Riksbank Pencils In 1st Potential Rate Hike During Latter Point Of 2024

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Notes / Observations

  • Riksbank is keeping policy stable as expected and has adjusted its previous leadership to see a rate hike in the latter part of 2024.

Asia

  • Bank of Korea (BoK) raised 7-Day Rap Rate by 25bps to 1.00% (as expected); signals that more hikes could come.

Crown virus

  • Italian Cabinet said to put new stricter COVID rules for vaccination from December 6 to January 15. Unvaccinated could not use cinemas, restaurants, hotels and gyms.

Europe

  • Schnabel of ECB (Germany) stated that Inflation will start to slowly recover from January; Did not see a significant risk of stagflation.
  • Makhlouf of ECB: drivers of inflation will retire in 2022; personal opinion that tariff increases are not needed.
  • Swedish Prime Minister Andersson resigned hours after the appointment of a new prime minister; Coalition partner Greens leave coalition after they were unable to reach a budget agreement.

Americas

  • FOMC New Minutes noted that the number of participants discussed that long-term inflation expectations could rise above a long-term target; Delta wave intensified the obstacles to supply chain. Some participants suggested that a reduction in the pace of net assets by more than $ 15B / month could be warranted so that the Committee is in a better position to make adjustments to the target range for the federal money exchange rate.

Speakers / Fixed Income / FX / Goods / Erratum

Stocks

  • Indexes [Stoxx600 +0.47% at 481.96, FTSE +0.19% at 7,300.26, DAX +0.44% at 15,948.51, CAC-40 +0.36% at 7,067.52, IBEX-35 +0.52% at 8,837.52, FTSE MIB +0.47% at 27,237.00, SMI +0.50% at 12,457.64, S&P 500 Futures +0.30%].

Market Focus / Key Issues:

Stocks

  • European indices open generally higher after a few sessions of losses; better performing sectors include industrialists and free consumers; late sectors include finance; Remy Cointreau in Paris is trading higher above 10% following its final half-year results and an updated profit outlook; Swiss insurance giant Swiss Life introduced new targets during its investment day and also announced a share buyback, also trading higher by around 3%; on M&A front, UK company Life Energy received a bid to be acquired, its shares rose nearly 20% on the London Stock Exchange; As a reminder, U.S. markets will be closed today and set for an earlier close tomorrow due to Thanksgiving Day; S&P500 futures currently stand at 0.3%.
  • Voluntary consumer: Remy Cointreau [RCO.FR] + 11% (final revenue; raises profit outlook), Studio Retail Group [STU.UK] -19% (income), Eco Animal Health [EAH.UK] -16% (income).
  • Energy: Life Energy [VVO.UK] + 20% (purchase offer).
  • Finances: Swiss Life [SLHN.CH] + 3% (CMD).

Speakers

  • The EU said it supports a 9-month limit on the validity of COVID-19 vaccine in travel targets.
  • Sweden’s Central Bank (Riksbank) Policy Statement noted that inflation was expected to be targeted ahead. It has trimmed its previous lead and has now seen a rate hike in the latter part of 2024 (** Note: previous view was expected to remain at zero for an entire forecast period, at least until Q3 2024). Announced that it will buy bonds during Q1 2022 while properties will gradually decrease after 2022.
  • Sweden Central Bank (Riksbank) Gov Ingves post-course decision-making press conference noted that expansionary policy is necessary for inflation at target.
  • A German report on the Bundesbank’s Financial Stability stressed that now is the time to take action against future risks.
  • Hardt of Poland’s Central Bank stated that Nov’s inflation reading was probably higher than 7%.
  • Japan Cabinet Office Monthly Report supported its overall economic estimate that the recovery continued to improve from an extremely low base but rate weakened.
  • Chinese Defense Ministry spokesman Wu Qian: Ready to crush Taiwan independence at any time.
  • China and the United States have said they plan to hold a meeting of their top defense officials before the end of 2021.
  • Iraq Oil Min Jabbar stated that OPEC did not want to lose success because oil markets remained fragile.

Currencies / Fixed Income

  • USD held its recent strength as the most recent FOMC minutes if various policymakers said they would be open to speeding up their bond buying program if high inflation held. The Fed also suggests it could raise interest rates faster.
  • GBP / USD has been softer despite traders suggesting that post-Brexit relations between the UK and the EU may not suffer a further breakdown any time soon.
  • EUR / SEK stabilized at 10.19 area after the Riksbank penciled in its first possible rate increase at the end of 2024.

