Round up of today’s market news

North American News

US stocks take a pause and snaps a five-day run to the upside

• Nvidia earnings will be released after the close

Major US stock indices take a break today and in the process snap a 5 day when straight for the S&P and NASDAQ indices. The final numbers are showing:

• Dow industrial average -62.77 points or -0.18% at 35088.28
• S&P index -9.21 points or -0.20% at 4538.18
• NASDAQ index -84.56 points or -0.59% at 14199.97
• Russell 2000, -23.82 points or -1.32% at 1783.26

Nvidia (NVDA) Surges Beyond Expectations as Revenue and Earnings Skyrocket, Defying Estimates with Remarkable Performance

• *NVIDIA 3Q REV. $18.12B, EST. $16.09B
• *NVIDIA 3Q ADJ EPS $4.02, EST. $3.36
• *NVIDIA 3Q DATA CENTER REVENUE $14.51B, EST. $12.82B
• *NVIDIA 3Q GAMING REV. $2.86B, EST. $2.7B
• *NVIDIA 3Q ADJ GROSS MARGIN 75%, EST. 72.5%
• *NVIDIA 4Q REV IS EXPECTED $20.00B PLUS OR MINUS 2%
• *NVIDIA SEES 4Q REV $20B, PLUS OR MINUS 2%, EST. $17.9B
• *NVIDIA: EXPECT SALES TO CHINA TO DECLINE SIGNIFICANTLY IN 4Q
• *NVIDIA US LICENSING REQUIREMENTS DIDN’T HAVE MEANINGFUL IMPACT

US treasury auctions off $15B of 10 year TIPS at a high yield of 2.18%

• WI level at the time of the auction2.145%

• High yield 2.18%
• WI 2.145%
• Tail 3.5 basis points vs 0.8 basis points last
• Bid to cover 2.84X vs 2.43X average
• Directs 16.2% versus an average of 15.9%
• Indirects 70.2% versus 76.7% average
• Dealers 13.6% versus 7.3% average

Weak demand from both international and domestic investors.

November FOMC minutes: Rate setting committees position was to proceed carefully

• The FOMC meeting minutes for November 2023
• Rate setting committee’s position was to proceed carefully
• all participants agreed policy decisions at every meeting would continue to be based on totality of incoming information
• all participants judged it appropriate to maintain target interest rate at 5.25% – 5.5%
• Real GDP expanded strongly in Q3, driven by a surge in consumer spending.
• Despite robust growth, participants see aggregate demand and supply coming into better balance due to restrictive monetary policy and normalizing supply conditions.
• Labor market remains tight but has eased, partly due to recent increases in labor supply.
• Current monetary policy is restrictive, putting downward pressure on economic activity and inflation.
• Financial conditions have significantly tightened in recent months.
• Inflation has moderated over the past year but remains high and above the 2% goal.
• A period of below-potential GDP growth and further softening in labor market conditions is likely needed to bring inflation down.
• Consumer spending data has been stronger than expected, likely due to a strong labor market and solid household balance sheets.
• Some participants noted financial pressures on low- and moderate-income households due to high prices and tight credit conditions.
• Several participants observed rising delinquencies on auto loans and credit cards among these households.
• Some participants reported a weaker consumer demand picture than indicated by aggregate data.
• Several participants suggested that repeated upside surprises in spending data could indicate sustainable momentum.
• A couple of participants theorized that households might have more financial resources than previously thought.
• A few participants noted that housing sector activity has flattened, likely due to rising mortgage rates.
• Business fixed investment was flat in Q3, with conditions varying across industries and Districts.
• Some participants noted benefits for businesses from improved hiring ability, supply chains, and reduced input costs.
• A few participants reported difficulties for businesses in passing on cost increases to customers.
• Several participants commented on the resolution of the United Auto Workers strike reducing business-sector uncertainty.
• Several participants noted the impact of higher interest rates on businesses, with firms cutting or delaying investment plans.
• A few participants highlighted challenges for small businesses due to tighter financial and credit conditions.
• A few participants mentioned the impact of higher interest rates on the agricultural sector.
• The labor market remains tight, with strong payroll growth and a low unemployment rate.
• Labor supply and demand are coming into better balance, with labor force participation rising, especially among women, and immigration boosting labor supply.
• A few participants expressed concern over the sustainability of increased labor supply.
• Various measures indicate some easing in labor demand, including lower job openings and quits rates.
• The pace of nominal wage increases has continued to moderate.
• A few participants noted that nominal wages are still rising at rates inconsistent with the 2% inflation objective.
• Inflation has moderated, with core PCE price inflation measures declining.
• Participants noted limited progress in reducing core services inflation excluding housing.
• Longer-term inflation expectations remain well anchored.
• Inflation remains well above the 2% objective, continuing to harm businesses and households.
• Financial conditions have tightened due to a substantial increase in longer-term Treasury yields.
• Many participants observed that the rise in longer-term yields was driven by an increase in term premiums on Treasury securities.
• Some participants suggested the rise in yields might also reflect expectations for a higher federal funds rate path.
• Participants generally noted high uncertainty in the economic outlook.
• Upside risks to economic activity include the persistence of factors behind strong spending.
• Downside risks include larger-than-expected effects of policy tightening and tighter financial conditions.
• Upside risks to inflation include the possibility of stalled disinflation or reacceleration of inflation.
• Downside risks to economic activity include potential disruptions to global oil markets.
• Participants generally agreed that the stance of monetary policy should remain restrictive to reduce inflation.
• All participants judged it appropriate to maintain the federal funds rate at 5¼ to 5½ percent.
• Further tightening of monetary policy may be needed if progress toward the inflation objective is insufficient.
• Participants stressed the importance of clear communication about their data-dependent approach.
• All participants agreed that policy should remain restrictive until inflation is sustainably moving toward the objective.
• Several participants commented on the recent decline in the use of the ON RRP facility.
• Participants discussed risk-management considerations, noting more balanced risks to achieving the Committee’s goals.
• Most participants continued to see upside risks to inflation.
• Many participants noted downside risks to economic activity, including potential effects on aggregate demand and the CRE sector.

