US equity futures have hit a new records, helped by surging Asian and European stocks which have all started November on a euphoric note. Surging commodity prices, optimism about tax reform and hope for a new dovish Fed chair all combined to drive global stock markets to record highs on Wednesday, with the MSCI’s world stock index climbing 0.3% to a fresh all time high. Mining stocks lead gains as nickel and other industrial metals soar. Oil rose above $55 a barrel for the first time since the start of the year in the longest winning streak in three months, on hopes that major producers would maintain their output cuts. The dollar firmed ahead of a Fed rate decision while bitcoin surged to a record high just under $6,600.
As Bloomberg summarizes in its Macro Squawk Wrap, equities globally extended gains as investors await Fed developments, with a rate decision due today and announcement of the next chair expected on Thursday. Euro Stoxx 50 futures advance for a third-straight day, while S&P 500 futures set fresh day highs in the European session. Treasury futures trade in tight ranges after earlier weakening; block trades emerge, consistent with selling of U.S. bonds and buying of German debt. U.K. Oct. manufacturing PMI beats estimates, buoying sterling and sending GBP/USD above 1.3300 for the first time in weeks. WTI futures climb above $55/bbl to hit highest level since January; base metals gain broadly as nickel futures trade limit up in Shanghai.
Among the proposed explanations for today's melt up is that we are witnessing a compressed and accelerated version of the Halloween rally, as summarized in the following Robeco chart:
Whatever the reason, the buying today is unstoppable, with the European STOXX 600 index climbing to its highest level since August 2015 as stock markets in London, Paris and Frankfurt gained 0.5 to 1.2 percent in early trade. As a result, the Stoxx 600’s relative strength index has now climbed above 70, a level that indicates overbought conditions, for the first time in more than 2 weeks, and is heading for its highest level since Aug. 2015, led by cyclical sectors including miners, automakers and technology.
Europe's jump followed a rally in Asia, where stock markets hit 10-year highs, with most of the 19 industry sectors rising. As of Tuesday’s close, 45 percent of MSCI Europe companies had reported results for the third quarter, of which 66 percent either beat or met expectations, according to Thomson Reuters I/B/E/S data. The U.K.’s FTSE 100 Index rose 0.3 percent to the highest in a week. Germany’s DAX Index increased 1.3 percent to the highest on record. DAX outperforms as German participants return to market from Reformation Day
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9%, led by a 1.3% jump in South Korea. South Korea’s economic growth accelerated to its fastest pace in seven years last quarter. Growth in Taiwan during the same period was the strongest in 2 1/2 years. Of note in Asia was Japan, where the stock meltup was most pronounced with the Nikkei rising nearly 2%, and the Topix index rising to the highest in more than a decade, buoyed by a weaker yen, as a surge in U.S. consumer confidence in October served as the latest confirmation of a global economic recovery ahead of a Federal Reserve policy decision on Wednesday. Electronics makers gave the biggest boost to the Topix as Sony jumped 11% to the highest level since June 2008 after lifting its annual operating profit outlook to a record, after the company announced record annual profit in 2017 owing to strong sales of semiconductors and favorable exchange rates. Tokyo Electron surged after posting results that beat expectations. The Nikkei 225 gained 5.5% in October, its strongest showing in 11 months. “Investors are gaining confidence as the global economy is solid,” said Masaaki Yamaguchi, an equity market strategist at Nomura Holdings Inc. in Tokyo. “Not only exporters but also domestic-demand-oriented companies are improving earnings.” “Business confidence and corporate earnings are good in the U.S., and business sentiment is improving globally,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “Stocks are inclined to rebound, with a series of good earnings results. There’s more room for high-tech related shares to rise.”
India’s benchmark equity indexes climbed to fresh records after a World Bank report showed it’s easier to do business in the nation. The S&P BSE Sensex rose 1.2% to 33,600.27 while the NSE Nifty 50 Index jumped 1% in Mumbai. Twelve of the 19 sectoral sub-indexes compiled by BSE Ltd. climbed, led by a gauge of telecom companies. Bharti Airtel Ltd. gained the most on the Sensex after the country’s largest wireless carrier said “reputed global investors” had expressed interest in buying a stake in its Bharti Infratel unit.
