Source: MNI - Market News/Bloomberg
UK
BOE (MNI BRIEF): Bank of England Deputy Governor Dave Ramsden said Wednesday that the Monetary Policy Committee's central view of inflation picking up above target over the next two years was "plausible" but that he thought it was at least as likely that disinflation continues and he said he would consider faster rate cuts if this happened.
UKRAINE (BBG): "Ukrainian forces fired British cruise missiles at military targets inside Russia for the first time, expanding the use of Western-provided long-range weapons as the 1,000-day conflict enters a new phase."
JOBS (BBG): "Ford Motor Co. will look to eliminate another 4,000 positions in Europe, further retrenching within a region where the transition to electric vehicles is losing traction industrywide."
EU
DEBT (MNI BRIEF): Some European Union countries have based fiscal consolidation plans on overly-optimistic estimates of future potential growth, a fiscal expert told the European Parliament's ECON Committee on Wednesday.
ECB (BBG): “The euro zone is on the cusp of sustainably reaching 2% inflation, putting the onus on officials to avoid undershooting that goal, according to European Central Bank Governing Council member Yannis Stournaras.”
US
FED (MNI): Federal Reserve Bank of Boston President Susan Collins said Wednesday additional adjustments to interest rates will be appropriate over time, but the aim is not to move too hastily.
FED (MNI INTERVIEW): Ex-Trump Economist-Fed Will Mistakenly Pause
FED (MNI): U.S. inflation is gradually coming down to the Federal Reserve’s 2% target in a way that should allow policymakers to keep cutting interest rates, although the pace and timing of further easing are not yet determined, Fed Governor Lisa Cook said Wednesday.
FED (MNI BRIEF): Federal Reserve Vice Chair for Supervision Michael Barr on Wednesday said he will finish the full scope of his current central bank leadership term, and added that it is still too early to judge what impact President-elect Trump's proposals might have on the economy.
TECH (RTRS): “Nvidia forecast its slowest revenue growth in seven quarters on Wednesday, with the artificial intelligence chipmaker failing to meet lofty expectations of some investors who have made it the world's most valuable firm.”
CORP (BBG): "The Justice Department and a group of states proposed a raft of changes to the business practices of Alphabet Inc.’s Google — including a forced sale of the company’s Chrome web browser — in the wake of a landmark ruling that the tech giant illegally monopolized online search."
OTHER
JAPAN (BBG): “Japan’s largest labor union chief is calling for Prime Minister Shigeru Ishiba’s government to accelerate efforts to boost wages, especially for workers at small firms, as they seek to achieve stronger results for next year’s pay negotiations.”
JAPAN (BBG): “ Japanese Prime Minister Shigeru Ishiba is set to unveil a $140 billion economic stimulus package to address a range of challenges from inflation to wage growth, following his election promises to alleviate a cost-of-living crunch.”
CANADA (MNI BRIEF): Canadian Prime Minister Justin Trudeau lost another cabinet minister Wednesday, adding to his Liberal Party's struggles ahead of an election due next year.
NEW ZEALAND (MNI INTERVIEW): RBNZ To Consider 75bp Cut - Former Economist
INDIA (RTRS): “Gautam Adani, the billionaire chair of Indian conglomerate Adani Group and one of the world's richest people, has been indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme, U.S. prosecutors said on Wednesday.”
CHINA
PBOC (ECONOMIC INFORMATION DAILY): The People’s Bank of China remains likely to cut the reserve requirement ratio by 0.25 to 0.5 percentage points by end-December to deal with accelerated government bond sales and fill the year-end liquidity gap, Economic Information Daily reported, citing analysts.
POWER (NEA): “China’s power demand in October reached 774.2 billion kilowatt hours, up 4.3% y/y, slower than the 7.6% y/y during the first 10 months of the year, data from the National Energy Administration showed.”
LOCAL GOVERNMENT DEBT (YICAI): “Asset-management companies are now allowed to acquire restructured and credit-impaired assets from financial and non-financial institutions, which will support local governments to resolve debt risks, Yicai.com reported, citing a National Financial Regulatory Administration announcement.”
MARKETS (CSJ): “China’s state-owned companies are seen actively exploring mergers and acquisitions as well as share buybacks for market value management, China Securities Journal reports Thursday, citing analysts.”
LENDING RATES (CSJ): “Chinese banks may hold their benchmark lending rates in December, with more cuts likely next year, China Securities Journal reported Thursday.”
