4.2 C
New York
Wednesday, November 30, 2022


Futures Sink To Session Lows As Sentiment Sours

US equity futures dropped to session lows, and surrendered earlier gains of as much as 0.2%, setting up Wall Street stocks to extend Wednesday’s weakness, with traders assessing comments from Fed officials about the path of rate hikes amid earnings reports (such as those from Target) confirming that the US consumer is hunkering down for a recession.  S&P 500 futures were 0.8% lower and those on the Nasdaq 100 dropped 0.6% at 7:30 a.m. in New York, with treasury yields bouncing after yesterday’s decline.  10-year Treasury yields rose, following indications from Fed officials on Wednesday that policy would tighten further. The dollar rallied half a percent against a basket of currencies.

Traders got mixed signals from policy makers, with Fed hawk Christopher Waller saying recent data have made him more comfortable with a moderate interest-rate increase of 50 basis points next month, but left the door open to a sequence of such increases if needed to curb inflation. Meanwhile, San Francisco Fed President Mary Daly said a pause in rate hikes was “off the table,” and New York Fed President John Williams said the central bank should avoid incorporating financial stability risks into its considerations.

“All this Fed talk in recent weeks starting with Powell’s press conference after the last meeting, they are indicating they are going to slow the pace of hikes,” Patrick Armstrong, CEO at Plurimi Wealth told Bloomberg TV, adding that he expected a 50 basis-point increase at the next meeting.

In premarket trading, Cisco Systems rose after the communications equipment company reported first-quarter results that beat expectations and raised its full-year forecast. Nvidia was also on the rise after topping estimates, lifting semiconductor peers AMD and Marvell. NetEase shares fell as the video game maker plans to end a 14-year partnership with Blizzard Entertainment. Bath & Body Works shares jumped the company boosted its full-year profit forecast. Here are the other notable premarket movers:

  • Ardelyx soars ~77% in premarket trading after its kidney disease therapy won the backing of a majority of a panel of FDA advisers. The response from analysts was mostly positive, with Piper Sandler upgrading the stock to overweight, saying it will be hard for the Food and Drug Administration to justify a rejection of the drug based on the advisory committee’s positive feedback.
  • Bath & Body Works shares jump ~21% in premarket trading after boosting its full-year profit forecast due to a focus on innovation and cost control. Analysts found the results to be impressive overall, noting the print was “strong” with the company reporting beats across the top line.
  • Elevate shares rise ~67% in premarket trading to ~$1.77 after it entered into a definitive agreement to be acquired by an affiliate of Park Cities Asset Management LLC for $1.87/share in cash, implying value of $67m.
  • NetEase shares fall in US premarket trading as the video game maker plans to end a 14-year partnership with Blizzard Entertainment after January, suspending services to licensed games that represented low-single-digit percentage of its revenue and net income in 2021.
  • Norwegian Cruise Line is double- downgraded to underperform from outperform at Credit Suisse, with the broker seeing downside risk to estimates and preferring the firm’s peers. Norwegian Cruise shares fall ~4% in US premarket trading.
  • Principal Financial drops ~2.4% in premarket trading after both Evercore and Morgan Stanley downgrade the stock, citing its high valuation.
  • Robinhood Markets shares gain ~1.4% in US premarket trading after the broker gave an operating update for October, with analysts positive on the company’s better performance during the month and early indications of stronger trading volumes for November.
  • Sonos jumped in postmarket trading after the speaker company reported fourth-quarter revenue that beat expectations and gave a full-year revenue forecast that is ahead of the analyst consensus.

US equities have marked a pause this week after the S&P 500 rallied 10.5% over the past month, while the Nasdaq 100 rose about 9.4% during the same period, with slowing inflation weighed against stronger-than-expected US economic data. “The market is likely to experience quite a few false bottoms” as seen in the IT sector at the moment, Jefferies strategists led by Sean Darby wrote in a note.

