EXECUTIVE SUMMARY
- HARRIS, TRUMP FINISH HISTORIC CAMPAIGN WITH DUELING RALLIES
- RBA HOLDS CASH RATE AT 4.35%, GOVERNOR MAINTAINS HAWKISH LANGUAGE
- CHINESE PREMIER PROJECTS CONFIDENCE IN ECONOMIC RECOVERY
- NEW ZEALAND’S ECONOMIC DOWNTURN COULD GET WORSE, RBNZ SAYS
Figure 1: Overnight USD/MXN vols spike to all-time high
Source: MNI/Bloomberg
NEWS
On November 5 the United States will hold elections for the country’s presidency, 34 seats in the United States Senate, the entirety of the House of Representatives, and a plethora of state and local-level offices. As polling falls within the margin of error in the key swing states, a polling miss could result in a comfortable win for either candidate, depending on the direction of the miss.
In this article, we provide an estimated timetable of events for the US general election taking place on Tuesday 5 November as ballots are counted. As well as a guide of what times various states may call their results, we also provide analysis on key counties to watch in swing states that are likely to give the best indication as to the direction the presidency is heading in.
MNI FED PREVIEW - NOVEMBER 2024: Cutting Through The Storms
The FOMC is on course to cut the Fed funds rate by 25bp on Nov 7, as it takes another step in paring back restraint. Stronger-than-expected activity and labor market data have removed a second consecutive 50bp cut from the conversation, but a soft if distorted October payrolls report cemented that November would see a cut and not a "skip". Given that Powell has previously endorsed the September Dot Plot as the best guide to policy, we would expect him to have to address whether it’s still current as of November 7. A hawkish reply would involve him setting up a “skip” in December, whereas a simple reiteration that the SEP still states the base case would be taken dovishly.
US (BBG): Harris, Trump Finish Historic Campaign With Dueling Rallies
Donald Trump and Kamala Harris concluded one of the most tumultuous and dramatic presidential campaigns in modern political history with dueling rallies late Monday, capping a furious final dash through battleground states that will decide the 2024 race.
RBA (MNI): RBA Holds Cash Rate at 4.35%
The Reserve Bank of Australia Board kept the cash rate steady at 4.35% Tuesday, repeating it would not rule anything “in or out” due to continued high underlying inflation. “While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high,” the Board said in a statement. “The November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the [2.5%] midpoint.” The Board’s decision was largely anticipated.
RBA (MNI): Governor Maintains Hawkish Language, Cash Rate
The Reserve Bank of Australia has seen little change in the economy over the last few months to warrant an adjustment to its higher-for-longer strategy, with Governor Michele Bullock noting inflationary risks remain balanced at a press event following the Board’s decision to hold the cash rate at 4.35% on Tuesday. “The forecasts published today are very similar to those that were published in August,” she told reporters. Pointing to Q3 CPI data, Bullock noted the flat 0.8% q/q read was not sufficient evidence that inflation was sustainably falling back to target.
GERMANY (BBG): Scholz to Make Fresh Effort to Quell Coalition Infighting
German Chancellor Olaf Scholz is holding further talks with his two most senior coalition partners Tuesday as his fractious ruling alliance seeks to finalize next year’s budget and set aside differences over how to lift Europe’s biggest economy out of its slump. With the next scheduled election less than a year away, relations between Scholz’s Social Democrats, the Greens and the Free Democrats have become increasingly fraught, prompting speculation the three-party alliance could break apart and trigger an early national vote.
CANADA/INDIA (BBG): Modi’s Top Aide in Spotlight as India-Canada Feud Worsens
A dramatic political rupture between India and Canada has cast a spotlight on a top confidante of Prime Minister Narendra Modi, who has been mentioned as a possible successor to lead the world’s most populous country. India’s Home Affairs Minister Amit Shah was accused last week by a senior Canadian government official of authorizing a wave of alleged crimes - including extortion and homicides - against overseas dissidents. The allegations are a significant escalation in a dispute between the two countries that began in September last year when Prime Minister Justin Trudeau first accused Indian government agents of involvement in the killing of a Sikh separatist in Canada.
CHINA (BBG): Chinese Premier Projects Confidence in Economic Recovery
Chinese Premier Li Qiang expressed confidence that his government can pull off an economic recovery, while also taking an apparent shot at the US and EU over trade. “The Chinese government has the ability to drive sustained economic improvement,” Li said in a speech Tuesday at the opening of the China International Import Expo in Shanghai. He added that officials had “ample space for fiscal policy and monetary policy,” and reiterated that China would hit its economic growth target of around 5%.
