ASIA:

The risk of stagflation is “very real” in China over the next couple of quarters as factory gate prices rise at a quicker pace and an ongoing power crunch hurts economic growth, Charlene Chu, senior analyst for China macro financial at Autonomous Research said Wednesday. Stagflation refers to a situation in which the economy simultaneously experiences stagnant activity and accelerating inflation. The phenomenon was first recognized in the 1970s when an oil shock prompted an extended period of higher prices but sharply falling GDP growth. In China, the producer price index jumped 10.7% in September compared with a year earlier — the fastest pace since October 1996 when data compilation started. Meanwhile, power cuts across the country prompted several big banks to slash GDP forecasts for China. Also, China’s economy is confronting multiple challenges. The 4.9% on-year growth recorded in the third quarter was the slowest in a year.

The Bank of Japan kept monetary policy steady on Thursday and slashed this year’s inflation forecast in a sign that it has no intention any time soon of following other central banks in preparing an exit from crisis-mode policies. The nine-member board also cut this year’s growth forecast but maintained its assessment that the world’s third-largest economy was headed for a moderate recovery.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 278.15 or -0.96% to 28,820.09
• Shanghai decreased 43.89 or -1.23% to 3,518.42
• Hang Seng decreased 73.01 points or -0.28% to 25,555.73
• ASX 200 decreased 18.30 points or -0.25 to 7,430.40
• Kospi decreased 15.94 points or -0.53% to 3,009.55
• SENSEX decreased 1,158.63 points or -1.89% to 59,984.70
• Nifty50 decreased 353.70 points or -1.94% to 17,857.25

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00469 or 0.62% to 0.75517
• NZDUSD increased 0.00472 or 0.66% to 0.72112
• USDJPY decreased 0.45 or -0.39% to 113.31
• USDCNY decreased 0.00408 or -0.06% to 6.38970

Precious Metals:

• Gold increased 6.49 USD/t oz. or 0.36% to 1,803.18
• Silver increased 0.108 USD/t. oz or 0.45% to 24.151

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from 1,225.4B to -604.5B

Foreign Investments in Japanese Stocks decreased from 958.3B to 229.7B

Large Retailers’ Sales (MoM) increased from -4.0% to 2.7%

Retail Sales (YoY) (Sep) increased from -3.2% to -0.6%

BoJ Interest Rate Decision remain the same at -0.10%

Australia:

Export Price Index (QoQ) (Q3) decreased from 13.2% to 6.2%

Import Price Index (QoQ) (Q3) increased from 1.9% to 5.4%

EUROPE/EMEA:

UK Chancellor Sunak, during his budget speech, said inflation is to spike to 4% next year as the economy struggles to keep up with demand in the wake of Covid and Brexit. In his Budget speech to the Commons on Wednesday, Rishi Sunak said inflation was 3.1% in September and is “likely to rise further.” He revealed that the Office for Budget Responsibility now expected CPI to average 4% over the next year. Addressing the issue is inflation, he said, “demand for goods has increased more quickly than supply chains can meet,” as economies around the world reopen, while global demand for energy has also “surged.”

Sweden’s economy grew more quickly than expected in the third quarter, as a vaccine rollout accelerated and COVID-19 curbs were lifted, a preliminary estimate from the Statistics Office showed on Thursday. GDP expanded by 1.8% in the third quarter from the previous three-month period, outperforming a forecast of 1.3% in a Reuters poll. The economy grew 4.7% compared to the third quarter last year. The Swedish economy has bounced back more rapidly from the pandemic than many others in Europe, with activity returning to pre-COVID-19 levels in the second quarter. Sweden, which never went to lockdown during the pandemic, lifted almost all remaining curbs and recommendations at the end of September.

The major Europe stock markets had a mixed day:

• CAC 40 increased 50.70 points or 0.75% to 6,804.22
• FTSE 100 decreased 3.80 points or -0.05% to 7,249.47
• DAX 30 decreased 9.48 points or -0.06% to 15,696.33

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00818 or 0.71% to 1.16814
• GBPUSD increased 0.00762 or 0.55% to 1.38094
• USDCHF decreased 0.00547 or -0.60% to 0.91265

Some economic news from Europe today:

Norway:

Core Retail Sales (MoM) (Sep) increased from -3.9% to 0.5%

Unemployment Rate (Aug) decreased from 4.3% to 4.0%

Spain:

Spanish CPI (YoY) increased from 4.0% to 5.5%

Spanish CPI (MoM) (Oct) increased from 0.8% to 2.0%

Spanish HICP (YoY) (Oct) increased from 4.0% to 5.5%

Spanish HICP (MoM) increased from 1.1% to 1.7%

Spanish Unemployment Rate (Q3) decreased from 15.26% to 14.57%

Spanish Business Confidence increased from 2.2 to 4.4

Germany:

