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Goldman Sees China Rebound Coming as Covid Policy Fuels Optimism, economy to gain momentum after initial reopening impact passes, sentiment improves since Beijing tweaks Covid, property rules "This Is Unprecedented": Enron Liquidator Overseeing FTX Bankruptcy Speechless: "I Have Never Seen Anything Like This".....“A complete failure of corporate controls”: Read the wildest parts of the new FTX bankruptcy filing - astonishing - what happened to due diligence...Singapore state investor Temasek has written off its $275mn stake in cryptocurrency company FTX, saying its trust in former chief executive Sam Bankman-Fried appeared ‘misplaced’ Billionaire investor Ray Dalio says we should stop thinking that the U.S. and China are going to erupt in nuclear war Fed's Mester cheered by CPI, but says big risks remain on inflation, US inflation is unacceptably high Fed's Bullard: Even "Dovish" Policy Assumptions Require Further Rate Increases 5 to 5.25% >> he is the über hawk and data dependent, see Phily Fed below.. Is Green Hydrogen the Fuel of the future? Russia-Ukraine grain deal extended in win for food prices Collapse in shipping rates continues to look unreal … cost to ship 40-foot container from Shanghai to Los Angeles has fallen by 83% from peak, by far largest drop on record (bringing level to lowest since June 2020) As expected, The UK announced its biggest tax hikes and spending cuts in 10 years. In his autumn statement, chancellor Jeremy Hunt laid out a £55 billion ($66 billion) “belt tightening” plan for the next five years that will seek to lower government debt >>> ''what's not great for folks, may be good for UK markets'', UK gilts and GBP taken this pretty well The Federal Reserve Bank of Philadelphia's monthly manufacturing index fell to negative 19.4 in November from negative 8.7 in October, with the gauge of employment showed continued growth in hiring but at its weakest pace since June 2020 Japan's inflation has hit its highest levels in 40 years, with prices jumping up more than three and a half percent in the year to October >>> BoJ still YCC'ing...so maybe the plan is to strengthen the JPY instead.. Markets: The next few HUGE events are on 14th and 15th of Dec, when Fed, SNB, BoE and the ECB will set policy/hike, we will get another NFP and set of US inflation before that, ISM next week be interesting after weak Phily Fed yesterday The 2s10s yield curve hasn’t been this inverted in the last 25 years. The 30-year US mortgage rate moved from 7.08% to 6.61% over the last week, the largest one-week decline (-47 bps) in rates since November 1981 >>> peak worries, peak rates as long as debt remains under control !! like the UK is showing..it will be tough but it's a must The global stock market rally could be about to meet recession reality..is something that you read fair bit about now already in article and research documents, markets reached overbought conditions, momentum slowing as we get into these huge SPX500 technical levels 4'050/4'150 resistance area, 200dma is right in the middle aroun 4'075 and the 100dma is aroiund 3'910 which is exactly where we held yesterday.. USD came back a bit on Bullard comment yesterday but given weaker Phily Fed (employment data..) and if other data comes in softer between now and Dec FOMC, USD likely to come under further pressure again. GBP going just fine, AUDUSD 0.6770 Fibo lev, more around China reopening or not (USDCNH etc). USDCHF popped its head above that big 09450/.9500 area, key are on monthly charts, probably on EURCHF buying mainly.. Markets likely to trade rangy/low vols (bar any new news.) till mid-December and all the CB meetings, macro rates side of things will be awaiting all these mostly priced in hikes Liz Ann Sonders on Twitter: "Collapse in shipping rates continues to look unreal … cost to ship 40-foot container from Shanghai to Los Angeles has fallen by 83% from peak, by far largest drop on record (bringing level to lowest since June 2020) https://t.co/Of6m4uUPrY" / Twitter chart Robin Brooks on Twitter: "Foreign selling in March 2020 triggered a US Treasury market blow-up, destabilizing highly leveraged carry trades hedge funds were doing, similar to the recent UK bond market blow-up. Japan in September sold the large amount of US Treasuries EVER to fund its defense of the Yen... https://t.co/fv3ACyHCqC" / Twitter chart Otavio (Tavi) Costa on Twitter: "More yield curve inversions happening today. The Fed funds rate is now higher than 30-year yields since the Covid recession. 62% of the entire Treasury curve is now inverted. This only supports our bearish case for US stocks. https://t.co/QM2P6Sz76a" / Twitter chart Frédéric Rochat: «Energy Independence Has Never Been More Relevant» (finews.asia) OK enough talks, actions required, in ALL countries, the 'not in my back yard' must sort of stop, it's too easy to push the problem to someone else, some other country etc Philadelphia Fed factory activity index drops unexpectedly (yahoo.com) Billionaire Ray Dalio: stop thinking U.S. and China are going to erupt in nuclear war | Fortune Fed's Mester cheered by CPI, but says big risks remain on inflation (yahoo.com) Fed's Bullard: Even "dovish" policy assumptions require further rate increases | Reuters Japan's inflation hits 40-year high (yahoo.com) October data also showed a yearly jump in energy costs by over 15%. Food items were 88% more costly than a year before, led by alcoholic drinks Poll reveals public support for Brexit at all-time low | Politics News | Sky News ''let's take back control...'' "This Is Unprecedented": Enron Liquidator Overseeing FTX Bankruptcy Speechless: "I Have Never Seen Anything Like This" | ZeroHedge this will soon be a must watch on Netflix or whatever provider FTX’s new CEO is steering the bankruptcy with experienced help (qz.com) Is Green Hydrogen The Fuel Of The Future? This CEO Is Betting On It (forbes.com) Pompeo dings Trump: GOP needs leader who doesn’t claim ‘victimhood’ | The Hill FDA says lab-grown meat is safe for human consumption (cnbc.com) not going to rush just yet.. Russia-Ukraine grain deal extended in win for food prices | AP News From income tax to pensions: What the Autumn statement means for you (yahoo.com) Have a great day Team PVM

UK's Jeremy Hunt to unveil £54bn of tax rises and spending cuts. The chancellor will insist to MPs that his autumn statement puts the UK on a "balanced path to stability" >>>> The OBR statement is at 2:30 GMT is very important for Gilts and GBP.. (either way) After two years of Democratic control of both the House and the Senate, the power dynamic in Washington will now shift Federal Reserve Governor Christopher Waller said Wednesday he’s open to reducing the level of interest rate increases to half a percentage point in December >>> 50bps in Dec is no surprise to anyone, priced in by markets. The likes of JPM look for 50bps in Dec, followed by a couple of 25bps in Q1 2023, with falling inflation and rising unemployment, so they expect Fed to ease policy from early 2024 >>> pretty extreme inversion! essentially, they are agreeing to what the curve saying in markets, 150 over 2 years …with 110 or so hikes priced . Quite funky Goldman Sachs just increased its forecast for the FED's terminal rate to 5-5.25% from 4.75-5.0% Once valued at US$10 billion, crypto empire behind Genesis caught up in FTX turmoil U:S Strategic Petroleum Reserve drained to March 1984 levels U.S. retail sales rise solidly; fourth-quarter GDP estimates raised Markets : MOVE Index - vol decline key for markets, vol decline has been huge since mid-October, helping overall market volatily lower, geo-politics (hopefully) easing still, although rocked in Poland this week, although note the index has moved back up a little last week or so Equity markets stopped in their track with the Poland news, but not much lower it's fair to say, SPX500 4'050 and 4'150 huge area/resistance medium-term still, acting as potential target for markets, support 3'925 area (bombed out markets, ARKK, non-profitable index etc recovered sharply from the mid-October lows (top in bond vols, peak inflation, peak USD..) USDollar remains on backfoot, GBP looking a little perky still going into UK Budget today, CABLE actually hit a 1.2020+ this week already, we've come a long way since we called for a low in GBP (after Kamikaze budget-overshoot etc), but perhaps 1.25-1.30 CABLE is not out of question if the USDollar remain soft into year-end Markets prone to wild short-term moves though still, markets remain pretty 'illiquid^' underneath going into Thanksgiving, World Cup, CB Dec meetings including SNB and year-end stuff - It WILL remain funky, though bond market vol lower helping, in many ways the bigger potentials move should come from China re-opening /how fast, going into 2023 Goldman says it sees a slightly longer string of 25 bps increases in '23 that will take the funds rate above 5% in May >>>>> Reasons: 1) Fiscal tightening has run its course 2) Inflation could remain "uncomfortably high" 3) Market overreactions prematurely ease financial conditions Autumn Statement 2022 live: Jeremy Hunt to unveil £54bn of tax rises and spending cuts (telegraph.co.uk) Republicans win control of House of Representatives in US midterm elections, projections show | US News | Sky News U.S. retail sales rise solidly; fourth-quarter GDP estimates raised | Reuters Republicans win U.S. House majority, setting stage for divided government | Reuters Fed's Waller says he's open to a half-point hike at December meeting (cnbc.com) Once valued at US$10 billion, crypto empire behind Genesis caught up in FTX turmoil | The Straits Times Jan. 6 panel hits back at Pence over new interview | The Hill A Lab-Grown Meat Startup Gets the FDA’s Stamp of Approval | WIRED Former Berkshire Exec Asks for Leniency in Elizabeth Holmes' Sentence (businessinsider.com) Reports of China reopening have translated to sharp stock market rises; are they sustainable? (thebull.com.au) Home Seller Offers a Free Tesla to Attract Buyers as New Zealand Prices Tumble - Bloomberg AUDUSD key Fibo level as well around 0.6770

