Finance Update – Sliding Into Routine

Asia – Alibaba CEO: China’s restrictions justified

Asian indices all continue in the green this morning, save the Hang Seng (-0.03%) and the Nikkei (-0.42%) after Japan’s manufacturing PMI for November shows a preliminary ½ point contraction to 48.3. Consumer inflation for October contracted by another 0.4% YoY.

Meanwhile, China’s central bank last week maintained its 3.85% interest rate, after the outgoing Trump administration announced a draft “list of 117 Chinese and Russian firms with military ties”, according to a Reuters’ exclusive. The resolution will ban access to US goods and technology. Also, Alibaba CEO Daniel Zang this morning said that China’s new anti-monopoly rules are justified, after the company’s $37 bn ANT listing had been postponed.

The Aussies is up a fraction on improving November PMIs – Manufacturing up 2 points to 56.1 and services up 1 to 54.9. The Kiwi is also starring after Q3 retail sales showed a remarkable 28% improvement QoQ. On Friday, Australia reported a better-than-expected 1.6% improvement in October retail sales.

Europe – Germany preparing additional aid

European benchmarks all ended up yesterday, Portugal’s PSI leading with a 1.3% gain and the DAX on the verge with 0.09%.

German Finance Minister Olaf Scholz is reportedly planning €190 bn in support funds for the economy, this as the G20, meeting in Dubai endorse extending debt payments by poor countries with a call upon private lenders to assist.

On Thursday, we learned that construction output in the EU contracted by 2.9% MoM in September, while November’s preliminary consumer confidence is showing a not-as-bad-as-expected drop to -17.6. German producer inflation in October improved to 0.7% YoYbut industrial sales in Italy contracted in September by 3.2% MoM.

Data from the UK was markedly better – public sector borrowing down to £21.584 bn and retail sales soaring by 5.8%YoY.

Americas – Biden nominates pro-regulation hi-tech czar

Futures optimistic, indices in the US ended down once again led by the DOW’s 0.75% drop. The Russell managed to squeeze by with a 0.09% gain.

This morning, Reuters reports that incoming President Biden has appointed Bruce Reed as his top technology adviser – a former Biden chief of staff who is strongly in favour of regulating high tech firms.

On Thursday, the Philly FED delivered a 6-point drop in their November manufacturing survey – not as bad as the 22 points expected. Continuing jobless claims continues to drop, but the initial figure missed expectations this past week by 40k – landing at 742K.

And in Canada, retail sales surprised to the upside in September, adding 1.1% MoM, while new home prices added 0.8%, missing expectations by 2 ticks.

Commodities – oil up on vaccine cheer

Oil futures are climbing steadily this morning, currently at $42.49 for a barrel of West Texas Crude, on vaccine optimism and after the Baker Hughes company admitted to a 5-rig reduction in their count – 231 for the past week.