MNI (SYDNEY) - **Corrected German Political Risk bullet
EXECUTIVE SUMMARY
Fig. 1: USD/CNY Fixing Surges Back To Late 2023 Levels
Source: MNI - Market News/Bloomberg
UK
GEOPOLITICS (BBC): “Sir Keir Starmer said a strong UK-US relationship was "crucial" as he congratulated Donald Trump on his election as US president.”
EU
GERMANY (MNI POLITICAL RISK): Confirming earlier wire headlines, German Chancellor Scholz tells reporters from multiple outlets that he will call for a snap election by the end of March 2025, with a vote of confidence to be held on January 15. This comes after Scholz dismissed Finance Minister Lindner following the collapse of Traffic Light coalition (SPD, Greens, FDP) talks late Wednesday.
ECB (MNI BRIEF): ECB policymakers will need to assess the policies of the incoming administration of President Donald Trump before any adjustments to its own policy considerations, ECB vice president Luis de Guindos said Wednesday.
POLITICS (ECONOMIST): “On Thursday European leaders will have their first chance to convene since Donald Trump stormed to victory in America’s presidential election. The occasion is a meeting of the European Political Community in Budapest. This body includes the heads of government of the European Union’s 27 members, plus the leaders of Britain, Turkey, Ukraine and others.”
DEFENCE (POLITICO): “"With the new U.S. president's political outlook diverging from that of his predecessors, we need to manage this situation, prepare for it and underline the efforts we are already making," German Defense Minister Boris Pistorius told reporters after meeting with his French counterpart Sébastien Lecornu following Trump's big victory.”
GEOPOLITICS (POLITICO): “European leaders rushed to speak to Donald Trump on Wednesday evening, as the U.S. president-elect basked in his stunning election victory and the world grappled with potentially seismic ramifications of his second term in office. French President Emmanuel Macron and Trump discussed the war in Ukraine and the crisis in the Middle East in a call on Wednesday, the French presidency said.”
IRELAND (POLITICO): “Prime Minister Simon Harris announced a snap election in Ireland for Friday, Nov. 29, in a bid to extend his Fine Gael party’s record 14-year run in power.”
US
POLITICS (BBG): “Democrats’ hopes for a powerful check on Donald Trump by controlling the US House are fading, with Republicans increasingly confident they will hold unified control in Washington ahead of next year’s big fights over tax cuts and spending.”
POLITICS (RTRS): “Donald Trump's Republicans looked set on Wednesday to possibly win control of both chambers of Congress, giving them sweeping powers for the first time in eight years to ram through a broad agenda of tax and spending cuts, energy deregulation and border security controls.
FED (MNI): With Jerome Powell's term as Fed Chair up in May 2026, attention now turns to his replacement under the incoming Trump administration as it looks unlikely he will get another term. Scott Bessent - who runs Key Square Group, a macro fund, and as an economic advisor to Trump is considered a leading candidate for Treasury Secretary under the new administration - made some noteworthy comments about the future Fed chair this morning on CNBC, including the notion that a new Fed chair could theoretically be more hawkish on rates than Powell.
OTHER
JAPAN (MNI BRIEF): The inflation-adjusted real wage, a barometer of households' purchasing power, held within negative territory for the second straight month in September, but narrowed to -0.1% from August’s -0.8%, preliminary data released by the Ministry of Health, Labour and Welfare on Thursday showed.
JAPAN (BBG): “Japan’s chief currency official warned that authorities will take appropriate action against any excessive currency moves, in an apparent attempt to stem the yen slide triggered by Donald Trump’s election win.”
BRAZIL (MNI EM BCB WATCH): The Central Bank of Brazil's decision to accelerate the pace of rate hikes Wednesday was accompanied by a hawkish message that suggests further increases of at least 50 basis points over its next few meetings -- perhaps even bigger moves if the inflation picture deteriorates further.
CANADA (MNI): Bank of Canada Senior Deputy Governor Carolyn Rogers said Wednesday that interest rates are moving back to normal from the highest in decades while avoiding an economic hard landing and households are able to cope with painful mortgage refinancing over the next two years.
SAUDI ARABIA (BBG): Saudi Arabia is planning a new artificial intelligence project with backing of as much as $100 billion as it seeks to develop a technological hub to rival the neighboring United Arab Emirates, people familiar with the matter said.
ISRAEL (BBG): “Israeli Prime Minister Benjamin Netanyahu’s shock firing of his defense chief on Tuesday night removed a key cabinet critic, but it also deepened anger among opponents over his handling of the country’s multi-front conflict.”