World leaders will state that today’s era “must not be of war” and will condemn threats to use nuclear weapons at the G20 summit in Bali, reflecting rising global anxiety around Russia’s war against Ukraine, RU isolated, Biden meats Xi, geo-politics calming down - we can hope ! U.S. President Joe Biden said there “need not be a new Cold War” between the U.S. and China, following a three-hour summit meeting with Chinese President Xi Jinping in Indonesia Mr Sunak has indicated he will abandon his predecessor Liz Truss’s push to formally recategorise China as a “threat” to the UK Goldman Sachs forecasts that core PCE will fall from 5.1% now to 2.9% by Dec 2023, as supply chain clearing lowers good prices, wage growth starts to slow and rents moderate. Fun fact: "1 million apartments are under construction or permitted, the largest pipeline since 1974." Fed Vice Chair Brainard says it may ‘soon’ be appropriate to move to slower pace of rate hikes, she highlighted two-sided risks as rates become more restrictive BoJ and BoE interventions in USDJPY and Gilts, got a lot of mockery, the whole markets were full of 'it will never work', we didn't, recall 'do not underestimate BoJ'... and here we are Quants Forced to Shed $225 Billion of Short Bets in Big Squeeze - Bloomberg Japan’s Economic Recovery Slammed Back into Reverse by Weak Yen - Bloomberg-Chipping In: Warren Buffett’s Berkshire Hathaway Takes $4 Billion Stake In Taiwanese Semiconductor Giant TSMC Markets : SPX500 4'050 key for 4'150 possible major resistance zone, 200dma etc, shorts have evaporated quickly and are at March 2020 lows already according to GS. Downside we need to hold 3'925 area in short-term for higher USDollar stays offered, USDCHF at the cusp of major fall-out, with SNB's chatters and general $ weakness. AUDUSD major Fibo level around 0.6775, CABLE much will depend on UK budget perception tomorrow (1.25 before xmas?), USDJPY sell rallies while sub 141-142JPY, USDCNH look for further downside, geopolitics easing and China eventually reopening GOLD, Silver, metals all higher, quite sharply may I add..finally Crude a little softer - welcome move for inflation PowerPoint Presentation (podbean.com) to charts in there - have a look and Squeeze on USD and sentiment hitting pivotal areas (podbean.com) Quants Forced to Shed $225 Billion of Short Bets in Big Squeeze - Bloomberg *Link: https://bloom.bg/3Geu8n9 G20 leaders to agree draft communiqué rejecting ‘era of war’ | Financial Times World leaders will state that today’s era “must not be of war” and will condemn threats to use nuclear weapons at the G20 summit in Bali, reflecting rising global anxiety around Russia’s war against Ukraine. A draft communiqué agreed by diplomats, seen by the Financial Times and confirmed by two delegations, said: “Most members strongly condemned the war in Ukraine and stressed it is causing immense human suffering and exacerbating existing fragilities in the global economy.” Keynesian Policies Have Left Big Debt, High Inflation, & Weak Growth | ZeroHedge Crypto.com CEO Kris Marszalek says its exposure to FTX was limited to $10 million | Fortune Biden sees no need for 'new Cold War' with China after meeting with Xi Jinping (cnbc.com) Events and webinars | Saxo Bank (home.saxo) 12:00 UTC With interest rates on the rise, bonds are staging a comeback in many investors’ portfolios. But what are bonds – and how can you make them part of your investing strategy? Join us for an exclusive webinar, taking place 15 November 2022 at 13:00 (UTC+01), as Saxo’s Head of Fixed Income, Nicolai Dahl Wallin, presents an overview of today’s bond market, the outlook for the future and what to look out for if you’re considering adding bonds to your portfolio. Fed Vice Chair Brainard says it may 'soon' be appropriate to move to slower pace of rate hikes (cnbc.com) World’s biggest Crypto fund hits record 42% discount to value of #Bitcoin it holds in the wake of exchange FTX’s shock bankruptcy filing. #GBTC price continues to plunge below the value of underlying coins. https://bloomberg.com/news/articles/2022-11-14/-broken-crypto-fund-hits-record-42-discount-as-etfs-hum-along?sref=R17xFhjo G20 latest: Softening stance on China 'completely wrong', Iain Duncan Smith warns Rishi Sunak - live updates (telegraph.co.uk) Chipping In: Warren Buffett’s Berkshire Hathaway Takes $4 Billion Stake In Taiwanese Semiconductor Giant TSMC (msn.com) Japan’s Economic Recovery Slammed Back Into Reverse by Weak Yen - Bloomberg *Link: https://bloom.bg/3EzFJvW USDCHF - always tricky these long-term charts, but just to put things in picture - downside pressure remains while we are below 0.9450 area - (for now) probably and overshoot from Friday's comments from Jordan

U.S Senate stays in Democratic hands, Trump a liability to Reps/WSJ Fed' Waller trying to put breaks on market's enthusiasm, Fed’s Waller Says There’s a ‘Ways to Go’ Before Rate Hikes Done FTX and al, what a circus, we might well go into crypto ice age for a while The Swiss National Bank Began Unloading its Biggest US Stock Holdings, incl. Apple, Microsoft, Amazon, Alphabet, Meta Finance minister Jeremy Hunt said he will set out tax rises and spending cuts this week to show Britain can fix its public finances and restore its economic credibility after financial market chaos sparked by former prime minister Liz Truss, big day on Thursday for UK and this might be useful : NI Protocol: UK-Irish relations have improved significantly - Irish PM SNB Chairman says monetary policy not sufficiently restrictive enough. US President Biden and Chinese President Xi Jinping met in Bali, ready to talk seriously he says, let's have it gents Goldman Sachs said it expects a "significant" decline in U.S. inflation next year due to easing in supply chain constraints, a peak in shelter inflation and slower wage growth Markets : Crypto malaise might be profound, most likely will be, how on earth PF's and other prominent HF name will try to get out, having said this for now this remains a crypto issuse, it doesn't have to spread to rest of the market USD weakened sharply last week, recovering overnight on Waller and oversold short-term conditions. USDCHF got knocked for three on Friday on Jordan's comments Bonds and equity markets rallied hard last week, time to be prudent, but talks CTRA buying above SPX500 4'050+ would be pretty big (talks 100bn+), now you can also add share buybacks into equation and the likes of GS talks about daily demand of anything up to $10bn per day till year-end! MOVE index, remember a few weeks back SAXO pointed out how important it was to markets overall (totally agreed with Steen, and coincided with peak inflation, peak usd, peak worrie setc)... valuation came our client's way, we increased risk in the mini panic 2months ago for our clients..>>> we needed bond vol to calm down for markets to calm down, in the space of 6weeks the index has collapsed from 160 to 110 area.. It's been a pretty volatile year for Equity markets, but we are happy to report that our philosophy and trust in our Investment Matrix has kept and sustained our client's wealth throughout these difficult times USDCHF tumbles to three-month lows on SNB Jordan’s comments (fxstreet.com) UK must raise taxes and cut spending, Hunt says ahead of budget (yahoo.com) Events and webinars | Saxo Bank (home.saxo) - tomorrow 'all you need to know about bonds' and more from Saxo - Bear markets have the most spectacular squeezes (podbean.com) daily + slide deck. Today we continue to find reason to question the quality of this melt-up in equity markets after last Thursday's soft US CPI print, with the first prominent Fed official already out overnight with pushback against this drop in US yields. Still, that's not to say that the move can't extend in the short term, as the market is also hoping that a shift in China's Zero Covid policy is coming. Xi and Biden will meet today ahead of the G20 meeting. We also look at stocks to watch this week, an important week for earnings, the big moves in metals both precious and industrial, the US dollar and much more The Trump Liability for the GOP - WSJ Fed’s Waller Says There’s a ‘Ways to Go’ Before Rate Hikes Done (yahoo.com) Goldman Sachs expects "significant" decline in U.S. inflation in 2023 (yahoo.com) Quarterback Tom Brady thaws Bitcoin from a block of ice in a new ad for FTX | Fortune Cheddar Flow on Twitter: "Just when you thought it couldn’t get worse 😬 “Bankman-Fried implemented what the two people described as a “back door” in FTX’s book-keeping system…” The back door let him move $10 Billion in funds to Alameda without triggering internal compliance or accounting https://t.co/gj5UQ6KpMJ" / Twitter The Swiss National Bank Began Unloading its Biggest US Stock Holdings, incl. Apple, Microsoft, Amazon, Alphabet, Meta | Wolf Street NI Protocol: UK-Irish relations have improved significantly - Irish PM - BBC News Have a great day Team PVM

US inflation cools in October. Overall #inflation as measured by CPI rose 7.7% YoY, way below the 7.9% est. Core CPI, increased 6.3% YoY, below the 6.5% YoY expected... forced one of the larger short squeeze days in memory in the ARKK like stocks that had been bombed out lately..duration rallies, long-end rallies 30bp or so and USDollar has one of its sharpest daily (few hours) decline in years...we talked a lot recently about consensus usd positioning... >>>> Strip away housing from core and CPI fell for the first time since May 2020, however with inflation still at 7.7% the FED cannot turn outright dovish (or maybe they do but will do more QT...) #China supercharges the softer U.S infl data/peak inflation, peak usd, peak worries view...with easing of quarantine & flight bans in a significant change of the Covid Zero policy, anything China limit up pretty much. (HSI Tech was too oversold...), Cathay Airlines will increase passenger flights between China mainland and Hong Kong Fed's Mester "monetary policy is going to need to be more restrictive", kind of stopped the short-covering rally in eq with SPX right on resistance levels around 3'920 (and USD turned as well) Layoffs coming to AMZN next: employees in certain divisions were told to look for jobs elsewhere in the company as their teams were being suspended or shut: Dow Jones FTX tapped into customer accounts to fund risky bets, Setting up its downfall. FTX Chief Executive Sam Bankman-Fried told an investor this week that Alameda owes FTX about $10bn...Madoff would be proud of Sam! UK and EU ‘not far apart’ on NI Protocol, says Brussels’ ambassador to London The crypto world 'issues' not over, in theory it won't matter too much to the rest of the market but might be a pretty harsh reality with those heavily involved directly, I fear Pension Fund will think twice and for a much longer time horizon before stepping in again (Ontario Teachers only to name one, let's hope not too many other PF's got involved!!.. far too many celebrities got involved to pump it all up, too little or no regulations, there were so many red flags all along, ignored by too many..sadly Elon Musk 'tells Twitter staff at all-hands meeting that bankruptcy is not out of the question' - The banks selling Elon’s Twitter debt were getting bids of 60¢ on the dollar *before* he said bankruptcy is possible (it's his company now..) Markets : MASSIVE turn on the USDollar, bonds, GOLD, equity (duration, ARKK etc) GOLD and 2y yields UST... >>> were all those we pointed out in recent weeks that will react the quickest on any signs of 'peak worries' USDJPY broke the big 145JPY level and never looked back, AUDUSD 0.6525+, CABLE 1.16+, EURUSD 1.0075+ only to name a few pairs, as long we remain above those levels, the USD long consensus was so big, we can still see some pain there into year-end... GOLD...In