MNI US OPEN - Kremlin Denies Reports of Trump-Putin Call
EXECUTIVE SUMMARY
- TRUMP TELLS PUTIN NOT TO ESCALATE IN UKRAINE; KREMLIN DENIES PHONE CALL
- TRUMP, MUSK WEIGH IN ON SENATE LEADER CONTEST AHEAD OF VOTE
- HABECK TO MEET W/PRES AS BERLIN ELECTION OFFICIAL WARNS OF EARLY VOTE
- CHINA OCT CPI SLOWS FOR 2ND MONTH TO 0.3% Y/Y
Figure 1: US-EU Stocks Gap Grows Further
Source: MNI/Bloomberg
NEWS
US/RUSSIA (MNI): Kremlin Denies Putin-Trump Call
Kremlin spox Dmitri Peskov has denied any telephone call took place between Russian President Vladimir Putin and US President-Elect Donald Trump, as was reported in WaPo over the weekend. Peskov: "[Reports of a call are] completely untrue. This is pure fiction. This is simply false information". Peskov went on to say that Putin has no "specific" plans to talk to Trump at present. Since the confirmation of Trump's election win, there has been significant international focus on what the Republican 'trifecta' (presidency, Senate, House) could mean for US policy with regards to Ukraine.
Since the confirmation of Trump's election win, there has been significant international focus on what the Republican 'trifecta' (presidency, Senate, House) could mean for US policy with regards to Ukraine. Polskie Radio reports comments from Polish PM Donald Tusk on 10 Nov, "Responding to a question about the partially released media plan [from Trump] regarding Ukraine, he emphasized that such a plan is likely only in the preparation stage. In his view, declarations can be expected soon, particularly regarding a ceasefire date, the border where it will be in effect, and security guarantees for Ukraine."
US/RUSSIA (WaPo): Trump Talked to Putin, Told Russian Leader Not to Escalate in Ukraine
President-elect Donald Trump spoke with Russian President Vladimir Putin on Thursday, the first phone conversation between the two men since Trump won the election, said several people familiar with the matter. During the call, which Trump took from his resort in Florida, he advised the Russian president not to escalate the war in Ukraine and reminded him of Washington's sizable military presence in Europe, said a person familiar with the call, who, like others interviewed for this story, spoke on the condition of anonymity to discuss a sensitive matter. The two men discussed the goal of peace on the European continent and Trump expressed an interest in follow-up conversations to discuss "the resolution of Ukraine's war soon," one of the people said.
MIDEAST (MNI): Hezbollah & Israel FM Say Negotiatons on Lebanon Ceasefire Underway
Saudi state-run Al Arabiya reporting that according to Lebanese Hezbollah, negotiations have begun to end the war with Israel. Separately, Reuters reporting on wires that Israel's new Foreign Minister Gideon Saar has said 'there is progress on Lebanon ceasefire talks', adding 'we are working with the Americans on this'. Saar: 'The main challenge will be to enforce what is agreed'. In an effort to temper expectations, Saar reiterates that the war with Hezbollah 'is not over yet' but its capabilities are 'severely reduced' and the majority of its missile capacity is destroyed.
US (BBG): Trump, Musk Weigh In on Senate Leader Contest Ahead of Vote
President-elect Donald Trump and Elon Musk moved to make demands of the next Senate Republican leader, potentially scrambling a race that has been expected to go to one of Mitch McConnell’s longtime allies. Trump insisted the next Republican leader endorse letting him make recess appointments bypassing the Senate, which Musk quickly said was essential to accomplishing Trump’s agenda. Musk then endorsed Florida Senator Rick Scott, a longtime Trump ally and McConnell critic, for the leader job, after Scott backed Trump’s demand.
US (WSJ): Trump’s Transition Effort Kicks Into High Gear
Donald Trump’s transition team has assembled digital presentations for the president-elect that feature headshots of potential contenders for key cabinet positions, according to people familiar with the process. Aides are reviewing candidates’ television interviews to gauge whether they are adept at selling Trump’s agenda, some of the people said.
