German PPI reaches its highest level in 40 years

Remarks / Observations

– German September PPI data hits 40-year high.

– The European bond yield shows signs of stabilization ahead of the ECB’s policy meeting on Thursday.

– UK Budget Speech finalized later this morning.

– The Australian bond yield rose 20bp after core CPI returned to the RBA target range for the first time in 6 years.

– Companies that need to report during the New York morning include ADP, Amphenol, Avery Dennison, Boeing, Brink’s, Bunge, Bristol-Myers, Boston Scientific, CME, GM, Garmin, Hess Corp, Hilton Worldwide, Harley Davidson , International Paper, Kraft Heinz, Coca-Cola, McDonald’s, Norfolk Southern, Old Dominion Freight Line, Penske Auto, Ryder System, Silicon Labs, Silgan Holdings, Spotify, TE Connectivity, Teva, Thermo Fisher.

Asia

– Australia Q3 CPI Q / Q: 0.8% v 0.8% e; Y / Y: 3.0% vs. 3.1% e (truncated average inflation returns to the RBA target range for the first time since Q4 2015).

– China’s industrial profits in Sept. Y / Y: 16.3% against 10.1% previously.

– New Zealand’s trade balance in September recorded a record deficit (NZ $): -2.2 billion against -2.1 billion previously.

Europe

– UK Oct BRC Shop Price Index Y / Y: -0.4% vs. -0.5% previously; BRC chief executive Dickinson noted that it was now clear that increased costs due to labor shortages, supply chain issues and rising commodity prices had started to creep up. pass on to the consumer.

– Budget speech by UK Chancellor of the Exchequer Sunak (Fin Min) to use up to £ 30 billion from faster economic growth to fund investment in public services and cut borrowing. Declaring Britain could start to look beyond Covid to an economy worthy of a new era of optimism.

Americas

– Congressional Democrats have said they disagree on several major issues regarding President Biden’s spending bill, which reduced the chances of getting a quick vote.

– Chief Sen Maj Schumer said he was on the right track to implement the measures of the economic agenda; There are 3-4 issues left on Pres Biden’s economic bill.

– Senator Manchin (D-WV) said he was undecided on the billionaire’s tax. Against the IRS filing proposal.

Energy

– Weekly API crude oil inventories: +2.3 M against + 3.3 M before (4th consecutive weekly construction).

Speakers / Fixed income / FX / Commodities / Erratum

Actions

Indices [Stoxx600 -0.46% at 473.56, FTSE -0.34% at 7,252.80, DAX -0.47% at 15,683.35, CAC-40 -0.38% at 6,740.75, IBEX-35 -0.73% at 8,935.50, FTSE MIB -0.60% at 26,809.00, SMI -0.42% at 12,095.50, S&P 500 Futures -0.15%].

Market focal points / Key themes: European indices opened slightly lower and slipped further into the red as the session progressed; some of the best performing health care and utilities sectors; while the consumer discretionary and industrials sectors are among those leading the downside; Wacker Chemie takes a stake in SICO; earnings expected in the next US session include Spotify, Coca-Cola, GlaxoSmithKline and McDonald’s.

Actions

Consumer discretionary: Puma [PUM.DE] + 2.5% (gains), Electrolux AB [ELUXB.SE] + 1% (gains), Heineken [HEIA.NL] -1.5% (trading update).

Energy: Equinor ASA [EQNR.NO] -3% (earnings; redemption).

Finances: Deutsche Bank [DBK.DE] -5% (gains), Santander [SAN.ES] -2.5% (gains).

Industrial: BASF [BAS.DE] -1% (profit; raises the outlook).

Utilities: Iberdrola [IBE.ES] + 1% (gains).

Loudspeakers

Swiss government noted that the SNB viewed the currency CHF (franc) as “highly valued” and underlined the need for an accommodative monetary policy.

German Ministry of Economy officially updated its economic outlook. Reduce the GDP growth forecast for 2021 from 3.5% to 2.6% while increasing the GDP growth forecast for 2022 from 3.6% to 4.1%.