German Unemployment Change (Oct) decreased from -30K to -39K

German Unemployment Rate (Oct) decreased from 5.5% to 5.4%

German Unemployment (Oct) decreased from 2.505M to 2.466M

German Unemployment n.s.a. (Oct) decreased from 2.465M to 2.377M

German CPI (YoY) (Oct) increased from 4.1% to 4.5%

German HICP (YoY) (Oct) increased from 4.1% to 4.6%

German HICP (MoM) (Oct) increased from 0.3% to 0.5%

Italy:

Italian Business Confidence (Oct) increased from 113.2 to 114.9

Italian Consumer Confidence (Oct) decreased from 119.6 to 118.4

Italian PPI (MoM) (Sep) increased from 0.5% to 1.6%

Italian PPI (YoY) (Sep) increased from 11.6% to 13.3%

Euro Zone:

Deposit Facility Rate (Oct) remain the same at -0.50%

ECB Marginal Lending Facility remain the same at 0.25%

Business and Consumer Survey (Oct) increased from 117.8 to 118.6

Business Climate (Oct) increased from 1.71 to 1.76

Consumer Confidence (Oct) decreased from -4.0 to -4.8

Consumer Inflation Expectation (Oct) increased from 33.1 to 40.0

Selling Price Expectations (Oct) increased from 38.3 to 42.2

Services Sentiment (Oct) increased from 15.2 to 18.2

Industrial Sentiment (Oct) increased from 14.1 to 14.2

US/AMERICAS:

The Commerce Department reported that the US economy slowed to its worst pace since the pandemic during Q3. GDP grew at an annualized pace of 2%, underwhelming estimates of 2.8%. Consumer spending, accounting for 69% of US economic activity, advanced only 1.6%. In comparison, consumer spending spiked 12% during Q2. Spending on service increased 7.9% last quarter compared with 11.5% in Q2. The disappointing report is largely due to the ongoing supply chain crisis that has caused inflation to spike, consumer spending to wane, and businesses to operate at less than full capacity.

Social media giant Facebook has changed its name to “Meta” in a move designed to rebrand the company after multiple years of scandals. The company will change its stock ticker to MVRS from FB on December 1. “Today we are seen as a social media company, but in our DNA we are a company that builds technology to connect people, and the metaverse is the next frontier just like social networking was when we got started,” CEO Mark Zuckerberg said. Zuckerberg said he hopes the “metaverse” will reach a billion people within the decade and “host hundreds of billions of dollars of digital commerce.” The company plans to invest $10 billion in the next year alone to develop this new technology.

US Market Closings:

• Dow advanced 239.79 points or 0.68% to 35,730.48
• S&P 500 advanced 44.74 points or 0.98% to 4,596.42
• Nasdaq advanced 212.28 points or 1.39% to 15,448.12
• Russell 2000 advanced 45.49 points or 2.02% to 2,297.98

Canada Market Closings:

• TSX Composite advanced 242.54 points or 1.16% to 21,197.53
• TSX 60 advanced 15.68 points or 1.25% to 1,274.18

Brazil Market Closing:

• Bovespa declined 658.14 points or -0.62% to 105,704.96

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.68 USD/BBL or -0.82% to 81.9800
• Brent decreased 0.84 USD/BBL or -0.99% to 83.7400
• Natural gas decreased 0.383 USD/MMBtu or -6.18% to 5.8150
• Gasoline decreased 0.0231 USD/GAL or -0.94% to 2.4266
• Heating oil decreased 0.0348 USD/GAL or -1.38% to 2.4800

The above data was collected around 11:35 EST on Thursday

• Top commodity gainers: Canola (4.99%) and Aluminum (2.60%), Cotton (1.56%) and lean Hogs (2.26%))
• Top commodity losers: Steel (-4.07%), Orange Juice (-1.88%), Natural Gas (-6.18%), and Methanol (-5.47%)

The above data was collected around 11:40 EST on Thursday

BONDS:

Japan 0.088%(-1.1bp), US 2’s 0.4832% (-0.02%), US 10’s 1.5580%(+0.79bps); US 30’s 1.9707%(

+0.01%), Bunds -0.141% (+3.5bp), France 0.2080% (+4.1bp), Italy 1.0014% (+10.58bp), Turkey 19.10% (-4bp), Greece 1.011% (+0.2bp), Portugal 0.400% (+2.4bp); Spain 0.519% (+4.53bp) and UK Gilts 1.001% (+1.6bp).