“We are cognizant that each time global markets attempt to rally on the back of speculation that the end of the Fed’s tightening intentions may be in sight, FOMC officials come out with a new paragraph of hawkish narrative, to tamp down any prospect of irrational exuberance,” Simon Ballard, chief economist at First Abu Dhabi Bank, wrote in a note to investors.

In Europe, the Stoxx 600 also erased gains to trade lower 0.4%. Basic resources and utilities underperformed, while food and consumer product stocks rose. The Dax outperformed while the FTSE 100 underperformed regional peers, while gilts 2-year yields rise above 3% and 10-year yields trade around 3.15%, both within Wednesday’s range. Investors braced for the release of the UK budget later in the day, while European Central Bank policy makers were said to consider a slowdown in interest-rate hikes, with only a 50 basis-point increase next month. Here are the biggest European movers”

  • Siemens jumps as much as 8.9% on the European engineering giant’s robust order books and outlook, which Jefferies says were well ahead of expectations and mainly driven by its division that makes factory automation software.
  • Chipmakers may be in focus after Nvidia posted quarterly sales that topped analysts’ estimates and Micron Technology said it was reducing production of chips due to weakening market conditions. ASML shares rose as much as 1.2%.
  • Subsea 7 gains as much as 7.7%, the most since March 7, after the Norwegian offshore energy firm published better-than-expected 3Q results, driven by higher margins and solid performance, Citi says.
  • Ocado drops as much as 9.4% after Kintbury Capital chief investment officer Chris Dale said even its bull case is for 50% downside in the stock, on expectations the UK company will struggle to finance itself.
  • Alstom declines as much as 6.1% — paring some of its post-earnings gains — after Morgan Stanley slashed its price target on worries about the French rail equipment maker’s balance sheet and record-low cash-flow guidance.
  • NN Group drops as much as 8.6%, the most since mid-August, after the insurer set new 2025 targets which Citi says may disappoint because of their “conservatism.”
  • Bouygues falls as much as 5.2% in Paris trading as a warning on margins at the Colas constructions unit overshadowed nine-month results from the French conglomerate that beat consensus estimates for operating income.
  • Embracer slides as much as 21%, the biggest intraday decline on record, after the Swedish video-game maker reduced its fiscal 2023 adjusted Ebit target, citing a delay in its Dead Island 2 game, a more challenging macro environment and a mixed reception to some of its key releases.

Earlier in the session, Asian stocks declined amid fears that Federal Reserve’s tightening still has further go to curb inflation after strong US retail sales print.  The MSCI Asia Pacific Index declined as much as 1.3%, its biggest drop in a week before paring losses. Tech drove losses with Meituan, Samsung and Netease leading the gauge lower.   Benchmarks in Hong Kong were notable losers in the region, with the Hang Seng Tech Index sliding as much as 5.6% before reducing the loss. They were down for a second day following rapid gains that put the gauges there into bull market territory. Equities in mainland China and South Korea also dropped while those in Japan, Australia and Singapore were slightly higher.  Tencent Holdings Ltd.’s plan to pay out $20b of stock in Meituan sparked a broad selloff of Chinese internet stocks on Thursday as investors fear more divestments by the online gaming company are on the cards.

The People’s Bank of China warned inflation may accelerate as overall demand in the economy picks up, suggesting it may refrain from adding more long-term stimulus. It did still doubled short-term cash injection Thursday to ease a selloff in sovereign debt. In the US, San Francisco Fed President Mary Daly said the central bank should keep hiking, while New York Fed President John Williams said it should focus on the economy rather than financial risks as it raises rates.  “The hotter-than-expected US retail sales data and hawkish leaning comments from Fed officials weighed on equities,” Saxo Capital Markets strategists including Redmond Wong wrote in a note. US retail sales posted the biggest increase in eight months in October

Japanese stocks traded range-bound as investors worried about further US interest rate hikes after San Francisco Federal Reserve President Mary Daly said that “pausing is off the table.” The Topix Index rose 0.2% to 1,966.28 as of market close Tokyo time, while the Nikkei declined 0.4% to 27,930.57. Sumitomo Mitsui Financial Group Inc. contributed the most to the Topix Index gain, increasing 2.1%. Out of 2,165 stocks in the index, 1,512 rose and 551 fell, while 102 were unchanged. “The US retail sales numbers came out higher than expected, also signaling that inflationary factors remain strong,” said Takeru Ogihara, chief strategist at Asset Management One.

