Source: MNI - Market News/Bloomberg
UK
HOUSE PRICES (BBG): “ UK house price growth will be weaker than previously expected in 2026 as high interest rates and taxes weigh on the market, according to revised forecasts from Hamptons International.”
UKRAINE (BBC): “Treasury minister Darren Jones has said the UK government's commitment to Ukraine is "resolute" amid fears incoming US President Donald Trump could push the country into giving up territory to Russia.”
TRADE (BBC): “The UK could face a £22bn hit to its exports if Donald Trump imposes a blanket 20% tariff on all imports into the US, according to a new analysis. UK exports to the world could fall more than 2.6% due to lower trade with the US and knock-on effects globally, economists at the University of Sussex's Centre for Inclusive Trade Policy (CITP) said.”
ECONOMY (BBC): “In a letter, more than 200 signatories have said the hospitality industry is disproportionately impacted by an "unsustainable" hike in the amount employers pay in National Insurance contributions (NICs). It adds that businesses have "no capacity to pass the costs onto customers", which would instead lead to job cuts and closures of smaller firms.”
EU
GERMANY (BBG): “German Chancellor Olaf Scholz said he’s open to moving up a parliamentary confidence vote by several weeks to before Christmas, potentially speeding up the country’s early election to February.”
GERMANY (DW): “A party ally says Chancellor Scholz would be open to talks with Friedrich Merz on when to move toward new elections — but only after dealing with urgent business in parliament. Merz earlier said this wasn't acceptable.”
GERMANY/US (BBG): “ German Chancellor Olaf Scholz told US President-elect Donald Trump in a phone call that his government is ready to continue “decades of successful cooperation” between the two countries, a German spokesman said.”
ITALY (POLITICO): “Chinese investment in Italy is “below potential” and should increase, Italian President Sergio Mattarella said on a visit to Beijing. Italy’s trade with China needs “re-balancing” between import and export, Mattarella told Chinese Premier Li Qiang on Friday, Sky Tg24 reported.”
GREECE (POLITICO): “Greece’s Syriza party cracked up further over the weekend and is about to officially lose its status as the country’s main opposition. The party’s recently deposed leader Stefanos Kasselakis announced on Saturday the creation of a new political movement, taking at least four MPs with him.”
POLAND/UKRAINE (POLITICO): “Polish Prime Minister Donald Tusk plans meetings with leaders from the EU, the U.K. and NATO to discuss the situation in Ukraine after Donald Trump’s election victory in the United States.”
RUSSIA/UKRAINE (BBC): “Russia's defence ministry said it intercepted 84 Ukrainian drones over six regions, including some approaching Moscow, which forced flights to be diverted from three of the capital's major airports. Ukraine's air force said Russia launched 145 drones towards every part of the country on Saturday night, with most shot down.”
RUSSIA (POLITICO): “Russia last month suffered its most significant troop losses since the start of the war in Ukraine while making territorial gains, the United Kingdom's Chief of the Defence Staff Tony Radakin said Sunday.”
US
GEOPOLITICS (RTRS): “U.S. President-elect Donald Trump spoke with Russian President Vladimir Putin and advised him not to escalate the Ukraine war, a source familiar with the conversation told Reuters on Sunday, as President Joe Biden plans to urge Trump not to abandon Kyiv.”
MARKETS (BBG): “Bitcoin rallied past $81,000 for the first time, boosted by President-elect Donald Trump’s embrace of digital assets and the prospect of a Congress featuring pro-crypto lawmakers.”
OTHER
JAPAN (MNI BRIEF): The Bank of Japan must carefully consider policy interest rate hikes, according to some board members at the Oct 30-31 meeting, and despite the board's view that it would gradually increase the rate, the summary of opinions showed on Monday.
CANADA (MNI): Canadian employment growth slowed and lagged economist forecasts in October, though it was enough to keep the jobless rate steady and workers continued to receive wage increases far above the pace of consumer price inflation.
