16th November 2018

Gove, Fox, Grayling, Mourdant and Leadsom all decide to stay as UK political resignations abate

ERG sources suggest 48 letters need for no confidence vote have all been handed in to Brady

Looking ahead, highlights include US Industrial Production, ECB’s Weidmann and Lane, Fed’s Evans

 ASIA

Asia-Pac stocks traded indecisively as the region lacked fresh catalysts and as uncertainty regarding Brexit and US-China trade played on investor’s...

• US-Chinese trade relations in focus again after conflicting reports suggesting the next round of Chinese tariffs are being placed on hold, which USTR Lighthizer later denied
• UK PM May said she will see this through and fight leadership challenge. UK PM May is yet to appoint a new Brexit Minister
• Looking ahead, highlights include EZ CPI, US Industrial Production, ECB’s Draghi, Weidmann and Lane, Fed’s Evans

TRADE

US and China are to step up efforts to strike...

• Sterling pounded amidst multiple cabinet resignations
• Gilts hit contract high, ahead of possible no-confidence vote as UK PM in Dis-May
• Looking ahead, highlights include US retail sales, US weekly jobs, NY Fed mfg, Philly Fed, DoEs, ECB’s Coeure, Praet and de Guindos, Fed’s Quarles, Powell and Bostic, earnings from Walmart

ASIA

Asian equity markets were eventually mostly higher after the region gradually shrugged off the cautious lead from the losses...

• Asian equity markets were eventually mostly higher after the region gradually shrugged off the cautious lead from the losses stateside
• UK PM May confirmed she has cabinet backing for her Brexit deal and stands ready to present the deal and a statement to Parliament
• There were reports that a PM May no confidence vote would be submitted today. However, questions remain over whether or not rebels would have enough votes to be successful
• Looking ahead, highlights include UK and US retail...

• Cable wings clipped by customs concerns ahead of 14:00GMT Cabinet meeting
• Source reports of a possible 1.4mln BPD oil supply cut by OPEC fails to stop the rot
• Looking ahead, highlights include, UK Brexit Cabinet meeting, US CPI, Fed’s Quarles, Powell, Supply from Germany and UK cabinet to meet to discuss Brexit deal

 ASIA

Asian equities traded lacklustre following a similar performance on Wall St where the energy sector was hit by a further aggressive slide in...

• Asian equities traded lacklustre following a similar performance on Wall St where the energy sector was hit by a further aggressive slide in oil prices
• All eyes are now on events at 10 Downing Street as UK PM May’s cabinet meets to discuss her Brexit deal
• Tensions between Italy and the European Commission remain after the nation left growth and deficit targets unchanged in its budget draft
• Looking ahead, highlights include German and Eurozone flash GDP, Swedish, UK and US CPI,...

• Brexit "endgame" talk lifts Cable to a 1.29 handle as a deal hangs in the balance; Italian assets underperform ahead of budget re-submission deadline
• Positive US-China trade rumblings lifting equities but oil extending losses as Presidential jawboning fails
• Looking ahead, highlights include Italian Budget Resubmission Deadline, ECB’s Stournaras, de Guindos, Fed’s Brainard, Harker, Daly

ASIA

Major Asian equity markets mostly followed suit to the...

• Major Asian equity markets mostly followed suit to the sell-off on Wall St where tech led the declines
• UK PM May said Brexit talks are now reaching their "endgame" and that both sides are working hard to reach an agreement but added that significant issues still remain
• Senior ministers led by UK Brexit Secretary Raab told UK PM May no deal is preferable to the current offer from the EU, according to Buzzfeed
• Looking ahead, highlights include German CPI (F), UK jobs report,...

• European equities are mixed after having initially opening higher across the board, DAX underperforms while FTSE 100 is buoyed by a weaker GBP
• DXY has extended recovery gains beyond 97.000 and through its previous ytd peak to top out just shy of 97.600
• Looking ahead, the calendar includes a lack of tier 1 data, ECB’s Lautenschlaeger, Fed’s Daly. US Veteran’s Day – no market closures

 ASIA

Asian equity markets eventually traded...

• Asian equity markets eventually traded mostly positive but with gains limited as some cautiousness lingered from the uninspiring performance on Wall St last Friday
• GBP/USD gapped lower towards 1.2900 after reports that UK PM May cancelled an emergency cabinet meeting which severely lessens the likelihood of an EU summit later this month
• Sources suggested EU and UK negotiators had agreed it would be impossible for the UK to unilaterally exit its backstop on Northern Ireland
• Looking ahead,...

• Major European equities are lower across the board (Eurostoxx 50 -0.8%) as the sentiment seen in Asia spills over onto the region
• WTI and Brent lost the USD 60/bbl and USD 70/bbl handles respectively, after the complex entered into bear market territory
• GBP has lost momentum and is underperforming alongside the NOK within the G10 ranks
• Looking ahead, highlights include US PPI, Baker Hughes, Fed’s Williams, Harker, Quarles, BoE’s Haldane, Tria to meet with...

• Fed kept Federal Funds Rate target unchanged at 2.00-2.25% as expected and continued to point to “further gradual increases” in rates
• Asian equity markets traded lower following a lacklustre lead from Wall St where the mid-term stock rally stalled
• EU is said to want a customs border in the Irish Sea in the event of a no-deal Brexit. However, the report noted that PM May said she would never allow this to occur
• Looking ahead, highlights include UK GDP, industrial and...