Australian stocks snapped a 3-day losing streak as the S&P/ASX 200 index rose 0.2% to close at 7,135.70, boosted by strength in healthcare shares and banks.  Australia’s jobless rate unexpectedly fell in October as a surge in full-time employment underpinned strong hiring, reinforcing the Reserve Bank’s arguments for further interest-rate increases. In New Zealand, the S&P/NZX 50 index rose 0.6% to 11,294.52.

Stocks in India declined, in line with global peers, as investors sought clarity over the Federal Reserve’s future policy moves and their impact on growth.  Expiry of weekly derivative contracts also weighed on local shares as investors continued taking profits from recent gainers such as banks after conclusion of quarterly results season.  The S&P BSE Sensex fell to close at 0.4%, its biggest drop since Nov. 10, to 61,750.60 in Mumbai, while the NSE Nifty 50 Index declined by an equal measure. For the week, the Sensex and Nifty are little changed. “With the result season now over, we expect the market to track global developments in the near term,” Motilal Oswal Financial Services analyst Siddhartha Khemka said. Mortgage lender HDFC and its banking unit provided the biggest drag to the Sensex. Out of 30 shares in the Sensex index, only eight rose and the rest fell. All but three of BSE Ltd.’s 19 sector sub-gauges closed lower, led by consumer durables stocks.

In rates, 10-year yields TSY yield add 3bps to 3.7%, while bunds 10-year yields drop 2bps to below 2%. Treasuries were cheaper by as much as 2.4bp across 10-year sector, with 3.714% yield vs session high 3.74%, following a more aggressive bear-flattening move in gilts after the UK government released its latest fiscal statement. Bunds outperform by 5bp in the sector while gilts lag by 2bp. UK curve sharply bear- flattens on the day with 2-year yield cheaper by 10bp, back above 3% level.

In commodities, crude benchmarks are under modest pressure given the USD recovery throughout the morning, generally softer APAC tone and a continuing deterioration to the China COVID case count weighing.
Ags. in focus and pressured following a as-expected extension to the Black Sea grain deal.
Currently, the yellow metal is holding around the lower-end of USD 1761-1774/oz parameters, and is thus a similar distance from the WTD peak of USD 1786/oz and the 10-DMA at USD 1738/oz.

WTI falls below $85. Spot gold falls roughly $8 to trade near $1,766/oz

To the day ahead now, and a key highlight will be the UK government’s autumn statement. Otherwise, data releases include US housing starts and building permits for October, the Philadelphia Fed’s business outlook index and the Kansas City Fed manufacturing index for November, and the weekly initial jobless claims. Finally, central bank speakers include the Fed’s Bullard, Bowman, Mester, Jefferson and Kashkari, the ECB’s Villeroy, and the BoE’s Pill and Tenreyro.