CHINA MARKETS
MNI: PBOC Net Injects CNY141.9 Bln via OMO Thursday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY470.1 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY141.91 billion after offsetting the maturity of CNY328.2 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6504% at 10:07 am local time from the close of 1.7259% on Wednesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 50 on Wednesday, compared with the close of 48 on Tuesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1934 Thurs; -0.93% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1934 on Thursday, compared with 7.1935 set on Wednesday. The fixing was estimated at 7.2473 by Bloomberg survey today.
MARKET DATA
SOUTH KOREA NOV FIRST 20 DAYS EXPORTS Y/Y 5.8%; PRIOR -2.9%
SOUTH KOREA NOV FIRST 20 DAYS IMPORTS Y/Y -1.0%; PRIOR -10.1%
MARKETS
US TSYS: Tsys Futures Steady, Ranges Narrow Ahead Of Jobless Claim, Fed Speak
- It has been another slow session for tsys so far, futures are trading with the prior days ranges, while most trading seems to be around futures rolls. TU is -00¼ at 102-19¾, while TY is trading +00+ at 109-22+.
- The belly of the curve is slightly outperforming today, with the 2s7s30s fly -1bp at -24bps, now the lowest since Nov 11th. The 2yr is -0.6bps at 4.308%, while the 10yr is trading -1.2bps at 4.398%.
- The 10yr has spent the past week trading in a narrow range, having failed to break above 4.50% on multi occasions, while the 2s10s has been rangebound since early Oct.
- Projected rate cuts have receded slightly this week vs Friday close (*): Dec'24 cumulative -13.0bp (-14.5bp), Jan'25 -20.0bp (-23.1bp), Mar'25 -34.0bp (-37.6bp), May'25 -41.6bp (-45.3bp).
- Earlier this morning the Fed's Collins earlier emphasized the need for additional interest-rate cuts but advocated a cautious and deliberate approach to avoid missteps, she also stated that while policy remains somewhat restrictive, current adjustments give the FOMC flexibility to assess risks to inflation and employment. She highlighted that inflation is progressing toward the 2% target, though unevenly, and noted the labor market remains healthy despite concentrated job growth
- Focus now turns to Philadelphia Fed Business Outlook, Jobless Claims, Leading Index & Existing Home Sales later today, while we also have Fed speakers including Hammack, Goolsbee, Schmid & Barr
Chart. 2s10s Curve Rangebound
JGBS: Little Changed, BOJ Ueda Remarks Due, Natl CPI Tomorrow
JGB futures are weaker, -14 compared to settlement levels.
- Outside of the previously outlined weekly International Investment flows, there hasn't been much by way of domestic drivers to flag.
- BoJ Governor Ueda delivers remarks around 2:10pm local time. "Remarks by Governor UEDA at the Paris EUROPLACE Financial Forum 2024 in Tokyo" per the BoJ website.
- Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off. Today in the US the focus will be on jobless claims and any pickup in activity in Ukraine/Russia.
- Cash JGBs are little changed across benchmarks. The benchmark 20-year yield is 0.6bp higher at 1.900% after today’s supply.
- The 20-year JGB auction delivered mixed results. While the low price missed dealer expectations, the cover ratio improved to 3.5233x from 3.0369x, and the auction tail shortened, indicating stronger demand. Today’s auction offered an outright yield 10bps higher than last month, despite the 10/20 yield curve remaining largely unchanged.
- The swaps curve has bear-steepened, with rates 1bp lower to 3bps higher. Swap spreads are mixed.
- Tomorrow, the local calendar will see National CPI and Jibun bank PMIs (P).
AUSSIE BONDS: Cheaper, Narrow Ranges, RBA Gov Bullock Speech Later Today
ACGBs (YM -3.0 & XM -2.0) are holding weaker in tight ranges in today’s data-light Sydney session.
- RBA Governor Bullock will give a speech at the Women In Payments Conference at 1900 AEST today.
- “Westpac has become the second big bank to push its forecast for the Reserve Bank of Australia’s first cash rate cut to May from February, as more economists and investors dump expectations for pre-election mortgage relief.” (per AFR)
- Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off. Today in the US the focus will be on jobless claims and any pickup in activity in Ukraine/Russia.
- Cash ACGBs are 2-3bps cheaper with the AU-US 10-year yield differential at +17bps.
- Swap rates are 3-4bps higher.
- The bills strip has bear-steepened, with pricing -1 to -6.
- RBA-dated OIS pricing shows no easing by year-end. A 25bps rate cut is not fully priced until August.
- Tomorrow, the local calendar will see S&P Global PMIs (P) alongside the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2028 bond.
