Risk Appetite Continues Following US Election Projections

Notes/Observations

• US Election is rapidly entering the rear view mirror as uncertainty over the outcome has abated; focus to shift towards vaccine developments, and monetary and fiscal stimulus
• Biden’s victory in the US presidential election seen as likely support risk appetite

Asia:

• China Oct Trade Balance: $58.4B v $45.8Be; Exports Y/Y: 11.4% v 8.9%e; Imports Y/Y: 4.7% v 9.3%e (fastest pace for exports in 19 months)
• China Oct Foreign Reserves: $3.13T v $3.143Te
• China national adviser stated that Govt to seek to renegotiate trade deal with President-elect Biden; unlikely Biden could do anything that could be construed as being soft on China
• BOJ Oct Summary of Opinions: BOJ must respond swiftly, appropriately as needed while in close cooperation with Govt and major central banks; desirable to guide 10-year JGB yield around 0%, while allowing for longer end of yield curve to steepen at moderate pace
• NZIER saw less need for additional stimulus

Coronaviurs:

• Total global cases 50.4M (+3.6% vs Fri); total deaths 1,.26M (+1.8% vs. Fri)

Europe:

• UK PM Johnson stated after a phone call with EU’s vonder leyen that a Brexit deal was there to be done, UK was very well prepared for Brexit. UK to redouble efforts to reach a deal
• EU Commission chief von der leyen stated that some progress had been made, but large differences remained especially on level playing field and fisheries
• UK Foreign Min Raab stated that Britain had assured the next US administration it would not risk the Northern Ireland Good Friday Agreement. UK argument was that the EU had put pressure on it with their approach. Saws good change of FTA with the EU if flexibility emerged
• Germany was said to be considering delaying $4.0B tariff strike on US. EU would be looking to ‘reboot’ trade relationship with US in a ‘post Trump’ environment
• BOE’s Cunliffe: Negative interest rates might help with bad debts
• Italy cabinet said to have drawn up plan to provide €2.5B in further pandemic aid
• Turkey President Erdogan removed central bank Governor Uysal and Fin Min Albayrak resigned citing health issues
• Moody’s affirmed Italy sovereign rating at Baa3; outlook stable
• Moody’s raised Greece sovereign rating one notch from B1 to Ba3; outlook Stable
• Fitch affirmed Germany sovereign rating at AAA; outlook Stable

Americas:

• Joe Biden was declared the winner of the Presidential election after calling Pennsylvania in his favor with its 20 electoral votes
• President Trump has no conceded Presidential election to Biden who was declared the winner after securing Pennsylvania
• President Trump legal team has said they will begin filing lawsuits in key states on Monday (Nov 9th)
• President-elect Biden speech noted that people had delivered us a convincing victory; pledged to be a President who sought to unify, to make progress we should not treat our opponents as enemies; climate change and systemic racism were a part of his mandate

Energy:

• Some key OPEC members were concerned are worried that strains could resurface with Joe Biden as US President. Iran sanctions could be re-evaluated meaning their oil could come back to the market risking over supply

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +1.49% at 371.86, FTSE +1.39% at 5,991.65, DAX +1.90% at 12,717.40, CAC-40 +1.65% at 5,042.75, IBEX-35 +1.89% at 7,000.00, FTSE MIB +2.16% at 20,106.50, SMI +0.81% at 10,406.59, S&P 500 Futures +1.47%]
• Market Focal Points/Key Themes: European indices open markedly higher across the board and stayed amply in the green as the session progressed; better performing sectors include consumer discretionary and materials; while health care and real estate sectors underperforming; Germany considering delaying retributive taxes on US goods following election results; UK-US trade deal seen less likely following election; Countrywide receives takeover offer from Connells; IEA sees lockdowns lowering demand for crude; ECB’s Villeroy sees French GDP contraction of 9-10% this year; reportedly Adidas might get approach for Reebok unit; earnings expected in the upcoming US session include McDonald’s, Beyond Meat, Clear Channel Outdoor and McDonald’s

Equities

• Consumer discretionary: Taylor Wimpey [TW.UK] +11% (trading update), Countrywide [CWD.UK] +45% (takeover proposal), Ryanair [RYA.UK] +4% (govt subsidies), Norwegian Air [NAS.NO] -17% (lack of govt support)
• Industrials: Airbus [AIR.FR] +3% (deliveries)
• Technology: Infineon [IFX.DE] +3% (earnings)

