A terminator or twilight zone is a moving line that divides the daylit side and the dark night side of a planetary body. The terminator is defined as the locus of points on a planet or moon where the line through the center of its parent star is tangent. An observer on the terminator of such an orbiting body with an atmosphere would experience twilight due to light scattering by particles in the gaseous layer. Wikipedia
It's going to be a humdinger of a week with the RBA, US election, BoE and FED all in 4 fun packed days.
The big unknown is the US election
Unless one side wins by a landslide there is a distinct possibility of a period of unrest as the political fighting intensifies.
And markets won't like it. And already the US Treasury market is wobbling, yields having risen 75bps since the last FED meeting (they cut 50bps). The Treasury is buying off-the-run bonds in a weekly program which may help stabilise prices, although their actions are more of a liquidity play - in a sell-off no-one wants to own off-the run issues.
This week we had a slew of data ending with Nonfarm payroll posting a mere 12k gain for October. The Government hired 40k and -28k for the private sector. Finally some unbiased statistics showing the real state of the US labour market
US 10 Year Treasury Yield Monthly
Europeans Told to Stockpile Food in Case of War With Russia [Newsweek]
South Korea Vows to Fight Volatility After Won Hits Three-Month Low [Bloomberg]
Dutch government announces ‘strictest asylum policy ever’ [Politico]
Why the BRICS De-Dollarization Dream Remains a Fantasy [Bloomberg]
Trump 2.0 Haunts World Economy Chiefs Gathering in Washington Before Vote [Bloomberg]
New Zealand Housing Market Bogged Down by Flood of Listings [Bloomberg]
NYCB reports another loss, reveals multifamily pain [Yahoo! Finance]
The Commercial Real Estate Crash Is Battering Even the Safest Bonds [Bloomberg]
China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy
Reaction to Reuters report on China's stimulus plans
Beijing mulls buying unsold homes for 4 trillion yuan [Asia Times]
Xi Calls for Efforts to Hit Growth Target Before Lawmakers Meet [Bloomberg]
China loses third of its billionaires as economy falters [FT]
Exclusive: China considers over $1.4 trillion in extra debt over next few years [Reuters]
China's Central Bank has a New Policy Tool to Manage Liquidity [Bloomberg]
China Industrial Profits Extend Drop as Deflation Takes Toll [Bloomberg]
China’s Economy Shows Flashes of Stimulus Taking Hold [Bloomberg]
The Bank of Japan meeting on 31st October told us;
You can read it all here [BoJ]. So much of the future of Japan's economy is dependent on outside forces. After some weeks of Ministry of Finance and BoJ Ueda telling us they want to hike rates further, there's still no action ( they don't dare ).
The IMF stuck the boot in about the Debt to GDP ratio
Japan must avoid issuing debt to fund fresh spending, IMF says [investing.com]
Japan election results echoed the economic and fiscal mess, and now a coalition government (not very Japanese).
Japan's ruling party loses its majority in blow to new PM [BBC]
With cross currents in the USD, USD / YEN closed at 153.00 Friday, it was the stock market that capitulated.
Nikkei 225 Daily
Japan Unemployment September 2024
Japan Household Confidence
Japan Retail Sales September 2024
Japan Construction Orders September 2024
Japan's Ruling Party to Lose Majority for the First Time Since 2009, Exit Poll Shows [Bloomberg]
Japan’s Potential Kingmaker Says BOJ Shouldn’t Hike Before March [Bloomberg]
The tone of the treasury market got even worse with some sloppy auction results.
Treasury Yields Resume Climb After Auctions Stir Supply Anxiety [Bloomberg]
And Treasury Secretary Yellen telling us there was an increase in fraud in the banking system is forewarning us that a bank is going to have to be sacrificed to maintain the system.
Markets were talking about the commercial real estate crisis reportedly threatening a big Wisconsin Bank.
Yellen Says Fraud is Huge, Growing Problem in Banking System [Bloomberg]
Economically a big miss in JOLTS and Nonfarm Payroll shows the labour markets true colours with GDP supported by insane government spending . Inflation seems to have bottomed out above the FED's target and it could be said that the federal government is actually keeping inflation higher.
So much of the US economy is distorted by out-of-control government spending.
US JOLTS September 2024
US GDP Q3 2024
US Core PCE Price Index September 2024
US Chicago Purchasing Managers Index October 2024
US Nonfarm Payroll October 2024
US Institute of Supply Management Manufacturing Purchasing Managers Index
A 10-Day Test Is Coming for Bond Market Battered by Selloff [Bloomberg]
US Treasury Trims Borrowing Estimate to $546 Billion for Quarter [Bloomberg]
"Treasury anticipates that over the course of the upcoming quarter it will purchase up to $30 billion in off-the-run securities across buckets for liquidity support and up to $22.5 billion in the 1-month to 2-year bucket for cash management purposes." Quarterly Refunding Statement [US Treasury]
In fact US$4 billion every week for the quarter
Trump is flirting with the idea of making crypto tax free
Bitcoin Exempt From Capital Gains? Bitcoin Becomes ‘Money’ In U.S.[Forbes]
Canada Wholesale Sales September 2024
Canada GDP September 2024
USD / CAD Daily
After signs of improvement in the last month or so, the GDP report showed a stagnant economy with rising wage prices. And the currency got the message, closing sharply lower with September's bull trap (CAD) a distant memory.
The UK Budget finally arrived and Gilt yields climbed. It hasn't been a Liz Truss moment yet though.
Farmers were the big losers and they're planning to blockade Whitehall.
UK 10 Year Gilts Yield Daily
As Ms Lagarde forewarned us last week, EU CPI rose but GDP is barely positive, showing that stagflation has really got hold. Volkswagen is the first of many economic victims.
Volkswagen plans to close at least 3 German plants and cut thousands of jobs [FT]
Volkswagen Workers Brace for Fallout From Years of Dereliction [Bloomberg]
Germany GDP Q3 2024
EU GDP Q3 2024
Germany CPI October 2024
EU CPI October 2024
EU races to prepare for a Trump win [FT]
Australia Retail Sales September 2024
Australia CPI Q3 2024
Australia PPI Q3 2024
Australia is just about the only country with both elevated PPI and CPI numbers. What are Australian companies buying where input prices are rising this fast ?
RBA will be no change, BoE might be a small cut, the US election will be a nighmare, leading the FED to do what?