Fed set to deliver another big rate hike, debate December downshift
Biden threatens higher taxes on oil companies if they do not work to lower gas prices
MS : Last year, “when money supply (M2) was growing by 27%Y .. it was crystal clear that 2.6%Y inflation was likely to explode higher. Fast forward to today .. M2 is now growing at just 2.5%Y.. the seeds have been sown for a sharp fall next year .. look out below.”
Goldman: U.S rates headed to 5%
Mainland Chinese investors have been NET BUYERS of Hong Kong stocks every single session in October
Exxon is taking a pretty strong swing at EU energy policy/BBG
U.S Personal savings rate ticked back down in September to 3.1%; cushion continues to evaporate as rate hovers near lowest since GFC (thread-chart)
Euro zone inflation hits record high of 10.7% as growth slows sharply
China's companies rewrite rules to declare Communist Party ties....More mainland-listed companies acknowledge 'Xi thought' in corporate constitutions / NikkeiAsia news
Australia's central bank lifts rate by quarter point, as expected. Inflation is now expected to peak around 8% later this year. Rates up, prices down….Sydney house prices have dropped by 10 per cent this year, according to latest data - ABC News
JPY : enough is enough.?.... Toyota net income down by a quarter as weak yen failed to offset higher raw material prices and semiconductor shortages
UK : Treasury insiders said that Sunak and chancellor Jeremy Hunt had agreed on Monday that while “those with the broadest shoulders should be asked to bear the greatest burden”, everybody’s taxes would go up, just when BoE is about to hike 75bps and start QT..tough
Urs Rohner und die Schuld am CS-Desaster and Credit Suisse Restructuring Involves Substantial Execution Risk/FitchRatings
37% of US small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October
ill Brazil’s Bolsonaro concede election loss? Incumbent expected to break silence today (best do it soon before it turns for the worse..)
Markets :
Chinese markets are ‘rallying’ ! just when everyone got too bearish ? see techs below, hard to know exactly how far down we could go, let’s just say it’s a lot cheaper than it was 2years ago, add some rumours that China might adjust its ‘zero covid’ policy, IF true, this is potentially BIG for anything macro going into 2023...(this was sort of denied by the Chinese foreign ministry) >>> BUY downside USDCNH 6months exp...if true this is going to move, anyway we are looking for signs of peak usd, peak inflation, peak worries etc...this would be one of them – China re-opening
Dow Jones up 14% in October, real economy awakening, as it should really, given inflation etc etc
USDollar – all about FOMC and presser, outlook or Dec and 2023 >>> the surprise INTO year-end, given strong usd long positioning, could come from aa not too hawkish Fed either pre med-terms, but that’s too political, most likely in Dec, AUD and cChina we could see a decent reaction there etc..
Equity markets : the next 200pts on SPX 500 is all down to Fed really, mini-pivot or not, call it what you wish... technically we can go to 4150 and/or re-test recent cycle lows, FWIW..tend to favour topside, but tricky road map ahead!
https://twitter.com/i/status/1586742825693192192 Lagarde '''inflation came up from...pretty much nowhere'', quell joke I’m sorry, this is so bad
Unreal, frightening, where is the accountability ?