The dollar and Treasuries held steady ahead of a Federal Reserve decision expected to signal a rate rise is still in the cards for December. The New Zealand dollar surged after the country’s unemployment rate fell, while the yen led losses on reports Japan may plan for an increased budget and reappoint Bank of Japan Governor Haruhiko Kuroda. European stocks jumped to a two-year high. The dollar’s index against a basket of six major currencies stood at 94.60, down from last week’s three-month peak of 95.15. The euro was little changed at $1.1644, some distance from the three-month low of $1.1574 it touched on Friday after the European Central Bank's stance was perceived to be more dovish than expected. The biggest currency mover was the New Zealand dollar. It jumped over 1 percent to $0.6931 after the country's jobless rate sank more than expected to a nine-year low of 4.6 percent. Bitcoin hit another record high above 6,600, boosted by bets the crypto-currency might enter the financial mainstream after the world's largest derivatives exchange operator said on Tuesday it would launch bitcoin futures. The yield on 10-year TSY rose 1bp to 2.39%. Germany’s 10-year yield also climbed 1 bp to 0.37% while Britain’s 10-year yield rose less than one basis point to 1.335%.
The Bloomberg Commodity Index climbed to the highest since March as WTI crude rose above $55 a barrel and industrial metals advanced, buoyed by optimism that demand from China won’t falter after a gauge of Chinese manufacturing suggested growth momentum remains robust. Nickel has been on a tear since Tuesday after Trafigura joined Glencore in revealing bullish forecasts because of the popularity of electric cars. Nickel sulphate is a key ingredient in lithium-ion batteries.
Meanwhile, in the US, Wall Street's three main indexes, the Dow, S&P and Naz, ended October with their biggest monthly gains since February. The focus remains firmly on central banks. In the U.S., the Federal Reserve is expected to keep rates on hold Wednesday while signaling an all-clear for a December hike. An announcement on who will helm the U.S. central bank is due by the end of the week, with current board member Jerome Powell said to have the edge over the likely more hawkish John Taylor. The Bank of England will probably lift borrowing costs on Thursday for the first time in a decade.
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller. Former Trump adviser George Papadopoulos claimed campaign officials approved a pre-election meeting with Russian representatives. US House Tax Committee Chairman Brady said that after consultation with President Trump and leadership team, they have decided to post pone the tax plan release to Thursday. There were initial reports that GOP tax plan would delay repeal of estate tax and will have corporate taxes cut to 20% during the 1st year, according to sources. (WSJ) However, there were later conflicting reports that stated some House GOP Representatives were said to consider phasing out 20% corp. tax over a number of years
Elsewhere, bitcoin soared to a record after CME Group, the world’s biggest exchange operator, said it plans to launch futures trading on the cryptocurrency by year-end.
Economic events include Fed’s rate decision, manufacturing data from ISM and Markit. Companies reporting earnings include Facebook, Kraft Heinz, Qualcomm.
Bulletin Headline Summary from RanSquawk
- Buoyant commodity prices and corporate earnings have help lift European bourses this morning
- GBP failed to sustain gains in the wake of upbeat UK manufacturing PMI ahead of tomorrow’s BoE announcement
- Looking ahead, highlights include ADP employment change, ISM manufacturing, DoEs and FOMC rate decision
Market Snapshot
- S&P 500 futures up 0.4% to 2,583.00
- STOXX Europe 600 up 0.6% to 397.40
- MSCI Asia up 1% to 169.66
- MSCI Asia ex Japan up 1% to 556.40
- Nikkei up 1.9% to 22,420.08
- Topix up 1.2% to 1,786.71
- Hang Seng Index up 1.2% to 28,594.06
- Shanghai Composite up 0.08% to 3,395.91
- Sensex up 1.2% to 33,607.95
- Australia S&P/ASX 200 up 0.5% to 5,937.77
- Kospi up 1.3% to 2,556.47
- German 10Y yield rose 0.3 bps to 0.366%
- Euro down 0.03% to $1.1642
- Brent Futures up 0.9% to $61.49/bbl
- Italian 10Y yield fell 2.1 bps to 1.561%
- Spanish 10Y yield fell 0.7 bps to 1.454%
- Gold spot up 0.3% to $1,275.46
- U.S. Dollar Index up 0.04% to 94.59
Top Headline News from Bloomberg
- A suspected terrorist plowed a truck down a bicycle path in lower
Manhattan blocks from the site of the World Trade Center, killing eight
and seriously wounding several more before an officer shot and arrested