CHINA (MNI): China NPC Press Conference Set for Nov 8
MNI (Beijing) China will hold a press briefing for the 12th Session of the 14th National People's Congress Standing Committee in the Hong Kong Hall of the Great Hall of the People on Friday Nov 8 stating 4.00pm, the Chinese Foreign Ministry said on Tuesday.
Officials from the NPC and Ministry of Finance will brief the press and answer questions concerning the State Council bill on raising the ceiling on local government debt to replace hidden debt, the MFA said.
CHINA (MNI EXCLUSIVE): China Stock Stabilisation Fund Talk Premature - Advisors
Chinese advisors discuss the prospects for a stock market stabilisation fund.- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
NEW ZEALAND (BBG): New Zealand’s Economic Downturn Could Get Worse, RBNZ Says
New Zealand’s central bank said the country is experiencing a pronounced economic downturn that could get worse. “Households have reduced their discretionary spending and businesses have put investment plans on hold,” the Reserve Bank said in its semi-annual Financial Stability Report Tuesday in Wellington. “While business confidence is recovering as inflation and interest rates fall, significant further weakening in the economy remains a risk.”
NORTH KOREA (MNI): N. Korea Stages SRBM Test Ahead of US Election
North Korea fired a barrage of short-range ballistic missiles (SRBMs) into the East Sea today, Yonhap News reported quoting South Korea's military. The latest missile test is an expected provocation in the direct lead-up to the US presidential election, with the timing chosen to amplify the message to North Korea's adversaries. The South's Joint Chiefs of Staff (JCS) said that multiple launches were detected around 7:30am local time and likely involved the use of KN-25 super-large 600mm rocket launchers capable of striking anywhere on South Korean territory. Furthermore, Yonhap reported that "South Korean officials have said the North remains ready to carry out what would be its seventh nuclear test at any time," having made the necessary preparations.
DATA
UK DATA (MNI): BRC-KPMG Retail Sales Edged Up But Remain Subdued
- UK BRC OCT BY VALUE SHOP SALES LFL +0.3% YY, TOTAL +0.6% YY
UK total retail sales in October edged up 0.6% Y/Y, a softer pace of growth compared to September's solid reading of 2.0% Y/Y (also matched by a solid reading in the official ONS series - although the food vs non-food split was not reflected). Like-for-Like sales rose 0.3% Y/Y (vs 1.7% prior). The underlying trend shows sales remain subdued. Non-Food sales in the 3-months to October are the highest since June 2023 but Y/Y growth remains negative at -0.1% Y/Y. This is a value rather than volume series, so the change in sales figures also reflect changing inflationary trends.
UK OCT FINAL SRVCS PMI 52.0 (FLASH 51.8); SEP 52.4 (MNI)
UK OCT FINAL COMPOSITE PMI 51.8 (FLASH 51.7); SEP 52.6 (MNI)
FRANCE DATA (MNI): Industrial Production Weaker Than Expected
- FRANCE SEP INDUSTRIAL PRODUCTION -0.9% M/M, -0.6% Y/Y
- FRANCE SEP MANUFACTURING OUTPUT -0.8% M/M, -0.9% Y/Y
France Industrial Production in September was weaker than expected at -0.9% M/M (vs -0.6% consensus, 1.1% prior revised down from 1.4%) and -0.6% Y/Y (vs -0.4% consensus, 0.1% prior revised down from 0.5%). The weakness was driven by both manufacturing and 'extractive industries' production. The former declined 0.8% M/M (albeit less than consensus of -1.3% from 4 analysts estimates, 1.4% prior). Extractive industries production fell 1.2% M/M (vs -0.1% prior).
SPAIN DATA (MNI): Registered Unemployment Rises Less Than Seasonal Norms in October
Spanish October registered unemployment claims were in line with consensus at 26.8k (vs 27.0k cons, 3.2k prior). The data are not seasonally adjusted, but the rise is less than the 2010-2023 October average of 63.5k. Similarly, the 67.8k monthly rise in registered employment was above the 28.5k October average from 2010-2013. A key tenet of Spain's economic outperformance post-covid has been strong population growth, which has fed through into falling unemployment rates. In Q2, Spanish LFS unemployment was 11.2%, its lowest since 2008.
