GERMAN DATA: Nov Flash PMIs: Composite Remains Expansionary Despite Miss vs Cons
The German composite PMI printed below consensus at 52.1 (vs 53.5 cons, 53.9 prior), with both services and manufacturing lower-than-expected. We don’t read into the services miss too much though – it’s still the third consecutive month of expansion and the bar set by consensus was probably too high after a very strong October. Manufacturing trends meanwhile remain sluggish, with poor export order performance weighing.
- GERMANY NOV FLASH MANUF PMI 48.4 (49.8 FCAST, 49.6 OCT)
- GERMANY NOV FLASH SERV PMI 52.7 (54.0 FCAST, 54.6 OCT)
Key notes from the release:
- “Goods production was up only slightly, registering its weakest pace of expansion since July (output index at 50.7). Service sector business activity growth likewise moderated in November, ….although it was still solid overall and in line with the long-run average (index at 52.7).”
- “Although new work continued to rise in the service sector, which panel member reports attributed to higher demand and more enquiries from customers, it did so at a slower rate than in October. Factory new orders meanwhile fell for the second time in three months and at the quickest rate since January, driven in large part by a solid and accelerated reduction in export sales”
- “The softening of capacity pressures was in turn reflected in further job losses across the private sector. …. Slower job creation in the service sector was seen alongside a further (albeit slightly softer) decrease in manufacturing workforce numbers.”
- “November’s flash survey showed the rate of output charge inflation slow for the first time in four months.”…” slower increases in prices charged in the service sector coincided with a renewed fall in manufacturing factory gate charges”
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GERMAN AUCTION PREVIEW: 2.50% Nov-32 Bund
This morning, Germany will reopen its on-the-run 7-year 2.50% Nov-32 Bund (ISIN: DE000BU27014) for the second and final time this year.
- The launch auction of the line on August 27 was very soft with only E3.170bln of bids received for the intended E4.0bln transaction. However, ahead of the first reopening came the release of the Q4 issuance plan in which it was announced today's auction would be the sole auction of the quarter for the 7-year Bund with a smaller E3bln size. That probably helped the first re-open of the line fare a little better, with a 1.48x bid-to-cover / 1.13x bid-to-offer combination and the lowest accepted price at the auction coming in above the secondary market mid-prices.
- Domestically in Germany, Finance Minister Klingbeil is scheduled to update the government's tax projections tomorrow, with current revenues likely running a little ahead of the previous plan. For detailed considerations see our post at 08:19 BST.
- The next German auction will be E4bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059) on October 28.
- Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CEST.
EQUITIES: FTSE-100 Stands Out in Soft Europe Trade
The trend condition in S&P E-Minis remains bullish and the contract is trading above support at the 50-day EMA. The average, currently at 6627.92, has been pierced but remains intact - for now. Note that the Oct 10 low of 6540.25 marks the key short-term support. The trend direction in Eurostoxx 50 futures is up and This week’s gains reinforce this theme. The breach of 5689.00, the Oct 2 high and bull trigger, confirms a resumption of the uptrend.
- Japan's NIKKEI closed lower by 8.27 pts or -0.02% at 49307.79 and the TOPIX ended 16.93 pts higher or +0.52% at 3266.43.
- Elsewhere, in China the SHANGHAI closed lower by 2.574 pts or -0.07% at 3913.758 and the HANG SENG ended 245.78 pts lower or -0.94% at 25781.77.
- Across Europe, Germany's DAX trades lower by 64.63 pts or -0.27% at 24263.12, FTSE 100 higher by 60.69 pts or +0.64% at 9487.18, CAC 40 down 43.81 pts or -0.53% at 8214.14 and Euro Stoxx 50 down 22.8 pts or -0.4% at 5663.71.
- Dow Jones mini down 22 pts or -0.05% at 47120, S&P 500 mini up 0.5 pts or +0.01% at 6774.25, NASDAQ mini down 31.5 pts or -0.12% at 25265.75.
COMMODITIES: Gold Pullback Deemed Corrective
A sharp pullback in Gold yesterday appears corrective - for now. Note that the trend is overbought and a deeper retracement would allow this condition to unwind. Support at the 20-day EMA, at $4031.4, has been pierced. A bearish theme in WTI futures remains intact and the move down last week reinforces current conditions. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend.
- WTI Crude up $0.97 or +1.69% at $58.21
- Natural Gas down $0.03 or -0.72% at $3.453
- Gold spot down $17.97 or -0.44% at $4106.71
- Copper up $0.7 or +0.14% at $497.15
- Silver down $0.03 or -0.07% at $48.6885
- Platinum down $16.74 or -1.08% at $1530.79