him - The biggest changes to the FOMC statement will probably come from an upgrade in its description of the U.S. economy. That would further cement the case for a move in December, though it’s unlikely that the committee will change the statement’s language to explicitly signal a rate hike; see FOMC decision day guide here
- House tax writers pushed back the reveal of their highly guarded, long awaited tax bill by a day, a sign that disputes among Republican lawmakers are threatening their effort to pass comprehensive legislation by Thanksgiving
- While an interest-rate hike by the BOE on Thursday is almost fully priced in, its nature is still in question, sending overnight volatility in cable to levels not seen since the Fed’s meeting in September
- Caixin China October manufacturing purchasing managers’ index at 51, matching estimates and unchanged from September
- One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller
- As investors eagerly await President Donald Trump’s Federal Reserve chair nomination, the central bank’s policy-setting committee will meet quietly in the background this week with many expecting them to keep interest rates unchanged
- Treasury 10-year yield is set to climb toward 3 percent as the Fed could tighten three times in 2018 after a likely move in December, said James Ashley head of international market strategy Goldman Sachs Asset Management at the money manager
- Best Buy Co. said it stopped some sales of Apple Inc.’s iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already expensive smartphones
- Mylan NV’s second-ranked executive took an active role in a vast and “sinister” price-fixing conspiracy among global makers of generic pills that kept prices of the medications artificially high, dozens of states alleged in a new complaint; Mylan Bond Spreads Widen Amid Price-Fixing Probe
- Former Trump adviser George Papadopoulos made a significant claim in an email: Top Trump campaign officials agreed to a pre-election meeting with representatives of Russian President Vladimir Putin
- Bank of England’s governor Mark Carney faces a defining credibility test on Brexit-era rates
- U.K. Hints at Compromises on Brexit Bill as Date Set for Talks
- Macau Oct. Casino Rev. Rises 22.1% Y/y; Est. 14.5% Rise
Asian equity markets began November solidly on the front-foot led by the Nikkei 225 (+1.95%) as exporters benefited from a weaker JPY and with Sony at its highest in over 9 years after its H1 profit more than tripled. Elsewhere, KOSPI (+1.3%) extended on record levels and ASX 200 (+0.5%) was also higher amid strength in commodity-related stocks. Hang Seng (+0.6%) and Shanghai Comp. (+0.1%) both initially conformed to the broad positive sentiment amid continued liquidity efforts by the PBoC, although mainland indices then trimmed gains in late trade. Finally, 10yr JGBs were flat with demand subdued amid the heightened risk appetite and with a firmer 10yr auction also largely ignored. Chinese Caixin Manufacturing PMI (Oct) 51.0 vs. Exp. 51.0 (Prev. 51.0). PBoC injected CNY 140bln via 7-day reverse repos, CNY 40bln via 14-day reverse repos and CNY 60bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6300 (Prev. 6.6487)
Top Asian News
- Hong Kong Stocks Advance as Tencent Climbs Most in a Month
- China’s Onshore Junk Bonds Show Resilience on Supply-Side Reform
- Iron Ore Flips as Traders Bet on Revival When China’s Curbs Ease
- Japan Shares Jump on Yen Weakness; Sony Leads Tech Stock Surge
- Noble Bonds Show Bet on Deal Delay as Hedge Funds See Trap
- Tencent’s Red-Hot E-Book IPO Sets Stage for Music Arm Debut
European bourses have been likewise lifted by surging commodity prices and corporate earnings. However, Next's (-5.4%) Q3 financial results have sent shares tumbling as much as 7%, which is also weighing on the retail sector with Marks & Spencer and AB Foods feeling the pressure. Standard Chartered have suffered losses this morning after their results printed lower than expected. DAX outperforms as German participants return to market from Reformation Day. Not even an upbeat UK manufacturing PMI and upward revision to the previous headline read enough to jolt Gilts, which high-ticked just ahead of the release before drifting back a mere 4 ticks or so. The range remains extremely narrow between 124.19-35, with the 10 year bond basically marking time ahead of BoE super Thursday to see what else the MPC has up its sleeve on top of the all but priced in ¼ pt rate hike. Bunds also trapped within tight parameters and poised for bigger market-moving events, like the FOMC and monthly US jobs data alongside the aforementioned BoE policy announcements (and QIR). US Treasuries a tad off recent highs/yields slightly firmer, also awaiting Trump tax reforms (now expected Thursday) and his long awaited choice as next Fed chair.