Gold we trust (long-term), even better XPT BONDS 30-40bps lower across curve, pretty brutal, as discussed recently, the Terminal rate is around 4.5/5% and the market had that priced in pretty much, now we should and will most likely get 50bps in Dec from Fed, but the market is taking the view it's the top (doesn't mean rates go lower for now, IMHO...patience, ) Equity markets, break of the 3925+ SPX500 confirmed for perhaps as high as 4150 big resistance area, duration/ARKK/non-profitable index etc which had been hammered/most shorted...., reacted the strongest, as you would imagine Europe's Gas Use Slides 22% as Households Keep the Heating off (mild weather helping..clearly too) Crypto - still shaky ...the moves were fast and brutal, totally Algo tastic driven for the first 4-5pct! in Eq. Huge post-CPI price action: and more overnight as China markets in re-opening/rally mode! S&P +5.3% = best day since Apr 2020 Nasdaq +7% = the best day since 2020 5yr yield biggest 1-day drop since 2009 DXY -2.25% = the worst day since 2015 Most shorted stocks jump almost 11% in one of the most violent rallies ever - more in this thread from the excellent Liz Liz Ann Sonders on Twitter: "This year’s losers were today’s winners; Tech pulled ahead with stunning 8.3% gain, followed by REITs & Cons Discr with gains of 7.7% … NASDAQ surged by 7.4%, which brings MTD gain to only 1.1% and YTD loss to -29% … Russell 1000 Value continues to lead MTD https://t.co/q7jct19XdV" / Twitter https://s358.podbean.com/pb/c3df747106c5b99f30211747013951c5/636e17a5/data1/fs56/5709963/uploads/2022_11_11_SaxoMarketCall.pdf?pbss=9e8f411a-f227-5706-b742-dc0151b61c72 Great charts from Saxo's daily and CPI print triggers historic day across markets (podbean.com) Holger Zschaepitz on Twitter: "Good Morning from #Germany, where energy crisis is easing somewhat. Electricity price w/1y delivery now just >€300 per MWh, while the price of gas is ~€100 per MWh. But that's also due to the mild weather. The real test to come next week, when temperatures are expected to drop. https://t.co/SEB6EfBKbq" / Twitter StockMKTNewz - Evan on Twitter: ""The October report supports the idea that we are moving past the firmest period for inflation and that a decent amount of the inflation we have seen over the past year will prove to be temporary or TRANSITORY in nature" - JPMorgan https://t.co/GARPzbZDD5" / Twitter jeroen blokland on Twitter: "On a 3-month annualized basis, flexible prices dropped by 0.7%. Sticky prices, however, were 'steady' at 6.9% annualized. https://t.co/bxlsTVMSF5" / Twitter UK and EU 'not far apart' on NI Protocol, says Brussels ambassador (cityam.com) FTX’s Bankman-Fried Quietly Invested More than $500 Million in Sequoia and Other VCs — The Information Sam Bankman-Fried invested hundreds of millions in Sequoia Capital, Paradigm, Multicoin and Altimeter, the same VC firms that backed FTX. These ties show just how deeply entangled Silicon Valley VC firms are in SBF's collapsing crypto empire. Who are the notable investors going down as FTX collapses? | Cryptopolitan The FTX ship has sunk, taking with it a number of prominent investors. The last several days have been a roller coaster. Binance is abandoning its intentions to acquire the embattled crypto exchange on Wednesday. Sam Bankman-crypto Fried’s enterprise is on the edge of implosion as a result. Private investors valued FTX at $32 billion earlier this year. SoftBank Vision Fund Loses $7.2 Billion as Writedowns Persist (9984) - Bloomberg US election: Trump tears into rising Republican rival DeSantis - BBC News no way back Donald Minister warns of ‘catastrophic’ power interruptions unless gas accepted as transitional fuel – The Irish Times Minister warns of ‘catastrophic’ power interruptions unless gas accepted as transitional fuel have a great day team PVM

FTX and crypto world, all that can be said is that there will be massive changes going forward, too many 'strange stuff gone on'' to be polite, too many people got caught with it all, as usual SEC and others get in there too late... : risk is the whole story is far from over, it can get worse, giant margin call etc etc. Investments in FTX MtM down to zero. FTX might have been some sort of very bad combination of LEHL (illiquid, undercapitalized) and something like MF Global (illegal use of client funds to fund its own terrible investments). The regulators probably quite happy in a way, ''we told you so' a while back, for now at least there does not seem to be much contagion but beware! Watch stuff like Tether etc, if stocks go down from here (CPI this afternoon), the Fed didn't seem to mind too much recently, if a mainstream bank was caught into this crypto deleverage then the CB will notice though, as long as it is specific to crypto, suspect FED won't mind too much, we still hvae 60ish bps priced for December Fed meeting, still think 50bps most likely scenario in Dec U.S med terms take away, IMHO, Reps will 'have' to move on and away from Trump fast for De Santis, and the Dems should do the same with Biden, and go with someone like Buttigieg Republicans limped toward control of the House as Democrats eyed maintaining the Senate in an election that boded better for Joe Biden and worse for Donald Trump than forecast. Biden said he still plans to run again for president in 2024. Despite GOP themes of inflation and crime, voters also focused on abortion rights and the threat to democracy itself. Still, the fate of the president's agenda hangs in the balance and government gridlock looms Chicago #Fed’s Evans Says It’s Time to Slow Pace of Rate Hikes >>> something breaking underneath...shadow banking and crypto, techs, ARKK and the non-profitable Index type names..Bond strategists-economists see terminal rate 4.75/5.00%-BBG France just legislated that every parking lot for 80 cars or more must be covered by solar panels that’s 11GW of new solar (same as 10 new nuclear reactors) powering millions of homes - zero new land needed - brilliant idea clearly The pace of #earnings downgrades has accelerated in the US, especially compared to Europe, as a Citigroup Inc. gauge of US earnings changes has had 23 consecutive negative prints, the longest losing streak since early 2020 - Bloomberg IEA's Birol: OPEC+ Production Cuts May Put Further Upward Pressure on Inflation and Weaken the Global Economy. Oil Prices Flirting with $100 a Barrel "Real Risk" for Global Economy Credit-Suisse, the embattled Swiss lender is marketing an 11-year fixed-to-floating-rate dollar bond at around 9 per cent – levels more consistent with where high-yield borrowers are currently trading, according to Bloomberg indexes. Russian troops ordered to leave Kherson. Israeli military analyst: 70% of Russia's Black Sea Fleet is incapacitated. "This does not mean that they are drowned, just incapacitated, meaning they can't carry out any offensive actions," Yigal Levin, former officer of the Israel Défense Forces, told Radio NV U.S Techs sell-off everywhere, retail consumers hurt by higher inflation, real-estate falling at fastest pace since 2011, industrial manufacturing activity softer, financial layoffs beginning on relatively large scale on revenues decline, clearly not very good signs Markets : Crypto world going for the big selloff by the looks, where was BTC in March 2020 - just before the big QE from the FED and all other CB's ?... with many stocks back to pre-covid levels, like Disney yesterday, why shouldn't BTC go back down towars 7K area, ETH was <200$.. >>> this is not a call just an observation ARK Innovation ETF sell-off deepens as crypto-related stocks like Robinhood, Coinbase, Block & Roblox crash, ARK now down almost 80% from high. Gold to take back its right as 'the' safe heaven USD weakened into med-term elections; this may have to reverse on a solid CPI and/or CPI is softer, and markets start to price 25bps for Dec and a shift etc etc U.S 10's bond auction last night was pretty awful, biggest tail since 2016 (3.5bps), 30's coming now Equity markets were also bought into med-terms, struggling, though for now we keep in sight 3600/3900 SPX500 range, with the soft weak names still under pressure, real economy vs the rest struggling (crypto, ARKK, GS non profitable companies type index, highly leverage balance sheet, China still not really recovering etc) we could see some pretty decent moves either way from after this CPI, as it is likely to set the tone for year-end Reporter: "Do you think @elonmusk is a threat to national security?" Biden: "It's worthy of being looked at." U.S. Treasury's $35 billion auction of 10-year notes was 'absolutely awful,' says Bleakley's Boockvar - MarketWatch Margin call contagion from crypto (podbean.com) Saxo : Today we look at the sudden shift of the plot over the last 24 hours as the crypto contagion effects from the meltdown in that space have reached sufficient magnitude to impact sentiment across markets. We emphasize caution on the network effects among many clusters of assets held by the same hands holding crypto. Also, a look at where we are with the equity risk premium as investors better not hope for "normal" equity valuations. A glance at FX and the USD rising on liquidity concerns and brushing off the drop in US treasury yields, which brings into question the reaction function around today's October US CPI release, which may not have the impact previously anticipated, even on a surprise Here is what the FED was saying approx 1 year ago : - interest rates will not have to rise until 2024 - don't worry, we are expecting a safe landing - a recession is very unlikely - housing market is not a bubble - and the best one, inflation is transitory, will fall to 2% in 2022 - literally all statements were wrong - ECB is still wrong and blaming global warming for higher inflation! Bitcoin's electrical cost has just been breached for the 2nd time only in 5 years. The electrical bill for the average miner is now greater than the income earnt Contrary to Evans, Richmond Fed President Tom Barkin says the central bank has to accept higher risks of causing a recession as the price of getting control of inflation: "If we back off for fear of a downturn, inflation comes back even stronger and requires even more restraint." Ontario Teachers’ Pension Plan faces a hit on investment in crypto trading platform FTX - The Globe and Mail got out of energy, oil and bought into crypto's...The irony of Ontario Teachers Pension Plan investing in FTX, which is actually banned in Ontario (because Canadian regulators deemed them too risky)... Authorities raid UBS offices in Germany - Citywire Binance-FTX: Crypto industry seeks to limit amount of ‘blood in the streets,’ Smartmedia co-founder (yahoo.com) The Block: Multicoin Capital hit by FTX collapse, with 10% of its fund's AUM stuck on the exchange Meta laying off more than 11,000 employees: Read Zuckerberg's letter announcing the cuts (cnbc.com) Mark Zuckerberg apologizes as #Meta announces 11,000 jobs cut. Says ‘I got this wrong.’ Job cuts represent ~13% of Meta’s employees BUT that's just about 1/3rd of the jobs Zuck has created since the pandemic Otavio (Tavi) Costa on Twitter: "The mega cap stocks-to-S&P 500 ratio just broke down from a decade-long support. While perceived as safe, FAANG and other large companies are in free fall relative to the overall market. These stocks remain historically expensive and there is likely more downside ahead. https://t.co/sERiGenMqf" / Twitter Marks & Spencer profit dented as Ocado joint venture books £0.7m loss (cityam.com) Brits told they should brace themselves for even higher food and drink prices (cityam.com) Nassim Nicholas Taleb on Twitter: "There is no such thing as a "liquidity" crisis with cryptos. A liquidity crisis is for something that has some hard intrinsic value. This is just a crisis." / Twitter and this is the real issue imho The Block: Lack of FTX buyer would leave 'giant hole' in crypto markets: Circle CEO Swiss government takes further measures to prevent energy crunch - SWI swissinfo.ch ‘This Is Ron DeSantis’ Party’: ‘Morning Joe’ Panel Says Trump ‘Lost’ America | The Daily Caller Trump was furious yesterday, particularly about Mehmet Oz, and was blaming everyone who advised him to back Oz -- including his wife, describing it as not her best decision, according to people close to him Democrat beats Trump-backed election denier in key Michigan race | US midterm elections 2022 | The Guardian Peter Schiff: The Gold Train Has Left the Station | SchiffGold Iran's army says "rioters" will have no place in country if order given by supreme leader - Mehr | Reuters Russia says troops leaving strategic Kherson, Ukraine doubts full pullout | Reuters Challenges to financial stability | Sveriges Riksbank “It is not the Riksbanks role to facilitate individuals participants who have taken excessive risks” Adidas warns of big earnings hit after ending Ye partnership (cnbc.com) As recently as June of this year, Credit Suisse "aced" the Fed's stress test. And now, 4 months later, CS was forced to sell assets, fire thousands and raise billions in emergency capital ... at very expensive levels ! Credit Suisse forced to pay junk-level yields for cash infusion | The Straits Times Beyond Meat reports wider-than-expected loss, falling revenue (msn.com) ..Sales down 22.5% in the last 3 months. Losses up by 180%, for every $1 of product it sells costs $1.82 to make........... Rishi Sunak seeks to fix relations with Nicola Sturgeon and Mark Drakeford at summit with devolved governments – UK politics live (theguardian.com) Have a great day Team PVM

Crypto’s tumbled again after Binance chief CZ Zhao surprised that market with a move to take over Bankman-Fried's FTX.com, which Zhao said was seeing a significant liquidity crunch. Some linked the jitters to a Zhao tweet that the letter of intent was nonbinding…. BTC slumped nearly 20%, and just about every other coin was hit. The potential takeover comes after a bitter feud between the two founders. SBF's net worth shrank to about $1 billion from $15.6 billion a day earlier, just a few days ago..."FTX is fine," Sam Bankman-Fried tweeted. But it wasn’t Trump Warns Freshly Re-elected Governor DeSantis Against Running for President In 2024: 'He Could Hurt Himself Badly'. Donald Trump expected to emerge from mid-terms as kingmaker.... Looks more likely that he’s been a drag on Republican hopes. Interesting to see if that affects his supposed “major announcement” next week. Or even if it happens. De Santis the new leader IMHO... which retires Trump - Yesterday Trump was rated by the betting markets as having a 60% chance of securing the WH2024 Republican nomination. That's now dropped to below 40% Goldman: We cut our 2023 S&P 500 EPS growth forecast to 0% as weak 3Q margins presage a headwind next year The German government plans to increase net debt issuance to €45bn in 2023, up from initial estimates of €17bn. A headline worth 1 basis point on the Bund….no wonder Weidmann wasn’t happy and quiet a short while ago In France, all large parking lots now have to be covered by solar panels TSLA -lots of bearish chatters – see charts below H&S etc One of China’s inflation gauges drops for the first time since 2020. Tencent, ByteDance, Alibaba founders see fortunes plunge as China billionaire list loses nearly 300 members French carmaker Renault is separating into five businesses. It’s partnering with China’s Geely to work on gas engines and hybrid tech, Google to develop software, and chipmaker Qualcomm to develop its new EV unit Germany blocks the sale of Elmos Semiconductor's facility to a Chinese firm, a sign of growing concern about Chinese access to strategic assets Markets : SPX500 3600/3900 still - awaiting med-terms confirmation, gridlock now a bad thing for markets - keeps the extremes out of the picture, left or right, keep large promises and spending at bay and thus helps talks of peak inflation, peak usd, peak worries etc USD holding where it should, 145JPY, below 1.0075 EURO and AUDUSD 0.6525 etc BTC and crypto's not exactly the inflation hedge they were meant to be GOLD higher on crashing crypto and slightly softer USD (chart - long-term break out?) https://www.cnbc.com/2022/11/09/one-of-chinas-inflation-gauges-drops-for-the-first-time-since-2020.html One of China’s inflation gauges drops for the first time since 2020 https://s355.podbean.com/pb/16fdb68baab25b1ce06ca2d101a4aab1/636b7232/data1/fs56/5709963/uploads/2022_11_09_SaxoMarketCall.pdf?pbss=469b98bc-6a49-5ac6-b8d7-673c982dbc84 Saxo slide deck - great stuff to follow - charts Otavio (Tavi) Costa (@TaviCosta) / Twitter Gold chart https://twitter.com/Schuldensuehner/status/1590239630133465088 FTX Token now down 92% from ATH rocked by the collapse of FTX Empire & the drama over potential acquisition of FTX by Binance. FTX was a huge player. According to CoinGecko, FTX was the 4th-largest crypto exchange by volume so much of it is reminiscent of the GFC, credit unwind.. https://qz.com/binance-goes-to-war-on-ftx-tokens-then-sweeps-in-to-bu-1849756069 Binance goes to war on FTX tokens, then sweeps in to buy all of FTX Two crypto titans clashed and made up in the most sensational way jonwu.eth on Twitter: "FTX was the world's 3rd largest crypto exchange. Today it's said to be insolvent and in the midst of an acquisition by Binance. Here's everything you need to know about Alameda Research and the collapse of FTX: 👇" / Twitter https://www.scmp.com/business/china-business/article/3198853/tencent-bytedance-alibaba-founders-see-fortunes-plunge-china-billionaire-list-loses-nearly-300 Tencent, ByteDance, Alibaba founders see fortunes plunge as China billionaire list loses nearly 300 members The number of billionaires on the annual Hurun China Rich List falls to 1,305, while their overall wealth declines by 18 per cent to US$3.5 trillion Nongfu Spring founder Zhong Shanshan tops the list for the second year, while Hong Kong tycoon Li Ka-shing surpasses Pony Ma and Jack Ma https://www.fxstreet.com/news/here-is-what-you-need-to-know-about-disney-dis-stock-202211090701 DIS - On Tuesday, Disney reported that its profit and major revenue divisions for the fiscal fourth quarter fell short of projections. The company also cautioned that the high growth in streaming for its Disney+ platform might slow down going forward. https://twitter.com/KobeissiLetter Layoffs This Month (% of Workers) : 1. Twitter: 50% 2. Cameo: 25% 3. Robinhood: 23% 4. Intel: 20% 5. Snapchat: 20% 6. Coinbase: 18% 7. Opendoor: 18% 8. Stripe: 14% 9. Lyft: 13% 10. Shopify: 10% 11. Meta: “Thousands” 12. Apple: Hiring Freeze 13. Amazon: Hiring Freeze https://electrek.co/2022/11/08/france-require-parking-lots-be-covered-in-solar-panels/ In France, all large parking lots now have to be covered by solar panels https://twitter.com/PeterLBrandt/status/1589655299480506370 Lots of chatter about TSLA – so here are a few charts H&S etc https://www.cnbc.com/2022/11/08/renault-and-google-team-up-to-develop-a-software-defined-vehicle.html Renault and Google team up to develop a ‘software defined’ vehicle Chinese iPhone plant still under strict COVID curbs despite lift of lockdown http://reut.rs/3tg1Tww Mainland Chinese investors have been net buyers of Hong Kong stocks every single day since late September. https://bloomberg.com/news/articles/2022-11-09/china-investors-snap-up-hong-kong-tech-stocks-in-buying-spree?srnd=premium-asia Jeremy McCrea, CFA on Twitter: "Energy is now 6% of the S&P 500. From a low of 2%, this move higher likely forces many more institutional investors to put Oil & Gas on the radar and look down-market to play catch-up. This also likely leads to some spill-over capital into CDN Oil & Gas #investing #OOTT #oilgas/1 https://t.co/QUvNKr0ImP" / Twitter

U.S mid-term elections: the anticipation has been that a clean sweep from Republicans would mean les spending, thus less inflation, and the market has been pricing this to a certain extent on the USdollar and risk perhaps, although UST’s doing their own things, 10’s UST 4.22% and we have a load of auctions this week too to deal with over next few days, final results could take days, with recount and challenges if very close… In reality, unless Republicans win big, markets should not price anything hugely different, and we have U.S CPI on Thursday to look forward too! Few major headlines that could change a few things in the macro world over next few weeks, aside from U.S CPI and med-terms, we have Senior WH officials in undisclosed talks with top Putin aides, China zero-Covid policy exit (sooner or later, in their own timeline, and Scholz was asking China to press Russia to end its war last week, perhaps not a coincidence the WH trying to organise few talks now.. There's only a 35% chance that the US suffers a recession in the next year, top Goldman Sachs economist says One year ago…..the median forecast in Wall Street's "year ahead" outlooks was 5,075 on the S&P500 – now most are for around 3600.. Americans' confidence in home buying has fallen to its lowest level since Fannie Mae survey began Stocks are in the process of bottoming and the Fed won't raise rates as far as Powell suggested, market veteran Ed Yardeni says Morgan Stanley & JPM analysts see the US equity rally continuing in the short term, in part on less rate volatility. MS's Wilson sees Republican wins in midterms as fuelling gains in Treasuries (& thus stocks) due to the prospect of less fiscal spending Rishi Sunak and Ursula von der Leyen agree to 'work together' to END NI Protocol row – that would be great start! It’s a small number, but in China in matters greatly: China reported some 7,700 new local COVID cases for Monday vs 5,500 a day earlier. China’s Lockdowns Fail to Contain Covid as People’s Anger Grows. National Covid infections rise to highest in over six months. Clash between residents and Covid officers leads to arrests-BBG BOE's Pill: We are not going to move at a pre-defined pace