CHINA
US/CHINA (BBG): "Chinese President Xi Jinping congratulated Donald Trump on his victory in the presidential election and called for stable ties between the world’s two largest economies."
STIMULUS (SHANGHAI SECURITIES NEWS): “Local governments have vowed to deploy wide-ranging policies to boost consumption and investment while solving their debt issues to spur growth, Shanghai Securities News reported, citing official documents.”
HOUSING (SECURITIES TIMES): "China could cut the loan rates of housing provident funds further, after commercial banks lowered their mortgage rates to help revive the domestic property market, Securities Times reported, citing analysts.”
YUAN (CHOICE DATA): “The Chinese central bank will likely make countercyclical adjustments should the yuan weaken to about 7.3 against the U.S. dollar should U.S. President Elect Donald Trump impose additional tariffs in 2025, said analysts from China Galaxy International Securities.”
YUAN (BBG): "China slashed the daily reference rate for its currency to a level unseen since late 2023, a sign the central bank is allowing depreciation under the treat of trade tensions with the US under a Donald Trump presidency."
DEVELOPERS (YICAI): “Private real-estate developers face financing difficulties despite increased housing policy support, Yicai.com reported. The total financing amount of 65 typical real-estate companies was CNY23.19 billion in October, rising 1.9% y/y from a low base, but declining 50.4% m/m, marking the lowest monthly financing this year, data by China Real Estate Information Corp.”
CHINA MARKETS
MNI: PBOC Net Drains CNY308.4 Bln via OMO Thursday
The People's Bank of China (PBOC) conducted CNY19.2 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY308.4 billion after offsetting the maturity of CNY327.6 billion today, according to Wind Information.
MNI: PBOC Sets Yuan Parity Higher At 7.1659 Thurs; +1.55% Y/Y
The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1659 on Thursday, compared with 7.0993 set on Wednesday. The fixing was estimated at 7.1672 by Bloomberg survey today.
MARKET DATA
AUSTRALIA SEPT. TRADE SURPLUS A$4.61B; EST. +A$5.27B; PRIOR +A$5.28B
AUSTRALIA SEPT. EXPORTS -4.3% M/M; PRIOR -0.6%
AUSTRALIA SEPT. IMPORTS -3.1% M/M; PRIOR -0.2%
JAPAN LABOUR CASH EARNINGS SEPT. +2.8% Y/Y; EST. +3.0%; PRIOR +2.8%
JAPAN CASHE EARNINGS SAME SAMPLE SEPT. +2.9% Y/Y; EST. +3.5%; PRIOR +3.5%
JAPAN SCHEDULED FULL-TIME PAY – SAME SAMPLE SEPT. +2.9% Y/Y; EST. +2.9%; PRIOR +2.8%
JAPAN REAL CASH EARNINGS SEPT. -0.1% Y/Y; EST. +0.1%; PRIOR -0.8%
JAPAN TOKYO OCT. OFFICE VACANCIES FALL TO 4.48%; PRIOR 4.61%
SOUTH KOREA BOP GOODS BALANCE SEPT. $10.67B; PRIOR $6.52B
SOUTH KOREA BOP CURRENT ACCOUNT SEPT. $11.12B; PRIOR $6.52B
CHINA TRADE BALANCE OCT. +$95.72B; EST. +$75.0B; PRIOR +$81.7B
CHINA EXPORTS OCT. +12.7% Y/Y; EST. +5.0%; PRIOR +2.4%
CHINA IMPORTS OCT. -2.3% Y/Y; EST. -2.0%; PRIOR +0.3%
CHINA TRADE BALANCE OCT. +CNY 679.1B; PRIOR +CNY 582.6B
CHINA EXPORTS OCT. CNY +11.2% Y/Y; PRIOR +1.6%
CHINA IMPORTS OCT. CNY -3.7% Y/Y; PRIOR -0.5%
MARKETS
US TSYS: Buyers Driving Yields Lower Across the Curve.
JGBS: Cash Bonds Cheaper After A Poor 10Y Auction, Focus On FOMC
JGB futures are weaker and at Tokyo session lows, -24 compared to settlement levels.
AUSSIE BONDS: Cheaper, Subdued Session Ahead Of FOMC Decision
ACGBs (YM -1.0 & XM -2.5) are slightly weaker after dealing in narrow ranges in today’s Sydney session.
NZGBS: Weaker, Trump Trade Policies To Add To Global Inflation: RBNZ
NZGBs closed on a weak note, with benchmark yields 2-3bps higher. The NZGB 10-year has underperformed since yesterday’s close with the NZ-US and NZ-AU yield differentials 6-7bps tighter.