Top European News
- Next Suffers as Warm Autumn Keeps Shoppers From Stores
- Greece Is Said to Plan Debt-Swap Exercise Worth EU30 Billion
- Turkey Raises Year-End Inflation Estimate to 9.8% vs 8.7%
- U.K. Clothing Retailers May Decline After Next Sales Slump
In FX, GBP has moved above 1.33 this morning for the first time since mid-October, which comes ahead of the Bank of England’s ‘Super Thursday’ meeting, where it is expected they will raise the bank rate to 0.5%. The question is, whether this will be the beginning of a sustained hiking cycle or a readjustment from last year’s QE measures. Within the option market, O/N GBP/USD breakeven is at 100 pips for the ATM straddle. UK Mfg. PMI rose above analyst estimates, providing a modest lift to GBP, although the move had been somewhat contained given the focus on tomorrows BoE decision. The beginning of a new month sees a change in the direction for NZD. Having found support at the 2017 low (0.6817), while also looking stretched on the downside. NZD has seen a move back above 0.6900, which came after a strong NZ jobs report, in which unemployment unexpectedly fell to a 9-yr low, while jobs growth rose 2.2%. Given that the new PM is looking at reforming
the central bank act to have a dual mandate (inflation + employment) this somewhat raises the prospect of a rate hike. However, a
rate hike is not seen in OIS markets until Q4 2018 at the earliest.
JPY continues to weaken against the greenback amid the uptick in UST yields, which is looking to make a retest at 2.4%. Although,
114.00 has kept a lid on the gains in USD/JPY for now, touching a high of 113.97 overnight. Levels past 114.00 that could act as
near term resistance is the highs seen in May and July at 114.45 and 114.49 respectively.
In commodities, precious metals have been gaining throughout the morning to trade at intra-day highs with gold up USD 7.5/oz. Newsflow has been on the lighter side, however, according to Chinese state media, China’s 9-month gold consumption rose 15.5% Y/Y. WTI has extended on recent gains following a larger than expected drawdown in headline API crude inventories and as all other components of the release also showed declining stockpiles US API weekly crude stocks (23 Oct, w/e) -5.09M (Prev. 0.52M). Flows to Ceyhan have fallen to 216k bpd from 288k bpd seen yesterday, according to a port agent.
Looking at the day ahead, the key event on Wednesday evening will be the FOMC meeting there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Facebook and Tesla are amongst the notable earnings reports.
US Event Calendar
- 7am: MBA Mortgage Applications, prior -4.6%
- 8:15am: ADP Employment Change, est. 200,000, prior 135,000
- 9:45am: Markit US Manufacturing PMI, est. 54.5, prior 54.5
- 10am: ISM Manufacturing, est. 59.5, prior 60.8; Prices Paid, est. 67.8, prior 71.5; New Orders, prior 64.6; Employment, prior 60.3
- 10am: Construction Spending MoM, est. -0.15%, prior 0.5%
- 2pm: FOMC Rate Decision
- Wards Total Vehicle Sales, est. 17.5m, prior 18.5m; Domestic Vehicle Sales, est. 13.7m, prior 14.3m
DB's Jim Reid concludes the overnight wrap
October wasn’t a particularly scary month for investors with 32 out of our 39 regularly tracked global assets seeing a positive return in our monthly performance review. The S&P 500 (+2.33%) finished with a positive total return, meaning that the index has now seen a positive total return for all 10 months so far this year, the first time that this has happened in the 90 years we have data for. If you go beyond the calendar year end, October now marks the 12th positive month in succession which equals the record set in 1949-1950 and 1935-1936. A word of warning though, the next two months saw the run break spectacularly with returns at -3.6% and -7.7% respectively. See the note “S&P 500: The longest winning streak on record soon?” we did last month for more on this.
October didn’t end in a particularly exciting manner but the action kicks off today and continues apace until the end of the week. However there is a European holiday today so the usual first of the month PMI releases across the continent will be delayed until tomorrow. We do see the important ISM in the US though as well as ADP which will provide some clues to the storm bounce back in Friday’s payroll release.
