The engine of the American economy, hit by inflation, is showing signs of overheating, while Europe is once again grappling with the risk that the pandemic will wipe out the recovery. But Asia, the continent that has suffered the most this year, seems ready to restart. This is the impression one gets from the data released this morning in China and Japan, the two main markets, but also from other key places for the world economy, such as Thailand and Vietnam, forced to slow down in recent months due to the absence of raw materials or the collapse of logistics, still in serious difficulty. But the performance of the price lists justifies a moderate optimism.
CHIPS PUSH SEUL, TRUFFLE EFFECT ON HONG KONG
The best stock market is that of Seoul (Kospi +1,1%) thanks to the push of chip manufacturers, in particular SK Hynix (+4%). The Samsung heir, recently released from prison after a corruption conviction, is leaving for the United States, where he will define the construction of a $17 billion chip plant. Korean biotech Celtrion gains 10% after European health authorities approve its drug for the treatment of Covid 19.
TOKYO'S GDP DOWN 3%
Tokyo stocks rose slightly: the Nikkei gained 0,3%, Topix +0,4%. Japan's GDP in the third quarter (that of the Olympics) recorded a drop of 3%, in the face of the closures of the main cities. But the loss of momentum should pave the way for the arrival of new stimuli from the government: Prime Minister Fumio Kishida presents the budget law this week. The governor of the Bank of Japan, Koruda, forecasts inflation at 2022% for 12. Taipei Taiex +0,7%. Sydney's S&P ASX 200 +0,5%. Thailand's GDP fell by 0,3% in the third quarter.
Hong Kong's Hang Seng is on par, awaiting developments on the Evergrande crisis. Last night a restaurant in the former British colony won a 950 gram white truffle for 118 dollars at an auction held at the castle of Grinzane Cavour.
THE STOCK EXCHANGE OPENS IN BEIJING, BRICK STILL DOWN
The CSI of Shanghai and Shanzhen (-0,5%) was weak on the day of the debut of the new Beijing Stock Exchange (81 listed stocks) dedicated to small and medium enterprises.
The data published tonight by the National Bureau of Statistics promise a recovery of the Chinese economy, even if the concern for real estate remains (the prices of new houses are falling). Industrial production is accelerating (+3,5), consumption is doing better: retail sales rose in October by almost 5%, against the +3,5% of the consensus.
Moreover, tonight the Central Bank of China made itself felt with a record liquidity injection: one trillion yuan, or 157 billion dollars.
GOLD HOLDS DOWN, EURO/DOLLAR AT 1,145
The 1,55-year Treasury Notes traded at 0,4% this morning. Gold loses 1.858%, to 1,145 dollars an ounce. The euro-dollar cross is recovering slightly to 1 (-XNUMX% last week). The US currency weakens against almost all benchmark counterparts.
TURKISH THINGS: A NEW RATE CUT IN VIEW
The Turkish lira is an exception: this week the Central Bank of Ankara is expected to announce a rate cut. Although inflation is hovering at around 20% and the Turkish lira is one step away from breaking ten against one dollar, President Erdogan is pressing for the Central Bank to reduce rates for the third month in a row this week.
WTI oil was down 0,7% to $80,3 a barrel.
CHINA INCREASES COAL PRODUCTION
Today's economic data, both from Asia and from Europe which will be published in the morning, come after the long event of the COP-26 in Glasgow, including the final disappointment for the partial step back by India and China on the goal of eliminating the use of coal. Just this morning the news arrived that in October China increased coal extraction to the highest level since 2015: 357 million tons against 334 in September.
TODAY THE VIRTUAL XI/BIDEN SUMMIT. WE WILL TALK ABOUT TAIWAN
But international activity has already turned the page. Today the spotlight is on the virtual summit between Xi Jingping and US President Joe Biden. The premises, however, do not appear promising. Chinese sources reveal that Xi only intends to speak about Taiwan. But on Saturday, Secretary of State Anthony Blinken and his Chinese colleague Wang Yi exchanged warnings and threats on the issue.
IN THE WEEK THE ACCOUNTS OF WAL-MART
On the financial front, the focus remains on inflation. The most anticipated data of the week in the US is retail sales. Analysts forecast an increase in sales for the year-end season between 8,2% and 10,5%, in the belief that inflation has not compromised the desire to spend of families, still strengthened by the incentives received during the pandemic.
In particular, the accounts of the US giants of physical consumption should be followed: Target, Home Depot and above all Wal-Mart.
YELLEN: CHARITY DEPENDS ON THE PANDEMIC, NOT ON BIDEN
The high cost of living threatens President Biden's remaining popularity and the Democrats' chances of passing the robust $1.900 trillion package of social measures. For this reason, the White House staff maintains that the price increase has nothing to do with the administration's economic policy or with the Fed's soft attitude on rates.
Janet Yellen, Minister of the Treasury and former president of the Central Bank took the field on Sunday: “The increase in inflation depends on the pandemic – she said during the Face The Nation broadcast on Cbs – Therefore, if we want to defeat inflation we must continue efforts against the pandemic. If we win this battle, I'm sure that prices will come back under control in the second half of next year”.
Meanwhile, there are not a few signs confirming inflationary pressures on rates: from the boom of some IPOs (see Rivian) to the peaks reached by gold and cryptocurrencies but also the jump in the prices of cereals and coffee on international markets.
EUROPE: PMI DATA TODAY, TOWARDS A BOE INCREASE
In Europe today, PMI data on the main European countries will hold the test, as well as Eurostat forecasts on the state of the economic situation in the Eurozone.
The currency markets are also in the spotlight. Analysts are convinced that the Bank of England, after disappointing expectations at its November meeting, will proceed with the rate hike in December. The Central Bank of South Africa could do the same during the week.
DRAGONS COMPARED WITH PENSION UNIONS
On the domestic policy front, the parliamentary discussion of the Maneuver is in full swing. In the meantime, the leaders of the trade unions will be expected at Palazzo Chigi on Tuesday afternoon who will talk to Mario Draghi precisely about how to reform the social security system.
TODAY RAIN OF ACCOUNTS FROM SMALL CAPS
Vodafone data is particularly awaited among the accounts released during the week, while Telecom Italia's uncertain navigation continues in Italy awaiting the industrial plan. The agenda of Piazza Affari during the day is modest. The accounts of Dhh, Ivs group, Pierrel, Reply, Salcef, The Italian sea group, Valsoia and sicaf are expected.