US (BBG): Trump Picks Former Immigration Chief Homan as His ‘Border Czar’
President-elect Donald Trump said he will install Tom Homan, the former acting head of the U.S. Immigration and Customs Enforcement agency, as a “border czar” with oversight over immigration, maritime and aviation security. “I’ve known Tom for a long time, and there is nobody better at policing and controlling our Borders,” Trump said in a social media post Sunday. “Likewise, Tom Homan will be in charge of all Deportation of Illegal Aliens back to their Country of Origin.”
GERMANY (MNI): Habeck to Meet w/Pres as Berlin Election Official Warns of Early Vote
Vice Chancellor Robert Habeck is set to meet with President Frank-Walter Steinmeier today in order to discuss 'an orderly path' to new elections according to unnamed gov't officials. Chancellor Olaf Scholz's apparent openness to accelerating the process towards snap elections has garnered notable attention in recent days. Speaking in a TV interview on 10 Nov, Scholz said that he would sign off on a confidence vote before Christmas if the Bundestag leader of his centre-left Social Democrats (SPD) Rolf Mützenich agrees with centre-right Christian Democratic Union (CDU) leader Freidrich Merz. Scholz's initial plan had a January confidence vote leading to a March election.
UK (Telegraph): Starmer Plots to Thwart Trump on Ukraine
Sir Keir Starmer and Emmanuel Macron are expected to plot a last-ditch attempt to thwart Donald Trump’s efforts to scale back US support for Ukraine. The British and French leaders on Monday will discuss whether Joe Biden, the US president, can be persuaded to give Ukraine permission to fire Storm Shadow missiles deep into Russia, according to UK Government insiders. The Telegraph has been told there are hopes in London that Mr Biden will finally give the approval Kyiv has sought for months in a bid to secure his foreign policy legacy.
SNB (BBG): SNB’s Martin Doesn’t See Mideast War, US Vote Pressuring Franc
The Swiss National Bank doesn’t see increased pressure on the franc from the conflict in the Middle East and the US elections, according to Vice President Antoine Martin. While the currency’s role as a safe haven can lead it to strengthen during periods of tension, “nothing today allows us to think that certain shocks will necessarily happen,” he told Swiss newspaper Le Temps in an interview published Monday. Lower inflation rates in Switzerland than in other countries mean the franc is expected to rise structurally in nominal terms over time, Martin said. Excluding the impact of price rises, the increase has been limited, however, he added.
EU/CHINA (BBG): EU Sees Little Chance of Quick China Deal to Avoid EV Tariffs
The European Union sees very limited progress in negotiations with China aimed at finding an alternative to tariffs on electric vehicles and the bloc currently sees little prospect of a quick deal, according to people familiar with the matter. China and the EU will continue technical talks this week after discussions in Beijing where both sides touted some progress. However, the chances of a deal remain slim for now, said the people, who spoke on condition of anonymity to discuss private negotiations.
CHINA (MNI): PBOC to Ensure Economy-Wide Liquidity - Dep Gov Lu
MNI (Beijing) 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. The focus of intermediate targets of monetary policy will shift to interest-rate adjustment from money supply control considering prices may be more related to economic performance and offer real-time control and measurability, he explained, noting fiscal and monetary policies should work in tandem, with promoted mechanisms for injecting and withdrawing liquidity.
CHINA (MNI): PBOC Has Room for More Easing - Research Head
MNI (Beijing) 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.
BOJ (MNI): BOJ Should Cautiously Mull Rate Hikes - Oct Opinions
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. “The BOJ needs to pay due attention to the future course of overseas economies, particularly the U.S. economy, and developments in financial and capital markets," noted one board member.
JAPAN (BBG): Weakened Ishiba Stays as Japan PM to Deal With Emboldened Trump
Japan’s Prime Minister Shigeru Ishiba won a runoff vote to stay in the job despite a national election setback, as he prepares for an expected meeting with US President-elect Donald Trump later this month. Ishiba garnered 221 votes to secure his leadership position in the final round of a lower house ballot, winning the plurality needed to pull through in the runoff. Although he failed to gain a majority of the votes, he prevailed against main opposition party leader Yoshihiko Noda who gained 160, following divisions in the opposition camp and a decision by a key smaller party to vote for its own leader.