FOREX: A$ & NZD Outperform Against Yen, To Fresh Multi Month Highs
The USD has given back part of Wednesday's gains in the first part of Thursday trade. The BBDXY index was last near 1268.3, off close to 0.15%. Gains have been dominated by AUD and NZD.
ASIA STOCKS: China Equity Markets Soar, Some SE Asian Markets Lagging.
OIL: Crude Rallies As Impact Of New US Administration Unclear
After falling only moderately on Wednesday in the wake of the US election result, oil prices have rallied today on a slightly weaker US dollar (BBDXY -0.1%) and better risk appetite supported by news of China state banks selling USDCNY onshore. WTI is up 0.7% to $72.20/bbl, close to the intraday high, while Brent is 0.8% higher at $75.52/bbl.
GOLD: Sharp Fall After Trump Victory
Gold remains steady in today’s Asia-Pacific session after a 3.0% drop to $2,659/oz yesterday. This decline reflected pressure from rising U.S. yields, a stronger dollar, and heavy positioning following the U.S. election outcome.
UP TODAY (TIMES GMT/LOCAL)
Date | GMT/Local | Impact | Country | Event |
07/11/2024 | 0700/0800 | ** | ![]() | Trade Balance |
07/11/2024 | 0700/0800 | ** | ![]() | Industrial Production |
07/11/2024 | 0700/0800 | ![]() | Flash CPI | |
07/11/2024 | 0800/0900 | ** | ![]() | Industrial Production |
07/11/2024 | 0810/0910 | ![]() | ECB's Schnabel remarks at Money Market conference | |
07/11/2024 | 0830/0930 | *** | ![]() | Riksbank Interest Rate Decison |
07/11/2024 | 0830/0930 | ** | ![]() | S&P Global Final Eurozone Construction PMI |
07/11/2024 | 0900/1000 | *** | ![]() | Norges Bank Rate Decision |
07/11/2024 | 1000/1100 | ** | ![]() | Retail Sales |
07/11/2024 | 1045/1145 | ![]() | ECB's Elderson in panel on climate leadership | |
07/11/2024 | 1200/1200 | *** | ![]() | Bank Of England Interest Rate |
07/11/2024 | 1200/1200 | *** | ![]() | Bank Of England Interest Rate |
07/11/2024 | 1230/1230 | ![]() | BoE Press Conference | |
07/11/2024 | 1330/0830 | *** | ![]() | Jobless Claims |
07/11/2024 | 1330/0830 | ** | ![]() | Preliminary Non-Farm Productivity |
07/11/2024 | 1330/0830 | ** | ![]() | WASDE Weekly Import/Export |
07/11/2024 | 1330/1430 | ![]() | ECB's Lane speech on Public Debt | |
07/11/2024 | 1400/1400 | ![]() | Monthly Decision Maker Panel Data | |
07/11/2024 | 1400/0900 | ![]() | BOC Deputy Mendes gives opening remarks before a lecture. | |
07/11/2024 | 1430/1530 | ![]() | ECB's Lane in panel on Lesson Learnt in Past Crises | |
07/11/2024 | 1500/1000 | ** | ![]() | Wholesale Trade |
07/11/2024 | 1530/1030 | ** | ![]() | Natural Gas Stocks |
07/11/2024 | 1630/1130 | * | ![]() | US Bill 08 Week Treasury Auction Result |
07/11/2024 | 1630/1130 | ** | ![]() | US Bill 04 Week Treasury Auction Result |
07/11/2024 | 1900/1400 | *** | ![]() | FOMC Statement |
07/11/2024 | 2000/1500 | * | ![]() | Consumer Credit |
08/11/2024 | 2330/0830 | ** | ![]() | Household spending |
08/11/2024 | 0001/0001 | ** | ![]() | KPMG/REC Jobs Report |
08/11/2024 | 0230/0230 | ![]() | BOE's Breeden at Singapore Fintech Festival | |
08/11/2024 | 0700/0800 | ** | ![]() | Private Sector Production m/m |
08/11/2024 | 0745/0845 | * | ![]() | Foreign Trade |
08/11/2024 | 0900/1000 | * | ![]() | Industrial Production |
08/11/2024 | 0900/1000 | ![]() | ECB's Cipollone moderating event on Italy and the World Bank Group | |
08/11/2024 | 1000/1100 | * | ![]() | Retail Sales |
08/11/2024 | 1110/0610 | ![]() | BOC Deputy Gravelle speaks on panel at ECB conference. | |
08/11/2024 | 1215/1215 | ![]() | BOE's Pill and Shortfall hold MPC Agency briefing | |
08/11/2024 | 1330/0830 | *** | ![]() | Labour Force Survey |