EXECUTIVE SUMMARY
- MNI US CPI PREVIEW: CORE GOODS INFLATION BACK IN FOCUS
- TRUMP PICKS MUSK, RAMASWAMY FOR GOVERNMENT EFFICIENCY EFFORT
- SENATE LEADERSHIP VOTE IS FIRST BIG TEST OF TRUMP’S DOMINANCE
- PBOC SIGNALS UNEASE WITH YUAN WEAKNESS SPURRED BY TARIFF THREAT
Figure 1: Recent US inflation developments
NEWS
MNI US CPI PREVIEW: Core Goods Inflation Back in Focus
US (WSJ): Senate Leadership Vote Is First Big Test of Trump’s Dominance
Republican senators’ secret ballot vote Wednesday for a new leader will test how much lawmakers want to shake things up as they enter an era defined by the populist energy that propelled President-elect Donald Trump back to the White House. The front runners for the top Republican position—open for the first time in nearly two decades—are Sens. John Thune (R., S.D.) and John Cornyn of (R., Texas), who have both served as top lieutenants to outgoing leader Mitch McConnell (R., Ky.) and are seen as providing continuity for the party.
US (BBG): Elizabeth Warren Set to Become Top Democrat on Banking Panel
Senator Elizabeth Warren of Massachusetts is set to become the top Democrat on the Banking Committee, a prominent position for a top critic of Federal Reserve Chair Jerome Powell, America’s biggest banks and the crypto industry. “In the aftermath of the 2024 election, it’s powerfully important for Democratic leadership to show that we can make life more affordable for working people and to act with urgency to rebuild our middle class,” Warren said in a statement.
BOE (BBG): BOE Policymaker Mann Says UK Inflation Yet to be ‘Vanquished’
Bank of England policymaker Catherine Mann said inflation in the UK has not been defeated despite the recent fall in the headline rate below the BOE’s 2% target and the bank’s decision to cut interest rates again last week. Speaking at BNP Paribas’ Global Markets Conference, Mann - the only member of the nine-member Monetary Policy Committee to oppose the cut to 4.75% - on Wednesday pointed to the persistence of high services inflation and wage growth.
GERMANY (BBG): Beleaguered Scholz Makes Election Pitch to Skeptical Germans
Germany’s election campaign kicks into high gear on Wednesday, when Chancellor Olaf Scholz makes his case in a public address for another term, despite polls showing voters are overwhelmingly looking for a change. Scholz’s Social Democrats will tout the chancellor’s experience while criticizing the opposition leader Friedrich Merz, who heads the conservative CDU/CSU bloc and is leading opinion polls by a wide margin. They’ll say he’s incapable of leading Europe’s largest economy through a world of growing threats and uncertainties.
GERMANY (BBG): Nagel Says Trump’s Tariff Plans Could Cost Germany 1% of GDP
Bundesbank President Joachim Nagel warned that Donald Trump’s threatened trade levies risk derailing the German economy. “If the tariff plans are implemented, it could cost us 1% of economic output,” he told Die Zeit newspaper in an interview published Wednesday. “If the new tariffs are actually imposed, we could even slip into negative territory.”
SPAIN (BBG): Spain on Red Alert for Extreme Rains in Catalonia and Andalusia
Spain’s weather forecaster issued red alerts for extreme rain, two weeks after deadly floods killed more than 220 people in the coastal region of Valencia. As much as 180 millimeters (7 inches) of rain could fall in 12 hours on Wednesday in the province of Tarragona, which lies southwest of Barcelona, according to forecaster Aemet. There’s another red alert in the southeast, where up to 120 millimeters are forecast for Malaga, the country’s sixth-largest city.
CHINA (MNI EXCLUSIVE): PBOC Said Restarts Counter-Cyclical Factor in Yuan Fixing
Chinese traders and policy advisors look at the PBOC's latest tactics on FX markets - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA (BBG): PBOC Signals Unease With Yuan Weakness Spurred by Tariff Threat
China indicated its discomfort with yuan weakness through its daily reference rate for the currency amid the threat of higher US tariffs under a Donald Trump administration. The People’s Bank of China set its reference rate for the yuan at 7.1991 per dollar, 445 pips stronger than the average estimate in a Bloomberg survey. The gap between the fixing and estimate was the widest since early August.
BOJ (MNI INTERVIEW): BOJ to Aim for 1.5% Policy Rate - Sakurai
Former BOJ board member Makoto Sakurai shares his policy rate outlook - on MNI Policy MainWire now, for more details please contact sales@marketnews.com.
DATA
JAPAN DATA (MNI): Japan Oct CGPI Rises 3.4% Y/Y, Import Prices Drop
- JAPAN OCT CORP GOODS PRICE INDEX +3.4% Y/Y; SEPT REV +3.1%
- JAPAN OCT CORP GOODS PRICE INDEX +0.2% M/M; SEPT REV +0.3%
Japan's corporate goods price index rose 3.4% y/y in October, accelerating from September’s revised 3.1%, and despite import prices posting their second straight drop, falling 2.2% y/y, data released by the Bank of Japan showed on Wednesday. The data indicated that the drop of import price caused by the correction of the yen’s fall will ease pressure on firms to raise prices. Company price revisions, however, drove October's CGPI result, which increased 0.2% m/m after rising 0.3% in September.
