Read on the Trading Floor - 23 Nov 2023
Today’s focus… more than Turkey this Thanksgiving…
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Macro Themes At Play
It maybe thanksgiving but we've had flash PMI's in Europe and the UK, a distressing NOK GDP print, CB meetings (Riksbank, SARB and TCMB) and of course some China stimulus stories.
Theme 1 - GDP, Flash PMI's and Budget Reactions
NOK QoQ GDP -0.5% vs exp +0.3%. Very disappointing print from Norway, led by a stark drop in petroleum production.
France, Germany and Eurozone - mixed data set across Europe, but even the better-than-expected prints are still sub 50 and increasing the odds of a recession next year.
S&P Global - HCOB Flash Germany PMI
S&P Global - HCOB Flash France PMI
Bloomberg - Germany Economic Downturn Eases as French Slump Persists
Source: Economic Calendar (tradingeconomics.com)
GBP - Composite PMI back above 50, but the focus in the UK press today has been the reaction to the Autumn statement and subsequent timing of next year's general election.
S&P Global - S&P Global / CIPS Flash UK PMI
Bloomberg - UK Inflation Fears Revived by Unexpected Output Growth, S&P Says
Macro Hive - Unpacking the Autumn Statement
Blonde Money - Autumn Statement 2023
FT - Jeremy Hunt defends tax cuts despite pressure on public services
FT - Hunt gambles fiscal tailwind on voter-friendly tax cuts
Source: Economic Calendar (tradingeconomics.com)
Theme 2 - Central Banks on diverging paths... Riksbank, SARB and TCMB
Riksbank with a surprise hold but TCMB hiked more than expected to 40%, and SARB sit quietly in the middle, matching unchanged expectations at 8.25%.
SEB - Riksbank leaves the policy rate unchanged and signals some probability of a rate hike in February
ING - A hawkish hold in Sweden, but scope for more tightening is limited
Theme 3 - China + Property + Stimulus
Country Garden's Shares rallied over 10% as expectations grow that the distressed builder will make it onto a draft list of firms eligible for state aid.
Bloomberg - Country Garden Shares, Dollar Bonds Jump on Financing Aid Hopes
FT - China property: running out of options as fallout spreads to shadow banking
Bloomberg - China Weighs Unprecedented Builder Support With First-Ever Unsecured Loans
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