at every meeting >> always keep the market guessing, always, meanwhile... UK Grocery Inflation Hit Record 14.7% In October Used car prices are now down 15% over the last 9 months, the largest 9-month decline on record with data going back to 2008. This was a leading indicator of higher inflation rates in 2020 and the recent downturn is likely a leading indicator of lower inflation rates to come/thread, Fed Loan Officer Survey just released...Banks are tightening credit criteria and raising the cost of business loans(thread-charts) and Housing "affordability is deteriorating faster than at any point in our data history, and with the recent runup in mortgage rates, the pace of that deterioration just took another step higher" -Morgan Stanley (Thread-charts) Germany's economic advisory council will recommend govt raise taxes on the wealthy to help finance multi-billion Euro relief packages it has agreed to fight energy crisis "A plan by ministers to review or repeal all EU laws on the UK statute book by the end of 2023 has suffered another setback after the discovery of 1,400 additional pieces of legislation" Japan's Cabinet Approves Second Supplementary Budget Spending Worth 29.1 Trln Yen for This Fiscal Year to Fund an Economic Stimulus Package – MOF, they need to speak to the BoJ.. and Japan's population problem forces changes to social security Trump Says, "Big Announcement" Coming on Nov. 15 Amid Expectations of Presidential Bid The ECB needs to continue increasing interest rates even if that weighs on economic output, according to Bundesbank President Joachim Nagel Markets : SPX500 3600/3900 range and 10pct possible on either side on a decisive break. Much more going on underneath as usual, QQQ-growthy stocks continue to struggle,loss-making companies missing earnings getting punished hard, value, solid balance-sheet doing just fine together with energy still, the longer rates/inflation stay firm (not necessarily firmer – we are looking for a peak inflation, rates, usd scenario over next few weeks/months), the longer this strategy will outperform growth. Finally, U.S investors are most bullish since March – Saxo chart pack below UST’s, bonds making new lows, taking Friday lows in fact, the whole curve is under pressure with 3,10 and 30y auctions this week. Also, it is a refunding month, so auctions sizes are larger for 10s and 30s.. BTC and few others down 5% suddenly even with USD down and risk slightly up (although I would put the coins in the qqq-growthy-loss making group of companies, so under pressure with higher rates etc), although FTX tensions – see below – very most likely the real reason USDollar, DXY – pretty key support ahead of med-terms and U.S CPI – Friday’s reaction was quite specific to med-terms, but let’s see https://twitter.com/charliebilello/status/1589714198527102976 Used car prices are now down 15% over the last 9 months, the largest 9-month decline on record with data going back to 2008. This was a leading indicator of higher inflation rates in 2020 and the recent downturn is likely a leading indicator of lower inflation rates to come. https://twitter.com/Callum_Thomas/status/1589716345167695873Fed Loan Officer Survey just released...Banks are tightening credit criteria and raising the cost of business loans https://twitter.com/topdowncharts/status/1589754940217790464 more charts there - Banks are tightening up credit criteria, raising loan pricing, and reporting weaker demand for new loans. This appears to be the story across the board (business loans, mortgages, consumer debt) - BUT one sector many overlook stands out in particular — Commercial Real Estate... https://twitter.com/GunjanJS/status/1589696283614543872 Housing "affordability is deteriorating faster than at any point in our data history, and with the recent runup in mortgage rates, the pace of that deterioration just took another step higher" -Morgan Stanley The ECB needs to continue increasing interest rates even if that weighs on economic output, according to Bundesbank President Joachim Nagel https://uk.finance.yahoo.com/news/ecb-continue-raising-rates-even-081641301.html https://s356.podbean.com/pb/c075e1af7313b615c081e98ffdcaba16/636a2115/data1/fs56/5709963/uploads/2022_11_08_MarketCall_Slides.pdf?pbss=e98afb54-e53d-51df-97aa-b06a317c0818 U.S investors are most bullish since March – chart .. https://twitter.com/DiEM_25/status/1589576786232635393 The world's elite have arrived at COP27 on hundreds of private jets to lecture you about climate change. Sponsored by Coca-Cola (biggest plastic producer of waste ish in the world?).. https://www.msn.com/en-us/money/markets/tensions-rise-between-crypto-exchanges-binance-and-ftx-what-it-means-for-the-market/ar-AA13Q698 Tensions rise between crypto exchanges Binance and FTX. What it means for the market. https://www.msn.com/en-us/money/markets/theres-only-a-35-25-chance-that-the-us-suffers-a-recession-in-the-next-year-top-goldman-sachs-economist-says/ar-AA13PKK9 There's only a 35% chance that the US suffers a recession in the next year, top Goldman Sachs economist says Elon Musk recommends voting for Republicans in U.S. midterm elections http://reut.rs/3hpsZys https://markets.businessinsider.com/news/stocks/stock-market-outlook-bottom-fed-pause-rate-hikes-ed-yardeni-2022-11 Stocks are in the process of bottoming and the Fed won't raise rates as far as Powell suggested, market veteran Ed Yardeni says Expected Trump indictment looms over midterm election https://trib.al/IwLwycI China's BYD to launch new premium electric car brand in 2023 http://reut.rs/3DSAllM https://www.scmp.com/economy/economic-indicators/article/3198672/china-trade-export-growth-suffers-first-drop-over-2-years-imports-also-down China trade: ‘turning point’ as export growth suffers first drop in over 2 years on weak demand, zero-Covid China’s exports declined by 0.3 per cent in October compared with a year earlier, down from 5.7 per cent growth in September Imports also declined by 0.7 per cent in October compared with a year earlier, down from 0.3 per cent growth in September… no wonder when parts of economy shut, should start to change in early 2023 This is pretty creepy ! https://twitter.com/WallStreetSilv/status/1589727995442647040 In Hunan Province they were in a hurry and built the camp right on the highway… They don’t need the roads if the population will be locked-up in isolation camps… Guangzhou's COVID outbreak deepens as more lockdowns loom in China http://reut.rs/3WM9n7Z Germany's economic advisory council will recommend govt raise taxes on the wealthy to help finance multi-billion Euro relief packages it has agreed to fight energy crisis. Tax revenues could jump >€1tn as early as 2025. Would be a doubling within 20yrs. https://reuters.com/markets/europe/germany-should-hike-taxes-rich-finance-relief-packages-advisers-say-report-2022-11-07/ "A plan by ministers to review or repeal all EU laws on the UK statute book by the end of 2023 has suffered another setback after the discovery of 1,400 additional pieces of legislation" https://on.ft.com/3EdpVP7 https://www.independent.co.uk/tv/lifestyle/christmas-tesco-party-advert-politics-b2220136.html?utm_content=Echobox&utm_medium=Social&utm_campaign=Main&utm_source=Twitter#Echobox=1667898938 Tesco’s new Christmas advert makes fun of UK politics in ‘party broadcast’ https://www.dw.com/en/japans-population-problem-forces-changes-to-social-security/a-63668379 Japan has a shrinking pool of young workers to fund retirement and healthcare. The only answer appears to be raising pension and health deductions from paychecks, but that is likely to be deeply unpopular. Have a great day Team PVM

U.S labour data headline was slightly better though unemployment rate rose a little, but the industry and household survey details both suggested a notable loss of momentum NFP starting to look odd, households basically saying no employment growth since end of Q1 2022 and NFP saying 2.5 million job created—(pretty strange), raised hopes of a Fed pause again at the Dec Meeting, more rumours of China re-opening on Friday pushed risk higher, though these re-opening chatters were denied over the week-end, risk is holding up though (China will reopen in the spring – very likely scenario IMHO) China agreed to approve BioNTech SE’s Covid-19 vaccines for foreign residents, German Chancellor Olaf Scholz said in Beijing Friday, in what would mark the first mRNA vaccine for Covid-19 approved for use in China/WSJ – this could help the re-opening eventually (for now Covid Cases Jump to Six-Month High as Outbreaks Flare) Jeremy Hunt to outline £60bn of tax rises and spending cuts - Guardian understands early drafts of UK government’s autumn statement include at least £35bn reduction in spending, helping GBP this morning Hong Kong's third-quarter GDP plunged 4.5%. The government is trying to rally support for fintech and finance, but has no clear plan to help mundane sectors like real estate and retail which are the biggest drags U.S economy is currently dealing with an average rate on 30y mortgage around 7.25% (highest since 2000), crashed demand to a 25year low, Well Fargo mortgage business down 90%, CC debt approaching $1trn, highest since 2008 and average American’s savings are down over 2/3rd In last couple of weeks, the BOC/ECB/RBA and BoE have all intimated they are stepping down (or intend to step down) the intensity of their tightening campaigns… if/when data weakens a little the FED will eventually pause too A Gruyère from Vorderfultigen in Bern has been named the 2022 World Champion Cheese, beating a Gorgonzola from Italy (has to be top world news!) BoJ : The central bank held 73% of 10-year government notes with a residual maturity of at least seven years as of end-October, up from 56.5% in June and 54.7% at the end of last year, according to data compiled by Bloomberg. IMF Georgieva: Global Inflation May Be Nearing Its Peak – BBG After a decade of making money for the US government, the Fed is now losing money on an ongoing basis. As the QE portfolio is taking a beating and interest on excess reserves to be paid to banks is quickly heading above 4%, the Fed will be delivering a negative P&L going forward Eurozone Sentix Investor Confidence Nov: -30.9 (est -35, prev -38.3) The United States midterm elections will be held Tuesday. Owing to time differences, polls will not start closing until late Wednesday morning AEDT Senior White House Official Involved in Undisclosed Talks With Top Putin Aides – WSJ Markets : U.S gridlock post med-terms generally speaking taken positively by markets – rule of thumb based on previous SPX500 still 3600-3900 range, lot more going on underneath, growth struggling vs real economy stocks still, this should go on for years! There's a correlation between changes in liquidity and S&P 500 price discovery, suggesting that as long as liquidity is being reduced, we're likely to see pressure on stock prices (thread). Hang Seng ignoring all sort of