From Marc to Market:
Overview: Reports that the Fed's Brainard was interviewed for the Chair helped soften yields a bit, not that they needed extra pressure, on ideas she is more dovish than Powell. In turn, the lower yields saw the yen rise to its best level in nearly a month and led the major currencies higher against the dollar. The yen is joined by the Scandis and sterling to lead the majors. The New Zealand dollar is the laggard. Emerging market currencies are also mostly stronger, and the JP Morgan EM FX Index is rising for the third consecutive session, the longest streak in a couple of months. The Turkish lira is a notable exception, even after the central bank hiked the reserve requirements for foreign currency and precious metal deposits by 200 bp. Note that the central bank meets next week (November 18). Asia Pacific equity markets are mixed. Japan, Australia, and Indian markets eased. Europe's Stoxx 600 continues to run. It is up for the ninth consecutive session today and has fallen only once since October 21. US future indices are edging higher. The US 10-year yield is off around three basis points to 1.46%. European yields are mostly 2-3 bp lower. Gold is firm near yesterday's highs. It has rallied from last week's lows near $1759 to $1827 earlier today to fray the upper Bollinger Band. December WTI is near $82.50 ahead of the EIA's short-term energy outlook, which is seen as a key factor in how the US responds to OPEC+ decision to stick to the gradual increase in supply. After yesterday's jitters, some preliminary signs that Russia will deliver more gas to Europe helped ease prices. Copper successfully tested the 200-day moving average last week and is rising for the third consecutive session. Technically, it looks bullish, and inventories are low.....MUCH MORE
Asia Pacific
In Japan, cash earnings rose a disappointing 0.2% in September. The consensus was for a 0.6% increase. Recall that cash earnings fell from April 2020 through February 2021. They have been rising since. Still, to boost consumption, the supplemental budget is expected to include a cash component. Separately, Japan reported its September current account. It was a little smaller than expected and down sharply from September (JPY1.03 trillion vs. a revised JPY1.5 trillion). The trade balance was in deficit for the second consecutive month. The balance of payments data includes some investor flows. Japanese investors bought the most US bonds in 18 months, in September, and purchased the most Dutch bonds since April 2019. They were net sellers of Australian bonds for the fifth consecutive month
While many investors have been chased from the Chinese real estate market, not Goldman Sachs Asset Management. Reports today suggest it has been buying dollar-denominated real estate debt in China. A Bloomberg index shows prices are off more than 20% in the past two months. Goldman has also reportedly bought local government yuan debt as well. China is expected to report October CPI and PPI first thing tomorrow in Beijing. Rising commodity prices (e.g., coal and oil) and the increase in input and output prices in the PMI point to an acceleration of PPI. Consumer prices are likely to soar, but from a low base (0.7% year-over-year in September) as pork prices may have passed their trough and higher vegetable prices have been reported. Non-food prices are also expected to have edged higher. The median forecast in Bloomberg's survey sees the CPI jumping to 1.4%, which would be the highest since September 2020....