Market Snapshot

  • S&P 500 futures down 0.2% to 3,960.25
  • STOXX Europe 600 down 0.2% to 429.39
  • MXAP down 0.7% to 152.94
  • MXAPJ down 1.0% to 494.58
  • Nikkei down 0.3% to 27,930.57
  • Topix up 0.2% to 1,966.28
  • Hang Seng Index down 1.2% to 18,045.66
  • Shanghai Composite down 0.1% to 3,115.44
  • Sensex down 0.1% to 61,897.84
  • Australia S&P/ASX 200 up 0.2% to 7,135.65
  • Kospi down 1.4% to 2,442.90
  • German 10Y yield down 0.5% to 1.99%
  • Euro down 0.2% to $1.0378
  • Brent Futures down 0.5% to $92.39/bbl
  • Gold spot down 0.5% to $1,765.56
  • U.S. Dollar Index up 0.27% to 106.57

Top Overnight News from Bloomberg

  • Bank customers are the most enthusiastic about using the British pound for global payments since mid-2016, around the same time the UK voted to quit the European Union
  • President Joe Biden rejected Ukrainian President Volodymyr Zelenskiy‘s assertion that Russia fired a missile that landed in Poland — continuing efforts by the US and allies to de-escalate the deadly episode
  • Chinese regulators asked banks to report on their ability to meet short-term obligations after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products, according to people familiar with the matter
  • China will well implement agreements made by Chinese President Xi Jinping and US President Joe Biden at G-20 summit over economic policy and trade negotiations, Ministry of Commerce says
  • Turns out Chinese President Xi Jinping’s partnership with Vladimir Putin has limits after all: He doesn’t want to follow the Russian leader into diplomatic isolation
  • Brazil President-elect Luiz Inacio Lula da Silva will ask congress to circumvent a key fiscal safeguard by excluding the country’s most important social program from a public spending cap to pay for his campaign pledges

A more detailed look at global market courtesy of Newsquawk

APAC stocks traded mostly lower throughout the session following the downbeat lead from Wall Street. ASX 200 was the relative outperformer with gains lead but the Consumer Staples and IT sector, with no reaction seen in wake of the Aussie jobs data. Nikkei 225 traded on either side of the 28k mark before stabilising under the round figure, with losses modest during the session. KOSPI gave up earlier gains and drifted lower throughout the session with losses led by the chip and IT sectors, whilst sentiment in the region was soured by North Korea firing a short-range ballistic missile. Hang Seng and Shanghai Comp opened with and then extended on losses with the former seeing downside in Meituan, which fell around 6% after Tencent announced a special dividend in the form of Meituan shares, whilst People’s Daily also suggested China is able to achieve COVID Zero as mainland cases roses at the fastest pace since April.

Top Asian News

  • China reported 2,388 (prev. 1,623) new confirmed coronavirus cases in the mainland on Nov 16th, via Reuters
  • China is able to achieve COVID Zero, according to People’s Daily.
  • China has asked banks to report on liquidity following the sudden bond rout, according to Bloomberg.
  • PBoC injected CNY 132bln via 7-day reverse repos with the rate at 2.00% for a CNY 123bln net injection.
  • Tokyo to raise COVID alert level by one notch amid the recent rise in COVID cases, according to NTV.
  • BoJ Governor Kuroda said it is important to continue monetary easing to support the economy. Kuroda said recent price hikes are due to cost-push factors, according to Reuters. Kuroda said BoJ will closely coordinate with the government to conduct appropriate policy.
  • Senior BoJ official Uchida said it is too early to discuss the exit from monetary stimulus, via Reuters.
  • Saudi Arabia signed USD 30bln worth of investment agreements with South Korean firms, covering clean energy and medical tech, according to the Saudi Investment Minister
  • China’s Commerce Ministry, on China-US economic & trade dialogue, says will implement the key consensus reached by leaders, domestic exports/imports will see greater pressure.

Stocks in Europe, Eurostoxx 50 -0.2%, are on a mixed footing after scaling back opening gains with no clear fundamental catalyst driving price action thus far ahead of numerous events. Stateside, futures have similarly pared back initial upside and are near the unchanged mark/marginally lower with the ES back below the 4k figure ahead of data, Fed speak and a few corporate updates.

