NETHERLANDS: NSC Pours Cold Water On Prospect Of Swift Deal w/PVV
Following the appointment of former Labour PParty (PvdA) minister Ronald Plasterk as the second post-election scout, tasked with sounding out parties on policies and potential partners, the prospect of a swift deal in reaching a governing coalition (which were already slim) have narrowed further. Pieter Omtzigt, leader of the centrist, 'good governance' New Social Contract (NSC) stated earlier in the week that, "All in all, the NSC faction now sees no basis for starting negotiations with the Party for Freedom (PVV) about a majority government or a minority government,".
- Omtzigt has raised concerns that, despite PVV lawmakers and ministers swearing allegiance to the constitution that parts of the right-wing party's manifesto risked breaking the Netherlands' democratic norms. He stated that PVV leader Geert Wilders would have to make clear what part of his manifesto he would be willing to "put on ice", and even then said he was concerned about democratic backsliding. However, Omtzigt did not formally rule out the prospect of an agreement in the future.
- The most feasible routes to a gov't are, firstly, a PVV-led minority coalition involving the NSC and the agrarian populist Farmer-Citizen Movement (BBB) propped up by the centre-right People's Party for Freedom and Democracy (VVD). The second route is a centrist coalition involving the second-placed group in the election, the centre-left GreenLeft-Labour alliance, the NSC, the VVD, and the liberal Democrats 66.
Source: Election Commission, MNI
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NORWAY: Manufacturing PMI Re-enters Contraction In October
The Norway October manufacturing PMI re-entered contractionary territory at 47.9 (vs a downwardly revised 51.8 prior). This continues the downward trajectory of the index seen since the 2023 peak of 56.5 in July. Today's data is unlikely to have any impact on the Norges Bank policy decision tomorrow where the previous guidance suggests a pause ahead of a hike in December.
- The release notes that all five sub-indices contributed to pulling the main index lower, and that purchasing prices are still rising somewhat (albeit lower than the long run average).
- The production index fell to 45.7 (vs 51.3 prior), while employment was slightly lower at 52.0 (vs 53.5 prior).
- The headline deterioration is somewhat consistent with the Q3 Business Tendency Survey, which was also contractionary at -2.2 points. However, the Tendency Survey masked large sectoral differences between capital goods (which performed strongly) and consumer/intermediate goods meaning a similar story may be at play with the PMI.
- NOK did not react meaningfully to the release, and continues to sit broadly weaker against the G10 this morning amid a soft risk environment and low volumes.
EUR: EURJPY retrace lower
- Market participants continue to fade Yesterday's 1.73% spike in EURJPY, after printing its highest level since 2008.
- Not much in terms of support at current levels, with initial area of interest moving up to 158.93.
OPTIONS: Expiries for Nov01 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.0585-05(E1.7bln), $1.0665-75(E1.2bln)
- USD/JPY: Y147.00-10($1.1bln), Y147.50-59($924mln), Y148.00-20($1.5bln), Y148.30-50($2.6bln), Y149.80-00($1.6bln), Y150.50-60($1.8bln), Y151.00($686mln), Y151.80-00($759mln)
- EUR/GBP: Gbp0.8675(E500mln)
- USD/CNY: Cny7.3000($1.4bln)
