Closing Wrap - Thursday 07.11
Headlines
  • China, US Agree To Tariff Rollback If Trade Deal Reached
  • John Bolton Willing To Defy WH And Testify If Court Clears The Way
  • Two BoE Members Unexpectedly Vote For Rate Cut As Outlook Sours
  • EU Warns Worst May Be Ahead As Euro-Area Resilience Wanes
  • ECB Sees Modest But Positive Eurozone Growth In H2
  • Eurogroup Gives Support To Isabel Schnabel's Candidacy To ECB
  • ECB’s Holzmann: ECB Should End Negative Rates As Soon As Possible
  • Japan PM Abe Pledges 'Timely' Steps To Fight Risks, Signals More Spending
  • OPEC, Allies Mull Production Cuts As Aramco IPO Complicates Dec Meeting
  • HSBC Warned Twice By BoE On Conduct Risk Control
  • Alibaba Cuts Fundraising Target For Delayed Hong Kong Listing
Commentary
BoE takes a ‘dovish turn’ ahead of UK Christmas election - Reaction
  • BoE leaves bank rate on hold at 0.75pct with 7-2 majority
  • In surprise dissention, MPC’s Saunders and Haskel vote for 25bp cut
  • Dissenters wanted reduction due to downbeat global economic outlook
  • Bank staff upgrade near-term GDP growth but downgrade further outlook

 

 

London, 7 Nov (LS NEWS) – As expected, the Bank of England’s Monetary Policy Committee (MPC) kept its bank rate and bond purchases unchanged Thursday, and BoE Governor Mark Carney warned that the UK could fall into recession if it cannot secure an agreement with Brussels before leaving the EU.

 

In a surprise spit, the MPC voted 7-2 to maintain the Bank Rate at 0.75pct but were unanimously behind keeping the stock of UK government bond and non-financial investment-grade corporate bond buys at GBP435bln and GBP10bln, respectively.

 

Market reaction was most evident on the vote, with sterling dropped sharply. Cable fell just over 50 pips from a pre-announcement 1.2860to 1.2806 lows post. For bond markets, UK 10-year bond yields fell from 0.76pct to 0.739pct. Continue reading

China, US Agree To Tariff Rollback If Trade Deal Reached

China and the U.S. have agreed to roll back tariffs on each other’s goods in phases as they work toward a deal between the two sides, a Ministry of Commerce spokesman said.

 

“In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement,” spokesman Gao Feng said Thursday.

 

A U.S. official, who spoke on condition of anonymity, confirmed Thursday that an agreement to roll back tariffs would be part of phase-one deal. The negotiations are ongoing and a time or place for any signing of a pact is yet to be determined.

 

Kellyanne Conway, senior White House adviser, said Thursday that President Donald Trump is "anxious" to sign the deal.

 

“If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,” Gao said. (Bloomberg – Continue Reading)

EU Warns Worst May Be Ahead As Euro-Area Resilience Wanes

The European Commission cut its euro-area growth and inflation outlook amid global trade tensions and policy uncertainty, warning that the bloc’s economic resilience won’t last forever.

 

The EU’s executive arm sees economic momentum remaining muted through 2021, forecasting an expansion of 1.2% for that year. At 1.3%, inflation is projected to remain well below the European Central Bank goal of just below 2% over the medium term.

 

The updated projections, which put the Commission broadly in line with the consensus view among economists, reflect more pronounced weakness in the region, which has stumbled along with the world economy as tariffs disputes hit manufacturers and dent broader confidence. The institution warned that risks, which include the possibility of a disorderly Brexit, remain “decidedly to the downside.” (Bloomberg – Continue Reading)

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