AUSTRALIA DATA (MNI): Aussie Q3 Wages Print at 0.8% Q/Q, 3.5% Y/Y
The Australian Wage Price Index for Q3 printed at 0.8% q/q, or 3.5% y/y, 10 basis points lower than expected, according to Australian Bureau of Statistics data published on Wednesday. The Reserve Bank of Australia in its most recent forecasts expects the WPI at 3.4% by Q4. “Wage rises for many jobs can be directly or indirectly linked to the outcomes of the Fair Work Commission Annual Wage Review decision,” said Michelle Marquardt, head of prices statistics at the ABS, pointing to the 3.75% increase paid from July 1, lower than the September quarter 2023 increase of 5.75%.
FOREX: JPY Weaker Against All Others, But Intervention Risk Minimal For Now
- JPY is weaker against all others in G10, triggered by the break of the weekly high in USD/JPY, for a show above Y155.00. US rates markets remain the key trigger here, with the 2yr US yield well within range of 4.4076%, the 200-dma.
- BoJ policy and the FX approach of the Japanese authorities becomes key here, with markets re-entering levels at which the Japanese authorities intervened in currency markets via JPY buying, however given the sharp gyrations in short-end US rates markets, it's unlikely recent price action meets the criteria for intervention.
- CHF trades similarly poorly, however ranges remain contained in EUR/CHF which, given the single currency's acute weakness in recent weeks, may suggest markets view the Swiss economy as facing similar growth risks relative to the Eurozone in the years ahead.
- Focus for the session ahead turns to US inflation, with markets looking to gauge inflation momentum headed into the inauguration of President-Elect Trump in January. With Trump's government likely to adopt a pro-inflationary policy mix, Fed pricing remains a key focus - particularly as ECB-Fed implied policy rate differentials continue to blow wider.
- Outside of the US CPI print, appearances from Fed's Kashkari, Williams, Logan, Musalem and Schmid are due, which should keep US monetary policy a key focus Wednesday.
EGBS: Recovery in Bund Futures Fades
This morning’s recovery in Bund futures has faded, with futures currently -43 ticks at 131.86. Sovereign supply burdens and an uptick in crude oil futures will have limited scope for a more meaningful rally earlier.
- The trend conditions in Bunds remains bearish, with resistance at the 20-day EMA (132.49) still intact).
- The German curve has bear flattened, with 2-year yields 3.5bps higher today.
- The 10-year OAT/Bund spread is 1.5bps wider at 77bps, after the lower house rejected the 2025 budget bill yesterday afternoon.
- 3/7/15-year BTP supply was digested smoothly, as was 10-year Bund supply. Portugal also came to the market with 10 and 20-year OTs.
- ECB’s Nagel warned of the risks that US protectionism poses to Germany growth, while also noting that core inflation pressures remained high.
- Global focus turns to today’s US inflation report at 1330GMT/1430CET.
GILTS: Mid-Range, Wide Tail at Latest Gilt Auction Counters Rally
Gilts soften from recovery highs, Futures last -41 at 93.41 (93.19-64 range).
- The November 6 low (92.53) presents the key bearish target on any extension lower.
- Initial meaningful resistance not seen until the November 1 high (94.73).
- Yields flat to 2bp higher. Belly under the most pressure.
- Bears unable to force a retest of November highs across benchmark yields.
- The pullback was aided by the presence of and results from the auction that introduced the new 4.375% Mar-28 line, which saw decent cover (above 3.00x), although the tail was relatively wide (1bp).
- BoE hawk Mann then reaffirmed her stance, stressing that inflation has not been vanquished, with headline readings masking the underlying price dynamics.
- There was only modest feedthrough from her comments, with Mann already known as the most hawkish voice on the MPC.
- BoE-dated OIS pricing 2.5bp of cuts for next month, 24.5bp through March, 42bp through June and 57.5bp through Dec ’25.
- SONIA futures at lows, last down 0.25-6.0. Some white and red contracts have tested/pierced November lows.
- U.S. CPI data headlines the macro calendar during the remainder of Wednesday trade.
BoE Meeting | SONIA BoE-Dated OIS (%) | Current Effective SONIA Rate (bp) |
Dec-24 | 4.676 | -2.4 |
Feb-25 | 4.513 | -18.7 |
Mar-25 | 4.455 | -24.5 |
May-25 | 4.316 | -38.4 |
Jun-25 | 4.278 | -42.2 |
Aug-25 | 4.206 | -49.4 |
Sep-25 | 4.179 | -52.1 |
Nov-25 | 4.134 | -56.6 |
Dec-25 | 4.125 | -57.5 |
EQUITIES: E-Mini S&P Holding Onto Bulk of Recent Gains, Trend Conditions Bullish
A bearish condition in Eurostoxx 50 futures remains intact and Tuesday’s extension down reinforces current conditions. The sell-off confirms a resumption of the downtrend that started Sep 30. Price has breached 4746.94, the 61.8% retracement of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, Nov high, where a break would highlight a reversal. The trend condition in S&P E-Minis remains bullish and the contract is holding on to the bulk of its recent gains. A key short-term support has been defined at 5724.25, the Nov 4 low. The latest rally 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 lower by 654.43 pts or -1.66% at 38721.66 and the TOPIX ended 33.1 pts lower or -1.21% at 2708.42.