• Major European indices are mixed (Eurostoxx 50 -0.2%) after starting the session in positive territory, financials outperform while consumer discretionary names la
• The dollar index is holding relatively firm above the 96.000 handle within a fairly confined range awaiting the Fed, while GBPUSD is choppy amid conflicting Brexit reports
• Looking ahead, highlights include US weekly jobs, FOMC rate decision, ECB’s Coeure, Draghi and...

• Asian stocks were mostly higher as they took impetus from the post-election rally seen on Wall St where all majors gained at least 2%
• EU Commission see Italian budget measures leading to a deficit/GDP ratio of 2.9% vs. the Italian government's view of 2.4%, according to sources
• FX markets calmed overnight in which the greenback consolidated at session highs above the 96.00 level after the prior day’s post-election rebound
• Looking ahead, highlights include German trade, US...

• Democrats have taken control of the House, while the Republicans retain control of the Senate, as expected
• European equities are positive across the board as investors digest the consequences of a split Congress, with US equity futures edging higher
• DXY lost the 96.00 handle as currency markets factor in the prospect of policy protraction and a more difficult passage for President Trump’s fiscal agenda through a divided Congress
• Looking ahead, highlights include weekly DoE crude...

• Democrats are projected to take control of the House after having gained an estimated 26 seats, while the Republicans are projected to have picked up a net 4 seats at the Senate
• A strong start for the Democrats initially weighed on US equity futures, although stock futures then recovered after further results and projections trickled in which suggested the unlikelihood of a Blue Tsunami
• EUR/USD and GBP/USD whipsawed overnight but head into the European session with mild gains at the expense of a...

• Major European indices are mostly in the red (Eurostoxx 50 -0.4%) with outperformance in Switzerland’s benchmark
• The greenback is trading cautiously ahead of today’s US mid-term elections, with the DXY hovering just above 96.200
• Looking ahead, highlights include US JOLTS, APIs, ECB’s Lautenschlaeger, de Guindos, US mid-term elections

• Asian equity markets were mixed as weakness in China clouded over the mostly positive lead from US where the DJIA and S&P 500 closed higher
• EU is reportedly to offer a compromise regarding the Irish border in which Britain could end the temporary customs arrangement
• However, reports also suggest that UK PM May reportedly faces a Cabinet showdown with Brexit Secretary Raab who is said to have been undermined on the Irish backstop plan
• Italy Finance Minister Tria signalled to euro zone...

• European equities kick start the week mixed with the FTSE MIB weighed on by banks amid stress test results
• The Times reported UK PM May secured private concessions from Brussels that will keep Britain in a customs union and avoid a hard border, this was later dismissed as speculation by Downing Street
• Dollar has lost some of Friday’s post-NFP recovery momentum ahead of the US mid-term elections and FOMC, but the index is holding relatively firm around 96.500
• Looking ahead,...

• Asian equity markets began the week with a negative tone following last Friday’s losses on Wall St after US-China trade hopes were tempered by pessimism from NEC’s Kudlow
• UK PM May secured private concessions from Brussels that will keep Britain in a customs union and avoid a hard border, according to reports; later denied
• In FX markets, the DXY was relatively flat and held on to most of Friday’s NFP-inspired rebound with EUR/USD contained below the 1.1400 handle
...

• Main European indices are in the green, continuing the trend from Asia with material names outperforming due to trade progression between the US and China
• The Greenback is weaker vs all G10 counterparts, bar the JPY, which is still bucking the trend as an even safer currency haven
• Looking ahead, highlights include US and Canadian jobs reports, Baker Hughes rig count

• Asian stocks are mostly higher and US equity futures recover Apple-inspired losses after reports that Trump has asked the cabinet to draft a potential China trade deal
• FT reports that the EU is floating a compromise with London on the Irish border backstop that would give the UK stronger guarantees of no need for a customs border
• Looking ahead, highlights include EZ Mfg PMIs, UK construction PMI, US and Canadian jobs reports, Baker Hughes rig count

• European equities trade mostly higher (Eurostoxx 50 +0.8%) after erasing initial losses as sentiment from Asian and Wall Street translated onto the region
• Cable dipped after a UK official said comments on the Times report on banks Brexit deal is "unsubstantiated"
• Dollar index is back down to 96.510 ahead of a busy agenda before NFP on Friday.
• Looking ahead, highlights include BoE rate decision, minutes & QIR, CNB rate decision, US weekly jobs, US ISM mfg PMI, a slew of...

• Asian equity markets traded mostly higher as the region sustained the positive momentum from Wall St.
• GBP supported by reports that UK PM May has reached a deal with Brussels on financial services
• More broadly in FX, DXY softened overnight and pulled back below the 97.00 level as its major counterparts made up for lost ground
• Looking ahead, highlights include UK mfg. PMI, BoE rate decision, minutes & QIR, CNB rate decision, US weekly jobs, US ISM mfg PMI, a slew of central bank...

• European equities are higher across the board (Eurostoxx 50 +1.3%) as the region took impetus from the gains experienced in Asia and on Wall Street
• USD will likely garner a bulk of the focus in the FX space today with month-end flows and SOMA redemption which will have a net USD -22.9bln impact on liquidity
• Looking ahead, highlights include US ADP, Canadian GDP, Chicago PMI, DoEs, a slew of central bank speakers and large cap earnings