NEW ZEALAND (BBG): “New Zealand two-year ahead inflation expectations crept higher, but remained near the midpoint of the central bank’s target band.”
CHINA
POLICY (MNI BRIEF): The People's Bank of China has room to ease monetary policy further, implementing strong interest-rate cuts and selectively reducing the reserve requirement ratio with the global trend of declining interest rates, said Ding Zhijie, head of the Research Institute at the central bank on Saturday during the Caixin Summit 2024.
POLICY (MNI BRIEF): The People’s Bank of China will ensure liquidity across the economy and financial markets remains reasonably sufficient via further cuts to the reserve requirement ratio, government bond trading and other open market operations, said Deputy Government Lu Lei on Saturday at the Caixin Summit 2024.
INFLATION (MNI BRIEF): China's Consumer Price Index rose 0.3% y/y in October, slowing from September's 0.4% and underperforming expectations by 10 basis points, however, core CPI rebounded slightly to 0.2%, data from the National Bureau of Statistics showed Saturday.
FISCAL (SECURITIES TIMES): “China is expected to raise its deficit-to-GDP ratio higher next year from 2024’s 3%, following the Ministry of Finance’s pledge to increase fiscal policy intensity, Securities Times reported, citing analysts.”
CHINA MARKETS
MNI: PBOC Net Injects CNY116.4 Bln via OMO Monday
The People's Bank of China (PBOC) conducted CNY133.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY116.4 billion after offsetting the maturity of CNY17.3 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5867% at 09:35 am local time from the close of 1.6104% on Friday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 57 on Friday, compared with the close of 52 on Thursday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1786 Mon; +1.55% Y/Y
The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1786 on Monday, compared with 7.1433 set on Friday. The fixing was estimated at 7.1814 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND RBNZ SURVEY Q4 2-YEAR INFLATION EXPECTATIONS 2.12%; PRIOR 2.03%
NEW ZEALAND RBNZ SURVEY Q4 AVERAGE 1-YR INFLATION EXPECTATIONS 2.05%; PRIOR 2.4%
JAPAN SEPT. TRADE DEFICIT Y315.2B; EST. -Y66.2B; PRIOR –Y377.9B
JAPAN SEPT. ADJUSTED CURRENT ACCOUNT SURPLUS Y1.272T; EST. Y2.951T; PRIOR Y3.146T
JAPAN SEPT. CURRENT ACCOUNT SURPLUS Y1.717T; EST. Y3.422T; PRIOR Y3.146T
JAPAN OCT. BANK LENDING EXCLUDING TRUSTS +3.0% Y/Y; PRIOR +3.0%
JAPAN OCT. BANK LENDING INCLUDING TRUSTS +2.7% Y/Y; PRIOR +2.7%
SOUTH KOREA NOV. 1-10 EXPORTS -17.8% Y/Y
SOUTH KOREA NOV. 1-10 IMPORTS -21% Y/Y
SOUTH KOREA NOV. 1-10 DAILY AVERAGE EXPORTS -0.1% Y/Y
SOUTH KOREA NOV. 1-10 TRADE DEFICIT $856M
SOUTH KOREA TOTAL BANK LENDING TO HOUSEHOLDS OCT. KRW 1139.5T; PRIOR KRW 1135.6T
MARKETS
US TSYS: Tsys Futures Edge Lower, Long-End Underperforming
- Tsys futures have continued to drift lower throughout the session, the long-end is underperforming, however still trades above Friday's lows, while the short-end has now broken below Friday's lows. TU was last -01⅜ at 102-23¼, TY is -08 at 110-01, while WN is -22 at 124-21.
- Looking at Dec'24 10yr futures technicals, a bear cycle remains in play following Wednesday's move lower reinforces current conditions. The recovery Thursday, above 110-00, is considered corrective. A resumption of the bear leg would open 109-05 next, the 76.4% retracement of the Apr - Sep bull cycle (cont). The 109-00 handle remains exposed too. Initial firm resistance is seen at 111-03+, the 20-day EMA.
