• Same story, different day...........year ie more of the same fiat floods the world
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The 3-Day Myth - Lehto's Law Ep. 5.25
Steve Lehto


Published on Nov 19, 2018
Many people mistakenly believe they can return a product or cancel a contract within 3 days - for any reason whatsoever. This IS NOT the case. I explain why, and describe the VERY LIMITED circumstances where you can do this. And it never involves cars.

http://www.lehtoslaw.com
 

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Naked Capitalism Links 11/19
https://www.nakedcapitalism.com/2018/11/links-11-19-18.html

SA - Market News Life Feed 11/19
https://seekingalpha.com/market-news

TBP - 10 Monday AM Reads 11/19
https://ritholtz.com/2018/11/10-monday-am-reads-192/

CWS - Morning News: November 19, 2018
http://www.crossingwallstreet.com/archives/2018/11/morning-news-november-19-2018.html

MtM - Does Monday's Calm mean a Storm is Around the Corner? 11/19
http://www.marctomarket.com/#!/2018/11/does-mondays-calm-mean-storm-is-around.html

SA - Wall Street Breakfast: Blow To The Renault-Nissan-Mitsubishi Alliance 11/19
https://seekingalpha.com/article/42...kfast-blow-renault-nissan-mitsubishi-alliance
 

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Asian Metals Market Update: Nov 19 2018
By: Chintan Karnani, Insignia Consultants
Thanksgiving week has been marked by abrupt moves and long-term trend changing moves in metals and energies. This has happened most of the time (not all of the time) over the past fifteen years. I will prefer to be cautious in metals, natural gas and the US dollar Index this week. Technicals are fine but one should see signs of a trend changing technically.
 

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Key Events In Thanksgiving Week: More Brexit, Euro Budget And Global PMIs


by Tyler Durden
Mon, 11/19/2018 - 08:54


While it's a holiday shortened week in the US, the focus for markets is likely to stay with the UK with Brexit and the implications of the result of a likely confidence vote on PM May. Outside of that, DB's Craig Nicol notes that we will also get the flash PMIs around the globe, and the European Commission's opinions on the budget plans of Euro Area countries, possibly including Italy.

To be sure, it is hard to look past Brexit developments as being the centre-piece for the focus in markets next week. Following a turbulent last few days, much will rest of on whether or not there is a confidence vote on PM May. The latest headlines suggest this is likely and could happen at any moment. DB's Oliver Harvey believes that the implications of May losing are very negative. Unlike 2016, Oliver believes that there is a strong probability that a full Conservative leadership contest results, with an ultimate vote taken to the Conservative Party membership, likely including a hard Brexiteer. The winner of the contest is likely to run on a no deal platform. He anticipates that the EU27 will make a no deal outcome their base case and both sides step up no deal planning.

The flipside of this is that May staying on would be a market positive as the tail of a hard Brexit would be reduced. The dilemma for Brexiteers voting against May's Withdrawal Agreement is that this may lead to a series of events which brings a second referendum and the possibility of no deal at all. DB's house view remains that PM May is likely to stick with the current deal and attempt to weather the political storm. Oliver Harvey's indicative probability of this at 35% with the indicative probability of a second referendum raised to 30% after events of this week. May losing a confidence vote and resigning with the risk of an early election is assigned 20%, while a pivot to a soft Brexit is given a 15% probability in Oliver’s view.

Outside of Brexit, the data highlight next week are the global flash November PMIs on Friday. Following the – albeit less than expected – decline in the composite PMI for the Euro Area in October to 53.1, expect there to be plenty of focus on whether or not we get some stabilization in the data, or if there’s any further signs of deterioration in Q4. At the time of writing the consensus is for a 52.9 print for the composite with the manufacturing reading expected to slide further to 51.7 (from 52.0), and the services reading to fall a smaller 0.2pts to 53.5.

In the US, the PMIs are expected to improve slightly. The manufacturing print is expected to rise 0.2pts to 55.9 and the services reading rise 0.2pts to 55.0. Outside of that, given the holiday shortened week there isn’t a huge amount of data due. The preliminary October durable and capital goods orders data on Wednesday will help to further firm up Q4 growth expectations. On Tuesday we also get October housing starts and building permits data while also due on Thursday will be the final University of Michigan consumer sentiment survey revisions and October leading index.



In Asia it’s a fairly thin calendar next week too with nothing of note in China, while the highlights in Japan will be the October CPI report on Wednesday and the manufacturing PMI on Friday. Japan core CPI is expected to remain steady at +1.0% yoy but the core-core measure to slip one-tenth to +0.3% yoy. DB notes that one condition for a change in the BoJ's 10y JGB yield target is steady core CPI above 1% for three to six months.

As for central banks next week, we'll get the ECB meeting minutes from the October meeting on Thursday. As a reminder this wasn't the most exciting of meetings with the ECB largely treading water and buying time ahead of next month's meeting when we get updated forecasts and the latest decisions on QE and reinvestments. Away from that next week's ECB speakers include Mersch, Weidmann, Knot and Visco all on Thursday, and de Guindos on Friday. Over at the Fed the only scheduled speaker is Williams on Monday while the BoJ's Kuroda will also be speaking on Monday. The BoE's Carney then appears before the UK Parliament's Treasury Committee on Tuesday to discuss the Inflation Report.

Also worth noting next week are the European Commission's opinions on the budget plans of the Euro Area countries on Wednesday. While the EC formally has three weeks to provide an opinion on Italy's new fiscal plan following Italy's submitted budget plan this week, it's possible that the EC will issue an opinion on Italy also on Wednesday. This raises the possibility of the EC informing the Eurogroup that in its view, an EDP exists for Italy. A Eurogroup meeting is scheduled for December 3rd which raises the possibility of an EDP being launched at the beginning of next month, depending on whether or not the EC opines on Italy on Wednesday.

Other things to keep an eye on the Euro Area finance ministers gathering on Monday to seek to make progress on Franco-German plans to shore up the currency union, the latest OECD economic forecasts on Wednesday, and German Chancellor Merkel speaking on the German economy on Thursday.

With Thanksgiving Day in the US on Thursday, both equity and bond markets in the US will be closed. The day after also marks the traditional start of the US holiday shopping season with Black Friday, so expect plenty of focus on how retailers have fared over the weekend.

Breaking down key events in the week ahead by day, courtesy of Deutsche Bank:

  • Monday: It's a fairly quiet start to the week on Monday with the only data of note being November house price data for the UK, September construction output data for the Euro Area and the November NAHB housing market index reading in the US. Away from that, the Fed's Williams is due to speak in the afternoon, while BoJ Governor Kuroda, Bank of France Governor Villeroy de Galhau and his predecessor, Noyer, will all speak at the Europlace Financial Forum. Euro Area finance ministers are also due to gather in Brussels to seek to make progress on Franco-German plans to shore up the currency union.
  • Tuesday: The main data highlight on Tuesday is October housing starts and building permits data in the US. Prior to this in Europe we'll get Q3 employment data in France and October PPI in Germany. Meanwhile, BoE Governor Carney will appear before the UK Parliament’s Treasury Committee to discuss the Inflation Report.
  • Wednesday: The data releases pick up on Wednesday, especially in the US where we'll get preliminary October durable and capital goods orders, the latest weekly initial jobless claims print, October leading index, October existing home sales and final November University of Michigan consumer sentiment survey revisions. In the UK we'll get October public finances data while late in the evening in Japan we get October CPI. Away from all that, the European Commission is due to publish its opinions on the budget plans of Euro Area countries, including Italy. The OECD is also due to present new economic forecasts.
  • Thursday: With it being Thanksgiving Day in the US on Thursday, equity and bond markets in the US will remain closed. Data releases are also fairly sparse with November confidence indicators in France and the November consumer confidence reading for the Euro Area the only scheduled releases. The minutes of the latest ECB policy meeting are also due, while the ECB's Mersch, Weidmann, Knot and Visco are all due to speak. German Chancellor Merkel will also speak on the economy to the BDA employers’ federation in Berlin.
  • Friday: It's a busy end to the week as we get a look at the flash November PMIs around the world. Overnight, we get the flash manufacturing PMI for Japan followed by the release of flash manufacturing, services and composite PMIs for France, Germany and the Euro Area, before the US PMIs are out in the afternoon. We'll also get Germany's final Q3 GDP revisions. Away from that, ECB Vice President de Guindos is due to speak.
Finally, looking at the US alone, Goldman notes that the key economic release this week is the durable goods report on Wednesday. New York Fed President Williams will speak on Monday.

Monday, November 19
  • 10:00 AM NAHB housing market index, November (consensus 67, last 68)
  • 10:45 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will speak in a moderated Q&A session in the Bronx in New York City. Audience Q&A is expected.
Tuesday, November 20
  • 08:30 AM Housing starts, October (GS 2.7%, consensus 1.6%, last -5.3%); Building permits, October (consensus -0.8%, last 1.7%): We estimate housing starts increased 2.7% in October after a decline in September (-5.3%). We expect a modest drag from Hurricane Michael, but starts look somewhat low relative to building permits. Over the next few quarters, we expect higher interest rates and tax reform to continue to weigh on homebuilding.
Wednesday, November 21
  • 08:30 AM Durable goods orders, October preliminary (GS -3.5%, consensus -2.5%, last +0.7%); Durable goods orders ex-transportation, October preliminary (GS +0.1%, consensus +0.4%, last flat); Core capital goods orders, October preliminary (GS +0.1%, consensus +0.2%, last -0.1%); Core capital goods shipments, October preliminary (GS +0.4%, consensus +0.2%, last -0.1%): We expect durable goods orders to decrease in the October report, given a sharp decline in commercial aircraft orders. We expect stagnant growth in core capital goods orders given trade tensions and slowing global growth. Manufacturing production growth was slightly above expectations in October, with significant growth in the capex-sensitive business equipment category of industrial production. Accordingly, we see scope for a 0.4% increase in core capital goods shipments, especially after two consecutive months of declines.
  • 08:30 AM Initial jobless claims, week ended November 17 (GS 215k, consensus 215k, last 216k); Continuing jobless claims, week ended November 10 (consensus 1,652k, last 1,676k): We estimate jobless claims edged down by 1k to 215k in the week ended November 17, following a 2k increase in the prior week.
  • 10:00 AM Existing home sales, October (GS -0.3%, consensus +1.0%, last -3.4%): We look for existing homes sales to decline by 0.3% in October based on regional housing data, following a 3.4% decline in September. Existing home sales are an input into the brokers' commissions component of residential investment in the GDP report.
  • 10:00 AM University of Michigan consumer sentiment, November final (GS 97.9, consensus 98.3, last 98.3): We expect the University of Michigan consumer sentiment index to edge down 0.4pt from the preliminary estimate for November due to renewed stock market declines and the potential impact of midterm election results on sentiment. The report’s measure of 5- to 10-year inflation expectations stood at 2.6% in the preliminary report for November.
Thursday, November 22
  • Thanksgiving holiday. NYSE closed. SIFMA recommends bond markets also close.
Friday, November 23
  • NYSE will close early at 1:00 PM. SIFMA recommends an early 2:00 PM close to bond markets.
  • 09:45 AM Markit Flash US manufacturing PMI, November preliminary (consensus 55.8, last 55.7); 09:45 AM Markit Flash US services PMI, November preliminary (consensus 55.0, last 54.8)
Source: Deutsche Bank, Bank of America, Goldman Sachs

https://www.zerohedge.com/news/2018...-week-more-brexit-euro-budget-and-global-pmis
 

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"Rogue Wave" Wipes Out Entire Fund - Just the Beginning?
Silver Fortune


Streamed live 2 hours ago
A wake up call for those shorting volatility, and many other topics this morning.

Help support the Silver Fortune Channel through my sponsor, SD Bullion - 10 oz. of Silver at Spot! https://sdbullion.com/sf

Support Silver Fortune through Patreon: https://www.patreon.com/silverfortune

Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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Putin & Erdogan to open Turkish Stream gas pipeline’s offshore section
RT


Streamed live 2 hours ago
#Putin & #Erdogan to open Turkish Stream gas pipeline’s offshore section
#TurkishStream
 

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Ira Epstein's End of the Day Financial Video 11 19 2018
Ira Epstein


Published on Nov 19, 2018
 

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Ira Epstein's End of the Day Agriculture Video 11 19 2018
Ira Epstein


Published on Nov 19, 2018
 

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Malinvestments: The Seeds for the Next Economic Crisis.
maneco64


Published on Nov 20, 2018
 

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Share Talk Bulletin Board Heroes, Tuesday 20th November 2018
Share Talk


Published on Nov 20, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Falanx Group Limited (FLX)
Haydale (HAYD)
Itaconix Plc (ITX)
Okyo Pharma Li. (OKYO)
Pcg Ent (PCGE)
SolGold (SOLG)
Uk Oil & Gas (UKOG)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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"A Sea Of Red": Global Stocks Plunge With Tech Shares In Freefall


by Tyler Durden
Tue, 11/20/2018 - 07:21


While there was some nuance in yesterday's pre-open trading, with Asia at least putting up a valiant defense to what would soon become another US rout, this morning the market theme is far simpler: a global sea of red.