All Participants:

• Agreed that monetary policy should remain restrictive until inflation sustainably moves towards the Committee’s objective.
• Judged maintaining the federal funds rate at 5¼ to 5½ percent as appropriate.
• Agreed on the necessity of reducing the Federal Reserve’s securities holdings.
• Agreed that every policy decision should be based on incoming information and its implications for the economic outlook and risk balance.

Most Participants:

• Continued to see upside risks to inflation, including potential prolonged imbalances in aggregate demand and supply.

Many Participants:

• Commented on the significant tightening of financial conditions due to higher long-term yields.
• Observed the contribution of term premiums to the rise in longer-term Treasury yields.
• Noted downside risks to economic activity, including larger-than-expected effects of tightening financial and credit conditions.

Several Participants:

• Noted potential cyber risks and the importance of readiness for such threats.
• Commented on the recent decline in the use of the ON RRP facility.
• Emphasized the importance of banks being prepared to use Federal Reserve liquidity facilities.

Some Participants:

• Noted benefits for businesses from improved hiring ability, supply chains, and reduced input costs.
• Reported difficulties for businesses in passing on cost increases to customers.
• Expressed concern over the sustainability of increased labor supply.
• Highlighted challenges for small businesses due to tighter financial and credit conditions.

A Few Participants:

• Noted nominal wages still rising at rates above those consistent with the 2% inflation objective.
• Expressed concern over the recent pace of increases in labor supply.
• Discussed the importance of monitoring Treasury market functioning and hedge fund leverage.
• Observed that the process of balance sheet runoff could continue even after reducing the federal funds rate target range.

US existing home sales for October 3.79M annualized versus 3.90M estimate

• US existing home sales for October 2023

• Prior month 3.96 million annualize rate revised to 3.95M
• Existing home sales for October 3.79M vs 3.90M estimate
• Existing home sales -4.1% versus -2.2% last month
• Inventory 1.15M which is 3.6 months up from 3.4 months last month
• Sales are down -14.6% from a year ago

Regionally:

• West -1.4% from September to an annual rate of 690,000. Down 14.8% from a year ago. Prices are up 2.3% from a year ago
• South -7.1% from September to an annual rate of 1.69 million. Down 14.6% from a year ago. Prices are up 4.2% from year ago
• Northeast -4.0% from September to an annual rate of 480,000. Down 15.8% from a year ago. Prices are up 7.5% on the year
• Midwest unchanged from September. Down 13.9% from year ago. Prices are up 4.2% from a year ago