- Cash trading is closed today for veterans day. The 10yr closed Friday at 4.304% about 17bps lower than the highs made on November 6th.
- There has been some decent unwinding of curve steepener trades over the past week, with the 2s10s flattening 14.5bps & the 2s30s flattening 18bps since the US election.
JGBS: Cash Bonds Slightly Richer, BOJ SOO Cautious, PM Vote Due
JGB futures remain stronger, +6 compared to settlement levels, after dealing in a narrow range in today’s Tokyo session.
- The BOJ’s summary of opinions for the Oct 30-31 meeting revealed that some board members believed the central bank must carefully consider policy interest rate hikes despite the board's view that it would gradually increase the rate.
- Japan’s DPP will nominate its head Yuichiro Tamaki at the premiership vote after alleged marital infidelity. The party’s support for Tamaki means it is unlikely that Monday’s vote will select a new prime minister. (per BBG)
- Cash US tsys are closed today for the Veterans Day holiday. Nevertheless, US tsy futures (TYZ4) are dealing heavily at 110-01, down 0-08 from Friday's close.
- Cash JGBs are flat to 1bps across benchmarks. The benchmark 10-year yield is 0.3bp at 1.006%.
- The MOF’s auction of 10-year inflation-indexed bonds showed solid demand amid speculation that consumer prices will keep climbing. Bid-to-cover ratio for the sale of ¥250b of linkers maturing in March 2034 rose to 3.54 from 2.96 at the previous sale in August.
- Swap rates are flat to 2bps higher. Swap spreads are wider.
- Tomorrow, the local calendar will see M2 & M3 Money Stock and Machine Tool Orders data alongside BOJ Rinban operations covering 1-25-year OTR JGBs.
AUSSIE BONDS: Early Gains Given Up As TYZ4 Grinds Lower
ACGBs (YM -4.0 & XM -1.5) are weaker and near lows, having given up early gains on a data-light Sydney session.
- Cash US tsys are closed today for the Veterans Day holiday. Nevertheless, US tsy futures (TYZ4) are dealing heavily at 110-00, down 0-08+ from Friday's close. Fed speakers resume Tuesday in addition to the Senior Loan Officer Opinion Survey on Bank Lending Practices.
- The local calendar has been empty today, ahead of Consumer and Business Confidence tomorrow. The Q3 Wage Price Index is released on Wednesday followed by the Employment Report for October on Thursday.
- Cash ACGBs are 1-4bps cheaper with the AU-US 10-year yield differential at +28bps.
- Swap rates are 1-4bps higher, with the 3s10s curve flatter.
- The bills strip has bear-steepened, with pricing -1 to -5.
- RBA-dated OIS pricing is 1-4bps firmer today, with no easing by year-end. A 25bps rate cut is not fully priced until July.
- This week, the AOFM plans to sell A$800mn of the 2.50% 21 May 2030 bond on Wednesday and A$700mn of the 4.75% 21 April 2027 bond on Friday. It also plans to sell A$150mn of the Inflation-Linked 0.25% 21 November 2032 bond tomorrow.
NZGBS: Closed On Weak Note Despite Anchored Infl. Exps.
NZGBs closed with a modest bear-steepening, benchmark yields 1-3bps higher, after trading 2-3bps richer early in the session.
- Q4 inflation expectations from the RBNZ’s business survey showed that they remain well anchored close to the mid-point of the target band. 1-year out they moderated to 2.05% from 2.4% while 2-years out they were slightly higher at 2.1% from 2.0%. 1-year out has a 90% correlation with headline inflation and 78% with core, so the RBNZ should be assured that the former will stay in the band and that the latter should return soon. Another 50bp of easing is likely at its November 27 meeting.
- Cash US tsys are closed today for the Veterans Day holiday. Nevertheless, US tsy futures (TYZ4) are dealing heavily at 110-00, down 0-08+ from Friday's close. Fed speakers resume Tuesday in addition to the Senior Loan Officer Opinion Survey on Bank Lending Practices.
- Swap rates closed 1-2bps higher.
