THAILAND: PM Seeks Dissolution Of Parl't, Early Election After Contentious Vote
Dec-11 15:49
Prime Minister Anutin Charnvirakul has formally submitted a request for the King to issue a decree dissolving the House of Representatives and calling a snap general election. The PM said that in submitting the request, "I am returning power to the people."
- The move comes after a contentious vote in parliament earlier today. Some MPs from Anutin's conservative Bhumjaithai Party voted against Article 256/28, a proposal from the Constitution Drafting Committee that was supported by, the progressive People's Party, which supports Anutin's minority gov't in a confidence and supply agreement.
- The proposal would have seen future constitutional amendments able to be approved by a simple majority of a joint sitting of parliament. However, some of Anutin's MPs voted against the article, meaning as least one-third of the Senate (dominated by pro-military lawmakers) would need to back any amendment for it to pass.
- In the aftermath, Natthaphong Ruangpanyawut, leader of the People’s Party and opposition leader in the House of Representatives, under parliamentary procedure called for a roll-call vote.
- With several Bhumjaithai MPs votingthe Article down, or absenting themselves from the chamber, the People's Party was set to pursue a confidence vote against the gov't. Without the People's Party's support, Anutin's gov't would have fallen.
- From the time that the King issues a Royal Decree dissolving the House of Representatives, the Election Commission must name an election date within five days. This date can be no less than 45 but no more than 60 from the date of the issuance of the Decree.
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GOLD: Overnight Advance Moderates, Bullish Conditions Prevailing
Nov-11 15:47
- Despite the broader pressure on the USD following the release of weak US ADP jobs data, spot gold has instead taken its cues from the moderate drift lower for US equities, which turned off their recovery highs overnight and extended some weakness over the past hour.
- There may be some short-term positioning dynamics in play here as well, given the punchy 4.65% rally from last Thursday’s lows. Importantly, spot gold is only 0.2% lower on the session, and has seen some fresh demand sub $4,100.
- Overall, the downleg for XAUUSD since Oct 20 appears to have been a healthy correction, which has allowed an overbought condition to unwind. Most recent gains also suggest the correction is over. Price remains above a key support at the 50-day EMA, intersecting at $3890.0.0. Clearance of this EMA would be required for a deeper retracement.
- On the topside, initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
EUROPEAN FISCAL: Little Details In Germany FinMin Debt Commission Update
Nov-11 15:38
- Along with the Bundesbank proposal from earlier, the German Finance ministry has also put out a press statement highlighting the current status of a debt brake reform proposal by its own enacted commission. The statement does not contain too many details, mainly mentioning a Q1'26 final report publication as well as the creation of 4 working groups within the commission, hinting at where the focus of their proposal may lie:
- 1) Sustainability of investment and growth, sustainability of public finances
- 2) Compatibility with EU fiscal rules
- 3) Exemption for defense-related expenditure, transitional arrangements following an exceptional emergency situation, repayment requirements, and cyclical adjustment
- 4) Monitoring / limitation of public debt
- Again, keep in mind that any constitutional amendments need a 2/3rds majority in Bundestag, which would be subject to approval from AfD / die Linke in the current legislative period.
BUNDS: Knee Jerk Lower On Bundesbank Proposal Quickly Fades; Volumes Spike
Nov-11 15:31
Bund futures saw a fleeting 15-tick knee-jerk lower following the release of the Bundesbank’s debt brake proposal. However, the move quickly faded, with RXZ5 back at 129.23 (+10 ticks today).
- The initial reaction may have been in response to the Bundesbank’s view that “the current rules in the Constitutional Law to be suitable for reliably securing sound public finances”. The proposal itself would represent a fiscal tightening versus current rules if implemented.
- Over 50k lots went through in the 5 minutes following 1500GMT, easily the healthiest sequential volumes across the last 7 sessions. Until that flurry of activity, cumulative volumes had been tracking below recent averages, with today’s US holiday likely playing a role.
- Today’s modest upside in Bunds has mostly been spillover from today’s UK and US labour market data. Resistance at the 20-day EMA (129.31 today) is untested, meaning a short-term bear cycle remains intact.
- Tomorrow’s calendar includes final October inflation and 30-year Bund supply.