INDIA (BBG): India Ready to Weaken Rupee in Line With Yuan on Trump Win
India’s central bank is ready to let the rupee weaken in tandem with the Chinese yuan after Donald Trump’s election win spurred fears of higher US tariffs, according to people familiar with the thinking of policymakers. A depreciating yuan will lower the cost of Chinese goods, potentially leading to more imports and further widening India’s biggest trade deficit with any country. The Reserve Bank of India is poised to cushion the blow by allowing a weaker rupee, even while using its ample reserves to keep the fall in check, according to the people, who asked not to be identified due to the sensitivity of the matter.
DATA
NORWAY DATA (MNI): Headline Inflation a Bit Higher Than Expected but Underlying In-Line
- NORWAY OCT CPI +0.6% M/M, +2.6% Y/Y
- NORWAY OCT CORE CPI +0.2% M/M, +2.7% Y/Y
At first glance, CPI-ATE broadly in line with expectations but there is an upward surprise of 2 tenths to headline CPI Y/Y. The Norges Bank September MPR forecast headline CPI to be 2.8%Y/Y in Q4-24 and CPI-ATE to be 3.0%Y/Y so today's print doesn't initially seem to endanger those forecasts.
CHINA DATA (MNI): China Oct CPI Slows for 2nd Month to 0.3% Y/Y
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. Food prices rose 2.9% y/y, decelerating 0.4 percentage points from September as weather conditions improved. Non-food prices fell 0.3% y/y, expanding from the previous 0.2% decline, led by a 10.7% fall in gasoline prices. On a monthly basis, CPI fell 0.3%, slowing from September's 0.0%.
CHINA YTD TSF CNY27.06 TRLN VS MEDIAN CNY27.2 TRLN (MNI)
CHINA YTD NEW LOANS CNY16.52 TRLN VS MEDIAN CNY16.7 TRLN (MNI)
CHINA END-OCT M2 +7.5% Y/Y VS MEDIAN +7.0%; END-SEP +6.8% Y/Y (MNI)
CHINA END-OCT M1 -6.1% Y/Y VS -7.4% Y/Y END-SEP (MNI)
CHINA END-OCT M0 +12.8% Y/Y VS +11.5% Y/Y END-SEP (MNI)
JAPAN DATA (MNI): Japan Oct Sentiment, Outlook Indexes Both Fall
Japan's sentiment and outlook index for two-three months ahead both posted their second straight drop in October as households continued to be hit by high prices and firms suffered high costs, the Economy Watchers released by the Cabinet Office showed Monday. The Economy Watchers sentiment index for the current economic climate stood at a seasonally adjusted 47.5 in October, down from 47.8 in September, while the outlook index for two to three months ahead fell 1.4 points to 48.3 from 49.7. The indexes linked to households, businesses and the labour market fell.
FOREX: USD/JPY Narrows Gap With Resistance on Ishiba Election, BoJ Minutes
- The greenback is regaining a small part of the recent lost ground, while JPY, NOK and EUR remain the key underperformers to begin the week.
- Bearish technical conditions dominate in EUR/USD and spot has narrowed in on 1.0666, a key support. Below here, 1.0611 represents the next downside target, the 38.2% retracement of the Sep '22 - Jul '23 bull cycle, just ahead of the year's lows at 1.0601, printed back in April.
- JPY remains weaker across the board, helping AUD/JPY remain just above the 200-dma and within reach of last week's post-election highs at 102.41 (the corresponding high in USD/JPY is just 85 pips above current spot at 154.71). The formal re-election of Ishiba may have bolstered JPY downside overnight, while the BoJ minutes showed very few pressing signals for a rate hike at the December BoJ meeting.
- The Monday session sees no meaningful data releases or notable central bank speakers - keeping focus on recent Presidential election results and the gradual assembly of Trump's cabinet for 2025 as well as policy priorities. Geopolitical risk remains a focus, with Trump's election seen as a possible turning point for global conflicts including the Russia-Ukraine war and Middle-east instability.
BONDS: EGBs Firm as Oil Softens & German Vote Eyed, Gilts Little Changed
Increased odds of an expedited German election process and weakness in crude oil futures drives a rally in EGBs this morning, although there has been a pullback.
- Risks to the implementation of the ruling German government’s supplementary Budget also factor into the rally.
- Bund futures +20 at 132.28 vs. highs of 132.61.
