Source: MNI - Market News/Bloomberg
UK
CONSUMER CONFIDENCE (BBG): “UK consumer confidence posted a surprise increase in November after the budget ended uncertainty over the tax and spending plans of the new Labour government, a survey found.”
BOE (MNI BRIEF): The Bank of England's terminal policy rate was clearly above where the Bank's models had assumed that it would be and that policy has not been as restrictive as previously thought, Monetary Policy Committee member Catherine Mann said Thursday.
EU
EU (BBG): “The election of Donald Trump is a wakeup call for Europe to implement long-delayed reforms, said the central bank chiefs of its top two economies, adding that more common debt isn’t needed for now.”
RUSSIA (RTRS): “ Russia fired a hypersonic intermediate-range ballistic missile at the Ukrainian city of Dnipro on Thursday in response to the U.S. and UK allowing Kyiv to strike Russian territory with advanced Western weapons, in a further escalation of the 33-month-old war.”
SWEDEN (BBG): “Northvolt AB filed for bankruptcy protection in the US after a desperate bid to secure rescue funding fell short, leaving the struggling battery maker with just one week’s cash in its accounts.”
TRADE (MNI BRIEF): The European Union should react to any move by the incoming U.S. Trump administration to impose tariffs in a coordinated, precise and proportionate way, Commission Executive Vice President Valdis Dombrovskis said on Thursday.
US
POLITICS (WSJ): “President-elect Donald Trump has floated selecting financier Kevin Warsh as his Treasury secretary with the understanding that he could later be nominated to lead the Federal Reserve when Jerome Powell's term as chair ends in 2026, according to people familiar with the matter.”
POLITICS (RTRS): “U.S. President-elect Donald Trump on Thursday nominated former Florida Attorney General Pam Bondi to be Attorney General of the United States, moving swiftly to replace former nominee Matt Gaetz after the embattled former congressman withdrew from consideration.”
FED (MNI BRIEF): Cleveland Fed President Beth Hammack said Thursday the U.S. central bank should consider the benefits of centrally clearing transactions at its Standing Repo Facility to further enhance the effectiveness of the backstop.
OTHER
JAPAN (MNI BRIEF): The year-on-year rise of Japan's annual core consumer inflation rate slowed to 2.3% in October from September’s 2.4%, 10 basis points higher than expected, due to lower energy, but corporate price revisions boosted services prices, data released by the Ministry of Internal Affairs and Communications showed on Friday.
JAPAN (BBG): “Japan’s Prime Minister Shigeru Ishiba confirmed Friday that a stimulus package expected to gain approval later in the day will be slightly bigger than last year’s as he followed up on a pledge to ramp up support for households and businesses struggling to cope with higher costs.”
CANADA (MNI BRIEF): Canadian Prime Minister Justin Trudeau said Thursday billions of dollars of proposed tax breaks won't boost inflation, an announcement coming as he’s badly trailing in opinion polls and the budget office says the government has already broken a pledge for deficits no greater than CAD40 billion.
CANADA (MNI BRIEF): Canadian Prime Minister Justin Trudeau on Thursday said that while keeping Mexico in a North American free trade pact is his first choice, other options may be needed, his strongest public comments to date about the potential for returning to a bilateral deal with the U.S.
CHINA
HOUSING (SECURITIES TIMES): “The year-on-year decline in new home sales nationwide is expected to soften as November sales stabilize and increased developer promotions would support December's results, Securities Times reported citing analysts.”
DEBT (SECURITIES DAILY): “Nine provinces or cities have released plans to issue special refinancing bonds to swap out outstanding implicit debts totaling about CNY500 billion, Securities Daily reported.”
CONSUMER (SECURITIES TIMES): “China will likely step up support next year for consumers to buy goods with its trade-in policies, Securities Times reports Friday, citing Shen Jianguang, chief economist with JD.com Inc.”
YUAN (MNI BRIEF): The People's Bank of China will continue to maintain the yuan exchange rate's flexibility while preventing any risk of excessive currency moves, said Liu Ye, an official within the international department, during a briefing on Friday.
