Commerzbank
Overnight News
Fed: Powell pledges to prevent inflation from getting entrenched. Brainard is committed to working Americans, which means "getting inflation down". Bostic says faster taper would give Fed "more optionality".
Fed: Biden says he reappointed Powell because “we need stability and independence" at the Fed. Next Fed picks will bring "new diversity".
US: Yellen sees monthly inflation increases back at "around 0.2% or 0.3%" in H2 2022. Fed has to make sure inflation does not become "endemic".
ECB: Villeroy is "serious" about ending PEPP in March but wants to maintain flexibility and calls for end of TLTRO subsidies. Knot says rates will rise "once inflation continues to exceed expectations in the time to come" but has "no reason to believe this will be the case".
Germany: Coaliton treaty and decision about ministry posts could be presented as early as today at 11CET (media reports).
Oil: OPEC+ may consider response to Biden's plans for coordinated stockpile release. WH says "no decision" has been made.
Markets: Bearish US Treasury flattening extends after sluggish 5y auction, futures hit new lows in Asia. Equities slip in late NY, remain on the back foot in Asia. DXY hits new high, EUR falls below $1.125. Oil is little changed.
Citi
European Open
Japan’s Labor Thanksgiving holiday meant a quiet morning in markets. Yesterday’s re-nomination of Fed Chair Jerome Powell by President Biden was top of mind during the Asian session. We had little in the way of new developments, but we saw JPY break past the 115 handle on a stronger dollar, and NZD dip 0.45% on price action, ahead of tomorrow’s RBNZ meet. SGD CPI printed above expectations at 3.2% YoY (vs 2.8% consensus), although this did not move SGD.
Looking ahead, today is PMI day, with EUR seeing prints from France at 08:15 GMT, followed by Germany at 08:30 GMT and Eurozone at 09:00 GMT. GBP Markit/CIPS UK Services PMI prints at 09:30 GMT, while we see BoE’s Bailey and Cunliffe at the House of Lords (15:00 GMT). Meanwhile we see Markit US manufacturing & services PMI at 14:45 GMT. CAD will see BoC’s Beaudry’s Speech at 18:00 GMT, although we do not expect much relevance for monetary policy outlook. Over in the EM space, we see TWD IP (08:00 GMT), PLN retail sales (09:00 GMT) and ARS economic activity (19:00 GMT).
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.