Stocks fell across the globe as worries over softening demand for the iPhone prompted a tech stock selloff across the world, while the arrest of car boss Carlos Ghosn pulled Nissan and Renault sharply lower. Even China's recent rally fizzled and the Shanghai composite closed down 2.1% near session lows, signalling that the global slump led by tech shares would deepen Tuesday, adding a new layer of pessimism to markets already anxious over trade. Treasuries advanced and the dollar edged higher.



S&P 500 futures traded near session lows, down 0.6% and tracking a fall in European and Asian shares after renewed weakness in the tech sector pushed Nasdaq futures sharply lower for a second day after Monday's 3% plunge and crippled any hopes for dip buying. News around Apple triggered the latest bout of stock market selling, after the Wall Street Journal reported the consumer tech giant is cutting production for its new iPhones.

Europe's Stoxx 600 Index dropped a fifth day as its technology sector fell 1.3% to the lowest level since February 2017, taking the decline from mid-June peak to 21% and entering a bear market. Not surprisingly, the tech sector was the worst performer on the European benchmark on Tuesday, following Apple’s decline to near bear-market territory and U.S. tech stocks plunge during recent sell-off. The selloff was compounded by an auto sector drop led by Nissan and Renault after Ghosn, chairman of both carmakers, was arrested in Japan for alleged financial misconduct. The European auto sector was not far behind, dropping 1.6 percent, and the broad European STOXX 600 index was down 0.9 percent to a four-week low.

“Most of Europe had a red session yesterday and that has been compounded by the news on Apple and tech stocks overnight, The overall climate is risk off,” said Investec economist Philip Shaw. “Beyond stocks, the Italian bonds spread (over German bonds) is at its widest in about a month now, and Brexit continues to rumble on - uncertainty is very much hurting risk sentiment,” he added.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.2 percent, with Samsung Electronics falling 2 percent. In Japan, Sony Corp shed 3.1 percent. Japan’s Nikkei slipped 1.1 percent, with shares of Nissan Motor Co tumbling more than 5% after Ghosn’s arrest and on news he will be fired from the board this week.

Meanwhile, as noted yesterday, the CDS index of US investment grade issuers blew out to the widest level since the Trump election, signaling renewed nerves about the asset class.



Exactly two months after the S&P hit all time highs, stocks have been caught in a vicious decline and continue to struggle for support as some of the technology companies that helped drive the S&P 500 to a record high earlier this year tumbled amid a slowdown in consumer sales and fears over regulation, many of them entering a bear market.

At the same time, a more gloomy macro outlook is emerging, with Goldman chief equity strategist David kostin overnight recommending investors hold more cash even as it reiterated its base case of S&P 3000 in 2019.



Ray Dalio disagreed, and said that investors should expect low returns for a long time after enjoying years of low interest rates from central-bank stimulus.

“The easy days of long, global bull markets where you can invest in a tracker for five basis points -- I say this as an active fund manager -- and watch the thing go up, I think those days are gone,” Gerry Grimstone, chairman of Barclays Bank PLC and Standard Life Aberdeen PLC, said in an interview on Bloomberg Television. “It’s going to be a move back to value investing, and back to the Warren Buffett-style of investment.”

In the latest Brexit news, UK PM May is reportedly drawing up secret plans to drop the Irish border backstop and win support from angry Brexiteers, while reports added PM May has received agreement from the EU to drop the backstop plan if both sides can agree on alternative arrangements to keep the border open. Meanwhile, Brexiteers reportedly still lack the sufficient number of signatures required to trigger a no-confidence vote against UK PM May, the FT reported. In related news, Brexit rebels reportedly admitted attempts to oust PM May has stalled as Eurosceptic MPs turned on each other. The Telegraph also reported that the confidence vote now appears to be on hold until after Parliament votes in December on Mrs May's Brexit deal.

Sky News reported that the UK government are to publish new analysis before the MPs’ meaningful vote on the Withdrawal Agreement comparing the “costs and benefits” of Brexit. The impact of three scenarios will be measured; no Brexit, no deal, and leaving with the government's draft deal and a free trade agreement.

In rates, Treasuries rose, driving the 10-year yield down to its lowest level since late September, ahead of Thanksgiving Thursday. Italian government bond yields jumped to one-month high on Tuesday and Italian banking stocks dropped to a two-year low, hurt by risk aversion and concerns over the Italian budget. Euro zone money markets no longer fully price in even a 10 bps rate rise from the European Central Bank in 2019, indicating growing investor concern about the economic outlook in the currency bloc.

In FX, the Bloomberg Dollar Spot Index whipsawed in early London trading even as it stayed near a more than one-week low on concern cooling global growth will slow the pace of Fed rate hikes, keeping Treasury yields under pressure. At the same time, the pound stabilized as Theresa May appealed to business leaders to help deliver her Brexit deal, and evidence mounted that a plot to oust her as U.K. Prime Minister is faltering.

The euro slid as Italian bonds dropped, pushing the yield spread to Germany to the widest in a month; the currency had opened the London session higher, supported by corporate buying in EUR/GBP. The yen rallied to a month-to-date high as Asian stocks followed a U.S. equity slide while the New Zealand dollar got a boost from a jump in milk production; the Aussie was on the back foot even after the RBA said Australia’s unemployment rate could fall further in the near term. India’s rupee rallied a sixth day after the central bank signaled a compromise with the government in their dispute over reserves.

Bitcoin extended its drop below $4,500 for the first time since October 2017.

WTI crude oil futures hovered around $57 a barrel after oil prices lost steam as fears about slower global demand and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries. Brent crude slipped 0.9 percent to $66.21 per barrel.

In other overnight news, BoJ Governor Kuroda said there is currently no need to ease further, while he added that there was a need for bold monetary policy in 2013 and now we need to persistently continue with policy. Furthermore, Kuroda suggested that the chance of reaching the 2% inflation target during FY2020 is low. Japanese PM Abe says the next initial budget is to have measures to address sales tax.

India's Finance Ministry sources expect that the RBI will stand pat on rates at its meeting next month.

RBA Governor Lowe states that steady policy is to be maintained for 'a while yet' and it is likely that rates will increase at some point if the economy progresses as expected.

Expected data include housing starts and building permits. Best Buy, Campbell Soup, Lowe’s, Medtronic, Target, TJX, and Gap are among companies reporting earnings.

Market Snapshot
  • S&P 500 futures down 0.8% to 2,676.00
  • STOXX Europe 600 down 0.5% to 353.25
  • MXAP down 1% to 150.89
  • MXAPJ down 1.2% to 481.70
  • Nikkei down 1.1% to 21,583.12
  • Topix down 0.7% to 1,625.67
  • Hang Seng Index down 2% to 25,840.34
  • Shanghai Composite down 2.1% to 2,645.85
  • Sensex down 0.8% to 35,498.94
  • Australia S&P/ASX 200 down 0.4% to 5,671.79
  • Kospi down 0.9% to 2,082.58
  • German 10Y yield fell 1.4 bps to 0.359%
  • Euro down 0.2% to $1.1433
  • Italian 10Y yield rose 10.4 bps to 3.223%
  • Spanish 10Y yield rose 0.3 bps to 1.653%
  • Brent futures down 0.8% to $66.23/bbl
  • Gold spot little changed at $1,223.14
  • U.S. Dollar Index up 0.1% to 96.29
Top Overnight News
  • Bank of England governor Carney appears before lawmakers on Tuesday. He’ll be joined by fellow interest-rate setters Jon Cunliffe, Andy Haldane and Michael Saunders. Treasury Committee Chair Nicky Morgan has already asked the BOE to assess any agreement
  • While Salvini is threatening to hijack the EU agenda as the dispute over Italy’s 2019 budget heats up, his closest adviser is trying to steer the populist coalition away from a head-on clash with Brussels, according to senior government and League officials who asked not to be named discussing confidential matters
  • Credit markets are set for the worst year since the global financial crisis as investors abandon hope of a late-2018 rally
  • Turmoil engulfed cryptocurrency markets again on Tuesday, with every major coin extending a rout that’s rocking confidence in the nascent asset class. Bitcoin, which started the year at more than $14,000, has fallen below $4,500. Rivals including Ether, Litecoin and XRP joined the slide, though they pared losses that reached as much as 17 percent
  • Evidence is mounting that the plot to oust U.K. Prime Minister Theresa May is faltering. One rebel leader said in private that more than 50 Tories had claimed they would submit letter but they hadn’t all followed through
  • Germany and France have warned the EU to do more to prevent the U.K. from being able to claim victory in Brexit talks, according to EU diplomats. Spain’s Foreign Minister said the EU shouldn’t accept a text on a Brexit agreement that Spain isn’t happy with
  • U.K. Labour Party leader Jeremy Corbyn said he wants to keep a second Brexit referendum open as an option
  • Australia’s unemployment rate may fall further in the near term based on leading indicators of labor demand, the central bank said in minutes of its November meeting
  • Bank of Japan Governor Haruhiko Kuroda says he welcomes a diversity of opinion on the effectiveness of negative rates. He also said he believes continuing current policy is best approach for achieving the central bank’s inflation target
Asian stock markets were lower across the board as the risk averse tone rolled over from Wall St, where the tech sector led the sell-off as Apple shares dropped nearly 4% on reports it had reduced production orders and with all FAANG stocks now in bear market territory. As such, the tech sector underperformed in the ASX 200 (-0.4%) and Nikkei 225 (-1.1%) was also pressured with Mitsubishi Motors and Nissan among the worst hit after their Chairman Ghosn was arrested on financial misconduct allegations. Shanghai Comp. (-2.1%) and Hang Seng (-2.0%) were heavily pressured after the PBoC continued to snub liquidity operations and as China’s blue-chip tech names conformed to the global rout in the sector, while JD.com earnings added to the glum as China’s 2nd largest e-commerce firm posted its weakest revenue growth since turning public. Finally, 10yr JGBs were weaker amid profit taking after futures recently hit their highest in around a year and following mixed results at today’s 20yr auction.

Top Asian News
  • BlackRock Doesn’t Expect Significant Growth Slowdown in China
  • China Stocks Lead Global Losses as Tech Rout Hits Fragile Market
  • Stock Traders in Asia Keep Finding New Reasons to Hit ’Sell’
  • World’s Largest Ikea to Open in Manila as Company Bets on Asia
Major European indices are largely in the red, with the SMI outperforming (+0.1%) which is being bolstered by Novartis (+1.0%) following their announcement of a joint digital treatment with Pear Therapeutics for substance abuse disorder. The DAX (-0.7%) is lagging its peers, weighed on by Wirecard (-5.0%) following a disappointing change to guidance forecasting as well as weak sentiment across IT names after the FAANG stocks entered bear market territory on Wall St. In particular, the Stoxx 600 Technology sector (-1.9%), dropped to its lowest level since Feb 2017. Meanwhile, Deutsche Bank (-2.5%) are in the red due to reports that the Co processed payments for Danske Bank in Estonia.

Top European News
  • Draghi’s Man in Rome Shows Populists Alert to Budget Backlash
  • BASF Targets $2.3 Billion Profit Boost From Corporate Revamp
  • Danske Fights Back as Hush Money Claims Raise New Questions
  • The One Thing Supercharging Europe Earnings in 2018 Is Crashing
  • As Things Stand, Spain Will Vote Against Brexit Deal: Sanchez
In FX, the DXY index remains technically prone to further downside pressure having closed below another Fib support level yesterday and testing the next bearish chart area around 96.050-10 ahead of 96.000 even. However, a more concerted bout of risk-off trade/positioning saved the DXY and broad Dollar from steeper declines as the tech-induced sell-off in stocks intensified, and jitters over Brexit alongside the Italian budget returned to the fore.

NZD/AUD - The Kiwi is bucking the overall trend and outperforming in contrast to this time on Monday, with Nzd/Usd rebounding firmly to 0.6850+ levels and Aud/Nzd retreating through 1.0650 to just south of 1.0600 following overnight data showing a hefty 6.5% y/y rise in NZ milk collections for October. Conversely, the Aud/Usd has slipped back under 0.7300 again, and close to 0.7250 in wake of RBA minutes underscoring no rush to hike rates and subsequent affirmation of wait-and-see guidance from Governor Lowe. In fact, he asserts that the jobless rate could decline to 4.5% vs 5% at present without inducing wage inflation, while also underlining concerns about the supply of credit.

JPY/CHF - Both benefiting from their more intrinsic allure during periods of pronounced risk aversion and investor angst, as Usd/Jpy probes a bit deeper below 112.50 and a key Fib at 112.46 that could be pivotal on a closing basis with potential to expose daily chart support circa 112.16 ahead of 112.00. Meanwhile, the Franc has inched closer to 0.9900 and over 1.1350 vs the Eur that remains burdened with the aforementioned Italian fiscal concerns.