YUAN (SHANGHAI SECURITIES NEWS): “ China’s currency may resume its upward momentum soon as gains in the US Dollar Index are seen limited, Shanghai Securities News reports Friday, citing analysts.”
CHINA MARKETS
MNI: PBOC Net Drains CNY345.9 Bln via OMO Friday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY635.1 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY345.9 billion after offsetting the maturity of CNY981 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6456% at 10:20 am local time from the close of 1.6986% on Thursday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 45 on Thursday, compared with the close of 50 on Wednesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1942 Fri
The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1942 on Friday, compared with 7.1934 set on Thursday. The fixing was estimated at 7.2497 by Bloomberg survey today.
MARKET DATA
AUSTRALIA NOV P S&P GLOBAL PMI MFG 49.4; PRIOR 47.3
AUSTRALIA NOV P S&P GLOBAL PMI SERVICES 49.6; PRIOR 51.0
JAPAN OCT NATL CPI Y/Y 2.3%; MEDIAN 2.3%; PRIOR 2.5%
JAPAN OCT NATL CPI EX FRESH FOOD Y/Y 2.3%; MEDIAN 2.2%; PRIOR 2.4%
JAPAN OCT NATL CPI EX FRESH FOOD, ENERGY Y/Y 2.3%; MEDIAN 2.2%; PRIOR 2.1%
JAPAN JIBUN BANK NOV P PMI MFG 49.0; PRIOR 49.2
JAPAN JIBUN BANK NOV P PMI SERVICES 50.2; PRIOR 49.7
UK NOV GFK CONSUMER CONFIDENCE -18; MEDIAN -22; PRIOR -21
MARKETS
US TSYS: Tsys Futures Edge Slightly Higher Ahead Of PMI
- Slow session in tsys futures today, they are trading slightly higher but within Thursday's ranges, trading has been largely focused on rolls. TU is +00¾ at 102-18+, while TY is trading +03+ at 109-19+, both trading just off session highs.
- Cash tsys curve has steepened slightly throughout the session, with yields trading 0.5 to 1.5bps lower. The 2yr is -1.4bps at 4.335%, while the 10yr is -1.2bps at 4.41%. Yields have been rangebound recently with the 10yr note stabilizing near 4.41%, aligned with its 9-day moving average. The lack of key economic data and ongoing political uncertainties are keeping yields steady.
- Projected rate cuts have firmed slightly acorss the next two meetings vs Thursday morning levels (*): Dec'24 cumulative -14.9bp (-13.1bp), Jan'25 -20.3bp (-19.5bp), Mar'25 -33.6bp (-33.8bp), May'25 -40.1bp (-41.4bp).
- Later today we have preliminary PMIs for November, with the final November UMichigan survey also of note, while the only Fed speaker scheduled is Gov Bowman after hours, but we've already heard from her this week.
JGBS: Small Yield Swings Despite Slightly Higher Natl CPI Core Measures
JGB futures are stronger and at Tokyo session highs, +10 compared to settlement levels, despite a slight beat for the core measures in today’s national CPI release.
- Japan's nationwide Oct CPI prints were a little above market expectations. The headline printed in line with consensus at 2.3%y/y, versus 2.5% prior. The core ex-fresh food measure was 2.3%y/y, against a 2.2% forecast and 2.4% prior outcome. The core measure which also excludes energy was 2.3%y/y against a 2.2% forecast and 2.1% prior.
- Services rose 1.5% y/y and 0.4% m/m against September's 1.3% and -0.4% as firms transferred higher labour costs to retail prices. The increase was largely in line with the lower end of the BOJ's forecast.
- Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s modest bear-steepener.
- Cash JGBs have twist-flattened across benchmarks beyond the 1-year, pivoting at the 5-year, with yields 1bp higher to 1bp lower. The benchmark 10-year yield is 1.1bps lower at 1.085% versus the cycle high of 1.108%.