- RBNZ dated OIS pricing is flat to 4bps firmer across meetings, with July 2025 leading. A cumulative 92bps of easing is priced by February, with 53bps by year-end.
- Tomorrow, the local calendar will see Card Spending data, ahead of Migration data on Wednesday.
FOREX: Safe Havens Underperform Amid Softer US Tsy Futures
The USD BBDXY index sits modestly higher, last near 1269.4, still comfortably within recent ranges. Yen is the weakest performer in Monday trade so far, off nearly 0.60% to 153.50/55.
- The bias in US Tsy futures has been lower, although much of the move took place in the first part of trade. 10yr futures are off -08, lending some support for the USD, particularly against the yen. CHF is also weaker off close to 0.20%.
- USD/JPY dipped modestly for Friday's session, so the first part of Monday trade is seeing some of this yen outperformance unwound. Earlier lows in the pair were at 152.64. Post US election highs were 154.71, so we still have distance to close that gap.
- There has been no cash Tsy trading due to the US holiday later, while news flow has been light. Other Trump related trades have also been solid, with Bitcoin rising to a fresh record high.
- We had the BoJ Summary of Opinions earlier, which showed a wide variety of viewpoints. In sum, a cautious approach to further rate hikes is likely.
- AUD/USD is up a touch but still under 0.6600. The regional equity tone is mostly negative, with HK markets the worst performers. Disappointment around China's stimulus announcement from late on Friday likely carrying over. AUD/JPY is up to 101.10/15, but sub recent highs of 102.405.
- NZD/USD has crept higher, last near 0.5970/75. Q4 inflation expectations from the RBNZ’s business survey showed that they remain well anchored close to the mid-point of the target band. 1-year out they moderated to 2.05% from 2.4% while 2-years out they were slightly higher at 2.1% from 2.0%. The Kiwi rose modestly on the data, but there was no follow through.
- There are no data in the US or Europe with Veterans/Remembrance Day observed in a number of countries. ECB’s McCaul speaks later.
EQUITIES: Chinese & Hong Kong Equities Mostly Lower, Property Underperforming
Chinese equities are mostly lower today, reflecting disappointment from last week's NPC meeting. The CSI 300 Index dropped 0.2%, with consumer staples, Real estate and energy stocks leading declines, although there have been strong gains made in Tech stocks. Hong Kong listed equities have significantly underperformed today with the HSI -2.20%, while HS China Enterprise Index is 2.15% lower following a sharp drop in China Property Developer Stocks.
- Despite a $1.4t program to tackle local government debt, the lack of new stimulus to boost consumption dampened investor sentiment. Ongoing weak economic data, including near-zero consumer price growth and falling factory-gate prices, added to concerns. UBS cut its 2025 growth forecast for China, citing uncertainty from Donald Trump’s U.S. election victory, which could lead to a more challenging trade environment.
- Speculative trading is surging, supporting turnover above 2t yuan in recent sessions. The upcoming Central Economic Work Conference next month may provide a new catalyst for further gains in Chinese stocks.
Foreign direct investment in China fell by nearly $13b in the first nine months of 2024, with companies like Nissan, Volkswagen, and IBM pulling back operations amid geopolitical tensions and economic concerns. Meanwhile, Chinese firms have sharply increased their outbound investment, adding $34b in overseas assets in the third quarter, as they expand their global presence to counter growing trade barriers.
EQUITIES: Asian Equities Edge Lower Following China Stimulus Update
Asian equities have started the week on the back foot driven by disappointment over China’s debt swap program, which investors found insufficient to address economic concerns. Persistent deflationary pressures in China and a drop in foreign direct investment further weighed on sentiment. Additionally, the US directive to halt advanced chip shipments to China hit stocks like Tencent and Taiwan Semiconductor. Weak commodity prices, particularly in crude oil, iron ore, and copper, dragged down Australian miners, exacerbating the region’s losses.
