- US stock markets mostly notched mild gains with outperformance in the tech-heavy Nasdaq 100 (+0.7%) which was buoyed by strength in Tesla (TSLA) (+5.7%) as it continued its post-Trump win rally, while sectors closed almost exclusively in the green with Energy and Communication Services the outperformers as the former was buoyed by the upside in the crude complex after Kazakhstan's Ministry of Energy announced oil production at the Tengiz oilfield (600k BPD) was reduced by 28-30% due to technical works and Equinor's Sverdrup (720k BPD) output was halted.
- USD was lower to start the week amid potential profit-taking as upward momentum in the Trump trade slowed and with newsflow sparse, while data and Fed speak were also light with Goolsbee on the wires although he did not say much of interest. There is also very little in the way of key events for the US this week aside from Nvidia earnings, Flash PMIs and Fed speak.
- Looking ahead, highlights include Malaysian Trade Data, RBA Minutes and Supply from Japan.
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LOOKING AHEAD
- Highlights include Malaysian Trade Data, RBA Minutes and Supply from Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stock markets mostly notched mild gains with outperformance in the tech-heavy Nasdaq 100 (+0.7%) which was buoyed by strength in Tesla (TSLA) (+5.7%) as it continued its post-Trump win rally, while sectors closed almost exclusively in the green with Energy and Communication Services the outperformers as the former was buoyed by the upside in the crude complex after Kazakhstan's Ministry of Energy announced oil production at the Tengiz oilfield (600k BPD) was reduced by 28-30% due to technical works and Equinor's Sverdrup (720k BPD) output was halted.
- SPX +0.39% at 5,894, NDX +0.71% at 20,539, DJIA -0.13% at 43,390, RUT +0.11% at 2,306.
- Click here for a detailed summary.
NOTABLE HEADLINES
- NY Fed Survey noted average credit rejection rates in 2024 well above 2019 levels as the 2024 credit rejection rate rose to 21% vs. 2023's 20.1% and 2019's 17.6%. Furthermore, credit application rates were largely steady over 2024 and the share of Americans too discouraged to apply for credit rose in 2024.
- Senior administration official said the Biden administration urges Congress to approve roughly USD 100bln for various disaster relief programmes after deadly hurricanes.
- Fox's Gasparino said former Fed Governor Kevin Warsh is in the front position for the Treasury Secretary job.
- Kevin Hassett is in the running to lead the NEC, according to Bloomberg citing sources.
FX
- USD was lower to start the week amid potential profit-taking as upward momentum in the Trump trade slowed and with newsflow sparse, while data and Fed speak were also light with Goolsbee on the wires although he did not say much of interest. There is also very little in the way of key events for the US this week aside from Nvidia earnings, Flash PMIs and Fed speak.
- EUR benefitted from the dollar weakness and briefly reclaimed the 1.0600 status, while there was a slew of ECB comments although the highlight came from Makhlouf who stated that evidence would need to be "overwhelming" for him to back a 50bps rate cut next month.
- GBP gained a firmer footing at the 1.2600 handle but stalled beneath the 1.2700 territory with participants looking ahead to BoE comments at the MPC Treasury Committee hearings.
- JPY was the laggard and failed to benefit from a weaker dollar after recent commentary from BoJ Governor Ueda who continued to signal a lack of urgency to immediately hike rates.
FIXED INCOME
- T-notes settled marginally higher in choppy trade with short duration outperforming amidst thin newsflow.
COMMODITIES
- Oil prices were firmer to start the week and buoyed by a couple of bullish factors including a weaker dollar and geopolitical tensions surrounding Russia, while Kazakhstan's Ministry of Energy said oil production at the Tengiz oilfield (600k BPD) was reduced by 28-30% due to technical works and it was also reported that Equinor's Sverdrup (720k BPD) output was halted.
- Kazakhstan's Ministry of Energy said oil production at Tengiz oilfield (capacity 600k bpd) was reduced by 28-30% due to technical works with repair works expected to be completed on November 23rd.
- Norway's Equinor (ENQR NO) halted output from its Johan Sverdrup oilfield (720k bpd), which is western Europe's largest, due to an onshore power outage.
GEOPOLITICAL
MIDDLE EAST
- Israeli PM Netanyahu said Israel will carry out operations against Hezbollah even if an agreement is signed with Lebanon, according to Sky News Arabia.
- Israel launched a strike on central Beirut, according to a Reuters witness.
- Lebanese official said that they are open to the content of the draft US proposal and will deal with it positively, according to Al Jazeera.
- Lebanon and Hezbollah reportedly agreed to the US proposal for a ceasefire with Israel with 'some comments' on content, according to a senior Lebanese politician who stated that the US ceasefire proposal is the most serious attempt yet to end the fighting.
- US envoy Hochstein is reportedly heading to Beirut after receiving clarifications that they are able to reach an agreement, according to Al Jazeera citing Israel's Channel 12.
- US State Department spokesman said progress has been made in negotiations on the ceasefire agreement in Lebanon, according to Axios.
- Israeli PM Netanyahu said the attack on Iran in October hit an element of Iran's nuclear programme.
OTHER
- Russia's Kremlin said regarding the decision by the Biden administration to allow Ukraine to strike deep into Russia that these reports did not have official sources and if such a decision has been made by the US, this will usher in a new round of tensions. Furthermore, the Kremlin said it would mean a new situation with the involvement of the US in the Ukraine conflict and if Western weapons are fired deep into Russia, this will not be Ukraine doing the targeting, but those countries which gave permission.
- EU widened sanctions against Iran for support of Russia in war with Ukraine which includes sanctions against Islamic Republic of Iran Shipping Lines and three Russian shipping companies.
- EU foreign chief Borrell said the role of China is becoming bigger and bigger in the Ukraine war and without Iran and China, Russia could not support its military effort.
ASIA-PAC
NOTABLE HEADLINES
- Chinese President Xi told UK PM Starmer their nations should uphold their strategic partnership and open up new prospects for China-UK relations, according to Xinhua.
- RBI Governor Das's term is likely to be extended by at least one year, according to sources cited by Reuters.
EU/UK
NOTABLE HEADLINES
- BoE's Greene said UK services inflation is elevated and on a downward path but noted the Budget will raise inflation in the UK. Greene said inflation gauges are generally coming down but services inflation is not falling as fast as she would like. Furthermore, she said the labour market is easing and wage growth should come off but noted the equilibrium rate may have gone up.
- ECB's Lane said if policymakers had perfect foresight about the shocks that were about to hit the economy, interest rates would have been raised earlier and more sharply.
- ECB's de Guindos said the balance of risks shifted to growth from inflation.
- ECB's Makhlouf, when questioned about the potential of a 50bps rate cut, said that evidence would need to be overwhelming and believes a cautious and prudent approach is needed, as well as believes that policy is working. Furthermore, he said the ECB is taking a meeting-by-meeting approach when asked whether a December cut is a done deal and said it is reasonable to assume inflation is on a downward trajectory.
- ECB's Nagel said global integration would have to decline substantially to prompt a notable increase in inflationary pressures and proposed tariffs by US President-elect Trump would upend international trade but only have a "minor impact" on inflation.
- ECB's Stournaras said a 25bps ECB rate cut by the end of the year is reasonable, while he added that Trump tariffs could lead to a recession in the medium term.
- ECB's Vujcic said the risk of inflation undershooting has picked up.