The sales pace was the slowest sales pace since August 2010

• Supply is up 1.8% in October but down -5.7% annually
• Median sale price of $391,800 up 3.4% year on year. That is an all-time high for October
• First-time home buyers were response for 28% of the October sales up from 27% in September and the same as October 2022
• All cash sales accounted for 29% of transactions in October unchanged from September but up from 26% in October 2022
• Individual investors or second-home buyers purchase 15% of homes in October down from 18% in September and 16% one year ago
• Distressed sales – foreclosures and short sales – represented to percent of sales in October unchanged from last month in the previous year
• Mortgage rates according to Freddie Mac average 7.44% as of November 16 which is down from 7.5% the previous week but up from 6.61% one year ago. Mortgage rates have declined for 3 consecutive weeks
• Single-family homes declined to an annual rate of 3.38 million in October down 4.2% from 3.53 million in September and 14.6% from the previous year. The median home price was $396,100 up 3% from 2022
• Multi family sales came in at 410,000 units down -2.4% from September and -14.6% from one year ago. The median price for a condo came in at 356,000 up 7.6% from theprior year

Philadelphia Fed nonmanufacturing business activity index -11 versus -20.3 last month

• Philadelphia Fed nonmanufacturing indices for November

• Nonmanufacturing business activity index -11 versus -20.3 last month
• Firm level business activity +10.3 versus -4.9 last month
• New orders -8.6 versus -16.1 last month
• Employment +14.7 versus +8.2 last month
• Wages and benefit cost index 32.8 versus 34.2 last month

From the Philadelphia Fed:

Firms responding to the November Nonmanufacturing Business Outlook Survey indicated overall improvement in business activity. The indexes for general activity at the firm level and sales/revenues returned to positive territory for the first time since July. The index for new orders rose but remained negative. The firms continued to report higher full- and part-time employment overall, and the prices paid and prices received indexes both indicate overall increases in prices. The respondents continue to expect growth at their own firms over the next six months.

Meeting minutes organized by various topics

• Participants’ Views on Current Conditions and the economic outlook

Economic Growth and Consumer Spending:

• Real GDP expanded strongly in Q3, driven by a surge in consumer spending.
• Despite robust growth, aggregate demand and supply are becoming more balanced due to restrictive monetary policy and normalizing supply conditions.
• Consumer spending data has been stronger than expected, supported by a strong labor market and solid household balance sheets.
• Some participants noted a weaker consumer demand picture than indicated by aggregate data.
• Several participants suggested that repeated upside surprises in spending data could indicate sustainable momentum.
• A couple of participants theorized that households might have more financial resources than previously thought.

Labor Market:

• The labor market remains tight but has eased, partly due to recent increases in labor supply.
• Labor supply and demand are coming into better balance, with labor force participation rising, especially among women, and immigration boosting labor supply.
• Various measures indicate some easing in labor demand, including lower job openings and quits rates.
• The pace of nominal wage increases has moderated.
• A few participants noted that nominal wages are still rising at rates above levels consistent with the 2% inflation objective.

Inflation:

• Inflation has moderated over the past year but remains high and above the 2% goal.
• A period of below-potential GDP growth and further softening in labor market conditions is likely needed to reduce inflation.
• Core PCE price inflation measures have declined, but progress in reducing core services inflation excluding housing is limited.
• Longer-term inflation expectations remain well anchored.
• Inflation continues to harm businesses and households.

Monetary Policy and Financial Conditions:

• Current monetary policy is restrictive, putting downward pressure on economic activity and inflation.
• All participants agreed to maintain the target interest rate at 5.25% – 5.5%.
• Financial conditions have significantly tightened, largely due to a substantial increase in longer-term Treasury yields.
• Many participants observed the rise in longer-term yields was driven by an increase in term premiums on Treasury securities.
• Some participants suggested the rise in yields might reflect expectations for a higher federal funds rate path.
• Further tightening of monetary policy may be needed if progress toward the inflation objective is insufficient.
• All participants judged that policy should remain restrictive until inflation is sustainably moving toward the objective.