Speakers

• ECB chief Lagarde: climate risks were not adequately priced and added that it was essential that they be included
• Bank of France (BdF) commented on economic impact from lockdown restrictions; measures seen reducing activity by 12% compared to 31% back in the April period
• German Chancellor Merkel: US and EU should not look at just the next four years for its transatlantic relation; should develop a common plan until 2030
• German Econ Min Altmaier stated that he expected to return to multilateral approach with US
• ECB’s Villeroy (France) saw French 2020 GDP likely contrac0ingt between 9-10%
• EU’s Dombrovskis (trade chief): To retaliate against US over Boeing aid; want a negotiated deal on aircraft aid
• Ireland Foreign Min Coveney stated that they are in the end game now on Brexit talks. Reiterates EU stance that key issues remain level-playing field and fisheries
• Greece Fin Min Staikouras: Domestic economy to show strong recovery following the conoravirus crisis
• Sweden said to extend furlough support program for companies hit by the Covid-19 pandemic by 6 months
• Russia govt spokesperson Peskov: Putin to congratulate US President after final results
• China Foreign Ministry noted that Biden had declared victory in the Presidential election; Understand result would be determined following US Laws
• Japan PM Suga stated that was holding highest sense of vigilance against pandemic; to come up with steps to revive and domestic economy. To deploy steps in a timely fashion
• Russia govt said to appoint Rushydro CEO Nikolai Shulginov as its new Energy Minister (**Note: Energy Min Novak confirmed to become new Deputy PM)
• IEA’s Keisuke: New lockdown measures in Western countries likely to push down global oil demand

Currencies/Fixed Income

• USD was slightly softer as the EU session began but moved off its worst levels
• TRY currency (Lira) was firmer by over 5% on Monday (Nov 9th) for its best daily performance since 2018. TRY currency appreciation attributed to speculation higher interest rates could be coming after the weekend resignations
• Italy’s 10-year government BTP bond test 0.575% for a record low after Moody’s affirmed Italy sovereign rating at Baa3; outlook stable

Economic Data

• (NL) Netherlands Manufacturing Production M/M: -6.8% v 1.3% prior; Y/Y: -6.8% v -3.6% prior; Industrial Sales Y/Y: -5.4 v -11.9% prior
• (SE) Sweden SEB Swedish Housing-Price Indicator: 55 v 58 prior
• (CH) Swiss Oct Unemployment Rate: 3.2% v 3.3%e; Unemployment Rate (Seasonally Adj): 3.3% v 3.4%e
• (DE) Germany Sept Current Account Balance: €26.3B v €19.0Be;Trade Balance: €20.8B v €16.0Be; Exports M/M: 2.3% v 2.0%e; Imports M/M: -0.1% v +1.5%e
• (DK) Denmark Sept Current Account Balance (DKK): 13.0B v 13.2B prior; Trade Balance: 7.2B v 4,5B prior
• (FR) Bank of France Oct Industrial (Business) Sentiment: 97 v 101 prior
• (TW) Taiwan Oct Trade Balance: $7.5B v $5.9Be; Exports Y/Y: 11.2% v 5.4%e; Imports Y/Y: % v -2.2%e
• (CH) Swiss weekly Total Sight Deposits (CHF): 707.6B v 707.6B prior; Domestic Sight Deposits: 638.7B v 636.0B prior
• (CZ) Czech Oct International Reserves: $157.9B v $157.4B prior
• (SG) Singapore Oct Foreign Reserves: $338.1B v $328.0B prior
• (EU) Euro Zone Nov Sentix Investor Confidence: -10.0 v -15.0e (9th month of negative readings)
• (GR) Greece Sept Industrial Production Y/Y: -2.4% v -3.8% prior

Fixed income Issuance

• (EU) EFSF opened book to sell EUR-denominated Apr 2035 bonds; guidance seen +3bps to mid-swaps