- Swaps are dealing mixed, with rates 2bps lower (5-10-year zone) to 3bps higher (20-30-year zone). Swap spreads are mixed.
- On Monday, the local calendar will see Coincident & Leading Indices and Nationwide Dept Sales alongside an Enhanced Liquidity Auction covering 1-5-year JGBs.
AUSSIE BONDS: Subdued Session, Local Calendar Until Wed’s Monthly CPI Data
ACGBs (YM +1.0 & XM +2.0) are slightly stronger and at Sydney session highs on a data-light session. Ranges have been, however, relatively narrow.
- Cash tsys curves are 1-2bps richer across benchmarks.
- “The Australian dollar’s resilience looks set to sustain heading into the final weeks of the year with the RBA’s determined push-back against bets on rate cuts finally starting to gain traction with traders. That’s making AUD/USD something of a haven at a time when peers such as NZD, EUR and GBP face rough economic and/or geopolitical outlooks.”
- Cash ACGBs are 2bps richer, with the AU-US 10-year yield differential at +15bps.
- Swap rates are flat to 1-2bps lower, with the 3s10s curve flatter.
- The bills strip is flat to +2 across contracts, with a flattening bias.
- RBA-dated OIS pricing is 1-2bps softer for late 2025 meetings. No easing is priced by year-end, with a 25bps rate cut not fully priced until July.
- The local calendar is empty until October’s CPI on Wednesday.
- Next week, the AOFM plans to sell A$800mn of the 3.50% 21 December 2034 bond on Wednesday and A$700mn of the 1.50% 21 June 2031 bond on Friday.
NZGBS: Closed On A strong Note As Market Looks To RBNZ Decision
NZGBs closed on a strong note, with benchmark yields 4-7bps lower, led by the belly of the curve.
- With the domestic calendar light again today, the strong move appears to reflect anticipation that the RBNZ may cut by more than 50bps next Wednesday or possibly signal a more aggressive easing profile looking ahead.
- All economists surveyed by Bloomberg are looking for a 50bp cut. That said, our policy team noted earlier this week that an ex-RBNZ economist said the central bank would consider a 75bps cut.
- The AUD/NZD cross continues to push higher, last near 1.1140. We are within striking distance of earlier YTD highs (1.1152). The NZDUSD fell to a one-year low.
- The next key release in NZ will be Q3 Retail Sales ex-Inflation on Monday.
- Swap rates closed 4-5bps lower, with implied swap spreads tighter.
- RBNZ-dated OIS pricing closed 3-9bps softer across 2025 meetings. A cumulative 95bps of easing is priced by February, with 54bps for next Wednesday.
- By July, New Zealand’s official cash rate is projected to be 64bps lower than Australia’s, despite currently sitting at +43bps. For context, back in late October, the NZ-AU official rate differential was expected to reach -75bps.
FOREX: USD/JPY Supported Sub 154.00, NZD Falters As AUD/NZD Tests Higher
The main focus in the first part of G10 FX trading for Friday has been JPY gains and NZD losses. At this stage, the BBDXY USD index is little changed, last near 1286.6. Moves elsewhere have been very muted.
- USD/JPY saw a brief dip under 154.00 not long after we had slightly stronger than expected Oct National CPI print (for core measures, headline was as expected). This reinforced the potential live nature of the Dec BoJ meeting, coming after Ueda's comments late yesterday.
- There was little follow through though and overnight lows in USD/JPY at 153.91 remained intact. The pair was last near 154.30/35, up a modest 0.15% in yen terms for the session.
- NZD weakness was associated with a break higher in the AUD/NZD cross. This cross got to 1.1180, fresh YTD highs, amid AU-NZ yield differential support. The respective central bank outlooks are divergent in the near term. The RBNZ meets next week (50bps cuts expected), while we also have the Oct CPI in Aust. The cross is a little lower now, last near 1.1140/45.
- NZD/USD fell to fresh YTD lows of 0.5829, but we sit back above 0.5840 in latest dealings. Next downside target is likely to be round figure support at 0.5800, last tested in Nov last year.
