Figure 1: Germany 'core' factory orders vs. sentiment
US (WSJ): Trump’s Plan Boosts Budget Deficits by $7.5 Trillion
Donald Trump’s flurry of recent tax-cut promises pushed his fiscal plan deep into red ink, and he would increase budget deficits by more than twice as much as Democratic rival Kamala Harris would, according to a new study that is among the most comprehensive estimates to date of the candidates’ proposals.
ISRAEL (BBG): Israel Says It Strikes Across Gaza to Thwart New Hamas Threats
Israel bombed Hamas targets across Gaza on Monday to prevent what it said was an “immediate” threat of rocket fire the group was planning to mark its devastating attack a year ago. The move, along with Israel sending troops back into parts of northern Gaza over the weekend, underlined the continuing danger from Hamas. That’s despite the Iran-backed militant organization suffering huge losses since the war erupted, with Israeli officials estimated around half its roughly 35,000 fighters are dead.
ECB (MNI EXCLUSIVE): ECB Should Cut In October, Says Kazaks
ECB Governing Council member Martins Kazaks discusses monetary policy with MNI. (in a two-part interview) - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
ECB (MNI): October ECB Rate Cut “Very Likely” – Villeroy
The European Central Bank will “very likely” cut interest rates again at its October meeting, as the balance of risks are "shifting” and dangers of undershooting the current inflation target are growing, Bank of France Governor Francois Villeroy de Galhu said in an interview with Repubblica published on Monday. Weak growth and a restrictive monetary policy for too long risks inflation going below 2%, with financial markets now seeing prices at 1.8% next year, he said, adding that core inflation will gradually come close to 2% too in 2025.
UK (BBG): Starmer Forced Into Messy Reset Less Than 100 Days In
Keir Starmer replaced his top aide and the Treasury acknowledged that key tax-raising plans were under review, as the Labour government tried to correct course from what even allies say has been a rocky three months in power. In an attempt to end the turbulence engulfing Britain’s first Labour administration in 14 years, the prime minister on Sunday moved his chief of staff Sue Gray out of her role following internal complaints about the political operation she ran at 10 Downing Street.
EU/CHINA (BBG): EU Backers of China EV Tariffs Face Biggest Risk of Retaliation
The European Union’s decision to impose tariffs on Chinese electric vehicles has moved the focus to how and when Beijing will retaliate for the escalation in its biggest trade dispute with the bloc in years. While talks continue, crucial clues may lie in the votes cast by individual EU member states on the EV measures last week. Beijing has previously threatened tariffs on EU brandy imports and launched investigations into pork and dairy products in response to the tariffs - offering a range of options that affect different parts of Europe.
CHINA (BBG): China Economic Agency Plans Briefing as Investors Eye Stimulus
China’s top economic planner will hold a press briefing on Tuesday to discuss a package of policies aimed at boosting economic growth, as investors look for more stimulus measures from President Xi Jinping’s government. The briefing, which is scheduled to start at 10 a.m., will include five senior officials from the National Development and Reform Commission, including Chairman Zheng Shanjie, according to a notice from the government on Sunday.
CHINA (BBG): Chinese Chip Stocks Gain $13 Billion on Talk of Beijing Stimulus
Top Chinese chipmaker Semiconductor Manufacturing International Corp. led a $13 billion sector rally, after investors bet that Beijing will declare more policy or financial support for an industry central to its geopolitical ambitions. Shares of SMIC, which Washington has blacklisted over allegations it aids China’s military, climbed as much as 28% Monday to their highest in four years. That took its gain since Thursday’s close to 65%, or roughly $10.7 billion of market value at the peak.
JAPAN (BBG): Japan’s Kato Warns of Negative Impact of Sudden Yen Moves
Sudden moves in Japan’s currency hurt companies and households, and that impact requires close government scrutiny, Japan’s newly appointed finance minister said, following a pronounced slide in the yen in recent days. “The problem is sharp currency fluctuations can have a negative impact on business activity and doesn’t help citizens’ lives,” Katsunobu Kato said in a group interview Monday, after being appointed finance chief by Prime Minister Shigeru Ishiba last week. Kato also called for clear central bank communication while reiterating that the government will quickly put together an economic package.
JAPAN (MNI): Japanese Firms Increasingly See Need to Raise Pay
The number of Japanese businesses that see the need to raise wages to ensure necessary workers is increasing, supporting the Bank of Japan’s view on wage hikes in fiscal 2025, the BOJ's regional economic report said on Monday. Some companies are considering raising retail prices, but smaller firms continued to voice concern over difficult profit conditions, making wage hikes harder.