Top of the bill (pardon the pun) today was supposed to be the next stage of the tax reform story. However, this morning we found out that the plans will be delayed until tomorrow, reflecting “the challenge of crafting and then passing a complex bill by Thanksgiving”. By then, we’ll see if there are any compromises in preserving deductions for state and local taxes which could impact Republican support in California and NY. We’d expect there to also be some focus on whether there is a phasing in of corporate taxes as per the leaks on Monday. Overnight, President Trump noted that “we’re not looking at that (phase in)”, but did left the door open by noting “it’s something, some people have mentioned, but hopefully not”. So all eyes on the House tomorrow. The FOMC meeting today should largely be a non-event, especially as there is no press conference. With a December hike priced at around 85%, it seems unlikely the Fed would want that number to change too much at the moment as it seems to suit them as things stand. They want to raise rates next month but leave a little wiggle room not to if events transpire against them over the next few weeks. DB’s Brett Ryan has previewed the meeting here.
Turning to Catalonia where tensions appear to have cooled further. Speaking in Brussels, ousted Catalan President Puidgemont denied he is seeking political asylum as he is here as a normal “EU citizen”. Further, he noted “the (Catalan) republic cannot be built on violence” and that he would return to Spain “immediately” if he gets “guarantees” of a fair trial. Note that the Spanish National Court has charged him for sedition where if convicted could carry jail terms of up to 30 years. Finally, he will press on with the region’s case for independence, but will respect the outcome of the new regional election scheduled on 21 December. As a reminder, El Mundo reported on Monday that opinion polls suggest Catalan secessionists could win 65 seats in a new election, but fall short of the 68 seats needed for new majority. On the other side, Spanish government officials told Bloomberg that there has been no signs of disobedience so far in Catalonia and article 155 measures are now fully in place. Yesterday, the Spanish markets rebounded further on increased signs of a return to normality with the IBEX up 0.74% and 10y yields down 3.5bp.
Now onto Brexit headlines, where there appears to be more signs that the UK may partly concede to break the stalemate in Brexit talks. One of the key issues is the potential financial settlement the UK owes to the EU bloc, where prior reports suggest the EU bloc want €60bln, while the UK only offered €20bln. Yesterday Brexit Secretary Davis noted “the withdrawal agreement…will probably favour the EU in terms of things like money and so on”. On the other hand, UK government spokesman James Slack noted that Brexit preparations have been accelerated with c3,000 new government jobs created to support Brexit planning, and that “each of these plans prepares the country for the range of negotiated outcomes and a no deal scenario”. Elsewhere, the main UK opposition party is seeking to apply parliamentary pressure on the government to release 58 studies on how leaving the EU will affect industries that make up c90% of the economy. Turning to the EU, the chief negotiator Barnier has offered some support and noted “I’m ready to speed up negotiations”, with the next round of Brexit talks to begin from 9th November.
This morning China’s October Caixin manufacturing PMI was in in line and steady at 51. Markets are rebounding, with the Nikkei (+1.28%), Kospi (+1.11%), Hang Seng (+0.52%) and ASX 200 (+0.57%) all up as we type. Now recapping markets yesterday. Despite broadly supportive macro data, US bourses only edged slightly higher (S&P +0.09%, Dow +0.12%), as investors await for more news re the FOMC, Fed Chair and draft tax plans. The Nasdaq rose a tad more (+0.43%) to a fresh record high, partly aided by further positive momentum from Apple shares (+1.39%). European markets were broadly higher too, with the Stoxx 600 up 0.33%, with gains led by real estate, energy and tech stocks, with partial offsets from financials including BNP Paribas (-2.67%) post its results. Across the region, the FTSE (+0.07%) was up slightly while the DAX was closed for the day and Spain’s IBEX gained 0.74% as tensions in Catalonia cooled further.
Over in government bonds, yields were mixed but little changed post the mini bond rally on Monday. The UST 10y rose 1.1bp while core European yields slightly outperformed (Bunds & Gilts -0.3bp; OATs -0.8bp) following lower than expected core inflation prints for the Eurozone (0.9% yoy vs. 1.1% expected). Peripherals continued to outperform, with Italian and Spanish 10y yields down 2bp and 3.5bp respectively.