bad news / bottoming? chart USD took a very decent notable ‘dive’ since NFP on Friday, market seems desperate to position itself for ‘peak worries, peak inflation, peak usd’ etc. We continue to look for signs of this developing, price action was telling U.S CPI on Thursday will be one of those moment again – confirmation of peak, or another delay U.S med-terms (gridlock usually a decent outcome for risk), UKR/RU/U.S and others talking, grain traffic, China covid policy all pretty binary, but (hopefully) going towards some sort of positive outcome – we all hope, long and bumpy road ahead though! Again for us, a Fed pivot of any kind is for now only a pause in the fast hiking cycle, not a view that they will cut any time soon – unless the data gets much worse (in which case, not sure at all this is positive for markets, a recession isn’t positive for most..), things can change quickly these days though, as often discussed in recent weeks, the first movers should be 2yUST, USDollar and Gold on any signs of peak inflation/peak worries, Friday showed just that… https://twitter.com/MikaelSarwe/status/1589555463011860481 NFP starting to look odd. Households basically say no employment growth since March, NFP says +2.5 million. Also, odd net birth/death business numbers & not sure about seasonal adjustment used, revisions sooner or later? …after med-terms! https://www.home.saxo/content/articles/equity/ta-dax-ger40-testing-key-resistance-07112022DAX/GER40 extending uptrend testing key resistance https://theconversation.com/with-two-days-until-us-midterm-elections-republicans-will-probably-win-control-of-both-chambers-of-congress-193442 With two days until US midterm elections, Republicans will probably win control of both chambers of Congress RNC chair says committee can’t pay Trump’s legal bills if he announces 2024 run https://trib.al/oGHD59C https://twitter.com/Mayhem4Markets/status/1589286490877857795 There's a correlation between changes in liquidity and S&P 500 price discovery, suggesting that as long as liquidity is being reduced we're likely to see pressure on stock prices https://twitter.com/Flash_news_ua/status/1589550129853632513 88 dry cargoes are waiting for permission to enter Ukrainian ports as part of the grain agreement, another 18 loaded ships are preparing for inspection in Turkish territorial waters, – the Joint Coordination Center reports. https://twitter.com/MacroAlf/status/1588555119687499778After a decade of making money for the US government, the Fed is now losing money on an ongoing basis As the QE portfolio is taking a beating and interest on excess reserves to be paid to banks is quickly heading above 4%, the Fed will be delivering a negative P&L going forward https://twitter.com/MichaelMOTTCM/status/1588906282437599232 Oct. CPI could be significantly hotter-than-expected. Analysts' estimates are for a y/y Oct. CPI of 7.9%, and Cleveland Fed estimates a y/y CPI of 8.2%. CPI has come in at or hotter than the Cleveland Fed Estimates 16 of the last 19 times, quite a few punters pointing this out, pricing action says differently at mom https://www.breakingnews.ie/world/apple-says-iphone-supplies-hit-by-coronavirus-curbs-in-china-1388213.html Apple says iPhone supplies hit by coronavirus curbs in China https://www.ibtimes.com/meta-eyes-large-scale-layoffs-this-week-tech-industry-pays-price-overhiring-3632807 Meta Eyes 'Large-Scale' Layoffs This Week As Tech Industry Pays Price Of 'Overhiring' https://www.bbc.co.uk/news/world-europe-63533769 Standoff as Italy stops male migrants from disembarking rescue ships https://www.theguardian.com/politics/2022/nov/06/jeremy-hunt-set-to-outline-60bn-in-tax-rises-and-spending-cuts Jeremy Hunt to outline £60bn of tax rises and spending cuts Guardian understands early drafts of UK government’s autumn statement include at least £35bn reduction in spending https://www.businesspost.ie/news-focus/bargaining-chips-how-the-semiconductor-industry-has-emerged-as-an-industrial-battleground/Bargaining chips: how the semiconductor industry has emerged as an industrial battleground https://www.bloomberg.com/news/articles/2022-11-04/india-s-massive-silver-demand-cutting-world-s-warehouse-stocks#xj4y7vzkg?leadSource=uverify%20wall India’s Massive Silver Demand Cutting World’s Warehouse Stocks Consumption of precious metal may jump about 80% to a record. ‘Poor man’s gold’ remains popular in nation’s rural regions https://www.swissinfo.ch/eng/business/gruy%C3%A8re-named-best-cheese-in-the-world--again-/48030670 A Gruyère from Vorderfultigen in Bern has been named the 2022 World Champion Cheese, beating a Gorgonzola from Italy Central Asia is poised for robust growth in 2023 stemming from oil export and growing ties with China https://econ.st/3zPxOYC https://www.independent.co.uk/news/uk/home-news/uk-strikes-rail-nhs-nurses-1980s-b2219225.html?utm_content=Echobox&utm_medium=Social&utm_campaign=Main&utm_source=Twitter#Echobox=1667813448 UK ‘facing largest scale strikes since the 1980s’ as NHS set for biggest walkout in history The United States' special envoy for climate John Kerry acknowledges that developing countries are angry that wealthy nations are not doing enough to fight climate change. He says it is "understandable" and he plans to address this during #COP27. https://trib.al/Rx0iR33 Binance versus FTX: the face/off https://on.ft.com/3UwcZZS Hang-Seng oversold

China Is Preparing a Plan to End Covid Flight Suspensions – Bloomberg >>> this looks like the weekly re-opening rumours from here on, although with a little more to it than last week…. it does feel as if they won’t be able to keep everything close for much longer, just a guess.. this will have a very decent reaction in markets over time, when confirmed Fed swaps price in peak policy rate of 5.2% in May-June 2023, interest payments on the $31 trillion US debt is about to exceed what is spent on the Defence Budget.. Seven BoE Officials vote for 75bp hike; 1 for 50 and 1 for 25 – BoE’s Bailey manage to deliver 75bps and then gave a dovish statement, which pushed GBP lower and actually lifted Gilts yields, not exactly wise words from Andrew there RBA ‘’inflation to peak around the turn of the year’’, headline inflation to be 3.5% by the end of 2024 APPL is now worth (or you could 'still worth') as much as Meta, AMZN and Google COMBINED It is necessary to seek negotiations between Putin and Zelenskyi, - said the new head of the Italian Foreign Ministry, Antonio Tajani, on the air on Canale 5. "The goal should be an agreement, a meeting between Putin and Zelenskyi China has set up a “reopening committee” to create a plan for China to roll back its strict pandemic rules – more to come not doubt, as they (no.-one) can issue more debt to keep folks at home! Canada to impose 2% tax on stock buybacks as of 1st Jan 2024 – so everyone is going to do it in 2023— ECB's President Lagarde: We must not, and will not, let high inflation become entrenched. If we were to see, for example, inflation becoming more persistent and expectations being at risk of de-anchoring, we would need to take additional actions Markets : UST 1year yields are now the highest since 2001, peak? re-reading and listening to Powell, what matters is what was written, not what he mumbled during presser? if so, we are getting near a peak..and a pause WTI call option open interest vs put open interest, huge upside buying, Brent March $200 calls traded more than 7k times on Thursday: BBG (Iran, Saudi Arabia) Equity markets: broad underperforming from QQQ and mega caps still, SPX500 range 3600-3900 still in place, key day with NFP now, note that we will get another NFP in Dec before the Dec FOMC, 2 soft numbers and 50bps and dovish and equity markets might actually hold, although big divergence between high growth and real economy still, which is welcome. Chinese stocks up 10-15%, way oversold last many months >>>> The volatility in 2022 is historic.The last time there were this many months up or down 7.5% was ... 1937! …we could yet get a ‘China pivot on covid policy’ and/or even some sort of FED pivot in Dec, and we have med-terms Bond markets similar picture, all about data, NFP and med-terms eventually, 10’s UST yields must hold below 4.35 cycle highs recently, or else risk will roll over again USDollar will follow bonds, although a China re-opening will push USDCNH down and take the rest with it, to a certain extent VIX down and SPX500 down yesterday, shows market long lots of downsides (not surprising) / Thread Happy Friday and wishing you a great weekend/team PVM https://www.ibtimes.com/china-stocks-notch-trillion-dollar-gain-hopes-reopening-better-us-ties-3632137 China Stocks Notch Trillion-dollar Gain On Hopes Of Reopening, Better U.S. Ties https://www.reuters.com/world/europe/g7-discuss-ukraine-support-after-attacks-energy-infrastructure-2022-11-03/ G7 to work together on winter aid for Ukraine, Germany says https://twitter.com/SteveMiran/status/1588270446591414272 Vix down AND stocks down today. That means the market has lots of downside put exposure already -- gamma kicked in and increased their delta and folks had to cut exposure, i.e. sell their protection structures, to prevent their exposure from increasing beyond their risk limits https://twitter.com/carlquintanilla/status/1588224678115549187 $9 Million Option Trade Targets 3.75% 10-Year Yield in Two Weeks – UST’s https://www.home.saxo/content/articles/forex/us-dollar-still-no-signs-of-peaking-04112022 Summary: With the Fed turning markedly more hawkish this week, along with other key central banks such as Bank of England and Norges Bank adding to the list of central banks taking dovish paths, there is potentially scope for another leg higher in the US dollar. A short-term peak in the greenback will only be seen when markets fully price in the Fed path, while a turnaround will have to wait for a shift in US economic data trends. Still, even mounting recession concerns will drive safe-haven flows to US assets. https://www.channel4.com/news/economy-was-potentially-hours-away-from-meltdown-says-bank-of-england-governor Economy was potentially hours away from meltdown, says Bank of England governor Why was BoE still doing QE months ago when it was evident inflation was heading (much) higher… no accountability, they got it wrong, and now everyone pays the price Mark Carney tells @BBCr4today that Brexit is a key reason for interest rates having to go up. Says 2016 vote devalued sterling, hit growth and productivity + adds he was right in his warnings. https://twitter.com/paulwaugh/status/1588447292046147584 Business leaders urge govt to restore ‘hard-won reputation for stability’ after rate rise and recession warning http://dlvr.it/ScCfwp https://www.bbc.co.uk/news/business-63507630?at_custom1=%5Bpost+type%5D&at_custom4=B7C13C16-5C07-11ED-B2A3-F3292152A482&at_medium=custom7&at_custom2=twitter&at_campaign=64&at_custom3=%40BBCNews A new nuclear power plant in Suffolk is under review and could be