JAPAN (MNI): Japanese Regions Note Recovery, Pick Up - BOJ
All Bank of Japan branch managers noted their economies had recovered moderately, picking up, or picking up moderately, despite some weakness seen in part, the BOJ’s quarterly regional economic report showed on Monday. Out of the nine regions, two upgraded their economies from the previous meeting in July, while the remaining seven kept their assessment unchaged. Many managers reported solid or recovering private consumption, but noted high prices had impacted spending. All managers reported the improvement of income conditions moderately.
RBNZ (BBG): RBNZ’s Orr Says Risks to Inflation Outlook Are More Balanced
RBNZ Governor Adrian Orr comments in his Statement published in the 2023-24 Annual Report. Governors statement dated Sept 26. “Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced.” Reiterates that annual consumer price inflation is expected to return to within the Monetary Policy Committee’s 1-3% target range by the end of 2024.
THAILAND (BBG): Thai Government Seeks Higher Inflation Target to Enable Rate Cut
Thailand’s Finance Ministry plans to propose a higher inflation target of 1.5%-3.5% for next year, adding pressure on the central bank to cut its key interest rate, according to people familiar with the matter. The ministry is due to hold talks with the Bank of Thailand to finalize the price band later this month, the people said, asking not to be named as they aren’t authorized to discuss the information. The central bank and the Finance Ministry need to agree on the target before it’s sent to the Cabinet for approval.
EUROZONE DATA (MNI): Retail Trade M/M In-Line with Consensus
Eurozone volume of retail trade growth came in-line with consensus at 0.2% M/M in August (vs 0.0% revised prior). On an annual basis, volumes of retail trade disappointed slightly printing 0.8% Y/Y (vs 1.0% consensus, -0.1% prior). The in-line reading was driven by sequential increases in all 3 subcomponents. In particular, 'Automotive fuel' component rose 1.1% M/M (vs a fall of 0.6% in July) - the highest increase since November 2023. Non-Food Products trade volume also rose by 0.3% M/M (vs a fall of 0.1% in July), as did 'Food, drinks, tobacco' trade by 0.2% M/M (from 0.1% in July). The largest eurozone members all saw monthly increases apart from Italy which saw flat trade volume (for where data is available). French sales rose 0.5% M/M - after three consecutive months of decline, Spain saw 0.4% and the Netherlands rose 0.8%.
GERMAN DATA (MNI): August Factory Orders at Renewed Cycle Low, Foreign-Driven
German factory orders surprised to the downside in September, at -5.8% M/M (vs -2.0% cons). July's upwardly revision of 1.0pp to +3.9% prior does not overshadow that the 'core' index value printed another cycle low. Some decline was expected after August's index was pulled up by one-offs in the "other vehicle" sector, but there also was an underlying deterioration. While August's decline was almost purely foreign-driven, the overall picture remains very weak; sentiment also deteriorated again recently. The yearly comparison also came in below expectations at -3.9% (vs -1.6% cons; +4.6% prior, revised from +3.7%). Looking at underlying 'core' orders (excl. large-scale one-offs), they fell 3.4% M/M. On a 3m/3m basis, the trend remained positive but tapered down a little, to +0.8% (vs +1.0% prior).
UK DATA (BBG): UK House Prices Climb for a Third Month, Halifax Says
UK house prices climbed for a third consecutive month in September as cheaper mortgages and increased incomes spurred more buyers into the market, data from Halifax showed. The mortgage lender said the average price of a typical home increased 0.3% to £293,399 ($384,900), just short of the record level reached in June 2022. House prices were 4.7% higher than a year earlier.
UK DATA (MNI): KPMG-REC Report on Jobs - Nothing Really Positive
The KPMG-REC Report on Jobs showed continuing falls in recruitment, further slowdown in salary growth and falling vacancies - all pointing to a softening labour market. Permanent staff placements continued to decline, albeit with marginally less of a decline in September than August while temporary placements fell at their fastest pace since April. These data corroborate last week's DMP data which showed that in the single month of September realised employment growth was 0%Y/Y - the first time it had not been positive since August 2021.
SWEDEN DATA (MNI): Small Rise In 5-year Ahead Inflation Expectations Won't Concern Riksbank
Swedish money-market participant 5-year ahead inflation expectations rose a tenth to 2.2% in October, according to Prospera. However, the Riksbank will likely focus more on the quarterly version of this survey (next released in December) when considering whether to adjust policy based on inflation expectations alone. In the September quarterly survey, 5-year ahead inflation expectations across money market participants, labour market parties and purchasing managers were well-anchored at the 2.0% target.
JAPAN DATA (MNI): BOJ Aug Consumption Activity Index Drops 0.0% M/M
The Consumption Activity Index fell for the second consecutive month to 0.0% in August following July's revised 0.1% fall (from +0.3% in July) as typhoons impacted spending, data released by the Bank of Japan showed on Monday. BOJ officials expected consumption to remain solid as income conditions improved. The Bank in September upgraded its assessment on private consumption, noting it “has been on a moderate increasing trend.” The previous view was that private consumption was resilient.