https://twitter.com/MenthorQpro/status/1587250997440745480 Japan is burning through FX reserves at the speed of light. This is not sustainable. Next round they will start selling Treasuries and guess what that will do? Spike Treasury yields higher and make the USD stronger which weakens the Yen. And we go round and round
https://twitter.com/DavidInglesTV/status/1585400349086871552container shipping rates falling form peak (chart)
https://twitter.com/C_Barraud/status/1587325291529134087 Housing Recession | U.S. pending home sales fell 35% YoY (the largest annual decline and the fewest homes under contract in any October since at least 2015) - Redfin
*A record 7.9% of homes for sale had a price drop
https://www.bloomberg.com/news/articles/2022-10-31/us-small-business-rent-delinquency-rates-rise-sharply-in-october More Than a Third of US Small Businesses Couldn’t Pay All Their Rent in October
https://www.home.saxo/content/articles/equity/ta-hsi-a50-31102022 Technical Update - Free falling Hang Seng and China A50 could drop much lower – charts
The amount of unsold new homes increased to a 15year high in HK
https://www.ft.com/content/2d3084f1-8956-4347-8dbb-191ad1aee64b?shareType=nongift George Soros: Issuing perpetual bonds would show that Sunak is serious
The new UK premier needs to reassure financial markets after the chaos caused by Truss and Kwarteng
https://twitter.com/JavierBlas/status/1585977050170548224 Exxon is taking a pretty strong swing at EU energy policy – see thread/chart
Fed set to deliver another big rate hike, debate December downshift http://reut.rs/3WguqPS
MORGAN STANLEY: Last year, “when money supply (M2) was growing by 27%Y .. it was crystal clear that 2.6%Y inflation was likely to explode higher. Fast forward to today .. M2 is now growing at just 2.5%Y .. the seeds have been sown for a sharp fall next year .. look out below.” https://twitter.com/carlquintanilla/status/1586894471727300610 peak usd / peak inflation / peak worries etc...let’s see what FOMC ha to say
https://www.businessinsider.com/mike-wilson-morgan-stanley-federal-reserve-pivot-stock-market-outlook-2022-10?r=US&IR=T Morgan Stanley's Mike Wilson says the Fed will pivot from interest rate hikes 'sooner rather than later' to help stocks rally by his predicted 6%
Goldman: rates headed to 5% https://twitter.com/BrianSozzi/status/1587008545660305408
https://twitter.com/RobinBrooksIIF/status/1586763249671966721 Global markets don't really care who wins in Brazil today. All they want is an orderly, uncontested transition of power. If that happens, Brazil will be by far the hottest EM going into 2023. Brazilian Real will quickly go below 5.00 and converge towards our 4.50 fair value... All About real rates! https://twitter.com/RobinBrooksIIF/status/1586758972924723200
https://twitter.com/DavidInglesTV/status/1586940180526936064 Mainland Chinese investors have been NET BUYERS of Hong Kong stocks every single session in October
https://citywire.com/ch/news/swiss-national-bank-records-biggest-loss-ever/a2401241?re=102553&refea=1898423 Swiss National Bank records biggest loss ever
The central bank’s results are mainly dependent on capital markets, foreign exchange and gold.... well it’s not that simple !!....but clearly it will have some fiscal consequences..
https://twitter.com/LizAnnSonders/status/1587037801475883010 Personal savings rate ticked back down in September to 3.1%; cushion continues to evaporate as rate hovers near lowest since GFC – whaoo
https://www.fitchratings.com/research/banks/credit-suisse-restructuring-involves-substantial-execution-risk-28-10-2022 Fitch Ratings-London-28 October 2022: Credit Suisse’s planned restructuring to scale back its investment bank and reallocate capital to its global wealth-management business will involve substantial execution risk, Fitch Ratings says. The plan, announced on 27 October, does not have immediate rating implications as it is consistent with our prior expectations. It will lead to further delays in improving profitability, one of the group’s main weaknesses. Credit Suisse does not expect to reach its revised target core return on tangible equity of at least 8% before 2025. However, the restructuring, if successful, could lead to reduced earnings volatility
https://www.cnbc.com/2022/10/31/euro-zone-inflation-hits-10point7percent-in-october-.html Euro zone inflation hits record high of 10.7% as growth slows sharply
https://asia.nikkei.com/Economy/Inflation/Australia-s-central-bank-lifts-rate-by-quarter-point-as-expected Australia's central bank lifts rate by quarter point, as expected
Inflation is now expected to peak around 8% later this year
https://www.cnbc.com/2022/10/31/joe-biden-threatens-higher-taxes-on-oil-companies-amid-high-gas-prices.html that’s going a little far.. “Their profits are a windfall of war,” Biden said, referring to Russia’s war in Ukraine, which prompted Western sanctions that reduced oil supply. “It’s time for these companies to stop their war profiteering.”
https://www.bbc.com/news/uk-politics-63465935 Treasury warns of tax rises to fill financial hole
https://www.handelszeitung.ch/bilanz/credit-suisse-wie-viel-schuld-tragt-urs-rohner-am-desaster-536738?utm_term=Autofeed&utm_campaign=article_traffic&utm_medium=Social&utm_source=Twitter&twclid=24srtv4jrdic28keonavsezcna#Echobox=1664861490 Urs Rohner und die Schuld am CS-Desaster – equal to anyone in management over last 10+ years?
Have a great day
Steph & Team
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