delayed or even axed, as the government tries to cut spending, the BBC has been told. … No No No ! this is ridiculous Tories cannot escape blame for economic chaos https://on.ft.com/3h0a1yi UBS launches digital bond that straddles blockchain and traditional exchanges http://reut.rs/3FM7YZi https://www.rba.gov.au/publications/smp/2022/nov/pdf/statement-on-monetary-policy-2022-11.pdf https://twitter.com/izakaminska/status/1588141602257702912?s=20&t=BxkXzqaAzrQ1AHCq48W34Q Very good thread from Izabella ! THREAD🧵Here’s why I believe the market is missing the true significance of @Elonmusk reconfiguring Twitter’s funding model into one that isn’t dependent on you being the product. If he succeeds, and I suspect he will, it could upend two-sided pricing in the digital economy. https://fortune.com/2022/11/03/3-charts-stock-market-valuations-outlook/?utm_source=twitter.com&utm_medium=social&xid=soc_socialflow_twitter_FORTUNE&utm_campaign=fortunemagazine The so-called Buffett Indicator shows that valuations have come down significantly Japan says North Korea has fired at least one more missile into the sea, bringing the day’s total to at least four. The launch came after North Korea threatened to retaliate over a decision by South Korean and the U.S. to extend joint aerial exercises. https://apnews.com/article/business-japan-united-states-seoul-south-korea-aed56829790621f0d0abfb4fafa91aca?taid=6363be75e9efe3000172d24c&utm_campaign=TrueAnthem&utm_medium=AP&utm_source=Twitter https://twitter.com/Peston/status/1588155825100570626 The Bank of England’s expectation that the British economy will be shrinking till mid 2024, as the interest rate it sets is on couse to rise from 3% today to 4.75% in coming months, means Sunak and Hunt face the two most stressful weeks of their political lives. Here’s why https://www.msn.com/en-us/money/savingandinvesting/roku-stock-plummets-as-grim-ad-sales-outlook-mars-q2-earnings-beat/ar-AA13GG3R Roku Stock Plummets As Grim Ad Sales Outlook Mars Q2 Earnings Beat brutal.. this stock was $450 during the covid moment, right back down and lower than pore covid https://twitter.com/JeffWeniger/status/1587871002654134275 The biggest headline today is not the Fed. Nope, it's this 90% decline bombshell from Wells. Total housing freeze-up. Keep your focus. Housing is the number one macro driver now and for all of 2023. https://www.insidermedia.com/news/national/britishvolt-secures-funding-to-support-operations?utm_source=northeast_newsletter&utm_campaign=northeast_news_tracker&utm_medium=manufacturing_article BRITISHVOLT ‘SECURES FUNDING TO SUPPORT OPERATIONS’ Some good news! Britishvolt is behind plans for a £3.8bn gigaplant in Blyth, which is expected to create more than 3,000 direct jobs once operational, alongside a further 5,000 in the wider supply chain. This has to be the news of the week.. https://www.news.com.au/lifestyle/real-life/news-life/as-a-dog-mum-i-deserve-the-same-rights-as-parents/news-story/088a80c6fa5146424e4aa36353604efc ‘As a dog mum, I deserve the same rights as parents’ As a mother to a pup, I should be able to leave work early to pick him up from doggie daycare, like parents can leave early for school pick-up SPX500 3600 support if we break 3300 target area, vs 3900 resistance (the top we mentioned a few times recently) before 4150 – that’s the play big picture. Till then rangy – together with bonds, we watch UST’s 4.35 levels, if we head higher QQQ will lead lower, if NFP softish, market may start to talk again, of some sort of ‘pause’ by Fed in Dec – long way to go AND we have the possibility of China re-opening + med-terms all shortly ahead of us. Interesting point is DAX and European markets holding up pretty well and VIX softer

Powell : an initial hint of slowing, but then again inflation still too high, so not really, then a clear sign : slower but higher plateau in rates >>> till something breaks..etc etc they will continue to sound hawkish, unless something breaks properly, see thread below ‘’ultimate level of rates will be higher than previously expected and historical record cautious strongly against prematurely loosening’’>>> a reminder that FED was still doing QE in Q2 2022, and the same members were telling markets in early 2022 that there was little or no need to hike… now rates are mooning – I still don’t hear any of them saying ‘’sorry folks we completely messed it up from 2021 for being blind and thinking inflation was ‘temporary’, so now everyone has to suffer and we have to go in recession’’… ECB’s Lagarde : recession wouldn’t be enough to tame inflation ( how would they know?..this sounds like cobblers..) >>> so they still don’t think recession is likely, this will probably change when the staff projection comes in December, a reminder that the ECB didn’t see inflation on the horizon either earlier in 2022.. Central banks, from Fed to ECB (Norway Canada,RBA etc) all fairly similar message, whether this is coordinated or not, moving rates gradually, fairly pragmatic about it, data dependent, so it should reduce the risk of a major policy mistake going forward (they will react both ways…), countries were housing markets are particularly struggling and at risk going forward… Central banks ease off on rate hike push in October Russia re-joins deal on wartime Ukrainian grain exports Russia is now India's top oil supplier, overtaking Iraq and Saudi Arabia, as Moscow looks to replace the EU as a customer Treasury warns of tax rises to fill financial hole In 2022, AMZN has destroyed all its out-performance of the last 5years – relative to SPX500 Germany to force plastic makers to help pay for clean-ups China Caixin Services PMI falls to 48.4 from 49.3, lowest since May this year Apple has bought back $549 billion in stock over the past 10 years, which is greater than the market cap of 494 companies in the S&P 500 Musk and Twitter, it’s his company now he can do what he likes – the worrying thing is, think the power this guys has using a platform like this to influence….anything he likes in the world.. Nomura has raised it projection of the Fed's upper bound to 5.75%....“Although market pricing for the US terminal rate has risen, post Fed communication, it still falls short of our expectation.” China to ‘Resolutely Adhere’ to Covid Zero as Cases Rise. Health officials ordered to implement zero-tolerance approach. The remarks come after stocks surged on reopening rumours – contrary to this week’s belief, no change for now then Germany’s solo trip to Beijing exposes Europe’s dilemma on China. Chancellor Scholz brings a high-profile delegation on his first state visit to Beijing and faces a delicate balancing act.Germany is running a massive trade deficit w/China / thread-chart Morgan Stanley Plans To Start A Fresh Round Of Layoffs In Coming Weeks - Planned Job Cuts In Asia Pacific Will Mainly Hit Teams That Focus On China-Related Business - RTRS Sources Markets : Wheat and rice prices (the biggest food staples in the world) are pretty much the same price they were back in Oct-Noc 2021 before the Russian invasion of UKR, and prices are LOWER than they were 10years ago EUStoxx50 topped on trend line (yesterday’s chart) as Fed sounded a little more hawkish than the short-term market wanted them to be, in reality they probably were pretty much as expected! Equity markets moved lower, and yet VIX was a little softer >>> big picture SPX500 3600/3900 range still, overall market sentiment shifting back to selling rallies on higher rates/USD and QQQ look to be the first one to be breaking down again (duration etc etc..) – see chart below – we need to get the excess out/COVID QE binge rally out of the way perhaps… The bond market was on the same page here. The hope for a policy pivot at this meeting seemed quite misplaced and obviously proved to be so, but the bond market was not looking for any sort of pivot, 10’s UST back to 4.20% USD same price action, down initially, and ‘sharply up’ again, BoE next, good luck Bailey. BoJ back fighting against the trend. USDCNH 7.33 and USDCHF massive levels ahead of 1.0200 area long-term (chart) GOLD back down on higher rates/USD, back to waiting for ‘peak hawkishness’, ‘’not yet’’ was the message from JPow yesterday, unless things change dramatically in markets sentiment/macro data, it may take a few more months before the ‘pivot’ https://saxostrats.podbean.com/e/the-fomc-pulls-off-a-hawkish-pivot/ The FOMC pulls off a hawkish pivot Today we look at the hawkish Fed Chair Powell press conference delivering a hammer-blow to sentiment as he managed to both pull off the idea that the Fed may indeed soon pivot to a slower pace of rate hikes as soon as December, but that any talk of a pause is "very premature". The result? Sentiment thrashed and the USD going vertical as the market takes Fed rate expectations and the terminal rate next year higher still. Incoming US data could further aggravate this move if the data remains even resilient, much less hotter than expected. We also talk through the reaction to the FOMC in gold, risks to sterling today if BoE fails to take the hawkish hint from Powell, stocks to watch, perspective on where we are with equity valuations and more Norges Bank’s Monetary Policy and Financial Stability Committee has unanimously decided to raise the policy rate by 0.25 percentage point to 2.5 percent: https://norges-bank.no/en/news-events/news-publications/Press-releases/2022/2022-11-03-rate/ https://www.reuters.com/business/finance/central-banks-ease-off-rate-hike-push-october-2022-11-02/Central banks ease off on rate hike push in October https://twitter.com/MacroAlf/status/1587909491961769986Massive Fed meeting, and huge market reaction. A thread that breaks down what happened, step by step. https://twitter.com/Schuldensuehner/status/1588101894391713795 Germany’s solo trip to Beijing exposes Europe’s dilemma on China. Chancellor Scholz brings a high-profile delegation on his first state visit to Beijing and faces a delicate balancing act. Germany is running a massive trade deficit w/China. >> chart-excellent thread from Holger China's gas consumption may post first fall in 20 years - state energy officials http://reut.rs/3DqCm8s https://www.bbc.com/news/uk-politics-63465935.amp Treasury warns of tax rises to fill financial hole https://blondemoney.co.uk/2022/11/the-credibility-doom-loop-part-3/ The Credibility Doom Loop – Part 3 – can highly recommend Blondemoney btw The LDI Gilt yield debacle should serve as a salutary lesson for every country that pursued relentless monetary easing since March 2020. Just as governments shifted the Overton window such that any external shock leaves the voting public demanding “something must be done”, so central banks are expected to ensure that meeting inflation targets does not conflict with financial stability. This is an impossible demand. The pivot from “Whatever It Takes to prevent a market meltdown” to “Whatever It Takes to stop inflation” necessitates a withdrawal of