Original insights into market moving news

RANsquawk EU Open Rundown 28.11.17

  • Asian stocks were downbeat on what was a choppy session amid a lack of drivers
  • FX trade very quiet amid a lack of data releases and after Fed speakers failed to spur a sustained impact on prices
  • Looking ahead, highlights include BoE Stress Test Results, US Wholesale Inventories, BoE’s Carney, Fed’s Dudley, Powell and Harker


Asia stocks were downbeat on what was a choppy session amid a lack of drivers and a humdrum lead from Wall St. ASX 200 (-0.1%) and Nikkei 225 (-0.1%) were indecisive with the Japanese benchmark at the whim of currency swings, while Toray shares were among the worst performers after the Co. fell afoul of ethical standards and became the latest to admit to product data falsification. Shanghai Comp. (Unch) and Hang Seng (-0.7%) were subdued, with underperformance in the latter following reports that the CSRC are to postpone approval of ‘south-bound’ funds which plan to invest over 80% in the Hong Kong stock market. Finally, 10yr JGBs were mildly supported at the open after gains in Tnotes and as Japanese markets began on a cautious note, although upside was capped as sentiment briefly improved and after an uninspiring 40yr auction result.

PBoC injected CNY 130bln via 7-day, CNY 110bln via 14-day and CNY 10bln via 63-day reverse repos. (Newswires)

PBoC set CNY mid-point at 6.5944 (Prev. 6.6874)


UK press reports stated that PM May faces fresh accusations of 'rigging Parliament' related to blocking Budget amendments. (Independent)

UK Brexit Secretary Davis has been informed he could be in contempt of parliament after his department heavily edited government analyses on the impact of Brexit on 58 industrial sectors before handing them to a select committee. (Guardian)


FX trade very quiet amid a lack of data releases and after Fed speakers failed to spur a sustained impact on prices. Nonetheless, USD was briefly supported after Fed’s Powell stated the Fed expects interest rates to increase somewhat further and that the size of Fed’s balance sheet is to sspanink gradually, although this was immediately pared as the comments weren’t anything surprising or new. Furthermore, Fed’s Kashkari and Dudley were also largely ignored after Kashkari stuck to his well-known dovish tone and with Dudley mainly providing reiterations. Elsewhere, CAD remained weak after the pullback in oil and most major currency pairs consolidated after the prior day’s swings in EUR/USD, GBP/USD and AUD/USD, although USD/JPY is marginally higher on the session as it nursed some of its recent losses.


Commodities were lacklustre with WTI crude futures languishing near the prior session’s lows where prices dropped over 1.0% to below USD 58/bbl, while there was also a somewhat bearish view from Goldman Sachs on oil ahead of the OPEC meeting. Gold trade was uneventful in tandem with a flat greenback and copper extended this week’s pullback amid the dampened risk tone, while Chinese metals trade was hampered by concerns related to steel demand which saw Shanghai nickel prices drop over 3.5%.

Keystone to resume crude oil deliveries on Tuesday and the pipeline will operate at a reduced pressure, according to (Transcanada)

Goldman Sachs said it sees oil risks skewed to the downside as 9-month extension seems to be already priced in. (Newswires)


There was little movement of significance along the Treasury curve on Monday. Early in the session, the curve was flattening, with 2-year yields rising, while longer-dated yields were falling. The narrative remains the same: the short-end is being driven by expectations that the Fed will lift rates in December, and the long-end seems to be held-back by the perceived lowflation landscape. US 10-Year T-Note Futures settle 5+ ticks higher at 125-04.

Fed's Powell (Voter, Neutral) said Fed expects interest rates to increase somewhat further and that the size of Fed’s balance sheet is to sspanink gradually. Powell also commented that he will do all in his power to defend twin goals and that ncertainty requires Fed policy to remain flexible. (Newswires)

Fed's Dudley (Voter, Soft Dove) said the FOMC is very united on appropriate policy path and that the Fed chair transition has been so far so good. Dudley added that Fed thinks US is at full employment and is not concerned inflation is below target, while he also sees the economy continuing above trend pace of growth, inflation to rebound and wages to increase. (Newswires)

Fed's Kashkari (Voter, Dove) said he sees no reason to put brakes on economy and sees no reason to hike rates amid continued low inflation. Kashkari also commented that the Fed doesn't currently see signs of an impending correction that would trigger a crisis and that the fact wages are not growing, signals labor market slack. (Newswires)

Fed’s Kaplan (Voter, Soft Hawk) said rate hike is appropriate and that overall hikes should be gradual, while he added that and that waiting too long to see evidence of inflation risks falling behind the curve. (Newswires)

US President Trump is to meet with congressional leaders on Tuesday, according to the White House. (Newswires)

US Senator Corker said could vote against the tax bill in budget committee due to deficit issue, but added that Republicans are working to resolve the issue. There were also comments from US Senator McCain who is undecided regarding the tax bill and GOP Senator Cornyn stated that there wasn’t enough votes yet to pass the tax bill, while Republican Senator Daines was also said to be a 'no' on the tax bill, but is optimistic about the changes.
Fitch Maintains the UK on Rating Watch Negative https://t.co/QuZXLMFNoR