Bund futures are -32 ticks lower at 133.60, pressured by a near-2% rise in Brent crude futures.
Gilts remain under pressure, with an extension of Friday’s NFP-driven weakness coming alongside worry surrounding higher for longer interest rates/increased gilt issuance and higher crude oil prices.
Fig. 1: UK 10-Year Yield (%)
Source: MNI - Market News/Bloomberg
Eurostoxx 50 futures recently breached resistance at 5024.00, the Sep 3 high. This confirmed a resumption of the bull leg that started Aug 5 and cancels a recent bearish theme. It also suggests that the pullback last week is likely a correction. Key short-term support to watch is 4925.27, the 50-day EMA. A clear break of this average would signal scope for a deeper retracement. Key resistance and the bull trigger is 5106.00, the Sep 30 high. A bull cycle in S&P E-Minis remains intact and the latest shallow pullback appears to have been a correction. Note that moving average studies are in a bull-mode setup, highlighting a dominant uptrend and positive market sentiment. Scope is seen for a climb towards 5868.50, a Fibonacci projection, and 5900.00 further out. On the downside, initial support to watch is 5735.68, the 20-day EMA. Key support lies at 5666.17 the 50-day EMA.
Time: 09:50 BST
WTI futures traded higher Thursday, extending the rally that started on Oct 1. Short-term gains appear to be corrective, however, the break of the 50-day EMA suggests potential for an extension near-term. This has exposed $76.40, the Aug 26 high. On the downside, initial support to watch is $70.56, the 20-day EMA. A clear break of this level would highlight a potential reversal and a resumption of the downtrend. Gold remains in consolidation mode. The trend condition is also unchanged and bulls remain in the driver’s seat. Recent gains confirm a resumption of the primary uptrend and maintain the bullish price sequence of higher highs and higher lows. MA studies are in a bull-mode set-up too, highlighting a clear uptrend and positive market sentiment. The focus is on $2690.2 next, a Fibonacci projection. Firm support lies at $2612.1, the 20-day EMA.
Time: 09:50 BST
Date | GMT/Local | Impact | Country | Event |
07/10/2024 | - | ![]() | ECB's Lagarde & Cipollone in Eurogroup meeting | |
07/10/2024 | 1530/1130 | * | ![]() | US Treasury Auction Result for 26 Week Bill |
07/10/2024 | 1530/1130 | * | ![]() | US Treasury Auction Result for 13 Week Bill |
07/10/2024 | 1700/1300 | ![]() | Fed Governor Michelle Bowman | |
07/10/2024 | 1750/1350 | ![]() | Minneapolis Fed's Neel Kashkari | |
07/10/2024 | 1900/1500 | * | ![]() | Consumer Credit |
07/10/2024 | 2200/1800 | ![]() | Atlanta Fed's Raphael Bostic | |
07/10/2024 | 2230/1830 | ![]() | St. Louis Fed's Alberto Musalem | |
08/10/2024 | 2301/0001 | * | ![]() | BRC-KPMG Shop Sales Monitor |
08/10/2024 | 2330/0830 | ** | ![]() | average wages (p) |
08/10/2024 | 2330/0830 | ** | ![]() | Household spending |
08/10/2024 | 0500/1400 | ![]() | Economy Watchers Survey | |
08/10/2024 | 0600/0800 | ** | ![]() | Industrial Production |
08/10/2024 | 0600/0800 | ![]() | Flash CPI | |
08/10/2024 | 0645/0845 | * | ![]() | Foreign Trade |
08/10/2024 | 0700/0900 | ![]() | ECB's Schnabel chairing ECB MonPol session | |
08/10/2024 | 0700/0300 | ![]() | Fed Governor Adriana Kugler | |
08/10/2024 | 0900/1000 | * | ![]() | Index Linked Gilt Outright Auction Result |
08/10/2024 | 1000/0600 | ** | ![]() | NFIB Small Business Optimism Index |
08/10/2024 | - | ![]() | ECB's de Guindos at ECOFIN meeting | |
08/10/2024 | 1230/0830 | ** | ![]() | Trade Balance |
08/10/2024 | 1230/0830 | ** | ![]() | International Merchandise Trade (Trade Balance) |
08/10/2024 | 1255/0855 | ** | ![]() | Redbook Retail Sales Index |
08/10/2024 | 1530/1130 | * | ![]() | US Treasury Auction Result for Cash Management Bill |
08/10/2024 | 1645/1245 | ![]() | Atlanta Fed's Raphael Bostic | |
08/10/2024 | 1700/1300 | *** | ![]() | US Note 03 Year Treasury Auction Result |
08/10/2024 | 2000/1600 | ![]() | Boston Fed's Susan Collins |