11.15.2018 Thur, Cloudy, Air Polluted
Summary：脱欧协议获得英国政府内阁批准提交议会，意大利预算陷入胶着状态的情况下，欧洲风险资产有所恢复，美元则相应受到压制，美股则受汽车关税阴影、DNC重要人物对NAFTA的质疑以及市场对APPLE的担忧而再次下跌。
Euro Session:
Asian risk assets traded through a choppy session in the aftermath of the 7% plunge in oil overnight, mixed China data and ahead of the UK Brexit cabinet vote which was supposed to hold on 2pm local time. To be noted, $Asia traded on divergent themes with the North Asia block weaker on heavy equities in contrast to the high yielders IDR/INR which extended gains on the oil collapse.
EU session proved to be dominated by May and her Brexit draft. After an cautiously opening with Italy 11bps wider to BUNDs, SX5E followed tightly what headline about the UK PM. From the late afternoon in Beijing time , good news came to take majority which pushed up the index paring initial loss. Good news like the key Brexiters Gove , Javid said to back deal, and bad news like Brexitteers anger so high, May could face a no confidence vote, as pro-Brexit skeptics cast doubt over the agreement ,conflicted against each other , coupled with GBPUSD dancing on high volatility. Around 3:15, May announced that the Cabinet collectively backed the deal. That statement of Cabinet support and would deliver a statement in parliament on the Brexit deal. Around 3:47, Both EU an UK release draft Brexit withdrawal treaty and Pound fell on such a fact!
Other news, Trade talks amongst the Association of Southeast Asian Nations (Asean) did not come to a conclusion on the Regional Comprehensive Economic Partnership (RCEP) multilateral trade deal during the summit in Singapore.
Economy data:
3:00, DEU Q3 GDP preliminary -0.2% vs -0.1%, prior 0.5%; 1.1% vs 1.2% , prior 2.3%; WDA 1.1% yoy vs 1.3%, prior 2%
5:30, UK Oct CPI 0.1% vs 0.2% mom, prior 0.1%; 2.4% yoy vs 2.5%, prior 2.4%;core CPI 1.9% yoy vs 1.9%, prior 1.9%
6:00, EMU Q3 GDP preliminary 0.2% qoq vs 0.2%, advance 0.2%
US Session:
It''s another session which exhibit the negative relation between UST price and UST price perfectly. New York session began with a modest UST sell-off modestly into and through the US CPI report, but after CPI, as US equity indexes gave back their early gains the belly led a bull steepening rally. That rally and steepening extended further through the midnight as US Rep. Pascrell (D-NJ), who is favored to lead the House Ways and Means Trade subcommittee, said that the new NAFTA deal needs changes in order for it to pass. Both USD/MXN and USD/CAD rallied on the comments and all the major US stocks index closed in loss again. Besides, news reported that both NEC and Treasure showed their own concerns about the car tariff.
As to the back ground of oil slump, NYT reported that A member of #Khashoggi kill team instructed a superior over the phone to “tell your boss,” believed to be Crown Prince Mohammed bin Salman, that the operatives had carried out their mission.
As to Fed, Quarles gave testimony to the House Financial Services Committee, saying the US economy is very strong and has sustainable growth, and the Fed has hit its inflation target but is not exceeding it. The focus of the speech was supervision and regulation and he laid out a plan for reforming the Fed’s stress testing process for the largest US banks
Economy data:
9:30 US Oct CPI 0.3% mom vs 0.3%, prior 0.1%; 2.5% yoy vs 2.5%, prior 2.5%. 2.4% increase in energy prices is the main cause. Core 2.1% yoy vs 2.2%, prior 2.2% yoy
US Oct real avg weekly earnings 0.9% yoy , prior 1.1% revised down to 0.8%
Key Data And Events Ahead:
UK retail sales
US retail sales, Empire manufacturing survey, Philadelphia Fed business outlook, initial jobless claims.
Quarles testifies in the Senate
Bostic Kashkari speaks
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