopolitical tensions, headlines out earlier supporting the China property market have done little to push equities higher. Asian tech stocks are the worst performing today, with the large-cap semiconductor stocks leading the losses. US Tsys yields rose, driving funds into the dollar and pressuring emerging Asian currencies, with the Thai baht and Indonesian rupiah weakening.
- Asia tech is struggling, tracking moves made overnight in the Philadelphia SE Semiconductor Index. Investors are now looking to key earnings reports from Tencent and Alibaba to gauge the impact of business streamlining efforts, and whether consumer spending will recover with potential Beijing stimulus.
- China mainland equities are outperforming Hong Kong listed equities, with the CSI 300 +0.40%, while the HSI is -1.75%, HSTech Index is -2.50%.
- Japanese equities are off earlier highs, with the TOPIX now just 0.10% higher for the day, Recruit Holdings surged 8.20% in early morning trading following better-than-expected operating profit for 2Q however most of those gains have now been erased and trades just 2.5% higher. The Nikkei has erased earlier gains and now trades down 0.70%, with Tokyo Electron (-3.20%) struggling.
- South Korea’s Kospi is trading 1.30% lower, marking a third straight session of losses, driven by foreign and local fund selling, while retail investors stepped in to buy. Taiwan's TAIEX is trading 1.70% lower, largely due to a 2.30% drop from TSMC following a 2.54% fall in the Philadelphia SE Semiconductor Index overnight.
- Australia's ASX 200 is 0.2% lower, primarily impacted by declines in gold miners as bullion prices retreated following volatility in the US. Meanwhile, Australian consumer confidence rose in November, as households appeared less worried about future interest rate hikes.
OIL: Crude Holds Onto Losses As Supply/Demand In Focus
After falling over 2.5% on Monday, oil prices are down a bit further during APAC trading today as demand concerns, especially from China, persist. There is also the risk of additional US supply under the Trump administration. Brent is down 0.15% to $71.72/bbl, off the $71.62 low. WTI is 0.1% lower at $67.96/bbl having broken below $68 to make a trough of $67.84. Continued greenback strength continues to weigh on dollar-denominated crude with the USD BBDXY index up another 0.1%.
- There will be further information on the current demand/supply position and the outlook later today with US industry-produced inventory data for last week and OPEC’s monthly report. The EIA’s short-term energy outlook is out tomorrow and the IEA’s report on Thursday.
- Prompt spreads continue to point to a tight oil market but it is easing with the gap between the two nearest contracts narrowing, according to Bloomberg.
- Later the Fed’s Waller, Barkin, Kashkari and Harker speak and the Senior Loan Officer Survey is published. US October small business optimism and NY Fed 1-yr inflation expectations plus UK labour market data and euro area November ZEW print. ECB’s Cipollone and BoE’s Pill appear.
GOLD: Drops To Lowest Level Since October 10
Gold is steady in today’s Asia-Pacific session, following a 2.4% decline yesterday to $2,619/oz, its lowest level since October 10.
- The cash US treasury market was closed on Monday in observance of the Veterans Day holiday, but Treasury futures (TYZ4) were weaker. US treasury yields are 1-3bps higher in today’s Asia-Pac session. Higher rates are typically negative for gold, which doesn’t pay interest.
- The S&P 500 reset its record high (6017.31) yesterday, though it failed to hold its early advance. The Russell 2000 Index was up ~1.5%, reaching its highest level since 2021. European equities made solid gains with the Euro Stoxx closing 1.2% higher.
- Despite the move on the back of the strong US dollar, Deutsche Bank remains bullish on gold long-term, supported by a higher rate of central bank accumulation.
- According to MNI’s technicals team, the trend condition in gold remains bullish and the latest pullback appears corrective. However, yesterday’s sell-off delivered a print below the 50-day EMA, at $2,646.2, turning attention to $2,604.9, the Oct 8 low.
- Silver also fell by a further 2.2% on Monday, narrowing the gap towards $30.269, a trendline support.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 12/11/2024 | 0700/0800 | *** |  DE | HICP (f) |
| 12/11/2024 | 0700/0700 | *** |  GB | Labour Market Survey |
| 12/11/2024 | 0900/0900 | GB | BOE's Pill panellist at UBS conference on Reversing tightening | |
| 12/11/2024 | 1000/1100 | *** | DE | ZEW Current Conditions Index |
| 12/11/2024 | 1000/1100 | *** | DE | ZEW Current Expectations Index |
| 12/11/2024 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 12/11/2024 | 1100/0600 | ** |  US | NFIB Small Business Optimism Index |
| 12/11/2024 | 1200/1200 | GB | Asset Purchase Facility Quarterly Report | |
| 12/11/2024 | 1330/0830 | * |  CA | Building Permits |
| 12/11/2024 | 1400/1500 |  EU | ECB's Cipollone chairing policy panel on financial sanctions | |
| 12/11/2024 | 1500/1000 | US | Fed Governor Christopher Waller | |
| 12/11/2024 | 1515/1015 | US | Richmond Fed's Tom Barkin | |
| 12/11/2024 | 1600/1100 | ** | US | NY Fed Survey of Consumer Expectations |
| 12/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 12/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 12/11/2024 | 1800/1300 | * | US | US Treasury Auction Result for Cash Management Bill |
| 12/11/2024 | 1900/1400 | US | Minneapolis Fed's Neel Kashkari | |
| 12/11/2024 | 2130/1630 | US | New York Fed's Roberto Perli | |
| 12/11/2024 | 2200/1700 | US | Philly Fed's Pat Harker | |
| 13/11/2024 | 0030/1130 | *** |  AU | Quarterly wage price index |
| 13/11/2024 | 0945/0945 | GB | BOE's Mann at Female Central Bankers panel | |
| 13/11/2024 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 13/11/2024 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 13/11/2024 | 1330/0830 | *** | US | CPI |
| 13/11/2024 | 1355/0855 | ** | US | Redbook Retail Sales Index |