Business Sector and Investment:

• Business fixed investment was flat in Q3, with conditions varying across industries and Districts.
• Some participants noted benefits for businesses from improved hiring ability, supply chains, and reduced input costs.
• A few participants reported difficulties for businesses in passing on cost increases to customers.
• Several participants commented on the resolution of the United Auto Workers strike reducing business-sector uncertainty.
• Several participants noted the impact of higher interest rates on businesses, with firms cutting or delaying investment plans.
• A few participants highlighted challenges for small businesses due to tighter financial and credit conditions.
• A few participants mentioned the impact of higher interest rates on the agricultural sector.

Risks and Uncertainties:

• Participants generally noted high uncertainty in the economic outlook.
• Upside risks to economic activity include the persistence of factors behind strong spending.
• Downside risks include larger-than-expected effects of policy tightening and tighter financial conditions.
• Upside risks to inflation include the possibility of stalled disinflation or reacceleration of inflation.
• Downside risks to economic activity include potential disruptions to global oil markets.
• Most participants continued to see upside risks to inflation.
• Many participants noted downside risks to economic activity, including potential effects on aggregate demand and the CRE sector.

Sam Altman and OpenAI board open talks for his possible return

Sam Altman and OpenAI (the firm he founded) have opened his talks for his possible return. A possible outcome could be adding Altman to the transitional OpenAI board.

It seemed that although Microsoft was open to hiring Altman and others from OpenAI, it may have been more of a headache legally. What happened behind closed doors to prompt his ousting is not fully known. It might make sense to hit the reset button, work out the problems and go forward. By the way, Microsoft owns 49% of OpenAI.

Canada October CPI 3.1% versus 3.2% expected

• Details of Canada’s CPI for the month of October 2023

• Prior month 3.8%
• CPI MoM 0.1% versus 0.1% expected
• Prior MoM -0.1%
• CPI YoY 3.1% versus 3.2% expected

Core measures:

• BOC Core YoY 2.7% versus 2.8% last month
• BOC core MoM 0.3% versus -0.1% last month
• CPI median 3.6% versus 3.8% last month revised to 3.9%
• CPI trim 3.5% versus 3.7% last month
• CPI common 4.2% versus 4.4% last month

• The year over year deceleration was largely a result of a lower price for gasoline (-7.8%). Excluding gasoline the CPI rose 3.6% in October (versus 3.7% in September)
• The largest contributors to the year-over-year CPI increase continue to be mortgage interest costs, food purchased from stores and rent
• Month-to-month was driven by travel tours and property taxes and other special charges which are priced annually in October
• grocery prices remain elevated levels but decelerated year on year to 5.4% from 5.8% last month.
• Service prices rise by 4.6% year-over-year which was higher than 3.9% in September. Rents rose 8.2% year on year versus 7.3% in September
• 6 of 8 major components decelerated from the previous month

Commodities

Silver rebounds, eyeing key resistance levels

• Silver has rebounded from Monday’s four-day low of $23.25, printing gains of over 1.80%.
• Silver maintains an upward bias, though it would require breaking above the November 17 high of $24.14 to solidify this trend.
• Silver’s drop below $23.50 might lead to a test of the 200-day moving average (DMA) at $23.29, and further down, the 50-DMA at $23.01.

Silver erased Monday losses, which witnessed the grey metal dropping to a four-day low of $23.25, climbing more than 1.80%, and trading at around $23.90 a troy ounce at the time of writing.

Market sentiment shifted negatively as Wall Street traded with minuscule losses. The US 10-year Treasury bond yield is almost flat at 4.43%, though it has failed to cap Silver’s advance.

Crude oil futures settle at $77.77

• Down $0.06 or 0.08%

The price of WTI crude futures are settling at $77.77.That’s down $0.06 or -0.08%.

The high price today reached $77.88. The low price reached $76.97. At session highs, the price still remains below its 200-day moving average at $78.12.

JP Morgan expects Brent crude oil prices to remain flat in 2024, averaging $83 a barrel

• JPM on crude oil supply and demand dynamics for 2024 and 2025

JP Morgan expects Brent crude oil prices to remain flat in 2024, averaging $83 a barrel

• down in 2025, averaging $75 per barrel
• for this year, 2023 sees average $81
• in 2023 demand is on track to grow by 1.9 million barrels a day, with non-OPEC supply is expected to surpass this with a 2.2m b/d expansion, primarily driven by a 1.5m b/d increase in U.S. outputsees global sustained demand of 1.6 million barrels a day in 2024
• supported by robust emerging-market economies, a resilient U.S., and a weak-but-stable Europe
• supply growth in 2024 from non-OPEC producers is seen at 1.7m b/d, more than matching gains in demand
• JPM says that to keep the oil market balanced, OPEC+ alliance would need to continue constraining production
• Global oil demand growth could decelerate to 1 million barrels a day in 2025, with non-OPEC+ supply potentially surging and the global market likely shifting into a surplus
• could lead to OPEC+ members deepening current cuts by a million barrels per day
• expects Saudi Arabia and Russia to extend their voluntary production/export cuts through Q1 2024

Crude oil – United Arab Emirates will increase its output target from January

• Ahead of the OPEC+ meeting on November 26, all eyes are on the oil market.

