CREDIT OPEN: Slow day ahead but busier week expected
EU stocks look set to get what promises to be a low-volume session with gains where a notable lack of data or events stands in sharp contrast to the momentous events which unfolded last week, the outcome of which markets will continue to evaluate for weeks and months to come.
As far as US markets are concerned, while there’s obvious concern that last week’s rally driven by hopes of tax cuts and easier regulation could unravel, that appears not to be today’s dominant thought where US stocks are also set for opening gains. That comes after a surge last week for S&P500 (+4.66%) and Nasdaq (+5.74%) which took both indices to record highs.
Asian markets continue to dance to a different beat though where Monday’s session has been a mostly defensive one for major regional stocks. Hang Seng led declines amid concerns that stimulus measures could prove insufficient. As a reminder of the need for stimulus, China’s latest price data for Oct (released Saturday) came in soft where annual CPI dipped to a 4-month low at 0.3% (from 0.4% in Sep) while PPI deflation unexpectedly deepened to -2.9% (from -2.8% in Sep).
Looking at the day in prospect and the lack of data and events likely leaves thoughts turning to key data due later in the week where US CPI comes on Wednesday while China also releases its usual data dump on Friday.
Cash USTs are shut across all time zones today.
Otherwise to note, the pace of earnings slows sharply this week in the US where just 11 S&P500 firms report while a larger 60 Stoxx600 members report.
For more on latest developments see the European Breakfast Briefing.
Monday’s supply prospects
European bond supply is expected to pick up this week with last week’s key risk events (which limited euro supply to just EUR4.75bn) in the rear-view mirror. An average combined estimate of EUR20.5bn was put forward by respondents in our latest survey where SSAs (which typically lead from the front) are likely to play a supporting role to IG corporate and FIG names. All that said, issuance isn’t set to get properly underway until Tuesday given that parts of Europe (Armistice Day) and the US (Veterans Day) are observing holidays today.
Stateside, according to the results of our weekly issuance poll, now that the dust has settled after Trump’s convincing victory, the Street is looking (on average) for USD30bn in new supply to hit the US market this week, despite the fact that it will be a four-day work week. For more details see the IG WEEKLY WRAP UP.
What to watch today (and for the week)
** Key Data: No key data scheduled to be released on Monday 11th Nov
** Key events/speakers: No key events scheduled for Monday 11th Nov
** Auctions: No major term auctions scheduled for Monday 11th Nov
** Earnings: 4 Stoxx600 & 1 S&P500 company report
** Holidays: Armistice/Veterans Day in parts of Europe/The US
** Viewpoint - The week ahead:
- SLOOS (Tuesday) Powell speaks (Thursday). Plenty of other FOMCers out and about
- US October CPI (Wednesday), PPI (Thursday), import prices/retail sales/IP (Friday)
- China FAI, IP, retail sales & jobless rate (Friday)
- UK labour market report (Tuesday). Q3/September monthly GDP (Friday)
- EMU September IP (Wednesday). 2nd Q3 GDP & Q3 employment growth/ECB mins (Thursday)
All times GMT
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