Recap 2014-11-3

Commentary:

None

Notable:

  • PMIs:
  1. US ISM jumped back to 59 vs 56.1 exp and 56.6 prev. However, the Markit measure was revised lower to 55.9 vs 56.2 exp and prev
  2. UK PMI improved to 53.2 vs 51.4 exp and 51.6 prev
  3. IT PMI declined to 49 vs 50.6 exp and 50.7 prev.
  4. Germany PMI was revised lower, while France’s PMI was revised higher
  5. Canada PMI improved to 55.3 vs 53.5 prev
  6. China Mfg PMI declined to 50.8 vs 51.2 exp
  7. China Non-Mfg PMI declined to 53.8 vs 54 prev
  8. Australia Mfg PMI improved to 49.4 vs 46.5 prev

US Auto Sales rose at an 16.5mm rate in Oct vs 16.4mm exp and prev

Australia Building Approvals declined -11% vs -1% exp

The ECB will leave the terms of the TLTRO unchanged although could adjust them going forward if economic data deteriorates. Reuters

JPM: we estimate that the projected $80bn of potential domestic equity buying by GPIF is exactly equal to the amount foreigners bought between Nov 2012 and April 2013 when Abenomics started. The projected $90bn of potential foreign equity buying by the GPIF is almost one third of the current $300bn annual pace of equity fund buying globally.

GS: Japan econ team thinks that the BOJ may have sought to give its support to a second consumption tax hike (slated for October 2015, decision to be taken early December) at a time when increasing number of voters as well as politicians are expecting the timing of the next tax hike to be pushed back. Amid a slew of weak macro data following the April tax hike, we think the Japanese government has a strong desire to lift share prices as far as possible and thereby improve corporate and household sentiment to make it easier for Prime Minister Abe to commit to a second tax increase… In our view, it is no coincidence that GPIF portfolio changes (lowering of domestic bond allocation, increase in equity allocation) and the BOJ’s adding easing measures were announced the same day.

WSJ: U.S. oil prices tumbled to a fresh two-year low Monday on news that Saudi Arabia cut its selling price for oil to the U.S., suggesting that the kingdom is trying to compete with U.S. shale oil. Saudi Arabia raised the prices for its oil in other locations, including Asia, where the country has cut its prices for four straight months.

Upcoming:

  • Mon: Australia Trade Balance, Retails Sales, RBA, Japan PMI
  • Tue: EU PPI, NZ Employment, China HSBC PMI, Kuroda Speaks, US Mid-term Elections
  • Wed: EU PMI, UK PMI, EU Retail Sales, US ADP, ISM Non-Mfg, DOE Oil Inventories, AU Employment, Japan PMI
  • Thu: BoE, ECB, CanadaBuilding Permits, US Jobless Claims, Unit Labor Costs
  • Fri: German Trade Balance, US Employment, Canada Employment, Yellen Speaks
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