The United Arab Emirates will increase its output target to 3.075 million barrels a day in January, or about 135,000 barrels a day more than it pumped last month.

This is not new news, the agreement allowing the UAE to pump more was reached at the OPEC meeting in June.

Bloomberg (gated) add:

The boost to the quota does not necessarily mean that aggregated production across the OPEC cartel will increase. Note that some OPEC+ members, for example, Iraq, Kazakhstan and Gabon are pumping above their respective ceilings, and if they were dragged back to their limits any hike from the UAE could be offset. And, quotas for Angola, Congo and Nigeria were revised down

New levels are subject to a review of each country’s capacity, so they could potentially change again before coming into force in January.

EU News

European indices are ending the day lower

• European shares closing lower on the day. Modest changes for the week

After gains over the last 3 weeks, the major European indices are off to a modest declines today and for the week so far. The subdued activity occurred as investors anticipate the release of the Federal Reserve’s recent meeting minutes, hoping to find indications that the central bank might be concluding its cycle of interest rate hikes.

The final numbers are showing

• German DAX, -0.78 points or 0.00% at 15900.54. For the trading week, the index is down -0.12%
• France CAC, -17.48 points or -0.24% at 7229.46.For the trading week, the index is down -0.06%
• UK’s FTSE 100, -14.37 points or -0.19% at 7481.98.For the trading week, the index is down -0.30%
• Spain’s Ibex is down -11.48 points or -0.12% at 9827.51.For the trading week, the index is up 0.68%
• Italy’s FTSE MIB tumbled -360.17 points or -1.22% at 29181.73

Switzerland October trade balance CHF 4.60 billion vs CHF 6.32 billion prior

• Latest data released by the Federal Statistics Office – 21 November 2023
• Prior CHF 6.32 billion; revised to CHF 6.28 billion

UK raises the minimum wage to £11.44 per hour from £10.42

The UK is raising the minimum wage rate to £11.44 per hour from £10.42 per hour. The new minimum wage rate will now apply to 21 and 22-year-olds as well as older workers.

ECB’s Lagarde: We have made those future decisions conditional on incoming data

• ECB’s Lagarde speaking on policy
• We have made those future decisions conditional on the incoming data meaning that we can act if we see rising risks of missing are inflation target
• The energy and supply chain shocks which played a substantial role in last year’s inflation surge are now unwinding.
• We expect headline inflation to rise again slightly in the coming months.
• Our monetary policy is in a phase where we need to be attentive to the different forces affecting inflation, but always firmly focused on our mandate.
• We will need to remain attentive until we have firm evidence that the conditions are in place for inflation to return sustainably to our goal.
• Given the scale of our policy adjustment, we can now allow some time for them to unfold.
• This is not the time to start declaring victory.
• Our assessment is that strong wage growth mainly reflects catch-up effects related to past inflation, rather than a self-fulfilling dynamic.
• Strong wage growth mainly reflects catch-up effects related to past inflation.
• We need to remain focused on bringing inflation back to our target and not rush to premature conclusions based on short-term developments

BOE’s Bailey: We are on target to get inflation back to 2%

• Remarks by BOE governor, Andrew Bailey, as he testifies in parliament
• Latest inflation fall is good news, largely expected
• There are some signs that wage growth is coming off
• But there is weakening in some parts of the labour market
• Inefficient labour market is one upside risk to inflation
• Approach to monetary policy can be characterised as being watchful, responsive
• Would not rule out having to raise the bank rate further in the future
• Markets underestimate risk of inflation persistence
• Markets are putting too much weight on current data releases
• Need to be concerned about potential inflation persistence

Other BOE Speakers:

• Need to cement commitment to 2% inflation target (Mann)
• More tightness in monetary policy now is important (Mann)
• Speed limit of UK economy is low now (Ramsden)
• We are very clear in distancing ourselves from market expectations (Ramsden)
• Fall in headline inflation is not a good guide on inflation trend (Haskel)

Barclays forecasts higher 2024 European equity prices, receding rates pressure, threats

• Barclays predicts European equity benchmark STOXX 600 to rise by 6% in 2024

An ICYMI re Barclays calling European equities higher in 2024:

• forecasts STOXX 600 (a Europe benchmark) to end 2024 at 485, that around 6% higher than current levels

Barclays cite:

• higher rates pressure easing
• hard landing scenario avoided

Other News

China’s smartphone exports decline amid shrinking global demand, relocation of production

• China’s smartphone exports witness a 6.4% drop in the January-October period

China’s smartphone exports fell 6.4% in the January to October period from a year earlier.

• exported 642 million smartphones in the 10 months ended Oct. 31
• exports +10% y/y to 81.1 million in October alone

Data comes via China’s General Administration of Customs in a report China state-owned media from Yicai Global, a financial news outlet.

The report cites:

• shrinking global demand
• manufacturers relocating some production offshore, Vietnam and other regions

China authorities curate funding list for property developers amidst growing default risks

• Chinese authorities are drafting a list of 50 real estate developers eligible for funding.

An ICYMI of reports that Chinese authorities are drafting a list of 50 real estate developers eligible for a range of funding.

Bloomberg had the info, citing unnamed people familiar with the matter.

• list includes both private and state-owned real estate developers
• the list will guide financial institutions in providing support for the sector via bank loans, debt and equity financing

Reuters followed up but said that the People’s Bank of China and the National Administration of Financial Regulation did not immediately respond to Reuters’ requests for comment.

Goldman Sachs highlights China’s property sector negative feedback loop

• Goldman Sachs says policy makers must not relax

Goldman Sachs on China, in brief from a video interview on CNBC, some points:

• consumption strength may be related to the singles day sales (November 11)
• remains to be seen whether this is a sustainable recovery in consumption
• the weakness in the property sector and also for investment outside of a property may be telling us all the headwinds in the property sector and local government financing vehicles are still strong
• policy makers cannot relax … more work needs to be done
• a very important aspect of the Chinese economy right now in many parts of the economy … we have a sort of self-fulfilling negative loop that’s ongoing
• if property prices are falling … is probably not the best time to buy … a buyer will want to wait until prices bottom to buy property and if that happens then the property price may decline further so there is a self-fulfilling negative feedback loop at work
• how do we get out of that that’s where we really need government policy, whether a clear road map how do we manage the property sector, how do we manage the growth slowdown … expanding central government balance sheet to concretely show the market that this is the how we’re going to address these issues … that will get us out of that negative feedback loop because otherwise it can keep going
• and slow growth becomes a slower growth and I think that’s something the policy makers would not want to see
• right now the property sector has two parts … if we’re talking about the old model that the develop developer buying land and pre-sales and the sort of the commodity housing we’re used to for the past 20 years, I don’t think much has changed and there’s still a lot negative news to come out because if you think about starts are down 60% but the total new homes under construction is only down 13% … at some point a total new home under construction should be consistent with the new starts and that should be a lot lower than where it is now … so I think there’s still more deceleration or decline to come
• but there’s also this new part of a property sector the government is trying to leverage to smooth that slowdown this is the where public housing Urban Village renovation and the 1 trillion yuan reported PSL (supplementary lending) the central go government may provide that’s where support is coming in
• we have to separate the two parts, if you think about the old model and the private developers I don’t think we’re out of the woods

RBA minutes show intense focus on inflation and inflation expectations risks

• Growing mindset among businesses that cost increases could be passed on to customers

Reserve Bank of Australia November meeting minutes, Headlines via Reuters:

• Considered case for raising rates or holding steady
• Board saw “credible case” that a rate rise was not needed at this meeting
• But judged case for hiking was the stronger one given inflation risks had increased
• Whether further tightening required would depend on data, assessment of risks
• Rising house prices could indicate policy was not especially restrictive
• Surge in domestic population growth made it harder to judge resilience of economy
• Inflation and economy were slowing, geopolitical and global outlook uncertain
• An escalation intensions in the middle east could be a drag on global growth

There is some real meat in these minutes. That summary above has the usual ‘data dependence’, ‘case to not raise rates’, the usual caveats. But the over riding impression is of a Bank somewhat behind the curve, or risking slipping behind the curve, and keen not to do so.