Economic data

  • (FI) Finland Oct Preliminary Retail Sales Volume Y / Y: -0.9% v + 2.7% prior.
  • (DE) Germany Q3 Final GDP Q / Q: 1.7% v 1.8% prelim; Y / Y: 2.5% v 2.5% prelim; MEP WDA (unadj) Y / Y: 2.5% v 2.5% prelim.
  • (DE) Germany Q3 Private Consumption Q / Q: 6.2% v 4.8% e; Government Expenditure Q / Q: -2.2% v + 0.4% e; Capital Investment Q / Q: -2.2% v 0.0% e.
  • (DE) Germany Dec GfK Consumer Confidence: -1.6 v -1.0e.
  • (DK) Denmark Oct Retail Sales M / M: + 1.7% v -1.2% previously; Y / Y: -2.5% v + 3.0% before.
  • (NE) Norway Sept AKU Unemployment: 3.6% v 3.9% e.
  • (ES) Spain Oct PPI M / M: 6.1% v 5.4% previous; Y / Y: 31.9% vs. 23.8% previously (highest annual rate in nearly 5 decades).
  • (SE) Sweden Central Bank (Riksbank) left Repo Rate unchanged at 0.00% (as expected).
  • (SE) Sweden Oct PPI M / M: 0.1% v 1.5% previous; Y / Y: 16.8% versus 17.2% previously.
  • (SE) Sweden Oct Household Lending Y / Y: 6.6% v 6.5% previous.
  • (HK) Hong Kong Oct Trade Balance (HKD): -30.5B v -46.1Be; Y / Y exports: 21.4% v 20.7% e; Y / Y imports: 17.7% v 19.5% e.
  • (IS) Iceland New CPI M / M: 0.4% v 0.6% previous; Y / Y: 4.8% versus 4.5% previously.
  • (PL) Poland Oct Unemployment Rate: 5.5% v 5.5% e.
  • (ZA) South Africa Oct PPI M / M: 0.7% v 0.6% e; Y / Y: 8.1% v 8.0% e.

Fixed income issue

  • (SE) Sweden sold a total of SEK1.25B in I / L 2030 and 2039 Bonds.
  • (IT) Italian Debt Agency (Treasury) sold € 2.25B against € 1.75-2.25B indicated range in 0.00% Jan 2024 BTP bonds; Average Yield: -0.26% v -0.23% previous; offer-to-cover: 1.45xv 1.65x before.
  • (IT) Italian Debt Agency (Treasury) sold € 1.0B against € 0.75-1.0B indicated range in 0.40% May 2030 I / L Bonds (BTPei); Actual Yield: -0.65% v -0.85% previous; offer-to-cover: 1.46xv 1.41x before.

Looking ahead

  • (PT) Portugal Annual Budget Report.
  • (AR) Argentina New Consumer Confidence Index: Not v 40.2 previous.
  • 05:25 (EU) Daily ECB Liquidity Statistics.
  • 05:30 (HU) Hungarian Debt Agency (AKK) to sell HUF20B in 12-month Invoices.
  • 06:00 (CA) Canada New CFIB Trading Barometer: There is no v 60.5 before.
  • 06:00 (BR) Brazil Nov FGV Construction Costs M / M: 0.8% ev 0.8% previous.
  • 06:00 (RO) Romania sell 3.25% 2026 Bonds.
  • 06:45 (USA) Daily Libor Fixing.
  • 07:00 (BR) Brazil mid-November IBGE Inflation IPCA-15 M / M: 1.1% ev 1.2% previous; Y / Y: 10.7% or 10.3% previously.
  • 07:00 (MX) Mexico Q3 Final GDP Q / Q: -0.3% ev -0.2% prelim; Y / Y: 4.5% and 4.6% preliminary; GDP Nominal Y / Y: Not up 29.6% ago.
  • 07:00 (MX) Mexico Sept IGEA Economic Performance Index (Monthly GDP) M / M: + 0.3% ev -1.6% previous; Y / Y: 2.7% and 4.3% previously.
  • 07:30 (BR) Brazil Oct Current Account Balance: – $ 4.8Be v – $ 1.7B previously; Foreign Direct Investment (FDI): $ 4.0Be v $ 4.5B previously.
  • 07:30 (EU) ECB Account on Policy Decision of October (Protocol).
  • 08:00 (UK) Daily Baltic Dry Bun Index.
  • 08:00 (RU) Russia Gold and Forex Reserve with November 19: Not before $ 626.2B.
  • 09:00 (BE) Belgium New Business Confidence: 3.6ev 4.0 prior.
  • 09:05 (YK) Haskel of BOE.
  • 10:00 (MX) Mexican Q3 Current Account Balance: – $ 5.0Be v $ 6.3B previously.
  • 10:00 (MX) Mexican Central Bank (Banxico) New Minutes.
  • 12:00 (UK) BOE Governor Bailey.
  • 14:00 (AR) Argentina Sept Supermarket Sales Y / Y: Not against 4.5% previously; Shop Center Sales Y / Y: Not before 245.2% previously.
  • 16:00 (NZ) New Zealand New Consumer Confidence Index: Not v 98 before.
  • 18:30 (JP) Japan New Tokyo CPI Y / Y: 0.4% ev 0.1% previous; CPI (ex-fresh food) Y / Y: 0.3% ev 0.1% previous; CPI (ex-fresh food / energy) Y / Y: -0.3% ev -0.4% previous.
  • 19:30 (AU) Australian Oct Retail Sales M / M: 2.2% ev 1.3% previously.
  • 22:30 (JP) Japan to sell 3-Month Bills.
  • 23:00 (MY) Malaysia Oct CPI Y / Y: 2.8% ev 2.2% previous.

Source

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