Closing Wrap - Friday 08.11
Headlines
  • US Pres. Trump Denies Agreeing To Roll Back Tariffs On China
  • WH Trade Adviser Navarro: US May Be Willing To Postpone Dec. 15 Tariffs
  • Fed’s Bostic: Opposed Rate Cut To Preserve Policy Space
  • UK PM Johnson Claims No Customs Declarations Between NI And GB
  • ECB’s Vasle: ECB Will Continue Current Policy Until Conditions Improve
  • Work On ECB Digital Currency Under Way, Progress Possible Next Year
  • Xerox Awaits Response From HP After Offering $22 Per Share
  • Thermo Fisher Sets New $2.5 Bln Stock Buyback Program
  • CDC Makes Breakthrough In Finding Possible Cause Of Deadly Vaping Illness
  • US May Raise The Vaping Age To 21
Commentary
LS Focus On The Week Ahead
(Click Image To Enlarge)

Week Ahead

 

All Times GMT

 

Monday 11 November

 

UK Prelim Q3 GDP (09.30)

Investec said the third-quarter figures are expected to show a return to growth after the quarterly contraction in the April-June period. “The UK’s largest sector, services, will likely be the key force behind the rebound.” Consensus: 0.4pct Q/Q (-0.2pct).

 

Tuesday 12 November

 

German, EZ Nov ZEW Survey (10.00)

The Sentix investors survey released on 4 November often plots the course for the ZEW’s German indicators, and this month respondents expressed significantly less pessimism about the present and the future. The Sentix expectations component for Germany rose to its highest level since May, and the pollster said the European Central Bank’s September stimulus package boosted the outlook for the Eurozone in general. Consensus: Economic Sentiment: -13.0 (prev -22.8).

 

Wednesday 13 November

 

RBNZ Rate Decision (01.00)

TD Securities said it was going against market expectations. “It's a line ball call but we remove a 25bps Nov RBNZ cut from our forecasts. We expect the RBNZ is likely to match the RBA and cut the OCR to 0.50pct in 2020.” Consensus: 25bp Cut To 0.75pct.

 

UK Oct CPI (09.30)

“October is likely to have seen a further fading of the favourable base effects seen in recent months,” Oxford Economics noted. “However, the balance of forces points to CPI inflation that month easing to 1.6pct.” Consensus: 1.6pct Y/Y (prev 1.7pct).

 

US Oct CPI (13.30)

“The last couple of months, CPI core has surprised on the upside, but we do not expect this to be the beginning of a new trend given the low inflation expectations,” Danske Bank said. Consensus: Headline CPI 1.7pct Y/Y (prev 1.7pct).

 

Thursday 14 November

 

German Q3 Flash GDP (07.00)

German September industrial production fell at a monthly rate of 0.6pct, according to data published Thursday, but Friday’s export data for September showed unexpected growth. Additionally, Germany’s performance may impact the second estimate of third-quarter Eurozone GDP growth due at 10.00 GMT. “While there is no doubt that industry is in recession, the entire German economy could have avoided another contraction – and hence a technical recession – at the very last minute,” ING Chief German Economist Carsten Brzeski said. Consensus: -0.1pct Q/Q (prev -0.1pct).  

Trump Sows Doubt On Trade Talks With Pushback On Tariff Unwind

President Donald Trump said that the U.S. hasn’t agreed to roll back all tariffs on China, diluting hopes the U.S. would make such a concession to secure a trade deal.

 

“They’d like to have a rollback, I haven’t agreed to anything,” Trump told reporters Friday. “China would like to get somewhat of a rollback -- not a complete rollback, because they know I won’t do it.”

 

U.S. bonds rallied and stocks slipped after the president’s remarks reduced some of the optimism that had been increasing around the prospects for a truce.

 

On Thursday, signs were pointing toward a first-phase deal that would include a tariff rollback. China’s Ministry of Commerce spokesman Gao Feng said negotiators had discussions and “agreed to remove the additional tariffs in phases as progress is made on the agreement.” (Bloomberg – Continue Reading)

UK spending plans, Brexit paralysis put rating at risk: Moody's

LONDON (Reuters) - Moody’s warned on Friday it might cut its rating on Britain’s sovereign debt again, saying that neither of the main political parties in next month’s election was likely to tackle high borrowing levels which Brexit had made even harder to fix.

 

In a toughly worded statement, Moody’s said the fissures in Britain’s society and politics exposed by its still-unresolved decision to leave the European Union would be long-lasting.

 

“It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the UK will return once Brexit is no longer a contentious issue, however that is achieved,” the ratings agency said. Continue reading

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