- AUD/USD has been mostly steady, last down a touch to 0.6505/10.
- Looking ahead, we have UK retail sales coming up. There will also be focus on flash UK and EU PMIs. We also get US flash PMIs, along with U. of Mich Consumer Sentiment. Fed speak from Bowman also crosses.
ASIA STOCKS: Asian Equities Mostly Higher, China Stocks Struggle
Asian equities are mostly higher today, tracking gains made overnight in the US following renewed optimism about Nvidia’s growth prospects, while crypto continues to tick higher with bitcoin now eyeing $100,000. China 7 Hong Kong equities have struggled following poor results from Baidu.
- Japan did report CPI at 2.3% y/y for October, Jibun Bank PMI was mixed with Mfg dropping to 49.0 from 49.2, although services PMI rose to 50.2 from 49.7, while equities pushed higher ahead of a $140b government stimulus announcement, and a slight strengthening of the yen following comments from Bank of Japan Governor Kazuo Ueda limited further gains. The TOPIX is 0.65% higher, while the Nikkei trades up 0.90%.
- China & Hong Kong equities have struggled today, with property the worst performing sector, the Mainland Property Index is down 2.30%, while tech stocks struggle following Baidu's shares dropping sharply following a revenue decline, adding to weakness in the sector following on from Alibaba’s lackluster performance after its recent earnings report. The CSI 300 is 1% lower, while the HSI is trading 1.30% lower.
- South Korean equities are higher as, SK Hynix surges 5% benefitting from the Philadelphia SE Semiconductor Index trading 1.60% higher overnight, Samsung which is trading just off four-year lows is trading unchanged. The KOSPI is 1% higher, while the KOSDAQ is 0.50% lower. Taiwan equities have also benefitted from higher global semiconductor prices with TSMC jumping 3%, which has helped the TAIEX rise 1.70%.
- Australia's ASX 200 is trading 0.95% higher, with Financials contributing the most to the index gains, tech stocks in Australia are struggling following Wisetech dropping 12% following disappointing earnings guidance. In New Zealand, the NZX50 jumped 2.20%, following Fisher & Paykel jumping 4.30% and A2Milk jumping 18%.
- Asian EM equities are mostly higher, India is up 1% however trades 10% off cycle highs following consistent selling from foreign investors recently, elsewhere Indonesia's JCI is up 0.80%, while Philippines PSEi is the worst performing with the index down 0.95%.
EQUITIES: HK & China Tech Stocks Edge Lower On Poor Earnings
The HSTech Index is losing momentum as Baidu's shares drop sharply following a revenue decline, adding to weakness in the sector following on from Alibaba’s lackluster performance after its recent earnings report.
- Alibaba's stock remains under pressure, last down 3.30%, despite appointing a veteran executive to lead its e-commerce operations, as its core Chinese e-commerce growth was just 1% in the September quarter. Without afternoon support from local investors, the tech index is unlikely to end the week positively.
- Baidu's Q3 earnings showed revenue of ¥33.56b (-2.6% YoY), slightly exceeding estimates of ¥33.53 billion, with Baidu Core revenue flat at ¥26.52bi while iQIYI revenue missing forecasts at ¥7.2b. Adjusted profit per ADR came in at ¥16.60, missing the ¥17.73 estimate and declining from ¥20.40 a year earlier, while adjusted operating profit fell 7.7% YoY to ¥7.01b, though it beat expectations of ¥6.36b. Monthly active users reached 704m, and cash reserves totaled ¥144.5b. Management cited weakness in online marketing but highlighted growth in AI Cloud and increasing adoption of its ERNIE AI model.
Chart. Asia Tech Stocks Struggle
OIL: Strong Performance for Oil this Week Despite Challenges.
- Having retreated yesterday on news of growing inventories in the US, Oil turned its attention to the escalation in Ukraine.
- Having fired US and UK manufactured long dated missile into Russia, Ukraine was at the receiving end as Russia launched their new ballistic missile at the city of Dnipro.
