The markets month ahead: December events for your trading diary

Get a preview of the month’s important market-moving events with our look ahead to December. 

Economic events to watch in December 

OPEC-JMMC meetings – Thursday December 2nd  

OPEC+’s December meetings will take on a different shape to its other monthly get-togethers. Crude oil has dipped below $70 for the first time since September. Questions are being raised over oil demand, especially with the emergence of the Omicron COVID-19 variant. With President Biden releasing oil from the US Strategic Petroleum Reserve, OPEC+ is likely to rethink its monthly production increases. 

US nonfarm payrolls – Friday December 3rd  

The US job market is in focus this Friday with the latest NFP print. Last month’s beat market expectations with 571,000 new jobs created in November. The hospitality sector led the way with 185,000 new roles. Can the momentum keep going? Jobless claims are at their lowest levels since 1969, but the US labour sector remains tight. 

Bank of Canada rate statement – Wednesday December 8th  

A fresh rate statement from the Bank of Canada is on the way. Is a rate hike getting closer? Governor Tiff Macklem has hinted as such, but one won’t be coming until Canada’s economic slack picks up. Inflation is high, but Macklem is putting all his chips in the nation’s flexible inflation target based around a 2% midpoint between 1-3%. Will it be enough to stave off inflation’s killer bite? 

US CPI data – Friday December 10th  

Speaking of inflation, we can gauge its effects on the US economy with the CPI data for November which comes this month. In the US, it’s already positively scorching. Prices rose 6.2% in October – the fastest rate seen since December 1990. Core inflation was also up 4.6%. It’s hoped inflation prints this scalding may force the Fed into action, but so far, no luck. 

US retail sales – Wednesday December 15th  

November’s retail stats are usually a good indicator of the strength of US holiday spending. Not only is Thanksgiving towards the end of the month, but also the Black Friday and Cyber Monday spendathons too. Interestingly, early projections suggest American shoppers have spent less during this year’s Black Friday event – down 28% year-on-year. This is the first time Black Friday sales have fallen. Is inflation proving too much for US consumers? 

FOMC statement – Wednesday December 15th  

Wednesday December 15th is a busy day for the US economy. The FOMC gives its final statement of 2021 today at a time when the job market is tight, and inflation is high. At the start of the month, Chair Jerome Powell stated it was time to retire the word “transitory” in relation to inflation, triggering market thoughts that a rate hike could finally be on the way. We’ll learn more about the direction of the US economy at this month’s FOMC talks. 

Bank of England rate statement – Thursday December 16th  

Hints that a UK rate hike was on coming were dropped in November, but one might not come just yet. The Omicron variant has caused jitters to economists around the world and the Bank of England’s top bods are no different. A 25-basis-point rate hike was being talked up, but it looks like Governor Bailey et al are holding fire until Omicron’s impact can really be measured. 

ECB Rate Statement – Thursday December 16th  

The big rate statements come thick and fast in mid-December. Following the Bank of England on December 16th is the European Central Bank. Unlike the Bank of England, the ECB has been pretty explicit about its rate hike plans. That is to say, one won’t be coming in December and won’t be coming in 2022 either. Christine Lagarde has warned against rushing into a “premature tightening” of ECB policy – but if inflation continues to grow across the bloc, something will have to give. 

Flash PMI data – Tuesday December 21st  

See how EU and UK are doing in terms of productivity with the final flash PMI estimates for 2021. November’s PMI numbers threw up some surprise for the EU at least. Its composite PMI index jumped from 54.2 in October to 55.8 in November. Conversely, the UK’s scores edged down month-on-month from October’s 57.8 to a November reading of 57.7. A small decline, but a decline, nonetheless.  

US Core PCE data – Thursday December 23rd  

There’s still time to squeeze in the Fed’s preferred inflation metric before markets shut down for Christmas. Much like other inflation ratings, personal consumer expenditures are up throughout the US. The latest reading showed household spending was up 4.1% year-on-year – the largest year-on-year jump since the 1990s. It’s probably we’ll round off the year with yet another hot PCE print.  