GBP/EUR - Almost a case of déjà vu for Sterling and the single currency as early attempts to the upside vs the Greenback saw Cable and Eur/Usd revisit recent peaks around 1.2880 and 1.1470 respectively, but a combination of chart resistance and bearish fundamentals forced both back down to circa 1.2825 and 1.1425. In terms of precise technical/psychological levels, 1.2897 and 1.1445 represent Fib retracements, ahead of 1.2900 and 1.1500, while the Pound has remained relatively unchanged and unresponsive to largely on the fence pending Brexit rhetoric from the BoE in testimony to the TSC on November’s QIR.

In commodities, gold has stayed within a USD 5/oz range and traded relatively flat throughout the session moving with the steady dollar ahead of US Thanksgiving. Similarly, copper traded lacklustre breaking a 5-day rally because of a subdued risk sentiment stemming from ongoing US-China trade tensions; with Shanghai rebar adversely affected from these factors. Brent (-0.1%) and WTI (+0.2%) are following a relatively quiet overnight session, while recent upticks in the complex resulted in WTI reclaiming the USD 57/bbl and Brent edging closer to USD 67/bbl. This follows comments from IEA Chief Birol that Iranian oil exports declined by almost 1mln BPD from summer peaks. Looking ahead, traders will be keeping the weekly API crude inventory data which is expected to print a build of 8.79mln barrels.

On today's light data calendar, in the US, there should be some interest in the October housing starts and building permits data, especially following Fed Chair Powell’s recent comments acknowledging a slowdown in the housing market and yesterday’s homebuilder data. Away from that, the BoE’s Carney is due to appear before the Parliament’s Treasury Committee to discuss the Inflation Report, while the ECB’s Nouy and Bundesbank’s Weidmann are both scheduled to speak at separate events.

US Event Calendar
  • 8:30am: Housing Starts, est. 1.23m, prior 1.2m; MoM, est. 1.79%, prior -5.3%
  • 8:30am: Building Permits, est. 1.26m, prior 1.24m; MoM, est. -0.79%, prior -0.6%
DB's Jim Reid concludes the overnight wrap
With the sell-off of the last 24 hours we have now traded through the last of our YE 2018 top level credit spread forecasts as US HY widened 6bps to +424bps (YE 2018 forecast was 420). We still think US HY is the most expensive part of the EUR & US credit universe but as discussed above, last night we’ve become more optimistic on all credit in the near-term after what has been the worst week of the year. Credit massively under-performed equities last week but equities caught up on the downside yesterday. The sell-off was underpinned by the FANG names selling off, an accounting scandal emerging at Nissan, oil swinging around and the US housing market spooked by weak data.

Just on the market moves first, the NASDAQ and NYFANG indexes slumped -3.03% and -4.28% yesterday, registering their fourth and third worst days of the year, respectively. Facebook and Apple fell -5.72% and -3.96% respectively, as the sector remains pressured amid a slew of negative PR and the spectre of stricter government regulation. Over the weekend, Apple CEO Tim Cook said in an interview that “the free market is not working” and that new regulation is “inevitable”. This negatively impacted highly-valued social media companies. Twitter and Snapchat traded down -5.02% and -6.78% respectively. The tech sector was further pressured after the WSJ reported that Apple had cut production orders in recent weeks for the new model iPhones, with chipmakers broadly trading lower and Philadelphia semiconductor index shedding -3.86%. The S&P 500 and DOW also slumped -1.66% and -1.56% respectively while in Europe the STOXX 600 turned an early gain of +0.71% into a loss of -0.73%. In credit, cash markets were 2bps and 11bps wider for Euro IG and HY and 2bps and 6bps in the US. CDX IG and HY were, however, 3bps and 11bps wider, respectively. Elsewhere, WTI oil first tested breaking through $55/bbl yesterday, after Russia stopped short of committing to supply cuts, before recovering to close +0.52% at $56.76.

Bond markets were relatively quiet, with Treasuries and Bunds ending -0.4bps and +0.6bps, respectively, albeit masking bigger intraday moves. BTP yields rose +10.6bps to 3.597%, within 10 basis points of their recent closing peak, as rhetoric between Italian officials and their European peers continued to intensify. Finance Ministers from Austria and the Netherlands separately spoke publicly about their concerns, and expressed their hope that the European Commission will loyally enforce the fiscal rules. Italian Finance Minister Tria tried to calm conditions by framing the disagreement as relatively minor, though he also accused the Commission of being biased against expansionary policies, which he argued are needed to avert a macro slowdown.

Back to credit, as we highlighted yesterday, the recent weakness in the asset class has become a talking point for broader markets and while our view is now that value is starting to emerge, there are an increasing number of idiosyncratic stories plaguing the market. There were a couple more examples yesterday with the aforementioned story about Nissan removing its chairman after being arrested for violations of financial law. This caused Renault’s CDS to widen +25.0bps (equity down -8.43%), while Vallourec bonds dropped 15pts after falling 11pts on Friday as concerns mount about the company’s rising leverage in the wake of recent results. Like we’ve see in equity markets, it does feel like credits are now getting punished with sharp moves in the wake of negative headlines Certainly something to watch, but as we said above, credit is now much more attractively priced than it has been for some time.

From steel tubing to Downing Street, where we’ve actually had a rare temporary lull for Brexit headlines over the last 24 hours, although behind the scenes it does look we’re getting closer to the threshold for a confidence vote in PM May with the Times yesterday reporting that “senior Brexiteers” had told reporters that they had “firm pledges” from over 50 MPs to submit letters. As a reminder, 48 are needed to trigger the process. Looking further out, yesterday DB’s Oliver Harvey published a report arguing that there is still a path towards an orderly Brexit based on the existing Withdrawal Agreement should May survive a confidence vote. This path is provided by the political declaration on the future economic relationship. The latter has yet to be negotiated, and as the EU27 and UK recognise in the joint statement, the existing temporary customs arrangement (TCA) already provides a basis for a future economic relationship. Oli argues that the UK should push for the political declaration on the future relationship to explicitly commit the UK to a form of Brexit that might be described as “Norway plus.” The temporary customs arrangement would become permanent, but under the governance framework of UK membership of the EEA and EFT. The UK should tie the political declaration on the future relationship to the good faith clause in the existing Withdrawal Agreement, meaning that if negotiations were not pursued on these lines after the transition period had begun, the UK could withhold payments from the EU27. This would help to allay concerns from across the political divide that the UK would be “trapped” in a sub optimal customs union with the EU27.

Meanwhile, to complicate matters, Bloomberg has reported that the EU is mulling over issuing a series of separate statements on Brexit on Sunday, in addition to the Withdrawal Agreement and the Political Declaration. This comes after pressure from some EU countries not to appease any additional UK demands. Elsewhere, the SUN has reported that the PM May has drawn up a secret plan to scrap the Irish backstop arrangement in an attempt to win over angry Tory Brexiteers after a meeting with them yesterday. However, if a mutually agreeable solution couldn’t be found over the last couple of years, it seems tough to imagine one was finally found yesterday afternoon. We’ll see.

Further adding to the complexity of where Brexit heads, last night the DUP abstained on the UK finance bill, which implements the budget. This stops short of their prior threat to actively vote against the legislation, but is still a surprise and signals that further political turbulence between PM May and the DUP is likely. The bill only just scraped through. Sterling finished +0.14% yesterday and this morning is trading flattish (+0.02%) in early trade.

Sentiment more broadly in Asia is following Wall Street’s lead with almost all markets trading in a sea of red. The Nikkei (-1.25%, with Nissan Motors down as much as -5.41% and Mitsubishi Motors -6.71%), Hang Seng (-1.84%), Shanghai Comp (-1.63%) and Kospi (-0.96%) are all down along with most other markets. Elsewhere, futures on S&P 500 (-0.29%) are extending losses as we type.

Back to yesterday, where as we mentioned at the top, weak US homebuilder sentiment survey data played its part in the moves for markets. The November NAHB housing market index tumbled to 60 from 68 in October after expectations had been for just a 1pt drop. That’s the lowest reading since August 2016 and biggest one-month drop since February 2014. The details weren’t much better and falls into line with the expectation of a softer outlook for housing. As you’ll see in the day ahead we’ve got more housing data in the US today so worth keeping an eye on even if the October data for starts could be distorted by Hurricane Michael.

As far as the day ahead is concerned, we’re fairly light on data today with Q3 employment stats in France, October PPI in Germany and November CBI total orders data in the UK the only releases of note. In the US, there should be some interest in the October housing starts and building permits data, especially following Fed Chair Powell’s recent comments acknowledging a slowdown in the housing market and yesterday’s homebuilder data. Away from that, the BoE’s Carney is due to appear before the Parliament’s Treasury Committee to discuss the Inflation Report, while the ECB’s Nouy and Bundesbank’s Weidmann are both scheduled to speak at separate events.

https://www.zerohedge.com/news/2018-11-20/sea-red-global-stocks-plunge-tech-shares-freefall
 

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Asian Metals Market Update: Nov 20 2018
By: Chintan Karnani, Insignia Consultants
Gold and silver are steady. There is good demand for physical gold in China and ASEAN nations. Prices of gold and silver are low in Asia due to a stronger currency against the US dollar. People are taking advantage of stronger currency to buy gold. There will be sudden one way moves in bullion anytime till Friday. Asian markets and Asian traders do not sleep on US holidays. Silver demand is superb in north India. Gold demand in India is stable as people are waiting for more price falls to buy.
 

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EXCLUSIVE - ‘I’m NOT a racist': Chipotle manager, who was fired after asking a serial dine-and-dasher to pay before ordering, breaks her silence and reveals she HASN'T decided whether to take her job back

  • Dominique Marie Moran, 23, lost her job at the Chipotle restaurant in St Paul, Minnesota, after a 21-year-old customer accused her of racial stereotyping
  • His history of dining and dashing was then revealed - with several tweets boasting about not paying for Chipotle
  • Moran said that she was devastated to have been painted as a racist - ‘I feel I’m a genuine person and helpful, I thrive from making people happy,' she said
  • After firing Dominique on Friday, Chipotle has now offered her the job back but have not apologized
  • She exclusively told DailyMail.com: ‘I’m not sure if I’m going to take the [job] offer yet. I feel grateful but at the same time I still have questions'
https://www.dailymail.co.uk/news/ar...ger-fired-called-racist-offered-job-back.html
 

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Ira Epstein's End of the Day Agriculture Video 11 20 2018
Ira Epstein


Published on Nov 20, 2018
 

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'Recession is so far in the distance I can't see it!' Trump's top economic adviser says fears of collapse are 'nonsense' as stocks erase ALL of 2018's gains in a few hours and five top tech stocks lose $1 trillion in value

  • Larry Kudlow told reporters Tuesday that there is no economic recession on Ameirca's horizon
  • 'Recession is so far in the distance I can't see it!' he said at the White House
  • By the time he spoke in mid-morning Facebook, Amazon, Apple, Netflix and Google's parent company Alphabet had lost $1 trillion in market value combined
  • And the stock market had wiped out all of 2018's gains
  • Kudlow pooh-poohed what turned out to be a deep recession in late 2017, saying: 'It’s not going to happen'
  • The Dow closed at 24,465 on Tuesday, 550 points down from Monday
https://www.dailymail.co.uk/news/ar...ic-adviser-says-fears-recession-nonsense.html
 

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£14million of Nissan cash was used to buy homes in Paris, Beirut, Rio de Janeiro and Amsterdam for under-fire chairman, it is claimed - to add to his £2.7million Tokyo apartment

  • Carlos Ghosn was arrested in Tokyo on suspicion of under-reporting his salary
  • Nissan said it had been probing possible improper practices of Ghosn and Representative Director Greg Kelly for months based on whistleblower report
  • Reportedly used £14m of company cash to buy homes in Paris, Rio and Beirut
  • Nissan and Mitsubishi shares plunge as car makers get ready to oust the men
  • Pictures show luxurious interior of Tokyo penthouse raided after Ghosn's arrest
https://www.dailymail.co.uk/news/ar...ares-plunge-arrest-chairman-Carlos-Ghosn.html
 

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Ira Epstein's End of the Day Financial Video 11 20 2018
Ira Epstein


Published on Nov 20, 2018
 

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Is A Social Credit System Coming to the U.S.?
Silver Fortune


Published on Nov 20, 2018
Make no mistake, this 2020 candidate is not a front runner. However, this is how these at first radical ideas, are introduced into our society.

Help support the Silver Fortune Channel through my sponsor, SD Bullion - 10 oz. of Silver at Spot! https://sdbullion.com/sf

Support Silver Fortune through Patreon: https://www.patreon.com/silverfortune


Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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Lessons From the OptionSellers.com Debacle.
maneco64


Published on Nov 21, 2018
 

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Share Talk Bulletin Board Heroes, Wednesday 21st November 2018
Share Talk


Published on Nov 21, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Bellzone (BZM)
Eurasia Mining (EUA)
Evgen Pharma (EVG)
Greatland (GGP)
Imaginatik (IMTK)
Sosandar (SOS)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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Futures Jump, Dollar Slides After Report Fed May End Hikes As Early As Spring


by Tyler Durden
Wed, 11/21/2018 - 07:13


After yesterday's historic rout in the market, there were signs of stabilization in overnight trading with most markets trading higher, with the key catalyst a report from MNI that the Fed may end its rate hikes as soon as this coming spring.