German economy Min Altmaier noted that growth was hampered by supply bottlenecks, but saw the economy return to pre-pandemic growth by the first quarter of 2022.

Turkish President Erdogan said he did not compromise on the issue of around 10 envoys (** Note: Threatening to expel Western ambassadors). To discuss the purchase of F-35 aircraft with Preidebnt Biden at COP26 in Glasgow.

Central Bank of Thailand said it would extend support for the corporate bond stabilization fund for one year until the end of 2022 in order to maintain market liquidity amid high uncertainty from the Covid-19 epidemic.

Thailand Fin Min Arkhom said he expected 2021 GDP growth to exceed 1.0%.

Zhao Lijian, Chinese Foreign Ministry spokesperson stated that the recent comments by the state sect Blinken on Taiwan violate the “one China” agreement between the two sides; recent US actions could pose huge risks.

China said he agreed on a plan to cap the price of coal at CNY 440 / tonne to help ease the energy crisis.

Currency / Fixed Income

– Focus on the upcoming rate decision (BoJ and ECB in the next 24 hours and plethora of Q3 GDP data (including US and Germany).

– The USD was mixed in trading on Wednesday. Dealers focused on Thursday’s release of US GDP data and its potential to disappoint markets.

– EUR / USD stable in the 1.16 area with a focus on Thursday’s ECB decision. Markets are currently forecasting an interest rate hike of nearly 10 basis points by the ECB before the end of 2022. Recent inflation data has remained warm, with Germany’s September PPI hitting a 40-year high.

– Currency AUD is stable despite the sharp rise in Australian bond yields after core CPI returned to the RBA target range for the first time in 6 years.

Economic data

– (FI) Finland Oct. Consumer confidence: 2.7 v 6.0 previously; Confidence in business: 22 against 21 before.

(DK) Germany Nov GfK Consumer confidence: +0.9 vs. -0.5e (2nd positive reading in a row).

– (DE) Germany Seven Import price index M / M: 1.3% vs. 1.5% e; Y / Y: 17.7% against 17.9% e (the highest annual rate since August 1981).

– (DK) Denmark Seven Retail sales M / M: -1.1% against -0.9% previously; Y / Y: 3.1% against 3.8% previously.

(FR) France Oct. Consumer confidence: 99 v 101e.

– (FR) France Seven PPI M / M: 1.7% against 1.0% previously; Y / Y: 11.6% against 10.0% previously.

– (ES) Spain August Total Y / Y mortgage loans: 48.3% against 5.7% previously; Y / Y real estate mortgage approvals: 66.9% vs. 36.8% previously.

– (TR) Turkey’s trade balance in September: -2.6 billion dollars against -2.6 billion dollars.

– (TR) Turkey Oct. Economic confidence: 101.4 against 102.4 previously.

– (SE) Swedish September trade balance (SEK): +6.3 billion against -10.5 billion previously.

– (SE) Sweden Seven Loans to households Y / Y: 6.5% against 6.4% previously.

– (EU) Euro zone Seven M3 Money supply Y / Y: 7.4% against 7.4% e.

– (AT) Austria Oct. Manufacturing PMI: 60.6 against 62.8 before (16th consecutive expansion).

– (CH) Swiss survey on expectations in October: 15.6 v 25.7 before.

– (TW) Taiwan Seven Monitoring Indicator: 38 v 39 before.

– (IS) Iceland Oct. CPI M / M: 0.6% against 0.5% previously; Y / Y: 4.5% against 4.4% previously.

Issue of fixed income securities

– (IN) India sold a total of 200 billion INR against 200 billion INR shown in the 3-month, 6-month and 12-month invoices.

– (THIS) Italian Debt Agency (Tesoro) sold € 6.0bn compared to € 6.0bn indicated in 6-month notes; Average return: -0.550% against -0.545% previously; Bid-to-cover: 1.27xv 1.29x front.

– (NO) Norway NOK sold against NOK 2.0B shown in 1.75% March 2025 bonds; Average return: 1.45% against 1.02% previously; cover offer: 4.01xv 3.90x front.