Turning to currencies, the US dollar index (-0.01%) and the Euro (-0.04%) were broadly flat, but Sterling gained 0.57%, partly aided by an expectation of a rate hike this week and news that UK First secretary of state Damian Green was appointed as the new head of Brexit and Trade cabinet sub-committee, as some view him as having a pro-EU stance. In commodities, WTI oil rose +0.42% while precious metals weakened modestly (Gold -0.38%; Silver -0.82%), but LME nickel jumped 5.31%, in part as some see materially higher usage of the metal in electric cars. This morning, other base metals are broadly trading higher (Copper +1.30%; Zinc +1.57%; Aluminium +0.12%).
Away from the markets, the world’s large exchange owner (CME) is planning to have futures on Bitcoins by the end of the year. The contracts are expected to be settled in cash and use a daily price from the CME CF Bitcoin reference rate, with likely data feeds from digital exchanges such as Bitstamp, GDAX, itBIT and Kraken. A functioning derivatives markets on the digital currency could increase accessibility as professional investors could get exposure to its volatility and trade it on regulated venues as well as using the futures as a hedging tool. As a reminder, the price of a Bitcoin will set you back c$6,425, where the price has tripled from c3 months ago, up c8x since 12 months ago and up c475x since 5 years ago.
Turning to central banker commentaries, the ECB’s governing council member Visco noted that the Eurozone low inflation “reflects very moderate wage dynamics in several economies, which are a consequence of still large labourmarket slack”. Elsewhere, he noted that ECB’s QE recalibration ‘will ensure a high degree of monetary accommodation’. Then onto Italy more specifically, he noted their internal surveys suggests a “gradual pick up of credit demand, supported by a recovery of investment” and core tier 1 ratios for Italian lenders have improved to 13.1% (from 11.5%), which partly supports S&P’s recent upgrade of Italy’s sovereign rating to BBB.
Following up the indictments by Mueller from yesterday, Bloomberg noted former Trump adviser Papadopoulos claimed in an email that top Trump officials agreed to a pre-election meeting with representatives of the Russian President Putin. However, there was no indication such meeting took place and the email was NOT included in court documents as part of his guilty plea.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the macro data was in line to above expectations. The CB consumer confidence rose to 125.9 (vs. 121.3 expected) – marking a record 17 year high. In the details, the present situation index rose 4.2pt to 151.1 (highest since 2001) and the expectations index rose 6.1pt to 109.1 (highest since March). The October Chicago PMI also rose 1pt to a 6 year high of 66.2 (vs. 60 expected). Elsewhere, the 3Q employment cost index (Fed’s preferred metric of wage inflation) was in line at 0.7% qoq, while the August Corelogic house price index was slightly above expectations at 0.45% mom (vs. 0.4%), leaving an annual growth of 5.9% yoy.
Across Europe, there was a deluge of macro data where broadly speaking inflation was lower than expected but GDP growth and unemployment beat expectations. In the Eurozone, the October core CPI was below expectations at 0.9% yoy (vs. 1.1%) even if some considered that there was noise in the series which included German holiday prices which might not persist. The 3Q GDP was higher than expected at 0.6% qoq (vs. 0.5%) and 2.5% yoy (vs. 2.4% expected) - the strongest rate of growth since 1Q11. The unemployment rate for September also beat at 8.9% (vs. 9% expected).
In France, 3Q GDP was in line at 0.5% qoq, but data revisions to prior readings meant the annual growth was a tad higher at 2.2% yoy – highest since 2Q11. Elsewhere, the October CPI was in line at 0.1% mom and 1.2% yoy, while the September PPI was slightly above last month’s reading at 0.5% mom (vs. 0.4% previous). In Italy, the October CPI was below expectations at 0% mom (vs. 0.2%) and 1.1% yoy (vs. 1.3% expected) and the September PPI was also lower than the prior reading at 0.3% mom (vs. 0.5% previous). However, the September unemployment was in line at 11.1%. In the UK, the October Gfk consumer confidence reading was in line at -10.
Looking at the day ahead, front and centre on Wednesday evening will be the FOMC meeting although it’s worth noting that there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Onto other events, UK Trade Secretary Liam Fox testifies before a parliamentary panel on plans for post-Brexit trade while BoJ Deputy Governor Nakaso is due to speak. Facebook and Tesla are amongst the notable earnings reports.