Looking Ahead

• 06:00 (PT) Portugal Sept Trade Balance: No est v -€1.1B prior
• 06:00 (RO) Romania to sell RON400M in 6-month bills
• 06:00 (RO) Romania to sell RON600M in 4.15% 2028 Bonds
• 06:00 (IL) Israel to sell combined ILS2.2B in 2023, 2025, 2026, 2037 and 2047 bonds
• 06:00 (IL) Israel to sell combined ILS2.4B in 2023, 2029, 2030, 2037 and 2047 bonds
• 06:25 (BR) Brazil Central Bank Weekly Economists Survey
• 06:30 (CL) Chile Oct Trade Balance: $1.2Be v $0.9B prior; Total Exports: No est v $5.5B prior; Total Imports: No est v $4.6B prior; Copper Exports: No est v $3.1B prior
• 06:30 (CL) Chile Oct International Reserves: No est v $37.8B prior
• 06:45 (US) Daily Libor Fixing
• 07:00 (MX) Mexico Oct CPI M/M: 0.6%e v 0.2% prior; Y/Y: 4.0%e v 4.0% prior; CPI Core M/M: 0.3%e v 0.3% prior
• 07:00 (MX) Mexico Oct Vehicle Production: No est v 301.4K prior; Vehicle Exports: No est v 247.1K prior
• 07:00 (LX) ECB’s Mersch (Luxembourg, outgoing) at Webinar
• 08:00 (RU) Russia Oct Official Reserve Assets: $585.0Be v 583.4B prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)
• 08:00 (ES) Spain Debt Agency (Tesoro) annobces size for upcoming bill auction
• 09:00 (FR) France Debt Agency (AFT) to sell 6.3-7.5B in 3-month, 6-month and 12-month bills
• 09:30 (UR) Ukraine Oct CPI M/M: 1.1%e v 0.5% prior; Y/Y: 2.7%e v 2.3% prior
• 09:45 (EU) ECB weekly QE bond buying update
• 11:30 (US) Treasury to sell 13-Week and 26-Week Bills
• 13:00 (US) Treasury to sell 3-year notes
• 13:30 (US) Fed’s Mester participates in Fintech Conference
• 16:00 (NZ) New Zealand Oct ANZ Heavy Truckometer M/M: No est v 4.1% prior
• 16:00 (NZ) New Zealand Government 3-Month Financial Statements
• 16:00 (US) Weekly Crop Progress Report
• (PE) Peru Sept Trade Balance: No est v $0.4B prior
• 16:45 (NZ) New Zealand Oct Total Card Spending M/M: No est v 4.8% prior; Retail Card Spending M/M: No est v 5.4% prior
• 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 99.9 prior
• 18:50 (JP) Japan Sept Current Account Balance (BOP): ¥2.020Te v ¥2.103T prior; Adjusted Current Account Balance: ¥1.770Te v ¥1.648T prior; Trade Balance (BoP Basis): ¥802.7Be v ¥413.2B prior
• 18:50 (JP) Japan Oct Bank Lending Y/Y: No est v 6.4% prior; Bank Lending (ex-trusts) Y/Y: No est v 6.2% -prior
• 19:00 (AU) Australia to sell A$150M in 0.75% 2027 Bonds
• 19:01 (UK) Oct BRC Sales Like-For-Like Y/Y: No est v 6.1% prior
• 19:30 (AU) Australia Oct Business Confidence: No est v -4 prior; Business Conditions: No est v 0 (flat) prior
• 20:30 (CN) China Oct CPI Y/Y: 0.8%e v 1.7% prior; PPI Y/Y: -1.9%e v -2.1% prior
• 20:51 (PH) Philippines SEpt Bank Lending Y/Y: No est v5.6% prior; Net Bank Lending Y/Y: No est v 4.7% prior
• 21:00 (PH) Philippines Q3 GDP Q/Q: -5.6%e v -15.2% prior; Y/Y: -9.6%e v -16.5% prior
• 22:00 (TH) Thailand Central Bank to sell THB40B in 3-month bills
• 22:30 (TH) Thailand Oct Consumer Confidence: No est v 50.2 prior; Economic Confidence: No est v 42.9 prior
• 23:30 (JP) Japan Oct Bankruptcies Y/Y: No est v -19.5% prior
• 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills
• 22:35 (JP) Japan to sell 30-Year JGB Bonds
• 23:30 (TW) Taiwan to sell TWD30B in 2-Year Bonds
• 23:30 (TW) Taiwan to sell TWD25B in 6-month Bills