- Initial resistance now comes in at 132.73, with Friday’s high broken & the 20-day EMA pierced.
- Yields 2.5-3.5bp lower across the curve, bull flattening.
- Bund vs. 3-month Euribor ASW printed at ~1.2bp before fading towards 0bp. Sell-side names still cautious on the idea of long swap spread trades.
- EGBs generally outperform Bunds by 0.5-1.0bp, aided by the bid in European equities and modest dovish move in ECB pricing.
- No meaningful outperformance for SPGBs after Fitch moved Spain’s outlook to positive late on Friday, with the medium-term positive fiscal trajectory well-defined, albeit with increased spending surrounding the recent floods noted.
- Gilts lag Bunds.
- Futures traded as high as 94.43 before fading back to 94.00. Last -4 at 94.14.
- UK yields little changed.
- 10s ~3bp wider vs. Bunds, spread back out to ~210bp after last week’s late move away from fresh cycle wides. Truss mini-Budget wides still in focus (227.6bp).
- BoE-dated OIS and SONIA futures little changed vs. late Friday levels.
- Little of note on the macro calendar today, with the U.S. and areas of Europe observing a public holiday.
EQUITIES: Last Week's Gains Reinforce Bullish Conditions in E-Mini S&P
A bearish condition in Eurostoxx 50 futures remains intact and last week’s fresh cycle lows reinforce current conditions, having confirmed a resumption of the bear cycle. The contract has pierced 4815.50, the 50.0% retracement of the Aug 5 - Sep 30 bull cycle. This exposes 4757.00, the Sep 6 / 10 low and a key support. Initial firm resistance has been defined at 5015.00, the Oct 29 high, where a break would highlight a reversal. Bullish conditions in S&P E-Minis remain intact and last week’s gains reinforce current conditions. A key short-term support has been defined at 5724.25, Nov 4 low. The move higher last week resulted in a breach of the bull trigger at 5927.25, Oct 17 high, confirming a resumption of the primary uptrend. The 6000.0 psychological handle has been pierced. Sights are on 6070.16, a Fibonacci projection. Initial support is at 5927.25, the Oct 17 high.
- Japan's NIKKEI closed higher by 32.95 pts or +0.08% at 39533.32 and the TOPIX ended 2.47 pts lower or -0.09% at 2739.68.
- Elsewhere, in China the SHANGHAI closed higher by 17.769 pts or +0.51% at 3470.066 and the HANG SENG ended 301.26 pts lower or -1.45% at 20426.93.
- Across Europe, Germany's DAX trades higher by 217.89 pts or +1.13% at 19435.1, FTSE 100 higher by 56.18 pts or +0.7% at 8128.55, CAC 40 up 81.63 pts or +1.11% at 7419.92 and Euro Stoxx 50 up 51.72 pts or +1.08% at 4854.58.
- Dow Jones mini up 120 pts or +0.27% at 44261, S&P 500 mini up 17.5 pts or +0.29% at 6042.5, NASDAQ mini up 67.5 pts or +0.32% at 21297.5.
Time: 10:00 GMT
COMMODITIES: Pullback in Gold Considered Corrective, Bullish Trend Unchanged
A bearish theme in WTI futures remains intact and the latest recovery, including last week’s gains, appear corrective. A resumption of weakness would expose $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal would instead refocus attention on the key short-term resistance at $77.70, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial resistance is $74.35, the Oct 14 high. The trend condition in Gold is unchanged, it remains bullish and the latest pullback appears corrective. The yellow metal has cleared the 20-day EMA and this highlights potential for an extension of the corrective cycle. Attention is on a key support at $2647.4, the 50-day EMA. A clear break of this average would expose $2604.9, the Oct 8 low. For bulls a reversal higher would refocus attention on the bull trigger at $2790.1, the Oct 31 high.
- WTI Crude down $0.91 or -1.29% at $69.52
- Natural Gas up $0.17 or +6.18% at $2.835
- Gold spot down $17.87 or -0.67% at $2667.29
- Copper down $2.75 or -0.64% at $427.95
- Silver up $0.05 or +0.15% at $31.352
- Platinum up $6.14 or +0.63% at $979.14
Time: 10:00 GMT
Date | GMT/Local | Impact | Country | Event |
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 |