US stocks were set to open sharply firmer after two days of losses that wiped out the S&P500’s gains for the year and left the tech-heavy Nasdaq index teetering on the brink of falling into the red. Losses were concentrated in the technology sector, as investors dumped their holdings of FAANG shares and pushed the Nasdaq index to seven-month lows and energy shares too had dropped in line with a 6 percent oil price slump S&P 500.

“High-flying momentum stocks have come off in a fairly spectacular fashion. At one point Apple and Amazon accounted for 40 percent of U.S. equity gains and people were just recycling money into the winners,” said David Vickers, senior portfolio manager at Russell Investments. “That’s come off the boil and set the cat among the pigeons... We’ve seen a lot of reflexivity, when selling begets selling, the market starts to turn over, people take profits, it leads to another leg down and so on.”

That fed through to Asia on Wednesday, taking MSCI’s index of ex-Japan Asia-Pacific shares almost half a percent lower, but it clawed most of the losses to trade flat, with MSCI’s all-country benchmark was flat too, attempting to snap two days of falls.

Chinese stocks closed in the green and near session highs, rebounding from Tuesday's drop as Asia closed mixed, but it was Europe that showed the most promise with the Stoxx600 solidly in the green, led by Italy where BTPs rallied from the open, after a report that Deputy PM Salvini may be open to budget revisions; Salvini then denied the report, clarifying that he’s only open to tweaks and won’t compromise on the main issues.



Italians bond yields fell up to 16 basis points initially, putting 10-year yields on track for their biggest daily drop in almost a month but the market gave up some of its gains after the denials. Sentiment was then dented again, and the EUR snapped lower after Ansa reported that the European Union has rejected Italy’s 2019 budget - as expected - and that the Excessive Deficit Procedure would be warranted on Italy. Still, despite the expected escalation in the standoff between Italy and Europe, the Estoxx and DAX pushed higher but were off best levels with banks and telecoms leading gains as Italy's FTSE MIB outperformed peers with local banks +1.5%.

However, it was a report from wire service MNI just after 6am that caught the market's attention, when Market News International reported that the Federal Reserve is starting to consider at least a pause to its gradual monetary tightening and could end its cycle of interest rate hikes as early as the spring, citing senior people at the Fed they didn’t identify.

While a Dec. rate hike is all but assured, the debate will become more lively beginning at the central bank’s March meeting and certainly by June, MNI says. The paradox, of course, is that according to the Fed's own dot plot there will be at least 3 hikes in 2019, so for one or more Fed presidents to engage in such an ECB-esque trial balloon of defiance of Chairman Powell must mean that the disagreements within the FOMC over the future of monetary policy are truly boiling over.

While it is still very much unlikely that the Fed will halt its rate hikes in the spring absent a rout in stocks and bonds, the MNI trial balloon sent futures back to session highs...



... and slammed the Bloomberg dollar index back to session lows.



US Treasuries and the Eurodollar strip also pared losses and faded Wednesday’s bear steepening after the MNI report; that said, Fed rate hike expectations are steady on Wednesday morning with December 2018 pricing in 19bps, and the next 25bps increase expected in March 2019. The U.S. 10Y TSY yield is 1bp to 3.07% with December T-Note futures -20 ticks to 119-04+; U.S. 2/10s +1bp to 26bps; U.S. 5/30s steady at 43bps.

Today's modest gains immediately sparked positive commentary: "We view the sell-off as overdone and a bull-market correction, with valuations that have become more compelling,” Jason Draho, head of asset allocation, Americas, at UBS Global Wealth Management wrote in a note. "We recently increased our overweight to global equities on the view that the markets are already pricing in growth and trade risks."

Still, while the Fed trial balloon helped preserve upside momentum in risk assets, investor sentiment remains susceptible to minute to minute volatility that’s rocked markets since October as traders have to contend with President Trump tape bomb unpredictability and demands for lower rates as corporate credit spreads at two-year highs reflect investor angst about borrowing costs.

In FX, the euro got an early boost and Italian bonds rallied after the abovementioned La Stampa report that Italy’s Deputy Prime Minister Matteo Salvini may be open to budget revisions; it trimmed gains after his League party denied the report, and as the EU was said see Rome’s budget at serious non-compliance risk. The pound was little changed against the dollar, after earlier rising on the back of broader weakness in the greenback; Britain’s budget deficit widened in October as spending rose at the fastest pace in 11 years. Australian dollar rebounds from a one-week low hit very early in Asia as a recovery in oil prices combined with exporter demand to trigger short-covering ahead of U.S. Thanksgiving holiday.

In commodities, WTI also halted yesterday's dramatic rout near $54 a barrel after API showed that U.S. crude inventories unexpectedly fell last week against doubts over OPEC’s plans to cut output. Emerging-market shares and currencies were stable. Bitcoin advanced after a recent sell-off

Expected data include mortgage applications, durable goods orders, jobless claims and existing home sales. Deere and Metro are among companies reporting earnings

Market Snapshot
  • S&P 500 futures up 0.5% to 2,653.75
  • STOXX Europe 600 up 0.5% to 352.66
  • MXAP down 0.4% to 149.96
  • MXAPJ down 0.1% to 480.09
  • Nikkei down 0.4% to 21,507.54
  • Topix down 0.6% to 1,615.89
  • Hang Seng Index up 0.5% to 25,971.47
  • Shanghai Composite up 0.2% to 2,651.51
  • Sensex down 0.7% to 35,212.54
  • Australia S&P/ASX 200 down 0.5% to 5,642.77
  • Kospi down 0.3% to 2,076.55
  • German 10Y yield rose 1.6 bps to 0.366%
  • Euro up 0.1% to $1.1381
  • Italian 10Y yield rose 1.8 bps to 3.241%
  • Spanish 10Y yield fell 0.9 bps to 1.638%
  • Brent futures up 1.8% to $63.63/bbl
  • Gold spot up 0.2% to $1,224.29
  • U.S. Dollar Index down 0.1% to 96.77
Top Overnight News
  • German Chancellor Angela Merkel warned the U.K. it can’t set unilateral terms for leaving the European Union as Prime Minister Theresa May heads to Brussels to try to complete a contentious Brexit deal
  • The Brexit divorce deal can’t be improved, and EU governments have made that clear, said Northern Ireland Secretary Karen Bradley
  • Saudi Arabian oil production surged to a record near 11 million barrels a day this month after the kingdom received stronger-than-usual demand from clients preparing for a disruption in Iranian supplies, according to industry executives who track Saudi output
  • Oil at one point slumped more than 7 percent in London and New York on Tuesday. The selloff -- just like the previous Tuesday -- was exacerbated by banks selling futures to rebalance their positions as prices fell, said people active in the market who are familiar with the matter
  • OPEC’s bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 million barrels of oil a day
  • The U.S. on Tuesday accused China of continuing a state-backed campaign of intellectual property and technology theft even as the world’s two largest economies have descended into a tit-for-tat tariff war
Asian stocks mostly weakened as the global stock rout continued into the region following the losses in US, where the DJIA dropped over 500 points to turn negative YTD and in which energy names were pressured as oil slumped nearly 7%. ASX 200 (-0.5%) and Nikkei 225 (-0.3%) were led lower by spill-over selling seen across the commodity-related sectors, while Wesfarmers shares plummeted nearly 30% after the spin-off of its Coles unit which had its stock market debut today. Hang Seng (+0.5%) and Shanghai Comp. (+0.2%) opened with firm losses but then rebounded off their lows with price action choppy amid ongoing trade uncertainty and after criticism from USTR Lighthizer’s report that China has not altered its unfair practices and appears to have conducted further unreasonable actions in recent months. Finally, 10yr JGBs failed to benefit from the widespread risk averse tone with price action subdued amid a lack of BoJ presence in the bond market and after the weakness in T-notes as US investors closed positions heading in to Thanksgiving.

Top Asian News
  • The American Carnage Isn’t Tanking Stock Markets in Asia
  • China Refrains From Injecting Cash for Longest Time Since August
  • Beijing to Judge Every Resident Based on Behavior by End of 2020
  • China Said to Eye Steel Mega-Deal as Baowu Chief Joins Rival
  • Yuan Debt in the Bag for Philippines as Xi-Duterte Ties Grow
European equities are higher across the board (Eurostoxx 50 +0.8%) as the region stemmed the stock rout seen in Asia and Wall Street. Italy’s FTSE MIB (+0.6%) was initially outperforming with Italian banks higher amid initial reports from Italian press that Deputy PM Salvini could potentially be open to budget revisions, which were later dismissed by League sources ahead of the budget ultimately being rejected. In terms of sectors, financial names lost the top spot to telecom names, who are outperforming after French telecoms jumped following comments from Orange (+1.7%) CEO which renewed M&A gossip. Elsewhere, Indivior (-13.6%) fell to the foot of the Stoxx600 (+0.4%) after the Co. lost a US court ruling that had prevented Dr. Reddy’s from selling a generic version of a treatment for opioid addiction.

Top European News
  • Merkel Warns U.K. It Can’t Dictate Brexit Terms for EU Summit
  • Rudd Says Parliament Would Block No Deal: Brexit Update
  • Laundromat Whistle-Blower Testifies in Brussels: Danske Update
  • Nyrstar Wins Lifeline From Trafigura With $650 Million Deal
  • Airbus Names New CFO, COO to Replace Wave of Exiting Execs
In FX, the DXY index has maintained its recovery momentum into the midweek session, but is off best levels amidst a welcome reprieve in riskier assets and broad sentiment ahead of Thanksgiving. The DXY has drifted back from another uptick towards 97.000, though remains underpinned ahead of 96.500 and recent lows. The Greenback also retains an underlying bid as G10 and EM counterparts struggle to recoup losses beyond round number/psychological/technical resistance against the backdrop of heavy option expiries at strikes within close proximity to prevailing prices (and with major fundamental issues still prescient of course).
  • EUR/CAD - The single currency is holding up relatively well given more toing and froing on the Italian budget, but ultimately ongoing recalcitrant stance from Rome after reports about potential revisions were renounced in advance of the EU’s official rejection and potential if not probable EDP implementation (scheduled release time 11.00GMT, but appears to have been preannounced). However, 1.1400 is proving almost as obstinate and a decent 1 bn option expiry could well be keeping the headline pair in check. Meanwhile, the Loonie is off worst levels after sliding through 1.3300 and could be gleaning some encouragement from a partial recovery in oil prices in the run up to Canadian wholesale trade data.
  • GBP/CHF/JPY - All bucking the overall trend, albeit barely in terms of the Pound and Franc, as Cable pivots 1.2800 and Eur/Gbp straddles 0.8900 on Parliament approval aspirations as UK PM May heads to Brussels for more discussions on the Brexit draft and the coup to oust her seems to have fizzled out. Meanwhile, Usd/Chf has only tentatively bounced from near 0.9900 lows within a 0.9935-55 range vs Usd/Jpy back on the 113.00 handle vs a base around 112.30 at one stage on Tuesday when risk-off flows were rife, but bidding interest prevented further downside. Note, a raft of option expiries could be key into the NY cut, stretching from 111.90-112.00 to 114.00 and totalling some 11 bn.
  • EM - Rand in focus for several reasons, as Usd/Zar hovers near 14.0000 ahead of Thursday’s SARP policy meeting and following softer than expected SA inflation data, with a decent 1.1+ bn options expiring between 13.9000-14.0000 along with speculation about more strike action.
In commodities, WTI (+1.6%) and Brent (+1.4%) took a breather from yesterday’s selloff, where prices fell almost 7% with the decline attributed to supply concerns, negative risk sentiment and Trump’s protective approach to Saudi relations. Prices are underpinned by the latest API inventory data which printed a surprise drawdown in headline crude stockpiles. Traders will be keeping an eye on today’s DoE release for any hints of increased US shale production. Today will also see the release of the EIA natural gas storage data, which has been rescheduled due to the US Thanksgiving Holiday. Elsewhere, the metals complex is in positive territory with gold (+0.2%), silver (+0.7%) and copper (+0.5%) all supported by the pullback in the USD. Goldman Sachs said slump in oil reflects over supply concerns for 2019 and that technical position factors have exacerbated the volatility, while it also cited low liquidity heading into Thanksgiving as well as broader selling in commodities and cross-assets amid rising growth concerns.

In terms of the day ahead, we’re due to get a first look at October durable and capital goods orders data along with the latest weekly initial jobless claims data, October leading index, October existing home sales and final November University of Michigan consumer sentiment survey revisions. Away from that, Italy’s Finance Minister Tria is due face questions in the Lower House and as highlighted earlier, today is the day that the European Commission is due to publish opinions on the budget plans of Euro Area countries, including possibly Italy.

