Buckle up for US inflation data this week - beginning Tuesday (PPI preview)

Only kidding, there will be plenty of Brexit big mouths gabbling away to shove the financial markets around;

• Boris Johnson says he will be buying new pants - BUY GBP!
• Boris Johnson says they'll be shorts - SELL GBP!

• Claimant count stabilized in October following the steady rise in recent months, however recruitment consultants continue to highlight staff shortages and rising wage pressures. We expect wage growth to stay strong with core at 3.2% 3m/y and headline at 3% 3m/y 
  

• UK pay growth took another step higher in September, rising to a post-crisis high of 3.2%3m/yr (regular pay). However, unemployment picked up to 4.1%. We expect these numbers to be unchanged in the October release. 
• The rate of job creation will be of interest, given it has slowed of late. This may reflect the higher cost of hiring and increasingly tight supply of labour(exacerbated by the fall in net migration) 
  

Central Bank of India reportedly selling US dollars for rupee, cicra 72.35

• Selling via state-run banks (so the reports say)

Reserve Bank of New Zealand Governor Adrian orr is testifying in front of a parliament committee

• Topic is the RBNZ's annual report
• Timing is Wednesday morning NZ
• Which is Tuesday 1915GMT

Forwarding a bit of chatter on stop loss sellers lurking under 0.7165 and 0.7160.

• Ahead of there bidders clustered 0.7170

This an overnight piece via Bloomberg on views from BoA/ML, most worried about volatility in global markets since 2008's GFC

• Democratic takeover of the House will weaken Donald Trump's hand on trade
• making a deal with the Chinese less likely
• and spur a fight over the U.S. debt ceiling
• "We'll have a $1 trillion budget deficit, a big fight over the debt ceiling, gridlock and the U.S. economy will be slowing at the same time" 
  

• In 2011, "brinkmanship literally took the country to the verge of default and culminated in the U.S. losing its AAA credit-rating status. That year we saw more volatility than we can remember. I think 2019 could turn out to be a little worse."
  
• "The only thing I'm confident in is volatility will be high next year."
  

Japanese finance minister Aso says has agreed with the US that forex will be discussed with US Treasury Secretary Mnuchin

• Says he has no recollection of US president Trump bringing up FX in talks with Japanese PM Abe
• Says the downgrade to Q3 GDP was due to one-off factors, he does not think the economy is worsening
  

This from the Commerce Ministry in China: China Vice Premier Liu He speaks with US trade rep

China's Commerce ministry with the 'we are talking!' news:

Monday was a soft session for stocks here in Asai and Tuesday is not getting off to a great beginning

• Japanese stocks are lower, Nikkei 225 of 0.6% (thereabouts)
• HK's Hang Seng is to open down around 0.5%
• Overnight trade on US equities is soft, the emini S&P500 (ES) is down 0.5%

• Stocks recover and end higher on the day

A quick snippet from an overnight Rabobank note on EUR 9bolding is mine):

• Higher EUR/USD is currently largely about the weak dollar
• EUR/USD got a boost for the decline in UST yields. As we view the recent dovish re-pricing of the Fed as unjustified, we expect the upside to EUR/USD to be rather limited from here over coming months. 

People's Bank of China onshore yuan reference rate

• PBOC allows fluctuation plus or minus 2% from this point (for the CNY that is, CNH is a no holds barred deal) 

Forex options expiries today, these the close by and of size for the 10am NY cut

National Australia Bank Business Survey for November

• Business conditions 11 (prior 13, revised from 12
• Business confidence 2 (prior 5, revised from 4)

• Both business conditions and confidence continued their downward trend in November. 
• Since around mid-2018 it appears the business sector has lost some momentum - albeit the level of activity remains reasonable. 
• Declines in business confidence to below average levels also suggest businesses' outlook is for momentum to ease further. Indeed, forward orders (the most reliable indicator of domestic demand) fell in the month and are now below average for the first time since late 2016. 
• While conditions across most industries remain above average, conditions in the retail industry continue to lag - with retail the only sector to report deteriorating conditions. This was indeed confirmed by the release of the Q3 national accounts which saw weaker growth in consumption & a large run-up in retail inventories. 

• downward trend for both … activity still reasonable … forward orders below average

• Heads up for AUD traders - monthly business confidence data 

For the y/y its in at 2.8%

• the prior month's results were -0.4% m/m and 2.9% y/y

• In light of recent volatility, the headline Gauge is overstating the degree of inflationary pressure. 
• Over the past three months, non-tradable prices (ex-accommodation) have increased 0.7%
• However, evidence that inflation is broadening is tentative at best.

Earlier post: Huawei CFO bail hearing - Canada says bail should be half cash, half home equity

Canadian court still deliberating as I post

Overnight news story ICYMI, 

• The phones covered by the ban make up about 10% to 15% of current iPhone sales in China
  
• The court granted a pair of preliminary injunctions requested by Qualcomm, an American microchip maker. Qualcomm claims that Apple violates two of its patents in the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X. The patents allow people to edit and resize photos on a phone and to manage apps by using a touchscreen, according to Qualcomm.
• The ban does not cover the new iPhone XS, iPhone XS Plus or iPhone XR, which were not yet available when Qualcomm filed its lawsuit.
  

• China said to plan first batch of US soybean purchases
  

A snippet from Nomura, this note prior to May cancelling the Brexit vote 

• we infer that investors are heavily sidelined, taking a "wait-and-see" approach to the parliamentary vote on the Brexit agreement this week (11 December)

• the aggregate exposure to the US equity market of hedge funds has fallen further, deviating from the average pattern in December.
• Speculative investors may have strengthened their cautious attitude towards equity market risk - with fast-money investor holdings of US stocks approaching year lows. Although there seems little positive to encourage buying equities right now, we do believe that hedge funds' cautious stance to US stocks is close to its peak.
  

Japan press (Nikkei) carries an item on the expected size of the  stimulus package being considered as part of Japan's fiscal 2019 year budget

•  2 trillion yen ($17.7 billion) 
• Finance Ministry is leading the effort to finalise details of the program
  

On Tuesday. May will head on over to Berlin. 

This is the weekly ANZ/Roy Morgan survey of consumers 

• prior 119.5

GS are not gung-ho on the AUD in their latest forex client note, but do favour it:

• In our view, Deputy Governor Debelle's comment that although the next move is likely a hike "there is still scope for further reductions in the policy rate" should be taken in the context of a speech dedicated to the policy response to the 2008 financial crisis rather than a signal on future policy direction. 

NZ data for retail sales in November 2018

• expected +0.3%, prior +0.1%
• for y/y, up 4.6%
  

• prior -0.1%

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