Top European News

  • COP27 Set for Showdown After Draft Leaves Out Fossil Fuel Pledge
  • China’s Forgotten Covid Zero Lockdown Has Just Hit 100 Days
  • Where European Energy Infrastructure Is Vulnerable to Attack
  • Rusal Asks LME to Disclose Origin of All Metal, Not Russian Only
  • European Stocks Steady as Investors Assess Policy, Growth Risks


  • DXY has seen a intra-day recovery from a 106.08 low to a 106.68 peak, with G10 peers now all pressured vs initial modest upside against the Greenback.
  • Fundamental driver(s) behind the move have been limited, with the sessions main events yet to come in the form of the UK budget and Central Bank speak thereafter.
  • Cable has, given the USD’s recovery, experienced a marked pullback from 1.1950+ best to back below the figure and almost a full point lower.
  • Similarly, EUR has moved into the red though this is comparably more contained given its initial upside was capped by EUR/GBP action, action which is now marginally EUR-favourable.
  • USD/CNY has reverted back to initial 7.14+ best levels after pulling back towards the figure, with the region focused on fresh COVID commentary.
  • PBoC sets USD/CNY mid-point at 7.0655 vs exp. 7.0479 (prev. 7.0363)

Fixed Income

  • Gilts unchanged ahead of significant fiscal changes from the UK, USTs await Fed speak post-Waller.
  • Currently, the UK benchmark resides at the lower-end of 106.32-107.17 parameters with the associated 10yr yield at 3.15%; a figure that is only 15bp above the current BoE base rate and significantly shy of the 4.632% peak seen in wake of the former PM/Chancellor’s ‘mini-Budget’.
  • EGBs and USTs are holding in similarly contained ranges around the unchanged mark; currently, +14 and -9 ticks respectively, with focus on the hefty Central Bank docket.
  • Italy maintains the new BTP Italia bond real annual coupon at 1.6%.


  • Crude benchmarks are under modest pressure given the USD recovery throughout the morning, generally softer APAC tone and a continuing deterioration to the China COVID case count weighing.
  • Ags. in focus and pressured following a as-expected extension to the Black Sea grain deal.
  • Currently, the yellow metal is holding around the lower-end of USD 1761-1774/oz parameters, and is thus a similar distance from the WTD peak of USD 1786/oz and the 10-DMA at USD 1738/oz.
  • TC Energy’s Keystone oil pipeline issues were resolved after force majeure, but TC Energy will reduce injections for the rest of November, according to Reuters sources.
  • Ukrainian Infrastructure Minister says the Black Sea grain initiative will be extended for 120-days, via Reuters; Russia will not cut off the Black Sea grain deal, via Tass citing the Deputy Foreign Minister.


  • Chinese President Xi may visit Russia in 2023; government heads could have call in December, according to Tass.
  • North Korea fired an unspecified ballistic missile toward East Sea, according to the South Korean military cited by Yonhap.
  • North Korea said the recent South Korea, US, and Japan summit would lead the Korean peninsula to an even more unpredictable situation, according to KCNA.
  • South Korean and US militaries conducted missile defence drills following the North Korean missile launch, according to the South Korean military.
  • UK blocked Chinese takeover of Newport chip plant, ordering Chinese-owned Nexperia to sell at least 86% of the factory in order to mitigate risk to national security, according to FT.
  • China’s President Xi said China is willing to increase imports from Italy, according to CCTV.
  • Turkish President Erdogan expects issues around the US F-16 jet purchases to resolve soon, via Reuters.

