PVM Friday bits / German PMI punchy / 10's 30's UST on the move / FED BS ATH's

Russia does not rule out the possibility that OPEC+ could extend its current 7.7 million barrels per day of production cuts into next year

  • Biden won by 19 points at Biden 54% vs Trump 35% - YoouGov poll – It’s Biden’s to loose still – nothing much changed after last night’s final debate, hard to see that this debate changed anyone’s voting intention, did Trump move the needle for many of the undecided ? still 10days to go, expect more noise from Trump, if he feels he didn’t win the debate…

  • Michel Barnier said the new free trade agreement “was in reach” and UK sources said it could be struck in “two to three weeks”

  • NUS start-up develops 60-second breath test to detect COVID-19 – can’t produce/provide this fast enough !

  • Turkey left rate unchanged versus 175 bps hike consensus, they signaled it last week, what was CBRT thinking.. TRY didn’t like that, hit new lows vs USD, just short of 8

  • U.S. Monitor: People in aggregate have the wherewithal and confidence to suggest strong holiday shopping season; The contrast between goods retailers and service-providers, though, will be stark

  • Markit: "While some services firms in Germany have been hit by new restrictions and increased uncertainty around a ‘second wave’, the dec line in service sector activity has so far been quite limited.." "...whilst at the same time the country’s economic performance is being buoyed by a strong showing from manufacturing.". Germany Oct. Flash Composite PMI drops slightly to 54.5, less bad than 53.3 expected as Manufactory PMI beat w/ rise to 58 vs 55 expected. BUT Services PMI dropped to 48.9, 4mth low, and way worse than expected 49.4., it’s another V (chart) – Saxo : It is getting K-shaped between manufacturing and services here in Europe. One thing is clear, China is clearly rebounding strongly without any doubt given the German manufacturing PMI.

  • UK retail sales surged in September

  • Fed balance sheet hit fresh All-Time High. Total assets rose by $26bn from prior week, to $7.177tn on QE. Treasury securities rose by $25bn to $4.50tn. Now balance sheet equal to 37% of US's GDP vs ECB's 66% and BoJ's 137% (chart)

  • Markets :

  • SPX 3400 continue to hold (3415 lows yesterday), 50dma and those ‘gamma’ levels, back higher on stimulus hopes and perhaps fact that, having tried the lows a few times this week, markets didn’t really budge (market is convinced we’ll get a stimulus pre or post U.S Election, which matters for short-term sentiment, but not really on a medium term basis… CSI in China has been in a narrow range since July (chart), DAX also held lows in that summer box..

  • 10y UST yields 84bp – not broken up yet, but supply + Biden sweep, markets expects 1.2% perhaps pretty quickly in November/into year-end…hard to argue against that! – 200dma just around here 85bp (chart)

  • WTI stays super range/above $40 – do we soon get a move higher ?

  • USD remains soft(er) on any signs of slight risk-on, a strong Biden win, including Senate and the market will price in a massive fiscal deal 4-5-6trn eventually, and a weaker USdollar overall. USDMXN interesting long-term chart….back to 19 levels seen in March on a fiscal deal ?..

https://www.home.saxo/content/articles/equities/batteries-will-be-a-high-growth-industry-as-green-transformation-accelerates-26082020 Saxo’s P. Garnry - Batteries will prove a high-growth industry as green transformation accelerates- Summary: The lithium-ion battery and energy storage industry is fast-growing, driven by high growth in the adoption of electric vehicles and energy storage systems to absorb excess energy from renewable energy. In this research note we provide a list of companies with exposure to this multi-decade theme and lay out the demand drivers for the industry. This is a core theme of the future, less carbon-intensive economy and something most investors should contemplate adding to their long-term portfolio.

https://www.cnbc.com/amp/2020/10/22/-paul-tudor-jones-says-he-likes-bitcoin-even-more-now-rally-still-in-the-first-inning.html?__twitter_impression=true Paul Tudor Jones says he likes bitcoin even more now, rally still in the 'first inning'

https://www.channelnewsasia.com/news/singapore/nus-covid-19-test-kit-60-seconds-minute-breathonix-13319362 NUS start-up develops 60-second breath test to detect COVID-19…early days, won’t help over next few weeks or months even – but…let’s get on with it! https://www.todayonline.com/singapore/nus-start-develops-60-second-breathalyser-test-covid-19

USDMXN - back towards 19 on a U.S fiscal deal ?

Market expectations on a Biden sweep . if for 10y UST yields to hit 1.2% or so..

German Manuf flash PMI - it's a V

U.S existing home sales – up nearly 10pct again - that's more than a V

As long as this goes on………..risk likely to do ok...they are probably going to have to buy a fair amount of TBills and issuance into year-end…

Are Dem's or Repuplican's good for markets (long-term) ?

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