- Elsewhere, in China the SHANGHAI closed higher by 17.308 pts or +0.51% at 3439.278 and the HANG SENG ended 23.43 pts lower or -0.12% at 19823.45.
- Across Europe, Germany's DAX trades higher by 75.98 pts or +0.4% at 19108.7, FTSE 100 higher by 20.39 pts or +0.25% at 8046.02, CAC 40 up 20.08 pts or +0.28% at 7247.06 and Euro Stoxx 50 up 10.94 pts or +0.23% at 4755.63.
- Dow Jones mini down 85 pts or -0.19% at 43990, S&P 500 mini down 4.75 pts or -0.08% at 6008.25, NASDAQ mini down 14.25 pts or -0.07% at 21175.25.
Time: 09:55 GMT
COMMODITIES: Recent Move Lower Reinforces Bearish Outlook for WTI Futures
A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high, reinforces current conditions. An extension lower would expose $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal to the upside 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 $72.88, the Nov 7 high. The trend condition in Gold is unchanged, it remains bullish and the latest pullback appears corrective. However, recent weakness has resulted in a breach of the 20-day EMA, and Tuesday’s sell-off delivered a print below the 50-day EMA, at $2644.4. The breach signals scope for a deeper retracement towards $2547.0 the Sep 18 low. Firm resistance is seen at $2689.5, the 20-day EMA. Clearance of this average is required to signal a reversal.
- WTI Crude up $0.64 or +0.94% at $68.75
- Natural Gas down $0.02 or -0.69% at $2.887
- Gold spot up $11.63 or +0.45% at $2609.67
- Copper up $0.9 or +0.22% at $414.65
- Silver up $0.24 or +0.79% at $30.9628
- Platinum up $1.15 or +0.12% at $950.18
Time: 09:55 GMT
| Date | GMT/Local | Impact | Country | Event |
| 13/11/2024 | 1200/0700 | ** |  US | MBA Weekly Applications Index |
| 13/11/2024 | 1330/0830 | *** | US | CPI |
| 13/11/2024 | 1445/0945 | US | Dallas Fed's Lorie Logan | |
| 13/11/2024 | 1800/1300 | US | St. Louis Fed's Alberto Musalem | |
| 13/11/2024 | 1830/1330 | US | Kansas City Fed's Jeffrey Schmid | |
| 13/11/2024 | 1900/1400 | ** | US | Treasury Budget |
| 14/11/2024 | 0030/1130 | *** |  AU | Labor Force Survey |
| 14/11/2024 | 0700/0800 | *** |  SE | Inflation Report |
| 14/11/2024 | 0800/0900 | *** |  ES | HICP (f) |
| 14/11/2024 | 0830/0930 |  EU | ECB's De Guindos remarks at event organised by ABC and Deloitte | |
| 14/11/2024 | 1000/1100 | *** | EU | GDP (p) |
| 14/11/2024 | 1000/1100 | ** | EU | Industrial Production |
| 14/11/2024 | 1200/0700 | US | Fed Governor Adriana Kugler | |
| 14/11/2024 | 1230/1330 | EU | Publication of the ECB MonPol meeting account | |
| 14/11/2024 | - |  GB | Rachel Reeves’ debut Mansion House dinner speech as chancellor | |
| 14/11/2024 | 1300/1300 | GB | BOE's Mann at Revitalising the global economy event | |
| 14/11/2024 | 1330/0830 | *** | US | Jobless Claims |
| 14/11/2024 | 1330/0830 | *** | US | PPI |
| 14/11/2024 | 1415/0915 | US | Richmond Fed's Tom Barkin | |
| 14/11/2024 | 1530/1030 | ** | US | Natural Gas Stocks |
| 14/11/2024 | 1600/1100 | ** | US | DOE Weekly Crude Oil Stocks |
| 14/11/2024 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 14/11/2024 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 14/11/2024 | 1830/1930 | EU | ECB's Schnabel in panel on "Reassessing policy tools" | |
| 14/11/2024 | 1900/1400 | *** |  MX | Mexico Interest Rate |
| 14/11/2024 | 2000/1500 | US | Fed Chair Jerome Powell | |
| 14/11/2024 | 2100/2100 | GB | BOE's Bailey speech at Mansion House | |
| 14/11/2024 | 2115/1615 | US | New York Fed's John Williams | |
| 15/11/2024 | 2350/0850 | *** |  JP | Japan GDP 1st Estimate |