US Event Calendar

  • 08:30: Nov. Initial Jobless Claims, est. 228,000, prior 225,000
    • Nov. Continuing Claims, est. 1.51m, prior 1.49m
  • 08:30: Oct. Housing Starts, est. 1.41m, prior 1.44m
    • Oct. Housing Starts MoM, est. -2.0%, prior -8.1%
    • Oct. Building Permits, est. 1.51m, prior 1.56m
    • Oct. Building Permits MoM, est. -3.2%, prior 1.4%
  • 08:30: Nov. Philadelphia Fed Business Outl, est. -6.0, prior -8.7
  • 11:00: Nov. Kansas City Fed Manf. Activity, est. -8, prior -7

Central bank speakers

  • 08:00: Fed’s Bullard Discussed the Economy and Monetary Policy
  • 09:15: Fed’s Bowman Discusses Financial Literacy and Inclusion
  • 09:40: Fed’s Mester Speaks at Financial Stability Conference
  • 10:40: Fed’s Jefferson and Kashkari Take Part in Panel Discussion
  • 13:45: Fed’s Kashkari Takes Part in Moderated Q&A
  • 20:05: Powell, Williams and Daly Honor Chicago Fed’s Evans

DB’s Jim Reid concludes the overnight wrap

After a strong rebound over recent days, the momentum behind risk assets started to peter out yesterday thanks to some hawkish comments from Fed officials, weak corporate earnings, as well as strong retail sales numbers that dampened hopes about a dovish pivot from the Fed. To be fair it wasn’t all bad news, and fears of a military escalation subsided after NATO leaders said the missile that hit Polish territory on Tuesday evening wasn’t the result of an intentional Russian attack. However, apart from specific assets like the Polish Zloty, that wasn’t enough to boost sentiment more broadly, and the S&P 500 (-0.83%) ended the day noticeably lower.

Running through those specific factors, a key one behind yesterday’s market moves were some fairly hawkish comments from Fed officials. For instance, Kansas City Fed President George cautioned about prematurely ending rate hikes in a WSJ interview, saying that “the more important question for this committee, looking out over next year, is being careful not to stop too soon”. Later on we then heard from San Francisco Fed President Daly , who said that she thought that “somewhere between 4.75 and 5.25 seems a reasonable place to think about” in terms of how high rates could go. Bear in mind that the peak rate priced in by futures is still at 4.92%, so the bulk of Daly’s range is above where pricing currently is. And finally we heard from Governor Waller, who said he was “more comfortable considering stepping down to a 50 basis-point hike” based on the data of recent weeks, but also said that “we still have a ways to go” and that “policy is barely in restrictive territory today”.

Those comments came against the backdrop of some decent retail sales numbers for October, with headline growth up by +1.3% (vs. +1.0% expected). That was the fastest pace of monthly growth since February, and the details looked pretty strong as well, with the measure excluding autos and gasoline up by +0.9% (vs. +0.2% expected). On one level that’s good news of course, but the report was seen as showcasing the strength of the US consumer amidst the ongoing rate hikes from the Fed, which should give them more space to keep hiking over the next few meetings.

With investors pricing in a slightly more hawkish Fed on the day, the 2yr Treasury yield ticked up +1.7bps to 4.35%. However, the broader risk-off tone meant there was a large decline in longer-dated yields on both sides of the Atlantic. In the US, the 10yr yield came down -8.0bps to 3.69%, and yields on 10yr bunds (-10.9bps), OATs (-12.0bps) and gilts (-14.9bps) all saw sharp declines as well. In turn, those moves pushed several yield curves even deeper into inversion territory, with the 2s10s yield curve closing beneath -60bps for the first time since 1982, which is concerning when you consider its historic accuracy as a leading indicator of recessions. Other yield curves also inverted by even more, with the 3m10yr curve down -6.6bps to -54.2bps. And even the Fed’s preferred yield curve (18m forward 3m yield minus the spot 3m yield) has now spent a full week in inversion territory, closing yesterday at -15.3bps, which is the lowest since March 2020. Overnight in Asia, yields on 10yr USTs (+2.8bps) have slightly retraced their moves yesterday, trading at 3.72% as we go to print.