US Event Calendar
  • 8:30am: U.S. Durable Goods Orders, Oct. P, est. -2.6%, prior 0.7%; Durable Goods Orders Less Transportation, Oct. P, est. 0.4%, prior 0.0%
  • 8:30am: U.S. Initial Jobless Claims, Nov. 17, est. 215k, prior 216k; Continuing Claims, Nov. 10, est. 1650k, prior 1676k
  • 10am: U.S. U. of Mich. Sentiment, Nov. F, est. 98.3, prior 98.3
DB's Jim Reid concludes the overnight wrap
I suspect they’ll be a lot of market participants in the US relieved that they only have to make it through today to get to Thanksgiving. I suspect they’ll also be a lot of market participants outside of the US relieved that the US market won’t be open tomorrow and we’ll have a circuit breaker for now and a chance to take stock after a very difficult few days.

The sell-off baton has been passed from asset class to asset class of late and yesterday it was oil’s turn to pick it back up again with Brent and WTI crude shedding -6.69% and -6.84% respectively taking losses close to -30% in only around 7 weeks from its 4-year highs. A remarkable run. These moves dominated price action across other markets, with the energy sector (-3.29%) leading US equity declines and inflation breakevens trending lower. US 10-year TIPS-implied breakeven inflation rates are now down to 1.98%, taking their year-to-date change into negative territory for the first time. Somewhat worryingly, there are signs that the oil drop is a negative demand story, rather than a positive supply shock. Oil-importing countries, who would theoretically see an improvement in their terms-of-trade, did not see their currencies gain, e.g. the Turkish Lira the worst performer of the day, falling -1.37%.

There didn’t appear to be one particular event which triggered the oil move although our commodity strategy team did note that recent commentary is foreshadowing possible disappointments at the OPEC meeting on December 6th. They believe that Libya and Russia are unlikely to support a renewed push from Saudi Arabia for discipline and therefore fear an underwhelming meeting outcome. Anyway that weakness for oil did spread to the US HY energy sector which widened +13bps, meaning it is now 169bps wide of the October and YTD tights.

As for equities, well the NASDAQ closed down -1.70% but was as much as -2.81% lower at one stage, while the S&P 500 and DOW closed down -1.82% and -2.21% respectively – both marginally off their lows. The NYSE FANG index also recovered to finish -1.55% from its intraday low of -4.48%, though Apple did fall another -4.78% meaning it’s now -23.74 % off the October peaks and therefore in the definition of a bear market amid concerns over demand for products. That move is also equivalent to a loss of value of $265bn, or roughly the annual GDP of Bangladesh a country with 165 million people. Meanwhile, the VIX touched 23.81 intraday yesterday (highest since October 31st) before closing at 22.48. Apart from the oil sector, which led losses, consumer discretionary also fell -2.18% after profit outlooks for the likes of Target (-10.53%), TJX (-4.39%) and Kohl’s (-9.24%) all disappointed ahead of the busy holiday shopping period.

Back to credit, cash spreads for Euro IG and HY finished +4bps and +13bps wider yesterday while in the US, spreads outperformed a bit but were still +2bps and +7bps wider respectively. It’s worth noting that this is now the eighth day in a row that Euro HY spreads have widened, for a cumulative move of +72bps. In fairness, spreads moved wider eight days in a row back in September, but the total size of that widening was a rather mild +17bps. In May, they actually widened for 10 days in a row when BTP yields were soaring, however the size of that move was +59bps so the current run really stands out. In fact, the biggest eight-day move in recent years came during January 2016, when spreads blew out +79bps amid similar conditions to today: plummeting oil prices.

Considering the sizeable risk-off that we’re seeing at the moment we’re hardly witnessing the flock to safe haven assets that one might expect. Treasury yields were only down -0.7bps yesterday while Bunds rallied -2.2bps and the USD index gained +0.67%. Gold and the Japanese yen both actually sold off -0.17% and -0.14%, respectively, and both have traded in a fairly benign +/-3% range for November to date.

This morning in Asia, sentiment continues to be remain negative but markets have rallied off the opening lows where the likes of the Nikkei began trading down around -1.5%. As we type this has recovered to -0.32%. Elsewhere the same pattern has emerged with the Hang Seng (-0.10%), Shanghai Comp (-0.13%) and Kospi (-0.51%) all down but off their session lows. Oil has bounced a bit from yesterday and is up +1.75% as we go to print. S&P 500 futures (+0.37%) are also pointing towards a slight improvement in market mood.

Sentiment remains nervous though and not helped by the overnight release of a report on China from the US Trade Representative Robert Lighthizer’s office which accuses China of continuing a state-backed campaign of intellectual property and technology theft. The report said, “China fundamentally has not altered its acts, policies, and practices related to technology transfer, intellectual property, and innovation, and indeed appears to have taken further unreasonable actions in recent months.” This ramp up in rhetoric just 10 days ahead of the upcoming G20 meeting overshadowed earlier comments from the White House economic advisor Larry Kudlow about President Trump injecting “a note of optimism” into trade talks with China.

Back to more selling off markets from yesterday now. BTP yields spiked to an intraday high of 3.714% yesterday (+12bps) and the highest since last month before paring much of that to finish at 3.617%. That wild ride for BTPs comes prior to the European Commission today opining on the budget plans of the Euro Area nations. For Italy, under EU fiscal rules the European Commission had three weeks to issue an opinion on Italy from November 13th – when Italy left unchanged its 2019 draft budget plan. The suggestion however is that the Commission will opine on Italy at the same time as other Euro Area nations so we’re likely to hear today. Assuming the Commission pushes ahead with launching an EDP, the process involves the Commission informing the Eurogroup first. The next meeting of the Eurogroup is December 3rd so it’s possible that the process gets aggressively accelerated to meet that deadline.

Our economists have previously highlighted that the decision to launch an EDP remains a political one – the Commission proposes the action but the Eurogroup has the option to overrule. However, it could be difficult to reverse the decision of the Commission. The Eurogroup votes on a double majority of countries representing 65% of the population (the country under procedure does not vote). As long as Germany and France support an EDP, the remaining countries do not have enough weight in the qualified majority vote to overturn the decision. Anyway expect the BTP market to be focused on this today.

The Brexit front was relatively quiet again, though the DUP did abstain again on a procedural vote on the UK budget, forcing the Conservatives to accept several amendments from Labour in order to secure enough votes. The DUP are effectively on strike until they get things more their way on the Irish border thus making the running of government very challenging. Separately, BoE Governor Carney and Chief Economist Haldane testified to Parliament’s Treasury Committee and said they welcome the negotiated Withdrawal Agreement. Haldane noted that uncertainty may be weighing on business investment and could negatively impact fourth quarter economic growth, while Carney said that the risk of a no-deal Brexit outcome is “uncomfortably high.” The BoE policymakers plan to send new Brexit analysis to the Committee next week on November 29. Elsewhere, UK PM May is all set to travel to meet the EC President Juncker this evening in an effort to make progress on an outline of the future trade deal the two sides want to strike. She is likely to ask for further concessions from the EU given the backlash she is facing at home from euroskeptic Tories. However, it seems unlikely that the EU will give further headroom to the UK PM ahead of the upcoming Sunday summit where the two are expected to sign off on the 585-page exit agreement as well as the future partnership paper.

On the data front yesterday, US housing starts and building permits mostly met expectations. New starts came in at 1.23 million, up 1.5% mom but down over the last 12 months, while building permits were at 1.126 million, down -0.6% mom and also down over the last year. In Europe, French unemployment stayed at 9.1%, marginally better than consensus expectations which had called for a rate of 9.2%. German PPI inflation printed at 3.3% yoy as expected.

In terms of the day ahead, this morning we’ll get October public finances data in the UK along with the OECD’s latest economic forecasts. Across the pond this afternoon we’re due to get a first look at October durable and capital goods orders data along with the latest weekly initial jobless claims data, October leading index, October existing home sales and final November University of Michigan consumer sentiment survey revisions. Away from that, Italy’s Finance Minister Tria is due face questions in the Lower House and as highlighted earlier, today is the day that the European Commission is due to publish opinions on the budget plans of Euro Area countries, including possibly Italy.

https://www.zerohedge.com/news/2018...s-after-report-fed-may-end-hikes-early-spring
 

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Amazon Rolling Out 'Amazon Pay' Digital Wallet In Physical Stores


by Tyler Durden
Wed, 11/21/2018 - 07:27


As FAANG stocks lead the market lower during what has become a relentless Q4 selloff, Amazon is hoping to reassure anxious investors that the company's relentless expansion and revenue growth will continue. To wit, the company is taking another big step toward establishing itself as the American WeChat or Alipay as it seeks to become the dominant player in electronic consumer payments in the US and beyond. According to the Wall Street Journal, the e-commerce giant is hoping to undercut Apple's Apple Pay by persuading more brick-and-mortar merchants to accept its Amazon Pay digital wallet.

As it tries to build a foothold in payments outside of its Amazon Go stores, the company is reportedly focusing on building partnerships with restaurants and gas stations (businesses that have yet to be scalped by the Bezos revenue-absorption machine). To entice owners to give Amazon Pay a try, the company is dangling what appears to be a pretty enticing carrot: Amazon is promising to lower processing costs at a time when so-called "interchange" fees charged by Visa and MasterCard have been rising.



The mechanics of how customers will use the soon-to-be rolled out Amazon Pay haven't been revealed: It's unclear whether customers will scan product barcodes on their phones, or simply tap their phones at checkout kiosks. Apple has a slight advantage in the digital payments space - more than 5 million US merchants now accept its Apple Pay platform. However, unlike their Chinese peers where digital cash has become the de facto standard, US consumers have been reluctant to adopt digital wallets; fewer than 1% of all US card transactions. In China, paying street vendors in cash has become a thing of the past, as AliPay, TenPay and WeChat Pay have attracted more than half a million users.

Amazon Pay has been growing in digital sales. Over the past year, the number of online shoppers using Amazon Pay outside of Amazon.com has climbed to some 14% of online shoppers, according to Bernstein Research. But in-person payments are still lacing; Amazon is also pushing customers at its Whole Foods stores to start using Amazon Pay, which so far is only in regular use at Amazon's handful of Amazon Go locations.

The Amazon Pay push in the US follows the company's introduction of the service in Japan, where Amazon believes it will have an easier time convincing consumers who already use digital wallets to switch to Amazon. Amazon Japan has partnered with Nippon Pay to utilize the service at businesses in Tokyo and Fukuoka, according to Nikkei Asian Review.

If the progress in China has any bearing on the pace of adoption in the US, soon, paying with cash - and even physical credit cards - will be a thing of the past. For better or worse, global consumer commerce is inexorably moving toward a cashless society. And Jeff Bezos wants to make sure that his company will take an early lead.

https://www.zerohedge.com/news/2018...out-amazon-pay-digital-wallet-physical-stores
 

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We're Thankful For Higher Prices - 11/21/18
iScrap App


Published on Nov 21, 2018
Check Scrap Prices Today: https://iScrapApp.com/ - With copper jumping again the last few days even with the stock market tanking, we are watching for the meeting in Argentina like we have said for the last few weeks. This meeting, which many have VERY mixed feelings on, will be one of the most important dates in the metals calendar for the year. Many are predicting that we will be able to see either a large increase or decrease afterward, but now we have to wait and see. Read more: https://iscrapapp.com/?p=1200851

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Ira Epstein's End of the Day Agriculture Video 11 21 2018
Ira Epstein


Published on Nov 21, 2018
 

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Ira Epstein's End of the Day Financial Video 11 21 2018
Ira Epstein


Published on Nov 21, 2018
 

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Two senior Amazon employees snapped up condos a few blocks away from company's planned NYC headquarters just days BEFORE the announcement that is driving up real estate prices in the area

  • Report on Tuesday says Amazon employees bought condos in Long Island City before announcement that company would build new headquarters there
  • Condos are in the trendy new building Galerie, where prices start at $720K
  • Amazon's announcement spurred surge in real estate prices in the area
  • Real estate transactions appear legal, unlike trading stocks on insider info
  • Queens residents have protested the decision over $3B taxpayer giveaway
  • Locals also fear the 25,000 new employees will overwhelm public transit
https://www.dailymail.co.uk/news/ar...YC-real-estate-headquarters-announcement.html
 

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Big Government: An Unnecessary Burden.
maneco64


Published on Nov 22, 2018
 

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Share Talk Bulletin Board Heroes, Thursday 22nd November 2018
Share Talk


Published on Nov 22, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Anglo Asian (AAZ)
Bushveld Minerals (BMN)
Oilex (OEX)
Simec Atlantis (SAE)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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Global Markets Slide In Thin Trading, Pound Soars On Post-Brexit Agreement


by Tyler Durden
Thu, 11/22/2018 - 07:47


S&P futures slumped into the red, following a drop in European stocks while Asian shares traded mixed in a subdued day of trading thanks to Thanksgiving holiday; the big moves were in FX where the pound jumped, the euro strengthened and the dollar slumped after a draft deal on post-Brexit ties was tentatively agreed.



US cash markets may be closed, but futures are open, and overnight the Emini slumped to Wednesday's session lows before rebounding modestly.