SWISS OCT UNEMPLOYMENT RATE +2.6% (MNI)
SWISS OCT UNEMPLOYMENT +2.8% M/M, +24.5% Y/Y (MNI)
CHINA DATA (MNI): China Private Services' PMI Expands in Oct
MNI (Beijing) China’s Caixin General Services PMI reached 52.0 in October, up from 50.3 in September, marking the fastest rate of growth in three months, Caixin said on Tuesday. Firms are becoming increasingly confident in the near-term macro economy, with the future activity expectations index rising 3 points to a five-month high, noted Wang Zhe, senior economist at Caixin Insight Group, in this month’s report.
FOREX: Greenback Softer, But Conviction Low Pre-Election Results
- The greenback is softer against all others early Tuesday, but pullbacks are shallow and general market conviction light. The election booths open today, with results due to filter through across the key swing states overnight, which should provide a indication for the victor of the US election around halfway through the Asia-Pacific session. Trump remains the betting-odds implied favourite, however the narrowness of recent polling data shows the results remain too close to call at this stage.
- Overnight FX options contracts now capture the immediate outcome of the election, and the impact is clear to see - USD vols are well bid, with the currencies seen as most exposed printing a considerable risk premia. As a result, USD/MXN overnight implied has cleared 100 points - that's an all-time high for the contract (other notable prints: 95 points mid-COVID, 96 points on Trump's '16 election and ~100 points in the '08 GFC). This implies a ~4% swing in USD/MXN on the results, and an implied range of approximately 19.35 - 21.05.
- The RBA kept policy rates unchanged in overnight trade, and retained a hawkish tone on policy. Markets have continued to push back on expectations of a first RBA rate cut, which may now not be until H2'25 - a prospect that's supporting AUD against most others into the NY crossover.
- Markets are likely to look through today's trade balance stats as well as the ISM services numbers for October, with the looming election results the key focus ahead. There are a number of speakers, including EC's Lagarde & Schnabel, while the BoC minutes are also set for release.
EGBS: Yesterday’s Range Contains Price Action in Bund Futures
Bund futures are -35 at 131.45, though price action has been contained by yesterday’s range ahead of tonight’s US election results. A bearish technical theme remains intact in Bund futures, with the October 31 low at 131.15 the first support.
- Notable headline flow has been quite light, with EGBs pressured by stronger-than-expected Chinese PMI data overnight (and an associated bid in mainland equities) and, to a lesser extent, this morning’s RAGB supply.
- The 10/20-year RAGB auction saw slightly softer bid-to-cover/issue ratios than the previous outing, but the lowest accepted prices exceeded the pre-auction mid-price in both lines.
- French September industrial production was a little weaker than expected, but wasn’t a market mover.
- 10-year peripheral spreads to Bunds are biased wider, with PGBs underperforming. The PGB/Bund spread is 1.3bps wider today at 49bps.
- US ISM services data headlines this afternoon’s global macro calendar, before ECB Executive Board member Schnabel speaks at 1830GMT/1930CET.
- Fallout from the US election results will be in focus tomorrow morning.
GILTS: Soft Reception of 10-Year Auction Weighs in Recent Trade, Off Lows
Gilts are softer this morning, although they have recovered from session lows.
- Gilt futures -21 at 93.81 vs. lows of 93.53.
- Yields 1-2bp higher across the curve, 10s lead the sell off.
- Spread vs. Bunds little changed around 206bp.
- Early weakness and subsequent recovery from lows seemed to be tied to broader movement in core global FI markets.
- Fresh selling pressure then emerged after the latest 10-Year gilt auction saw a lower cover ratio vs. the previous auction, while the lowest accepted price was below pre-auction mids.
- Those results won’t help sentiment following the large increase in issuance announced last week.
- Recent comments from the OBR suggested that post-Budget market moves have matched their expectations.
- BoE-dated OIS is little changed to 3bp less dovish on the day, showing 22.5bp of cuts for Thursday, 30.5bp of cuts through year-end, 57bp of easing through March and 75bp of easing through June.
- SONIA futures +0.25 to -4.5. Still not retesting last week’s lows.
- No impact from lower tier domestic data and final services/composite PMI prints (latter saw marginal upward revisions).
- The remainder of the session will see eyes on spillover from any potential last minute pre-U.S. election positioning.
EQUITIES: Eurostoxx 50 Futures Trading Close to Recent Lows
Eurostoxx 50 futures are trading closer to their recent lows. Last week’s move down, resulted in a breach of support at 4914.00, the Oct 16 low. Note that 4884.06, 38.2% of the Aug 5 - Sep 30 bull cycle, has also been cleared. This exposes 4815.50 next, the 50.0% retracement point. Initial firm resistance has been defined at 5015.00, the Oct 29 high, where a break is required to highlight a reversal. First resistance is at 4936.69, the 20-day EMA. S&P E-Minis traded sharply lower last Thursday and the contract is trading just above its recent low. Price has cleared both the 20- and 50-day EMAs - an important short-term bearish development. The break lower signals scope for an extension and has exposed the next support at 5724.00, the Oct 2 low. Clearance of this level would open 5637.60, a Fibonacci retracement. Initial firm resistance is 5816.84, the 20-day EMA.