- WTI had hovered around US$69 for some time before the news, then spiking to $70.38.
- Following a retreat to $69.40, oil again rose to finish trading in US hours at $70.14 before settling around $72.22 in Asia trading.
- WTI has performed strongly this week, up almost 5%.
- Brent’s price action was somewhat similar having traded around $73 into the US open, it popped on the news to a high of $74.40, before retreating do $73.50.
- Further headlines from Ukraine saw a resurgence in Brent up to $74.30 for the close and has traded around $74.35 during Asia trading.
- Brent will see a 4.6% increase over the course of the week.
- China’s economic malaise has been a drag on oil prices this year and data out yesterday was watched keenly by oil markets and particularly OPEC+.
- With the market facing a sizeable supply glut in 2025 markets await a decision from OPEC+ on plans to revive idled production which signs of an improvement in China could thwart.
- Road congestion and new vehicle registrations rose to the highest levels seen in several years.
- In Brazil, Petrobras announced plans to invest $111bn over the next five years.
- As oil begins to trade in the Asia region, traders are clearly mindful of the Geopolitics driving markets with prices ticking marginally higher in early trading.
GOLD: Up For A Fourth Consecutive Session
Gold is 0.7% higher in today’s Asia-Pac session, after closing 0.7% higher at $2669.72 on Wednesday, its fourth consecutive daily gain.
- The move brings the yellow metal to its highest since Nov 11, amid continued safe-haven demand following the further escalation of geopolitical tensions.
- As a result, the 20-day EMA at $2,653.1 has been breached. This highlights a stronger reversal for gold and signals the end of the recent bearish corrective cycle, opening $2,710.4, the Nov 11 high, according to MNI’s technicals team.
- Traders also weighed yesterday’s comments from Fed Bank of Chicago President Austan Goolsbee, who said he sees interest rates moving “a fair bit lower” and expressed confidence inflation is easing toward the central bank’s target. Lower rates typically benefit bullion as it doesn’t pay interest.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 22/11/2024 | 0700/0800 | *** |  DE | GDP (f) |
| 22/11/2024 | 0700/0700 | *** |  GB | Retail Sales |
| 22/11/2024 | 0815/0915 | ** |  FR | S&P Global Services PMI (p) |
| 22/11/2024 | 0815/0915 | ** | FR | S&P Global Manufacturing PMI (p) |
| 22/11/2024 | 0830/0930 | ** | DE | S&P Global Services PMI (p) |
| 22/11/2024 | 0830/0930 | ** | DE | S&P Global Manufacturing PMI (p) |
| 22/11/2024 | 0830/0930 |  EU | ECB's Lagarde on Europe and New World Order | |
| 22/11/2024 | 0840/0940 | EU | ECB's De Guindos at Foro Observatorio Económico | |
| 22/11/2024 | 0900/1000 | ** | EU | S&P Global Services PMI (p) |
| 22/11/2024 | 0900/1000 | ** | EU | S&P Global Manufacturing PMI (p) |
| 22/11/2024 | 0900/1000 | ** | EU | S&P Global Composite PMI (p) |
| 22/11/2024 | 0930/0930 | *** | GB | S&P Global Manufacturing PMI flash |
| 22/11/2024 | 0930/0930 | *** | GB | S&P Global Services PMI flash |
| 22/11/2024 | 0930/0930 | *** | GB | S&P Global Composite PMI flash |
| 22/11/2024 | 1330/0830 | ** |  CA | Retail Trade |
| 22/11/2024 | 1330/0830 | ** | CA | Retail Trade |
| 22/11/2024 | 1445/0945 | *** |  US | S&P Global Manufacturing Index (Flash) |
| 22/11/2024 | 1445/0945 | *** | US | S&P Global Services Index (flash) |
| 22/11/2024 | 1500/1000 | ** | US | U. Mich. Survey of Consumers |
| 22/11/2024 | 1545/1645 | EU | ECB's Schnabel in panel on MonPol | |
| 22/11/2024 | 2315/1815 | US | Fed Governor Michelle Bowman |