Europe’s bourses dropped back into the red on Thursday as investor worries mounted about slowing global growth in the face of rising U.S. interest rates and trade tensions. The Stoxx Europe 600 Index dropped as much as 0.9%, giving up much of Wednesday’s gains as almost every sector fell, led by basic resources and banking shares. The biggest decliners include BAT -1.9%, Total -1.1%, HSBC -1%, AstraZeneca -1.1%, although trading volumes were lethargic. Italy was under pressure in both stock and bond markets as sparring resumed over its budget plans. Some disappointing big-name earnings added to the gloom.



Europe’s tech sector lost another 1.2 percent, but it wasn’t the worst performer. Banks were 1.6 percent weaker and mining companies and other resources firms were down nearly 2 percent and approaching a one-month low, reflecting the bitter Sino-U.S. trade war, encouraging investors to take money off the table before U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, meet in Argentina next week.

The pound soared, rising sharply above 1.29 and gilts fell as a draft Brexit deal pointing to deep ties between the U.K. and European Union as well as a solution to the Irish border question was agreed at a “political level,” according to the EU. Enthusiasm was dented however after Reutrers reproted that Spain will vote against the current Brexit draft proposal because of a lack of clarity on Gibraltar.



Earlier, Asian indexes swung between gains and losses before turning higher, with Japanese stocks getting an end-of-session boost on a report about a possible government rebate. MSCI’s broadest index of Asia-Pacific shares outside Japan had ended little changed after recovering from an initial wobble. The index has managed to hold up so far in November after three straight monthly declines, but is on track for its worst annual performance since 2011. Japan’s Nikkei had finished almost 0.7 percent higher but Chinese shares closed 0.4 percent in the red.



“Investors are still wary about whether they’ll see further lows, given none of the issues that drove the recent correction have dissipated,” said Shane Oliver, Sydney-based head of investment strategy at AMP.

Trading volumes in the region were also depressed. Singapore became the latest to warn about the potential impact on Thursday. The city state is considered as a bellwether for international trade.

“Risks in the global economy are tilted to the downside,” said Loh Khum Yean, Singapore’s permanent secretary for trade and industry.

Elsewhere, Bitcoin steadied, emerging-market assets were broadly stable and gold nudged upward. Treasuries didn’t trade because of the U.S. holiday. In commodities, China-sensitive metals like copper fell and oil prices reversed early gains, although they were still above one-year lows touched earlier this week. U.S. crude futures were last down 8 cents at $54.55 a barrel after hitting a one-year low of $52.77 on Tuesday. Brent eased 15 cents to $63.33, off Tuesday’s low of $61.71.

The US is closed today for Thanksgiving holiday.

Top Overnight News from Bloomberg
  • E.U., U.K. see free-trade area and deep regulatory cooperation; state "determination" to replace backstop: Draft
  • U.K. and European negotiators are working through the night to hammer out the final part of the Brexit deal as Theresa May fights to keep a crunch summit on Sunday on track. After meeting EU Commission President Jean-Claude Juncker Wednesday, PM Theresa May announced that she will return to Brussels for last minute talks on Saturday, just a day before EU leaders are due to sign off on the deal. That wasn’t expected: Brexit update
  • Technology stocks rose Wednesday, posting a partial rebound from a bruising three-day decline, though analysts said further volatility and losses are likely
  • Federal Reserve Chairman Jerome Powell and his colleagues are likely to turn more wary about marching interest rates higher after delivering a widely anticipated quarter percentage-point increase in December. Fed may pause cycle of rate hikes as early as spring: MNI
  • The Republican chairman of the U.S. Senate committee overseeing trade rebuffed a call by a dozen GOP senators to vote on a revised a U.S.-Canada-Mexico trade agreement this year, a move that likely will doom their effort
  • U.S. consumers will be hit hard if President Donald Trump goes ahead with tariffs on the remaining imports from China, worth about $260 billion in 2017. That’s because China has an "exceptionally large" market share in goods that have so far escaped the tariffs, according to Deutsche Bank AG. They note that 93 percent of U.S. laptop imports came from China in 2017 while 80 percent of mobile phone imports came from China
  • Italy PM Conte confident spread will narrow; acting responsibly on budget; Italy’s Di Maio sees margins for dialogue with EU; infringement procedure would be unfair; Salvini/Di Maio say won’t change a comma on budget: Repubblica
  • BTP Italia total placement closed at EU2.16b: Treasury
  • WSJ: Apple to offer Japan carriers discount to up iPhone XR sales
DB's Jim Reid concludes the overnight wrap
Happy Thanksgiving to all our US readers. Apparently Americans will consume up to 4,500 calories each over the course of today, although I read that us Brits consume around 7,000 on Xmas Day so our friends stateside are lightweights. For those working in financial markets both these numbers might be eclipsed this year after the stresses of the last couple of weeks. However, ahead of the holiday, there were some healthier markets yesterday to raise a glass to. In addition to that, we ran the numbers yesterday and the Friday after Thanksgiving has seen a ratio of positive to negative days for the S&P 500 of just under 2 to 1. This long-term daily average is 1.13 to 1.

Anyway, back to the present, where the rout which plagued just about every risk asset on Tuesday reversed to some degree yesterday with the NASDAQ (+0.92%), S&P 500 (+0.31%) and NYSE FANG (+0.51%) all closing higher. These indexes pared their peak intraday gains (S&P 500 up just over 1% at highs) though amid thin afternoon liquidity ahead of today's US holiday. The DOW closed flat, while in Europe the STOXX 600 (+1.14%) and DAX (+1.61%) both rallied before the US dipped after Europe went home. HY spreads in the US and Europe were both around -7bps tighter, and WTI and Brent rallied +1.97% and +1.34% respectively. The climb for oil was fairly steady during the day helped partly by a drop in the latest API inventories data and also President Trump’s early morning tweet in which he thanked Saudi Arabia for lower oil prices. Inventories data out of the EIA later in the session didn’t really move the dial.

There were seemingly a few reasons for the turn in sentiment. One was the decent rally for BTPs, where two- and 10-year yields fell -23.3bps and -14.6bps respectively, for their best day in over a month. As expected, the European Commission rejected the latest Italian draft 2019 plan, with Commissioner Moscovici warning against Italy adopting free-rider behaviour in comments with the press. The EC confirmed that they are not yet opening the EDP but suggested that they see this as the path which is opening ahead. Moscovici confirmed yesterday that Italy will have two weeks to answer queries put forward by the EC. After that, the EC will have to make the decision whether or not to recommend opening an EDP to the Eurogroup. The hope for Italy might be that Moscovici sounded willing to keep a dialogue open, rather than shutting the door completely. Our economists rightly noted that the ball is now back with Italy. On that, Deputy PM Salvini initially said yesterday that the Government is open to a dialogue on spending revisions but wouldn’t stretch to discussing the budget deficit or pension reform. A potential sign of compromise appeared to be enough for the market though with the FTSE MIB also climbing +1.41% and an index of Italian banks up +2.35%, both snapping a five-day losing run.

Also attracting some interest yesterday was an MNI article quoting ‘senior Fed sources’ as suggesting that the Fed is considering a pause in hiking rates and may also consider ending its tightening cycle as soon as spring next year. The article went on to say that Fed officials appear to be converging around 3% for the neutral rate and that policymakers see inflation as peaking around the current 2% level before falling lower. A couple of comments are worth making on this. The first is that MNI isn’t seen as the most reliable source for Fed news, and the second is that this story broadly repeats commentary we have already heard from Clarida and Powell in recent days. So not particularly groundbreaking in our view. Treasuries didn’t move much on the article and 10y yields ended flat, while two-year yields sold off +1.0bps by the close of play and the Dollar index edged down -0.11%.

Overnight Asian markets are mixed in thin trading due to today’s Thanksgiving holiday in the US and a holiday in Japan tomorrow. The Nikkei (+0.61%) and Hang Seng (+0.06%) are up while the Shanghai Comp (-0.55%) and Kospi (-0.39%) are down. Elsewhere, crude oil prices both WTI and Brent are down c. -0.35% this morning. On the data front, Japan’s October CPI printed in line with consensus at +1.4% yoy and core at +1.0% yoy while core-core CPI stood at +0.4% yoy.

Yesterday’s Brexit newsflow was fairly thin on the ground again, though Prime Minister May did meet with EU Commission President Juncker in Brussels. The two leaders made "good progress" according to a spokesman. More talks are planned for Saturday which is cutting it fine for Sunday’s summit, especially with some reports (BBC) suggesting that Friday is the key deadline to have things ready for the summit. Negotiators are working through the night to hammer out more on the agreement. Earlier in the session Gilt yields rose +1.3bps and the pound traded -0.09% weaker, as markets remain in a holding pattern ahead of the EU summit and the eventual UK Parliament vote, which is due sometime over next few weeks.

Meanwhile, the latest in the trade debate was the announcement by the WTO yesterday that they intend to launch a dispute investigation into the US allegations about China continuing a state-backed campaign of IP and technology theft. A decision is expected next year. In Germany Economy Minister Altmaier also announced that Germany planned to increase regulatory barriers to foreign investors by the end of this year, in effect making it harder for Chinese companies to launch takeovers of German companies. All this before the G20 meeting in just over a week now which will include a meeting between Trump and Xi Jinping on the sidelines. On that the FT reported yesterday that the draft communique made no explicit comment on fighting protectionism – language which has in essence been a mainstay of the statement since 2008.

The OECD released updated macroeconomic forecasts yesterday, and revised down its global growth projection for 2019 -0.4pp to 3.5% from the last May edition. The forecast for euro area growth was revised down -0.3pp to 1.8%, the US down -0.1pp to 2.7%, and China down -0.1pp to 6.3%. In their first projections for 2020, the OECD expects global growth to remain steady as faster growth in most EMs balances a further slowdown in developed markets and China.

It was a busy day for US economic data ahead of the Thanksgiving holiday, headlined by somewhat soft durable goods orders which fell -4.4% mom, the sharpest drop in over a year. Durables ex-transportation were soft as well, up +0.1% mom versus the expected +0.4%. Core capital goods orders were flat after a revised -0.5% mom drop in September. Our economists had highlighted their expectations for capex to slow over the medium term, so this data does not change their baseline forecasts. Separately, initial jobless claims ticked higher to 224,000 from 216,000 last week, which presents some downside risks to the November nonfarm payrolls report due two weeks from Friday. Finally, the University of Michigan consumer sentiment index moderated slightly to 97.5, though 5-10 year inflation expectations ticked up to 2.6% from 2.4%, matching their highest level since March 2016.

As far as the day ahead is concerned, with it being a holiday in the US and markets subsequently closed, we’re extremely sparse on data releases with November confidence indicators in France and the November consumer confidence print for the Euro Area the only readings of note. That being said it’s a packed day for the ECB with Angeloni, Weidmann, Knot, Visco and Mersch all due to speak. The ECB’s October meeting minutes are also out today with Italian Finance Minister Tria due to face questions in the Upper House this afternoon.The BoE’s Saunders then speaks tonight.

https://www.zerohedge.com/news/2018...hin-trading-pound-soars-post-brexit-agreement
 

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US Farm Bill Could Legalize Hemp – Effect on Cannabis Stocks

by inezfrans

Wed, 11/21/2018 - 15:14

Cannabis stocks all rallied into the legalization of its recreational use in Canada earlier this year. After the law came into order, there was a massive sell-off of the stocks. This could be interpreted as a classic “buy the rumor sell the news” type of event. Now a new potential catalyst could affect both the cannabis market and cannabis stocks. A new U.S. law removing the ban on industrial hemp can come into effect later this year. The Hill writes;

Senate Majority Leader Mitch McConnell (R-Ky.) pledged that language lifting the federal government’s longstanding ban on industrial hemp will be included in the engrossed version of HR 2: The Agriculture Improvement Act of 2018 (the farm bill)

The language also for the first time amends the federal Controlled Substances Act of 1970 so that industrial hemp plants containing no more than 0.3 percent THC are no longer classified as a schedule I controlled substance. This change would green light states to regulate the crop’s production and retail sale free from federal interference.

In essence the new law would mean a total federal approval of selling products based on Hemp, which produces one the main ingredients CBD. Furthermore one of the most important effects of the new bill could mean easing of banking restrictions for hemp producers, processors and retailers that sell products with them as it would no longer be federally illegal. In addition, hemp producers would access federal crop insurance and capital markets.

As the US market is by far the world biggest market, a potential passing of the bill would be game changing for the whole sector. Major Cannabis companies such as Tilray (TRLY US) have already stated that they aim to massively move into the U.S market if the bill passes. Bloomberg quoted Tilray CEO;

If Congress passes the farm bill, which would legalize non-intoxicating cannabidiol derived from hemp, Brendan Kennedy said Tuesday on the company’s third-quarter earnings call. He is also closely watching the STATES Act, which would give states the power to legalize marijuana without the threat of federal interference.