liquidity that will expose the excessive yield-hunting risk-taking that is lurking . https://markets.businessinsider.com/news/commodities/russia-india-crude-oil-iraq-eu-saudi-arabia-markets-energy-2022-11 Russia is now India's top oil supplier, overtaking Iraq and Saudi Arabia, as Moscow looks to replace the EU as a customer https://apnews.com/article/russia-ukraine-africa-business-sudan-middle-east-50d92706e72b3f0f591792bd1732c90a Russia re-joins deal on wartime Ukrainian grain exports https://apnews.com/article/europe-business-germany-climate-and-environment-government-politics-120afb291f27d866d8263f91cddee5b1 Germany to force plastic makers to help pay for clean-ups https://news.sky.com/story/rishi-sunak-to-go-to-cop27-in-egypt-despite-earlier-saying-he-couldnt-go-12736272 PM makes 'screeching U-turn' on attending COP27 - and all his campaign pledges are under review https://www.bbc.co.uk/news/health-63475630?xtor=AL-72-%5Bpartner%5D-%5Bbbc.news.twitter%5D-%5Bheadline%5D-%5Bnews%5D-%5Bbizdev%5D-%5Bisapi%5D&at_custom4=9C318828-5AF6-11ED-81AF-06EE4744363C&at_custom2=twitter&at_campaign=64&at_medium=custom7&at_custom3=%40BBCNews&at_custom1=%5Bpost+type%5D Magic-mushroom drug can treat severe depression, trial suggests – oh good! https://www.ft.com/content/f3bb0f96-1816-4481-8318-4f7583326a4a Hedge fund Elliott warns of more pain to come after 2022 market rout Prominent asset manager says ‘hyperinflation’ could spark one of the worst crises since the second world war’ >>> you think they short the markets ? A reminder though that https://twitter.com/RyanDetrick/status/1587843828383637504 stocks usually bottom before EPS, jobs, and GDP start to improve. Time after time we've seen it (but note it didn't work during the Tech bubble). The bottom line, stocks sniff out better times and rally in the face of bad news. QQQ – the whole aberation/binge rally from COVID’s ridiculous major printing of some $6trn could be reversed and go back to long-term trend.. Have a great day Team PVM

FED : we have 130bps priced in for next 2 meetings, about 50/50 for 50 or 75bps in December >>> bring on presser tonight >>> U.S implied terminal rate back up to 5% for some time in Q2 2023 JPMORGAN: “.. the disinflation phase has already begun .. bond yields are likely in the process of peaking out .. inflation prints .. will be meaningfully lower in 3-6 months’ time. Our economists project US core CPI at 5.3% YoY rate in Q1, vs 6.6% currently ..” - thread The Fed currently pays more in interest on reserves than it receives in coupons on its Treasury holdings. Unlike other CBs, the Fed does not ask Treasury for a check. Instead, it issues an IOU. Very interesting article by @NickTimiraos in WSJ – thread/chart Brazil’s president Jair Bolsonaro broke a two-day silence after his election defeat, saying protests by his supporters reflected ‘indignation’ at the outcome but vowing to follow the country’s constitution-FT >>> a relatively smooth transition could see USDBRL down 5-10pct pretty quickly, thread below North Korea fires 17 missiles; one lands off South Korean coast for first time UK fresh food prices rise 13.3% in year to October – BRC UN and Ukraine to resume grain deal shipments on Thursday GOLD : “Central banks bought a record amount of gold last quarter, continued diversification, with a large chunk of the purchases coming from as-yet unknown buyers. That’s about 400 tons scooped up by CB’s last quarter, more than quadruple the amount a year earlier.” FCC commissioner says government should ban TikTok Moody’s talks - Liquidity tightens for leveraged finance market, raising corporate default risk U.S personal savings near historical bottom (chart/thread) – and credit card loans through the roof Oil windfall tax on companies, somehow it is a little strange to think governments want to tax the companies that they want to invest more in energy infrastructure for the future..might achieve the opposite of what they want them to do (having said that the likes BP and Shell have said many times that they would be OK with a relatively small one off tax…) Germany's manufacturing sector gathers pace at start of Q4…remember the potential +ve impact from lower NatGas prices.. US and Chinese officials working to set up Biden-Xi meeting S&P downgrades Credit Suisse Group, Moody's cuts some ratings U.S Workers are “showing up late .. but companies can’t do anything about it because .. it is so hard to replace” them.“Back in 2019, the policy was one strike and you’re out .. Right now it’s 10 strikes, maybe you’ll be out.” / Washington post Markets: Equity markets saw some very decent capitulation last week with the mega caps losing close to 750bn$ in market cap (MSFT, GOOG, AMZN and META..), with some of them dropping 20% - clear sign of capitulation >>> a relatively friendly FED not forcing markets to price in more than is currently priced in, should help calm markets/possibly push for further correction higher in risk, as long as bond markets remain relatively steady<, IF so watch MOVE index (bond vols) they should steadily move lower and thus give markets time to breathe USDollar, we remain on the look out for signs of peak inflation/peak usdollar/peak hawkishness etc , all about the FED, one could argue, the BoJ would not spend $50/70bn in interventions if they didn’t have a reasonable view that the FED will go on ‘pause’ sooner or later’ (pause does not mean lower rates, lets be clear, at least for now). IF China was to re-open and the FED goes on pause, USDCNH should correct lower, AUDUSD should have a decent bump higher, USDJPY will struggle (key area 145 USDJPY a must hold for the bulls..) Depending on FED outlook, markets could move quite sharply into year-end, IF Fed stays the course/sound hawkish, USD will try higher again, but market will quickly turn and think December pivot etc again (the more they do now, the sooner they will flip…), IF the FED sort of flips now already, long USDollar consensus will be challenged clearly.. Next 200pts on S&P500 are in play, technically we can go to 4150 area, on a break of our recent top of the range level around 3925. However, a FED that talks of more to come and more QT etc could bring us back quickly to 3650 support area https://twitter.com/HannoLustig/status/1587290874613940225 The Fed currently pays more in interest on reserves than it receives in coupons on its Treasury holdings. Unlike other CBs, the Fed does not ask Treasury for a check. Instead, it issues an IOU. Very interesting article by @NickTimiraos in WSJ – thread/chart https://twitter.com/carlquintanilla/status/1587183969447120897 JPMORGAN: “.. the disinflation phase has already begun .. bond yields are likely in the process of peaking out .. inflation prints .. will be meaningfully lower in 3-6 months’ time https://twitter.com/CiovaccoCapital/status/1587429862284853248 JPMorgan laid out a very wide range of scenarios for Fed day, with the two below lining up best with what has come from the Fed in recent weeks. 75 bps with tone of the press conference being the most likely wildcard. Click image to enlarge. Text via Bloomberg https://twitter.com/Schuldensuehner/status/1587740166122356739Downturn in Germany's manufacturing sector gathers pace at start of Q4. Goods producers reported steepest drop in output since May2020. German manufacturing sector slid further into contraction territory w/MFG PMI dropped to 45.1 in Oct from 47.8 in Sep. https://pmi.spglobal.com/Public/Home/PressRelease/16d6b88628bb4586b8c080b38dae43eb https://twitter.com/Mayhem4Markets/status/1587599539992764416 U.S personal savings near historical bottom (chart/thread) – and credit card loans through the roof Russia rejoins wartime deal on Ukrainian grain exports https://trib.al/i4PcDnE https://www.bbc.co.uk/news/business-63446174 US throws out charges against interest rate ‘rigger’ Indeed, it was proven that the FCA senior executive responsible for investigating LIBOR manipulation allegations had made various knowingly false representations in a statement for the U.S. Court >> who was in charge of FCA !!!????... A certain Andrew Bailey.. https://uk.news.yahoo.com/uk-fresh-food-prices-rise-001243249.html UK fresh food prices rise 13.3% in year to October – BRC https://www.reuters.com/world/asia-pacific/north-korea-fires-ballistic-missile-says-south-korean-military-2022-11-02/ SEOUL, Nov 2 (Reuters) - North Korea fired at least 17 missiles into the sea on Wednesday, including one that landed less than 60 km (40 miles) off South Korea's coast, which the South's President Yoon Suk-yeol described as "territorial encroachment" by Pyongyang https://www.cnbc.com/2022/11/01/amazon-plunge-pushes-valuation-below-1-trillion-first-time-since-2020.html Amazon sell-off pushes market cap below $1 trillion for first time since April 2020 https://meduza.io/en/news/2022/11/02/un-and-ukraine-to-resume-grain-deal-shipments-on-thursday Ukrainian Infrastructure Minister Oleksandr Kubrakov said Wednesday that grain shipments through the Black Sea humanitarian corridor will resume on November 3 as part of the grain export deal that was reached in July https://www.axios.com/2022/11/01/interview-fcc-commissioner-says-government-should-ban-tiktok FCC commissioner says government should ban TikTok Could give a bit of help to Meta S&P downgrades Credit Suisse Group, Moody's cuts some ratings http://reut.rs/3NqvJYu https://www.moodys.com/web/en/us/about/insights/podcasts/moodys-talks-behind-the-bonds/liquidity-tightens-for-leveraged-finance-market-raising-corporate-default-risk.html?utm_medium=social&utm_campaign=Levfin_2022&utm_source=twitter&utm_content=&utm_term=&cid=YJZ7YNGSROZ5414 The leveraged finance market – leveraged loans and high-yield bonds – has expanded considerably in recent years and now represents around $4 trillion in outstanding debt worldwide. In the first segment of this podcast, we look at how the tide of liquidity that helped the market grow so much is turning now and what tighter, pricier credit means for speculative-grade companies. Then, at 8:45 minutes, we examine the role of private equity firms in this market and the risks for companies they own. https://twitter.com/RobinBrooksIIF/status/1587469694709137411 We'd flagged that an orderly transtion of power would take Brazil's Real below the psychologically important $/BRL 5.00 threshold. Markets priced a large election risk premium of over 10%. That's coming off now. An orderly transition will make Brazil the top EM into 2023... >>> FWIW like the idea Tesla closes its first showroom in China in retail strategy shift - sources http://reut.rs/3zFbxfN https://www.youtube.com/watch?v=t7WO05eMJDg Man Group CEO Says US Recession 'Inevitable' to Curb Inflation Corona und Ukraine-Krieg kosten deutsche Wirtschaft 420 Mrd. Euro http://to.welt.de/tVPn7zx https://www.washingtonpost.com/business/2022/10/31/productivity-down-employers-worried-recession/ U.S. workers have gotten way less productive. No one is sure why. EUstokks50