NZGBS: Slight Bear-Steepener, NZ Treasury Cuts Econ & Fiscal Forecasts
NZGBs closed flat to 2bps cheaper after a subdued data-light session of dealings.
- NZ Treasury said it would likely cut its economic and fiscal forecasts because of a sustained productivity slowdown in the economy. The May budget’s forecasts had anticipated a return to economic growth in the second half of 2024, but the latest data suggests the recovery will begin later, Treasury Chief Economic Adviser Dominick Stephens said in a speech. (per Reuters)
- Today’s supply showed mixed results across the cash lines, with cover ratios ranging from 1.71x (May-32) to 4.17x (Apr-29).
- Swap rates closed flat to 3bps higher, with the 2s10s curve steeper.
- The case for another sizable RBNZ rate cut next week is almost as strong as it was in October and at present remains the “path of least regret,” according to ASB Bank. RBNZ will lower its OCR by a further 50bp to 4.25% on Nov. 27, bringing it closer to the more neutral level which is in a rough 3-4% range, economists Nick Tuffley and Mark Smith write in note.
- RBNZ dated OIS pricing is flat to 2bps firmer. A cumulative 92bps of easing is priced by February, with 52bps by year-end.
- The local calendar is light for the remainder of the week. The next key release will be Q3 Retail Sales ex Inflation on Monday.
FOREX: Dollar Gives Back Some Of Wednesday's Gain, USD/JPY Near 155.00
The USD has spent the first part of Thursday's trade, giving back some of Wednesday's gains. At this stage, the BBDXY index is down around 0.15%, last near 1282. This comes after the index rose a little over 0.40% for Wednesday's session. G10 FX pairs remain firmly within recent ranges though.
- Yen has outperformed the G10, albeit marginally. We are up 0.30% against the USD. This puts USD/JPY back near 155.00. The data calendar has just had weekly investment flows, while earlier reports crossed of the largest union urging the government to back wage rises, particularly at small firms.
- The government is also set to pass a stimulus package, which has been well telegraphed but is slightly larger than last year's per onshore media (BBG).
- BoJ Governor Ueda is set to speak later, but it remains unclear if the policy outlook will be covered. He is to speak at the Paris EUROPLACE Financial Forum 2024 in Tokyo around 2:10pm local time.
- AUD/USD is up around 0.25%, last near 0.6520. NZD/USD is close to unchanged at the 0.5880 level. The AUD/NZD cross is tracking higher, last near 1.1090, close to recent highs.
- In the cross asset space, US equity futures are down, led by tech (Nasdaq futures off around 0.40%). Some disappointment post Nvidia results (from late in Wednesday US trade) has weighed. This hasn't impacted higher beta FX though.
- US yields sit down a touch, Fed speak has been mixed between hawks/doves in the past 24 hours.
- Coming up, we have the RBA Governor speaking at 7pm AEDT, but at a payments conference so monetary policy may not be spoken about. Later on, we have the Philly Fed survey in the US, and initial jobless claims. Fed speak is also due, along with more ECB speak.
EQUITIES: Asian Equities Mostly Lower, As Tech Stocks Weigh On Market
Equity markets are trading mostly lower today, following on from Nvidia's revenue forecast, which fell short of the highest expectations, dampening sentiment in semiconductor and AI-related stocks. In Asia, Japanese chipmakers like Advantest and Hoya led declines, pulling the Topix down 0.3% and the Nikkei 225 by 0.8%. TSMC and SK Hynix also saw losses, reflecting concerns about the AI boom slowing. In Australia, Nvidia’s earnings report weighed on tech and consumer discretionary shares, though energy and financials offered some support. Traders are also cautious ahead of BOJ Governor Ueda’s remarks, which could provide insights into the central bank's policy direction. Meanwhile, geopolitical and legal developments, including the Adani bribery charges, are adding to market uncertainty.
- Hong Kong & China equities are trading in narrow ranges today, although most major benchmarks are pointing to small losses so far. The HSI is -0.20%, while the CSI 300 is -0.15%.
- Foreign investors have been slightly better sellers of Korean equities today, with a net outflow of $65m, most of that coming from the tech sector. The KOSPI is 0.15% higher, as Samsung trades up 0.75%, while the KOSDAQ trades 0.45% lower.
- US equity futures are trading lower, with the Nasdaq leading losses, last down 0.45%.
OIL: US Inventory Led Weakness Steadies in Asian Trading.
- Oil prices lost ground overnight as concerns as to an escalation in Ukraine were overshadowed by a jump in US inventories.