- Japan's NIKKEI closed higher by 421.23 pts or +1.11% at 38474.9 and the TOPIX ended 20 pts higher or +0.76% at 2664.26.
- Elsewhere, in China the SHANGHAI closed higher by 76.78 pts or +2.32% at 3386.987 and the HANG SENG ended 439.45 pts higher or +2.14% at 21006.97.
- Across Europe, Germany's DAX trades higher by 63.78 pts or +0.33% at 19211.92, FTSE 100 higher by 27.74 pts or +0.34% at 8211.89, CAC 40 up 22.41 pts or +0.3% at 7393.75 and Euro Stoxx 50 up 14.04 pts or +0.29% at 4866.11.
- Dow Jones mini up 48 pts or +0.11% at 42004, S&P 500 mini up 11 pts or +0.19% at 5754.25, NASDAQ mini up 69.75 pts or +0.35% at 20155.5.
Time: 10:00 GMT
COMMODITIES: This Week's Gains in WTI Futures Appears Technically Corrective
A bearish theme in WTI futures remains intact and the latest recovery, including Monday’s gains, appears to be a correction. 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 S/T resistance at $77.70, the Oct 8 high. Clearance of this level would resume to the recent uptrend. Initial resistance is $72.34, Oct 24 high. The trend condition in Gold is unchanged and the latest pullback is - for now - considered corrective. Recent gains resulted in a breach of $2685.6, the Sep 26 high, confirming a resumption of the primary uptrend and maintaining the price sequence of higher highs and higher lows. Sights are on the $2800.0 handle next. Firm support is $2712.7, the 20-day EMA. A clear break of this EMA would highlight a short-term top.
- WTI Crude up $0.4 or +0.56% at $71.81
- Natural Gas up $0.01 or +0.36% at $2.791
- Gold spot up $2.32 or +0.08% at $2739.33
- Copper up $3.5 or +0.79% at $446.6
- Silver up $0.16 or +0.49% at $32.6115
- Platinum up $10.45 or +1.06% at $996.36
Time: 10:00 GMT
| Date | GMT/Local | Impact | Country | Event |
| 05/11/2024 | - |  EU | ECB's De Guindos participate in ECOFIN Meeting | |
| 05/11/2024 | - |  US | US Presidential Election | |
| 05/11/2024 | 1330/0830 | ** | US | Trade Balance |
| 05/11/2024 | 1330/0830 | ** |  CA | International Merchandise Trade (Trade Balance) |
| 05/11/2024 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 05/11/2024 | 1430/1530 | EU | ECB's Lagarde speech at French Competition Authority's event | |
| 05/11/2024 | 1500/1000 | *** | US | ISM Non-Manufacturing Index |
| 05/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 05/11/2024 | 1800/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 05/11/2024 | 1830/1330 | CA | BOC Minutes (Summary of Deliberations) | |
| 05/11/2024 | 1830/1930 | EU | ECB's Schnabel speech on Macroeconomic Policy | |
| 06/11/2024 | - |  SE | Riksbank Meeting | |
| 06/11/2024 | 0700/0800 | ** |  DE | Manufacturing Orders |
| 06/11/2024 | - | US | FOMC Meeting / S.E.P. | |
| 06/11/2024 | 0930/0930 | ** |  GB | S&P Global/CIPS Construction PMI |
| 06/11/2024 | 1000/1100 | ** | EU | PPI |
| 06/11/2024 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 06/11/2024 | 1400/1500 | EU | ECB's Lagarde address at 10th anniversary of Single Supervisory Mechanism | |
| 06/11/2024 | 1430/1530 | EU | ECB's De Guindos speech and Q&A at Distinguished Speaker Seminar | |
| 06/11/2024 | 1500/1000 | * | CA | Ivey PMI |
| 06/11/2024 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 06/11/2024 | 1725/1225 | CA | BOC Sr Deputy Rogers speech in Toronto. | |
| 06/11/2024 | 1800/1300 | *** | US | US Treasury Auction Result for 30 Year Bond |
| 07/11/2024 | 2330/0830 | ** |  JP | average wages (p) |