Growing speculation about a recession proved bad news for equities, and the mood was further hit by a weak earnings release from Target (-13.14%), who cut their outlook and saw earnings miss expectations. By the close, that had seen the S&P 500 shed -0.83%, with the losses driven by the more cyclical sectors. Tech was impacted in particular, with the NASDAQ down -1.54% and the FANG+ index down -2.10%. For Europe it was much the same story, with the STOXX 600 (-0.98%) and the DAX (-1.00%) both losing ground on the day, and after the close we then heard a Bloomberg report that suggested ECB policymakers would slow down their rate hikes to a 50bp move next month.

In more positive news, there were strong signs that a military escalation had been avoided after a missile struck Polish territory on Tuesday evening, after both NATO and Poland’s leaders said that it did not look to have resulted from an intentional Russian attack. Polish President Duda said that “most likely, this was an unfortunate accident”, and NATO Secretary General Stoltenberg said that their view was it resulted from a Ukrainian air defence missile that was fired in defence against Russian attacks. The news helped Poland’s Zloty to regain its position prior to the attack, strengthening +1.14% against the US Dollar yesterday.

Looking forward now, attention will be on the UK today as the government delivers their Autumn Statement. That’s set to outline their fiscal consolidation plans for the years ahead, which is part of their plan to regain market confidence following the turmoil in late September and early October. Our UK economist published an update earlier this week on what to look out for (link here) but a key one will be the overall scale of the package, as well as how that’s distributed between spending cuts and tax rises. Keep an eye out as well on what’s announced on energy prices, since the current Energy Price Guarantee is only confirmed until the end of March. Ahead of the statement, data yesterday showed consumer price inflation surprised on the upside in October, coming in at +11.1%. That’s the highest reading since 1981, and is above the consensus estimate of +10.7%, as well as the Bank of England’s projection at +10.9%. Interestingly, the ONS said that without the government’s Energy Price Guarantee, CPI would have been around +13.8%, rather than +11.1%.

Overnight in Asia, the major equity markets are trading lower this morning, including the Hang Seng (-1.49%), the Shanghai Composite (-0.63%), the CSI (-1.01%), the Nikkei (-0.35%) and the KOSPI (-1.10%). Tech stocks are under pressure again as well, with the Hang Seng Tech index (-3.48%) on track for its biggest decline in a couple of weeks. That follows an announcement from Tencent that they’d be distributing $20bn of shares in Meituan. In the meantime, Bloomberg reported that regulators in China had asked banks about their ability to meet short-term obligations, following a bond selloff that triggered investor withdrawals.

Elsewhere overnight, US equity futures are pointing towards gains at today’s open with contracts on the S&P 500 (+0.21%) and NASDAQ 100 (+0.29%) both higher. And we also had an employment report from Australia showing that the unemployment rate fell to a 48-year low of 3.4% in October (vs. 3.5% expected).

Back in the US, we finally got confirmation overnight that the Republicans had gained control of the House of Representatives following last week’s midterm elections. The Associated Press’ count now puts the Republicans at the 218 mark needed for the majority, whilst the Democrats have 211 seats with only 6 districts now outstanding. So that means from January the Democrats will require at least some Republican support to pass legislation.

When it came to yesterday’s other data from the US, it wasn’t as strong as the retail sales numbers, with industrial production contracting by -0.1% in October (vs. +0.1% expected). We also got the latest NAHB housing market index for November, which fell to 33 (vs. 36 expected). If you exclude the pandemic month of April 2020, that’s the lowest reading for that index in over a decade.

To the day ahead now, and a key highlight will be the UK government’s autumn statement. Otherwise, data releases include US housing starts and building permits for October, the Philadelphia Fed’s business outlook index and the Kansas City Fed manufacturing index for November, and the weekly initial jobless claims. Finally, central bank speakers include the Fed’s Bullard, Bowman, Mester, Jefferson and Kashkari, the ECB’s Villeroy, and the BoE’s Pill and Tenreyro.

This post was originally published on this site

Notify of
Inline Feedbacks
View all comments

Stay Connected


Latest Articles

Would love your thoughts, please comment.x