– (SE) Sweden sold 7.5 billion SEK against 7.5 billion SEK indicated in the 3-month invoices; Average return: -0.3875% vs. -0.3985% previously; bid to cover: 1.75xv 1.84x.

Look ahead

(DE) The German Ministry of the Economy will update the economic outlook.

– (PT) Debt Agency of Portugal (IGCP) Changing the results of the auction to organize the reverse auction.

– 5.25 am (EU) Daily liquidity statistics from the ECB.

05:30 (DE) Germany will sell 2.0 billion euros in 0% Bunds in May 2036.

– 05:30 (HU) Hungarian Debt Agency (AKK).

– 5:30 a.m. (EU) ECB allocation as part of its monthly 3-month LTRO operation.

– 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).

– 06h00 (FR) France T3 Total job seekers: N ° is v 3.511M before.

– 06:00 (UK) Russia will sell RUB10B in March 2032 OFZ inflation-linked bonds.

– 6:45 am (US) Correction of the daily Libor.

– 7:00 a.m. (US) MBA mortgage applications w / e October 22: none is -6.3% v before.

– 07h00 (MX) Mexico’s trade balance in September: -2.6 $ against – 3.9 billion dollars previously.

– 07:00 (UK) Weekly PM House Question Time.

07:30 (UK) Sunak Budget Speech by Chancellor of the Exchequer (End Min).

– 08:00 (BR) Brazil August National unemployment rate: 13.4% compared to 13.7% before.

– 08:00 (BR) Brazil Sept PPI Manufacturing M / M: No estimate against 1.9% before; Y / Y: No is v 30.2% before.

– 08h00 (UK) Daily Baltic Dry Bulk Index.

8:30 am (United States) Sept Preliminary durable goods orders: -1.0% ev + 1.8% forward; Durable goods (excluding transport): 0.4% ev 0.3% before; Orders of capital goods (excluding defense / excluding aircraft): 0.5% ev 0.6% before; Shipments of capital goods (excluding defense / excluding aircraft): 0.5% ev 0.8% before.

– 8:30 a.m. (United States) Anticipated merchandise trade balance in September: – $ 88.4 against – $ 87.6 M before.

8:30 am (United States) Seven Preliminary M / M Wholesalers Stocks: 1.0% ev 1.2% forward; Retail stocks M / M: 0.2% ev 0.1% before.

– 9.45 a.m. (UK) BOE purchases £ 1.147 billion as part of the Gilt APF (7-20 year) purchase transaction.

10:00 a.m. (CA) Bank of Canada (BOC) decision on interest rates: Should leave interest rates unchanged at 0.25%.

– 10:30 am (US) Weekly DOE oil inventories.

– 12:00 (UK) Russia Sept Industrial Production Y / Y: 4.6% ev 4.7% before.

1:00 p.m. (US) The Treasury will sell 2-year FRN.

1:00 p.m. (United States) The Treasury will sell 5-year notes.

– 1:30 p.m. (BR) Brazil Sept. Total Federal Debt (BRL): No est v 5.481T before.

5.30 p.m. (BR) Decision of the Central Bank of Brazil (BCB) on interest rates: Is expected to increase the Selic target rate by 150 basis points to 7.75%.

19:50 (JP) Japan Sept Retail sales M / M: + 1.5% ev -4.0% before (revised from -4.1%); Y / Y: -2.4% in ev -3.2% before.

– 19:50 (JP) Japan Sept. Department store, Y / Y supermarket sales: -3.3% ev -4.7% before.

– 20:30 (AU) Australia Q3 Import price index Q / Q: 3.4% ev 1.9% before; Q / T Export Price Index: 6.5% ev 13.2% before.

(JP) Interest rate and BOJ policy decision (no time set); Should leave Excess Reserve Interest (IOER) unchanged at -0.10% and keep Yield Control Target (YCC) at 0.00%.

(JP) BOJ Quarterly Outlook for Economic Activity and Prices.

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