“Companies such as ours would deploy massive amounts of capital in one single location or two single locations in one or two states and quickly move that product from state to state,” Kennedy said

We have previously noted various stocks and EFTs to follow in the sector. With the recent general market turmoil, Cannabis stocks have like all other sectors taken big hits. This could potentially mean that the market have not priced in the new law passing. As an investor one should monitor the space potential passage of the new laws could mean further focus and movements in the stocks.

https://www.zerohedge.com/news/2018-11-21/us-farm-bill-could-legalize-hemp-effect-cannabis-stocks
 

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Cyber Threats To Shipping Grow In East Mediterranean


by Tyler Durden
Thu, 11/22/2018 - 05:00


Via Platts' 'The Barrel' blog,

In the first part of this double feature, Katherine Dunn investigates an emerging security risk for the shipping industry, as maritime authorities report a rising number of GPS failures



Early one Sunday in mid-March, a ship in Port Said, the northern gateway to Egypt’s Suez Canal, suddenly and inexplicably lost all connection to GPS on board.

“All of them affected,” the vessel’s crew wrote in a March 18 report to the US Navigation Centre of Excellence (NAVCEN), after a total of seven receivers lost connection to GPS. “Disturbance still continuous.”
The cause of disruption, after an investigation by NAVCEN, was listed as “unknown interference.”

In the following days, vessels in and around Port Said and the Suez Canal reported sudden and unexplainable outages in their GPS, some lasting days, and referenced dozens of vessels in the area experiencing the same problem.

The disruptions were concentrated around the Canal, but also extended north along a strip of sea, from just east of Cyprus to the Lebanese coast. NATO has also reported disruptions off the south coast of Turkey. While the GPS mostly just disappeared, the reports noted, sometimes it placed the vessels somewhere they were not: in one case, a vessel in Port Said appeared on GPS to be west of Alexandria, more than 150 nautical miles to the west.

US and NATO officials were paying attention, with good reason. The region has seen military tensions escalate in recent years, particularly off the coast of Syria. It is also a vital trade route: in March, 1,450 vessels of all sizes transited the waterway, about a third of which were oil tankers or LNG ships, according to data from the Suez Canal Authority. Those vessels were carrying about 61 million barrels of crude oil alone, or nearly 2 million b/d.

By March 23, just five days after the first report, the US Maritime Authority (MARAD) released an alert warning vessels of possible GPS interference in the East Mediterranean. By the summer, the incidents had drawn an alert from NATO’s Allied Maritime Command (MARCOM).

“In recent months, several electronic interferences have been detected, particularly GPS and AIS interference, as well as possible GPS jamming in the East Mediterranean,” a July 31 advisory warned.​
Altogether, 16 individual reports of GPS interruptions were made between March 18 and November 4, all with the cause listed as unknown. In October, a NATO official from MARCOM said they were still investigating.

Cheap tricks
The Global Positioning System, or GPS, underpins most of the world’s digital systems for determining location, time, and communication — on everything from your mobile phone, to the world’s largest commercial vessels.

“For so many years we were used to using [only] GPS,” says Chronis Kapalidis, an expert in maritime security and the East Mediterranean at Chatham House.​
It has always been possible to disrupt GPS, but doing so is now easier and cheaper than ever, experts say.

That has meant an explosion of both GPS “jamming” — when GPS is interrupted — and “spoofing” — when a receptor is tricked into believing it is somewhere it is not.



Disruption can come from civilians, who can now buy cheap jammers on the internet. It also comes from states, appearing in geopolitical hot spots alongside a new wave of cyber conflict.

Experts say many large vessels have no back-up to GPS, and crew often lack awareness that it is even vulnerable to disruption. Without back-up, an increasingly digital generation of commercial vessels risks getting caught in the crosshairs.

States or rogue elements?
There is no official explanation for why GPS is being disrupted in the East Mediterranean, but a patchwork of military operations in the region is likely to be a major cause of the interruptions. That itself is a result of rapidly rising tensions north of Egypt and off the coast of Syria.

“The eastern Mediterranean is extremely busy militarily,” MARCOM officials wrote in a report in October. “There are numerous warships operating in the region all with high powered transmitting devices.”



In fact, the East Med disruptions began before March, according to a specialist on the region, citing NATO intelligence.

Reports of disruption were heard in 2017, says Hans Tino Hansen, the CEO of Copenhagen-based maritime risk consulting firm Risk Intelligence, who published a report on GPS disruptions based on anecdotal reports from clients.

Those disruptions are likely a result of both military operations by the Egyptian army, who are fighting militants in the Sinai, and Russian warships off the coast of Syria.

“The GPS spoofing and jamming in [Port] Said and Suez is a byproduct … from a military operation that has nothing to do with the ships,” says Hansen.​

GPS jamming technology is now accessible enough for jamming to be the work of “rogue” individuals, says Todd Humphreys, director of the Radionavigation Laboratory at the University of Texas at Austin.

But experts agree that in the East Med, the location and sheer scale of the interruptions points towards the work of nation states.
As a result, the potential risks of a vessel losing the ability to navigate, or drifting off course without realizing, are countless.

“The political situation in the East Med is so tense, everyone is at each other’s throats,” says Sebastian Bruns, head of the Center for Maritime Strategy and Security at the University of Kiel. “Just imagine if a Turkish freighter ran aground and spilled oil all over the Israeli coast.”

Geopolitical tensions
The Eastern Mediterranean is just one of the latest hot spots in an expanding list of regions that have seen interruptions rise alongside geopolitical tension.

Last year, the US-based Resilient Navigation and Timing Foundation reported that hundreds of vessels in the Black Sea saw their GPS locations disrupted. Many saw their locations at an inland Russian airport. Anecdotal reports of interruptions in the Black Sea date to at least 2016, multiple experts say.

Recurring, large scale disruptions have been reported off the Korean peninsula, in Lapland in northern Finland, and on the northern Norwegian border with Russia during NATO military drills, which Norway’s Foreign Ministry blamed on Russian forces in a comment to the Associated Press. Russian officials denied involvement.

In October, one report was logged in the Strait of Hormuz, off Iran, and two more were logged at the Saudi Arabian port of Jeddah, in the Red Sea, prompting another advisory from MARAD.

GPS disturbances are just one element in an expanding list of threats to cyber infrastructure, affecting everything from banks to social media websites and consumer utility grids. Cyberattacks have already affected the shipping industry. Last year, Maersk suffered an attack to its central networks that disabled the company for 10 days and cost the company an estimated $250-$300 million.

Meanwhile, GPS interruptions have continued in the East Med. In November, interruptions were reported at the Israeli port of Haifa, and from near the eastern tip of Cyprus.

“We have encountered more severe than normal GPS interference tonight,” read the November 4 report. “Thank goodness for paper charts.”
 

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US Equity Futures Slide After Euro PMIs Stumble; China, Crude Plunge


by Tyler Durden
Fri, 11/23/2018 - 07:24


Returning from Thanksgiving holiday, US traders who braved record cold temperatures on their office commute are in a sour mood, with S&P futures sharply lower, following the latest sharp drop in Chinese stocks, where as noted earlier the Shanghai composite lost the 2,600 level, tumbling 2.5% to one month lows after the WSJ reported Trump asked allies to boycott China's telecom giant Huawei.



The news dragged Asian shares lower, while Europe was mixed after the latest disappointing PMI which saw German Manufacturing and Services miss expectations, dragging the Eurozone Manufacturing PMI to 51.5, missing expectations of a 52.0 print, a 30 month low and the weakest since print since May 2016, while the composite index tumbled to the lowest level in 4 years in November.



Contracts on the Dow, S&P and Nasdaq all pointed lower, after Chinese equities led regional declines in Asia, with the technology sector weak on concern the U.S. is ratcheting up a campaign against Huawei Technologies. The result was a sharp drop in the Shanghai Composite, which slumped to levels last seen in late October, wiping out the recent rally.



In European trading, the preliminary PMI data dented hopes of an economic rebound into year end, sparking a rally in bunds and gilts, while 10Y TSY yields dropped to session lows of 3.04% after Thursday’s Thanksgiving holiday. Euribor contracts pushed higher after officials flagged downside risks and data added to nerves ahead of the ECB’s December meeting. Meanwhile in Italy, BTPs printed fresh highs for the week on signs of a budget compromise. European equities were mixed, printing small gains after a steady open, largely ignoring trade war concerns, which weighed on Chinese stocks. Italy's FTSE MIB outperformed peers on renewed deficit discussion optimism and helping local banks rise over 1.5%. Technology and telecommunications stocks pared initial gains as equity gains are tempered by oil oversupply concerns, acting as a drag on energy/basic resources sectors



The dollar climbed and the euro reversed earlier gains as data showed German’s growth outlook weakened; the Euro slumped on renewed fears the slowing economy may delay any ECB balance sheet normalization while the pound handed back most of Thursday’s gains. In the latest Brexit news, Tory Brexiteer Iain Duncan Smith stated that the Brexit deal will be killed off by him and his Brexiteer colleagues in Parliament, while he is said to dismiss PM May’s efforts to adopt a tech solution to the Irish border problem and implied it is meaningless, according to ITV’s Peston.



Elsewhere, emerging market currencies and shares fell on renewed China trade concerns. Bitcoin declined and is on course to lose more than 20% this week.

Meanwhile, in commodities, WTI saw another sharp decline through $53, after energy minister Khalid Al-Falih said Saudi Arabia is producing oil in excess of 10.7 million barrels a day, more than in recent years, giving the strongest indication yet that the kingdom has boosted output to record levels. “We were at 10.7-something in October, and we are above that. We will know exactly when the month is over,” Al-Falih said. That said, he added that “we will not flood the market. We will not send oil that customers don’t need. And we’ve started doing that in December, and I expect we’ll continue doing that into the new year.”



The Organization of Petroleum Exporting Countries and allied producers warned earlier this month that oil markets will probably be oversupplied in 2019. Concerns that slower economic growth and a trade war could erode demand for oil are outweighing fears of potential shortages caused by U.S. sanctions on Iranian exports and supply disruptions elsewhere.

As a result, WTI has wiped out all modest gains observed in recent days, and was trading back at 1 year lows headed for its 7th weekly drop.



Falling energy prices are just one of several indicators that concern investors about the strength of global economic growth. Meanwhile, political turmoil in Europe, lingering uncertainty over a Brexit agreement and a trade war that’s engulfed the world’s biggest economies add to nervousness according to Bloomberg. Slowing growth is one of several prospects in the U.S. that may lead Federal Reserve to more caution in 2019 should they raise rates next month.

Elsewhere, base metals decline with LME copper 1% lower. EUR offered after PMIs to trade weakest levels this week, cable declines on broad USD strength.

In overnight geopolitical news, North Korea appeared to be expanding operations at its main nuclear site, according to the IAEA, while there were also reports that atomic agency inspectors are said to be demanding North Korea allow nuclear inspectors back into the country amid reactor activity concerns. China is to reportedly resume the purchase of Iranian oil in November after their waiver.

Expected data include PMIs. No major companies are scheduled to report earnings.

Market Snapshot
  • S&P 500 futures down 0.5% to 2,636.75
  • STOXX Europe 600 up 0.4% to 353.88
  • MXAP down 0.05% to 150.61
  • MXAPJ down 0.2% to 481.05
  • Nikkei up 0.7% to 21,646.55
  • Topix up 0.8% to 1,628.96
  • Hang Seng Index down 0.4% to 25,927.68
  • Shanghai Composite down 2.5% to 2,579.48
  • Sensex down 0.6% to 34,981.02
  • Australia S&P/ASX 200 up 0.4% to 5,716.21
  • Kospi down 0.6% to 2,057.48
  • German 10Y yield fell 1.6 bps to 0.354%
  • Euro down 0.2% to $1.1376
  • Italian 10Y yield fell 1.6 bps to 3.082%
  • Spanish 10Y yield fell 1.6 bps to 1.621%
  • Brent futures down 1.2% to $61.84/bbl
  • Gold spot down 0.5% to $1,223.00
  • U.S. Dollar Index down 0.04% to 96.67
Top Overnight News from Bloomberg
  • Following the weak German PMI figures, the euro-area composite index fell to the lowest in four years in November, denting expectations for an economic pickup after a summer slowdown. Adding to worries, the data also showed that employment and orders growth slowed and companies’ expectations dropped
  • A Spanish official criticized the inclusion of an article in the Brexit text that his government believes has unacceptably blurred the issue of future talks over Gibraltar
  • Some countries are frustrated that PM Theresa May is coming to Brussels on Saturday to see European Commission President Jean-Claude Juncker. The last pre-summit meeting of member-state officials is Friday -- and they don’t want anything to change after that
  • U.S. President Donald Trump and Chinese leader Xi Jinping have indicated they’re both ready for a highly anticipated meeting at the Group-of-20 summit next week. Trump told reporters that China wants to make a deal “very badly” after his administration placed tariffs on on about $200 billion worth of Chinese goods
  • The Bank of England may need to increase interest rates at a quicker pace than currently envisaged by markets, according to policy maker Michael Saunders. Spare capacity in the economy has been used up, and, assuming Brexit reaches a smooth conclusion, inflationary pressures will probably build somewhat faster than officials predicted in their latest projections, Saunders said Thursday
  • The Chinese consulate in Karachi was assaulted by militants on Friday in an attack that killed at least seven people in Pakistan’s largest city and financial hub. The incident is the second major attack this year on Chinese officials in Karachi, in a country that is one of the key partners in China’s Belt and Road initiative
  • With Brexit in sight, Paris should become the next center for the clearing of interest-rate derivatives, said Bank of France Governor Francois Villeroy de Galhau
  • Shoppers across the U.S. poured into stores for Black Friday at the traditional kickoff of the holiday gift-giving season
  • A way out of Sweden’s political crisis is closing for the speaker of parliament. After his third pick to form a government threw in the towel on Thursday, speaker Andreas Norlen will need to get creative to break the gridlock caused by Sweden’s inconclusive election more than two months ago. He will hold a press conference at 10 a.m. in Stockholm on Friday
  • It may take until February or even later for some of Iran’s biggest oil buyers to resume purchases after winning waivers from the U.S. as they seek to resolve complications over insurance, shipping and payments.
Asian stocks traded mostly lower with sentiment in the region subdued by trade concerns and holiday-thinned conditions in the US, while Japan and India also observed public holidays. ASX 200 (+0.4%) was positive with the index supported by strength in its top-weighted financials sector amid gains in Australia’s largest banks after Macquarie pulled-off a rarity at the banking royal commission in which it emerged unscathed and with its reputation enhanced. Elsewhere, Shanghai Comp. (-2.5%) and Hang Seng (-0.4%) were negative amid ongoing trade uncertainty as China responded to the recent trade report by the US, in which it dismissed the accusations of unfair trade practices as groundless and totally unacceptable. In addition, the US called for its allies to stop using Huawei equipment and weak earnings results from Meituan Dianping in which the online service provider’s losses ballooned, further added to the glum. China responded to the recent US report in which it labelled the accusation by the US of China continuing with unfair trade practices as groundless and totally unacceptable, while it added that it hopes US drops rhetoric and behaviour that are damaging to relations.