These:

• Saw risk that inflation expectations could increase if rates were not raised
• Important to prevent even a modest further increase in inflation expectations
• Growing mindset among businesses that cost increases could be passed on to customers
• Noted staff forecasts for inflation at meeting assumed one or two more rate rises
• Board noted cash rate remained below that in many other countries

RBA Governor Bullock says the Bank is increasingly optimistic about the labour market

• RBA Governor Bullock expresses increasing optimism about the labour market

Reserve Bank of Australia Governor Bullock is speaking as part of a panel in Melbourne this morning.

• Bullock is optimistic that the gains made in employment can be kept
• says inflation is a crucial challenge in the next one or two years
• says inflation is not only about supply issues, gasoline and rent, that there is still ongoing & underlying demand
• if inflation expectations adjust higher in response that’s a problem
• we haven’t had any productivity growth in Australia for a number of years

Australian weekly consumer confidence has one of its 10 worst results since COVID

• Should be renamed to the ANZ-Roy Morgan Australian Consumer lack of Confidence index

ANZ-Roy Morgan Australian Consumer Confidence weekly survey rose to 74.7 from 74.3 the previous week.

ANZ comment:

• remained weak
• one of the 10 worst results since the pandemic began
• Subindices for future conditions rose, but in the last 2 weeks those that capture current conditions fell.

New Zealand sees rising exports in October trade data

• NZ trade data reveals an increase in exports, while imports experienced a slight decline

New Zealand trade data for October shows exports rising from September:

Exports NZD 5.4bn

• September was 4.77bn

Imports slipped marginally to 7.11bn NZD

• September 7.19bn

Trade balance for October showed a deficit of 1709mn nzd

• September’s deficit was 2425mn NZD

Japan’s chief cabinet secretary: No damage reported so far from North Korea missile launch

Japan’s chief cabinet secretary Matsuno:

• No damage reported so far from North Korea missile launch.
• Japan will lodge protest to North Korea in the strongest possible terms.
• Will keep in close contact with allies.
• Will soon convene a national security committee meeting.
• North Korea’s actions are extremely problematic for the people Japan

It was reported earlier that North Korea launched a missile that led to Japan telling residents to take cover.South Korea military said North Korea launches what it claims to be a spy satellite.

Japan small manufacturers’ union demands record base pay rise for next year

• The Japanese Association of Metal, Machinery and Manufacturing Workers (JAM) joins in on the call for a big bump in wages

They are demand for a record monthly pay increase of ¥12,000, or 4% of the base pay, for 2024. JAM chairman, Katahiro Yasukochi, spoke to reporters and said that “what is important is to realise wage growth that is faster than price hikes”. This is certainly what the BOJ and Tokyo wants to hear after having pressured firms to raise wages even more next year.

Cryptocurrency News

Richard Teng steps up as new Binance CEO as Changpeng Zhao confirms resignation

• CZ confirms resignation as CEO, takes responsibility for wrongdoing and says Binance is not a baby

Binance CEO Changpeng Zhao (CZ) has confirmed his resignation as CEO of the world’s largest cryptocurrency exchange by trading volume, Binance. 

He admitted to making mistakes, saying he would take responsibility, a move intended to be for the sole benefit of the community, Binance, and for himself.

CZ also introduced Richard Teng as the new CEO, stepping up from his former role as Global Head of Regional Markets.Teng steps up with immediate effect. 

Binance Coin price crashes by more than 8% in an hour as Binance CEO CZ resigns

• Binance Coin price crashed by over 8% in the span of an hour, falling from $258 to $244 at the time of writing.
• The crash was the result of Binance agreeing to a $4.3 billion settlement with the US government.
• The US Justice Department alleged that CEO Changpeng Zhao violated criminal anti-money laundering requirements.
• After Binance CEO CZ resigned on Tuesday and BNB crashed, nearly $3 million in long contracts were liquidated within a couple of minutes. 

Binance Coin price fell by 8.39% in the past hour to trade at $244 as Changpeng Zhao, the CEO of the world’s biggest cryptocurrency exchange and the parent company of the altcoin Binance, resigned on Tuesday. 

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