- US crude inventories rose 4.8m barrels last week and gasoline 2.05m barrels.
- This damped the prospects for oil which had been alert to the news of the use of US and UK made missiles used by Ukraine on Russia.
- WTI peaked at US$70.15 during the US trading day, finishing the day at $68.87 following the inventory report. It has opened in Asian trading a touch firmer at $69.04 before trading down to $68.90.
- Brent had peaked at US$73.94 during the US trading day only to finish at $73.30 and has traded around $72.92 / $72.98 for most of the day.
- The inventory story and its impact on prices should remain temporary as Russia’s veiled threats for nuclear retaliation remain prominent for investors.
- In the Middle East efforts remain ongoing to find a ceasefire between Hezbollah and Israel as Joe Biden’s time as US President comes to an end.
- In the options markets, the premiums for bullish call options over bearish put options in Brent futures has disappeared at time where the additional risk premium that oil futures have had embedded in them (due to war-related supply issues), has all but disappeared since Trump’s election.
- Data released from China customs yesterday show that Malaysia has replaced Saudi Arabia as China’s second largest supplier of oil, behind Russia.
GOLD: Buoyed By Geopol Tensions
Gold is steady in today’s Asia-Pac session, after closing 0.7% higher at $2650.60 on Wednesday, a third consecutive session of gains.
- The move came amid a further increase in geopolitical tensions as Ukraine launched another long-range missile attack on Russia.
- Despite the heightened geopolitical risk, analysts at Standard Chartered believe that macro factors, including the US dollar and rate-cut expectations, are likely to set the tone in the near term.
- Federal Reserve Bank of Boston President Susan Collins said that more interest-rate cuts were needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly.
- Lower rates are typically positive for gold, which doesn’t pay interest.
- According to MNI’s technicals team, the long-term trend condition in gold remains bullish, with the yellow metal piercing the 20-day EMA at $2,651.3 today.
- A clear break above it would highlight a possible reversal and signal the end of the recent bearish corrective cycle, opening $2,710.4, the Nov 11 high.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 21/11/2024 | 0700/0700 | *** |  GB | Public Sector Finances |
| 21/11/2024 | 0745/0845 | ** |  FR | Manufacturing Sentiment |
| 21/11/2024 | 0830/0930 |  EU | ECB's Cipollone at ECRB meeting | |
| 21/11/2024 | 1100/0600 | *** |  TR | Turkey Benchmark Rate |
| 21/11/2024 | 1100/1100 | ** | GB | CBI Industrial Trends |
| 21/11/2024 | 1330/0830 | *** |  US | Jobless Claims |
| 21/11/2024 | 1330/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 21/11/2024 | 1330/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 21/11/2024 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 21/11/2024 | 1345/0845 | US | Cleveland Fed's Beth Hammack | |
| 21/11/2024 | 1400/1400 | GB | BOE Mann fireside chat with Brown Brothers Harriman | |
| 21/11/2024 | 1500/1600 | ** | EU | Consumer Confidence Indicator (p) |
| 21/11/2024 | 1500/1000 | *** | US | NAR existing home sales |
| 21/11/2024 | 1500/1000 | * | US | Services Revenues |
| 21/11/2024 | 1530/1030 | ** | US | Natural Gas Stocks |
| 21/11/2024 | 1530/1630 | EU | ECB's Lane in panel on macroeconomic effects of geopolitical uncertainty | |
| 21/11/2024 | 1530/1630 | EU | ECB's Elderson at the University of Cyprus | |
| 21/11/2024 | 1600/1100 | ** | US | Kansas City Fed Manufacturing Index |
| 21/11/2024 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 21/11/2024 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 21/11/2024 | 1730/1230 | US | Chicago Fed's Austan Goolsbee | |
| 21/11/2024 | 1730/1230 | US | Kansas City Fed's Jeff Schmid | |
| 21/11/2024 | 1800/1300 | ** | US | US Treasury Auction Result for TIPS 10 Year Note |
| 21/11/2024 | 2140/1640 | US | Fed Vice Chair Michael Barr | |
| 22/11/2024 | 2200/0900 | *** |  AU | Judo Bank Flash Australia PMI |
| 22/11/2024 | 2330/0830 | *** |  JP | CPI |
| 22/11/2024 | 0001/0001 | ** | GB | Gfk Monthly Consumer Confidence |
| 22/11/2024 | 0030/0930 | ** | JP | Jibun Bank Flash Japan PMI |
| 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 |