Top Asian News
  • China’s Capital Controls Keep a Bad Year From Getting Worse
  • The World’s Best and Worst Markets Are Both in China This Year
  • China Railway Unit Said to Be Planning 30 Billion Yuan IPO
  • Apple to Offer Japan Carriers Subsidy to Up iPhone XR Sales: WSJ
After opening with little in the way of firm direction amid holiday thinned markets (US, Japan and India), European equities have posted modest gains with the EuroStoxx 50 higher by 0.2%. Leading the charge in Europe is the FTSE MIB (+0.6%) with Italian assets underpinned by optimism that the populist government could reign in some of their budgetary demands with reports suggesting that the EU Affairs Minister Savona could step down from his position (later denied) due to dissent over Italy’s intentions to violate EU budget laws. This also comes amidst a backdrop of increasing pressure from President Mattarella who wants the technocratic PM Conte to get a deal done with the EC, whilst other Italian press report highlight the need for Italy to increase the sincerity of Italy’s concessions to Europe. In terms of sector specifics, upside in Italian banking names has helped spur gains in European financials with the telecoms sector outperforming. To the downside, energy names lag, in-fitting with price action in the complex with crude seemingly unable to stem recent losses. Individual movers include Renault (+4.2%), who have been granted some reprieve from recent losses following a broker upgrade at Jefferies and as Nissan continue to reorganise their corporate leadership. Elsewhere, GEA Group (-14.3%) are lower after cutting guidance whilst Altice (-9.8%) continue to face selling pressure following yesterday’s disappointing market update

Top European News
  • EU, U.K. See Free-Trade Area, Deep Regulatory Cooperation:Draft
  • German Growth Slows More Than Expected to Four- Year Low
  • Denmark Wants Danske Whistle-Blower to Explain His Testimony
  • Ericsson Rises as Goldman Sees ‘Strong Competitive Position’
In currencies, the Dollar has benefited from the aforementioned relative weakness elsewhere, and the index is holding nearer the upper end of 96.394-751 parameters as a result, and on course to end the holiday-shortened week with a net gain, albeit modest having traded up to 96.898 and down to 96.037 at the other extreme.

the Euro was not the most discounted major currency on offer, but cut price in wake of considerably weaker than forecast preliminary PMIs from France, Germany and the Eurozone overall. The single currency is now under 1.1400 vs the Usd and has broken the 10DMA to the downside at 1.1356, with fibs now being eyed ahead of 1.1300, while pivoting 0.8850 against the Gbp even though Sterling is also suffering in sympathy and jittery on Brexit issues following initial euphoria due to the UK-EU Political Declaration.

CAD/NZD/AUD - Also going relatively cheap and underperforming against their US peer, with the Loonie back below 1.3200 amidst an even steeper slide in crude prices ahead of Canadian CPI and retail sales data. Meanwhile, the Aud has retreated through 0.7250 again and hardly helped by overnight developments as ANZ revised its RBA outlook to unchanged until August 2020, and the ASIC launched a probe of CBA for the alleged mis-selling of insurance products. Similarly, the Kiwi has lost grip of 0.6800 amidst speculation that the RBNZ could loosen mortgage restrictions as part of its FSR due next week.

GBP - As noted above, the Pound has lost a bit more positivity after Thursday’s rally on the draft PD reached by Brexit negotiators given a mixed reaction to the details in UK political circles and ongoing doubt about approval by EU leaders. Cable is back below 1.2850 vs circa 1.2900 at best yesterday, albeit ‘comfortably’ above the recent 1.2785 low with decent bids noted at 1.2800.

EM - Some consolidation at the end of a solid week for the likes of the Zar and Try that have both made potentially significant breaks of key levels at 14.0000 and 5.3000 vs the Usd respectively due to a combination of bullish technical and fundamental factors, ie the SARB ¼ point hike yesterday.

In commodities, WTI (-4.3%) and Brent (-2.6%) are on track for their seventh weekly loss with WTI prices briefly breaching the USD 52.00/bbl level to the downside while Brent lingers just above USD 61/bbl. Some traders are citing the recent decline to technical factors, while Saudi Arabia signalled that its output may have reached a record high of above 10.7mln BPD, and the kingdom’s Energy Minister Al-Falih noted that demand for oil will be lower in January 2019 compared to December 2018. This comes amidst the backdrop of this week’s EIA data which showed that US production remained at a record high of 11.7mln barrels, the most since at least 1983; according to government data.

Therefore, the complex is suffering from a double whammy with supply glut concerns and weaker demand concerns weighing on traders’ minds. Oil fell into bear market territory this month after the US granted temporary waivers to eight countries in regard to Iranian oil, in turn pouring cold water on some supply concerns, while sources emerged this morning noting that China are to resume the purchase of Iranian oil in November after their waiver. Some analysts highlighted that due to complications over insurance, shipping and payments, it may take until February or later until some of Iran’s largest buyers such as South Korean and Japan resume purchases.

Elsewhere, gold (-0.4%) prices saw some downside after the yellow metal felt pressure from the firmer USD and copper weakened amid underperformance in China alongside a decline in Chinese commodity prices. Furthermore, China’s Dalian Exchange are to relax their risk management restrictions on some futures in an attempt to attract more investors to boost liquidity given the recent slump in iron ore prices.

US Event Calendar
  • 9:45am: Markit US Manufacturing PMI, est. 55.7, prior 55.7
  • 9:45am: Markit US Services PMI, est. 55, prior 54.8
  • 9:45am: Markit US Composite PMI, prior 54.9
DB's Jim Reid concludes the overnight wrap
For those brave enough to attempt to snap up a few bargains today at the Black Friday sales then good luck. The day also marks 25 business days left in 2018 which after the last few weeks might feel like 24 too many. A shining light is that the Friday after Thanksgiving tends to favour the bulls looking back at moves for the S&P 500 however expect it to be another relatively thin day for volumes.

Ahead of today, there was little sign of any holiday spirit for markets in Europe yesterday with equities down across the board. With volumes about 25% below average, the STOXX 600 closed down -0.70%, which means the index has now closed lower on 6 out of the last 7 days and 8 of the last 10. It wasn’t any better for the DAX (-0.94%), CAC (-0.75%), FTSE MIB (-0.69%) and IBEX (-0.61%). The FTSE 100 (-1.28%) was the biggest faller with a +0.77% rally for the Pound to blame following more Brexit developments, although the domestically focused FTSE 250 (-0.30%) did at least put up more of fight.

More on that shortly but a quick refresh of our screens this morning shows that sentiment hasn’t improved at all in Asia this morning. Markets in Japan are closed which is sapping some more energy out of the session however there have been particularly heavy losses in China with the CSI 300, Shanghai Comp and Shenzhen down -1.59%, -1.75% and -2.72% respectively. The Hang Seng is down a more modest -0.40% while the Kospi is down -0.78%. Futures on the S&P 500 (-0.35%) are also in the red. Another sharp fall for WTI Oil (-2.23%) this morning which has seen the price of a barrel fall to $53.59 isn’t helping however the relative big moves in China appear to be due to an earlier WSJ article which suggested that the US was contacting key allies in order to join forces and persuade telecoms firms in their countries to avoid using equipment from China’s Huawei Technologies. Huawei is private however ZTE has shed over 3% this morning. The story has more than offset what is a seemingly positive sound bite from President Trump last night ahead of the G-20 meeting next week, with Trump saying that he believes China “wants to make a deal and we’re very happy with that.”

Back to yesterday, where, in a quiet newsflow and light volume session, the highlight was confirmation that the EU and UK had finally come to an agreement on the draft terms of the UK’s exit from the EU. The agreement has been “agreed at the negotiators’ level and agreed in principle at political level, subject to endorsement”. That endorsement will need to come from this Sunday’s European Council summit which, for those interested, kicks off at 8.30am GMT and includes a press conference at 12.00pm GMT. PM May is due to continue meetings with EC President Juncker on the weekend prior to the summit taking place. Back to the draft text, despite the bounce for the Pound yesterday, it didn’t appear that there was anything substantially different in the political declaration text and therefore unlikely to convince the opposition to the deal – the remainers and Brexiteers – to change their minds. One outstanding issue remains Gibraltar however PM May did sound confident that an agreement with Spain on this would be met.

Perhaps unsurprisingly, the agreement was shot down by the Labour Party and also Tory Brexiteers later in the day when May addressed MPs at the House of Commons. Labour’s Corbyn called the text “empty” and said that it falls short of Labour’s six tests. There’s no date set for the parliamentary vote yet but clearly there is still much for the PM to do to make the numbers stack up in her favour, which at this stage still looks a long way off.

As for the rest of markets yesterday, well it was a slightly better day for credit spreads in Europe with cash spreads for IG and HY 0.4bps and 2.6bps tighter respectively. That being said, CDS markets were a lot weaker with Main and Xover +2.0bps and +8.7bps wider respectively. There wasn’t much to talk about in bond markets where Bunds closed 0.5bps lower in yield and at 0.368%, have essentially fluctuated in a 0.34-0.40% range for the last 6 sessions which is impressive given the scale of the risk-off moves that we’ve seen elsewhere. BTPs did outperform again yesterday, not quite to the scale of Wednesday, however 2y and 10y yields did fall 10.7bps and 1.7bps respectively. Italian Deputy PM Di Maio said that there are “margins for a dialogue and discussion” between the government and the EU which appeared to help sentiment. It’s worth noting that next week the BTP market faces the test of a 5y and 10y auction on the same day which could be an important marker in light of recent poor retail demand for BTPs. On that, yesterday’s linker auction in Italy received the second-lowest order book on record.

In other news, yesterday’s ECB minutes didn’t throw up too many surprises. The text revealed that “it needed to be emphasized that the incoming data, while somewhat weaker than expected, remained overall consistent with an ongoing broad-based expansion”. There was also an acknowledgement of a “number of uncertainties and fragilities” but this was in the context of officials agreeing to a “continuity and steadiness with respect to monetary policy”. The next ECB meeting is in just under 3 weeks and as a reminder we’ll get new economic forecasts which as the minutes noted “would provide an occasion for a more indepth assessment” of the economy.

It’s perhaps timely then that today we’ve got the flash November PMIs in Europe which will act as the last major growth input for the December staff forecasts. The consensus for the Euro Area composite is 53.0 which is marginally down from the October print of 53.1. Manufacturing is expected to hold steady with the decline coming in the services sector. Germany’s composite is expected to fall a slightly greater 0.3pts to 53.1 while France is expected to fall 0.2pts to 53.9. DB’s Peter Sidorov noted that as things stand, the survey data present a downside risk to the ECB’s 1.8% 2019 GDP forecast in September, so it’s something worth watching. That said falling oil prices could at least provide some offset.

As far as the rest of the day ahead is concerned, we’ll also get the November PMIs in the US while prior to that we get the final revision to Q2 GDP in Germany (no change from -0.2% qoq expected) as well as the accompanying growth components. The ECB’s Luis de Guindos is also slated to speak in Madrid at lunchtime while as noted earlier, Black Friday officially gets underway, marking the traditional start to the US holiday shopping season.

https://www.zerohedge.com/news/2018...de-after-euro-pmis-stumble-china-crude-plunge