- Japan's major benchmarks are slightly lower today, with the TOPIX -0.30% with Real Estate the worst performing, followed by materials as commodity prices fall. The Nikkei 225 is performing slightly better although still trades 0.10% lower, consumer discretionary stocks are higher following a 6.40% jump from Sony following the company posting better-than-expected operating profit for second quarter. Operating income 455.08b yen, +73% y/y, estimate 335.31b yen. Suzuki is also 5.10% higher following a 43.9% rise in attributable profit to 217.45b yen for the first half of the fiscal year 2024.
- There has been decent selling by foreign investors of South Korean equities today, largely focus on the tech sector, with Samsung down 3.30%, while SK Hynix is 3.40% lower, the KOSPI is 1.10% lower. Taiwan equities are off earlier lows, although the TAIEX still trades down 0.60% for the session, with TSMC about 1% lower.
- Australian equities are lower, led by sharp declines in mining stocks following disappointment over China's underwhelming debt relief program. Major miners like BHP, Rio Tinto, and Fortescue dropped significantly due to concerns about weaker Chinese demand and falling commodity prices. Goldminer Resolute Mining plunged over 28% after its CEO and two executives were taken captive in Mali. The ASX 200 closed 0.35% lower. New Zealand's NZX 50 closed 0.66% lower.
OIL: Crude Continues To Weaken, Key Industry Reports Out This Week
After falling sharply on Friday, oil prices are lower again today after China’s October PPI/CPI data printed lower than expected. The latest stimulus decision also disappointed markets, who have worried about the strength of China’s energy demand for some time. Brent is down 0.4% to $73.60/bbl after a low of around $73.50, while WTI is 0.5% lower to $70.06 after falling briefly below $70 several times. The USD index is 0.1% higher.
- China October CPI rose only 0.3% y/y down from 0.4% the previous month, while the PPI deteriorated to -2.9% y/y from -2.8%. Persistent weak price pressures added to oil market concerns regarding demand from China, the world’s largest crude importer.
- Monthly reports are released this week from OPEC on Tuesday, the US EIA on Wednesday and the IEA on Thursday. Demand forecasts will be in the spotlight. IEA has been less optimistic than OPEC about the 2025 outlook projecting a market surplus for some time.
- The Brent prompt spread, difference between two nearest contracts, remains bullish but is narrowing signalling that physical strength is moderating, according to Bloomberg.
- There are no data in the US or Europe with Veterans/Remembrance Day observed in a number of countries. ECB’s McCaul speaks later.
GOLD: Trump Win Weighs Despite US Fed Cut
Gold is 0.6% lower in today’s Asia-Pac session, after closing 0.8% lower at $2684.77 on Friday.
- Friday’s move left bullion 1.8% lower on the week.
- On Friday, Wall Street ended on a positive note, with the S&P marking its fourth consecutive gain amid optimism for a pro-growth, business-friendly agenda under Trump. The index rose 0.38% to close at 5,995, testing but not quite reaching the 6,000 level. This marked the S&P's 50th record high this year. The week's 4.66% rally was also the strongest weekly gain of the year.
- US short-term rates softened amid the rally in risk assets and reduced expectations for rate cuts. Typically, lower rates are supportive for gold, as it carries no interest yield.
- Despite this week’s dip, UBS analysts say that gold will likely see support as a hedge against the inflationary pressures of higher US government borrowing.
- From a technical perspective, the trend condition remains bullish, and the latest pullback is considered corrective, according to MNI’s technicals team. Attention is on a key support at $2,647.4, the 50-day EMA. For bulls, a reversal higher would refocus attention on the bull trigger at $2,790.1, the Oct 31 high.
- Meanwhile, silver has underperformed, falling by ~2.5% on Friday and 3.8% on the week.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 11/11/2024 | 0700/0800 | *** |  NO | CPI Norway |
| 11/11/2024 | - | *** |  CN | Money Supply |
| 11/11/2024 | - | *** | CN | New Loans |
| 11/11/2024 | - | *** | CN | Social Financing |
| 11/11/2024 | - |  GB | DMO quarterly investors/GEMM consultation | |
| 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 |