Major economic data 

Date  Time (GMT)  Asset  Event 
Wed 01-Dec  12:30am  AUD  GDP q/q 
  1:15pm  USD  ADP Non-Farm Employment Change 
  1:30pm  CAD  Building Permits m/m 
  2:00pm  GBP  BOE Gov Bailey Speaks 
  3:00pm  USD  Fed Chair Powell Testifies 
  3:00pm  USD  ISM Manufacturing PMI 
  3:00pm  USD  Treasury Sec Yellen Speaks 
  3:30pm  OIL  Crude Oil Inventories 
Thu 02-Dec  8:00am  EUR  Spanish Unemployment Change 
  All Day  All  OPEC-JMMC Meetings 
  1:30pm  USD  Unemployment Claims 
  2:00pm  USD  Treasury Sec Yellen Speaks 
  4:30pm  USD  FOMC Member Barkin Speaks 
Fri 03-Dec  8:30am  EUR  ECB President Lagarde Speaks 
  11:00am  GBP  MPC Member Saunders Speaks 
  1:30pm  CAD  Employment Change 
  1:30pm  CAD  Unemployment Rate 
  1:30pm  USD  Average Hourly Earnings m/m 
  1:30pm  USD  Non-Farm Employment Change 
  1:30pm  USD  Unemployment Rate 
  3:00pm  USD  ISM Services PMI 
  Tentative  USD  Treasury Currency Report 
Tue 07-Dec  Tentative  CNY  Trade Balance 
  3:30am  AUD  Cash Rate 
  3:30am  AUD  RBA Rate Statement 
  10:00am  EUR  ZEW Economic Sentiment 
  10:00am  EUR  German ZEW Economic Sentiment 
  3:00pm  CAD  Ivey PMI 
Wed 08-Dec  3:00pm  CAD  BOC Rate Statement 
  3:00pm  CAD  Overnight Rate 
  3:00pm  USD  JOLTS Job Openings 
  3:30pm  OIL  Crude Oil Inventories 
  Tentative  CAD  BOC Press Conference 
  6:01pm  USD  10-y Bond Auction 
Thu 09-Dec  1:30pm  USD  Unemployment Claims 
  6:01pm  USD  30-y Bond Auction 
Fri 10-Dec  1:30pm  USD  CPI m/m 
  1:30pm  USD  Core CPI m/m 
  3:00pm  USD  Prelim UoM Consumer Sentiment 
Tue 14-Dec  1:30pm  USD  PPI m/m 
  1:30pm  USD  Core PPI m/m 
Wed 15-Dec  2:00am  CNY  Retail Sales y/y 
  7:00am  GBP  CPI y/y 
  1:30pm  CAD  CPI m/m 
  1:30pm  CAD  Common CPI y/y 
  1:30pm  CAD  Median CPI y/y 
  1:30pm  CAD  Trimmed CPI y/y 
  1:30pm  USD  Core Retail Sales m/m 
  1:30pm  USD  Retail Sales m/m 
  1:30pm  USD  Empire State Manufacturing Index 
  3:30pm  OIL  Crude Oil Inventories 
  7:00pm  USD  FOMC Economic Projections 
  7:00pm  USD  FOMC Statement 
  7:00pm  USD  Federal Funds Rate 
  7:30pm  USD  FOMC Press Conference 
  9:45pm  NZD  GDP q/q 
Thu 16-Dec  12:30am  AUD  Employment Change 
  12:30am  AUD  Unemployment Rate 
  7:00am  GBP  Retail Sales m/m 
  8:30am  CHF  SNB Monetary Policy Assessment 
  8:30am  CHF  SNB Policy Rate 
  9:00am  CHF  SNB Press Conference 
  12:00pm  GBP  Asset Purchase Facility 
  12:00pm  GBP  MPC Asset Purchase Facility Votes 
  12:00pm  GBP  MPC Official Bank Rate Votes 
  12:00pm  GBP  Monetary Policy Summary 
  12:00pm  GBP  Official Bank Rate 
  12:45pm  EUR  Main Refinancing Rate 
  12:45pm  EUR  Monetary Policy Statement 
  1:30pm  EUR  ECB Press Conference 
  1:30pm  USD  Philly Fed Manufacturing Index 
  1:30pm  USD  Unemployment Claims 
  2:15pm  USD  Industrial Production m/m 
  2:45pm  USD  Flash Manufacturing PMI 
    USD  Flash Services PMI 
Fri 17-Dec  Tentative  JPY  Monetary Policy Statement 
  Tentative  JPY  BOJ Press Conference 
  9:00am  EUR  German ifo Business Climate 
Tue 21-Dec  12:30am  AUD  Monetary Policy Meeting Minutes 
  8:15am  EUR  French Flash Services PMI 
  8:30am  EUR  German Flash Manufacturing PMI 
  8:30am  EUR  German Flash Services PMI 
  9:00am  EUR  Flash Manufacturing PMI 
  9:00am  EUR  Flash Services PMI 
  9:30am  GBP  Flash Manufacturing PMI 
  9:30am  GBP  Flash Services PMI 
  1:30pm  CAD  Core Retail Sales m/m 
    CAD  Retail Sales m/m 
Wed 22-Dec  1:30pm  USD  Final GDP q/q 
  3:30pm  OIL  Crude Oil Inventories 
Thu 23-Dec  1:30pm  CAD  GDP m/m 
  1:30pm  USD  Core PCE Price Index m/m 
  1:30pm  USD  Core Durable Goods Orders m/m 
  1:30pm  USD  Durable Goods Orders m/m 
  1:30pm  USD  Unemployment Claims 
  3:00pm  USD  Revised UoM Consumer Sentiment 
Tue 28-Dec  8:00am  CHF  KOF Economic Barometer 
  3:00pm  USD  CB Consumer Confidence 
Wed 29-Dec  3:00pm  USD  Pending Home Sales m/m 
  3:30pm  USD  Crude Oil Inventories 
Thu 30-Dec  1:30pm  USD  Unemployment Claims 
  2:45pm  USD  Chicago PMI 
Fri 31-Dec  1:00am  CNY  Manufacturing PMI 


Sterling highest vs euro since Feb ’20, UK inflation spikes

Chances the Bank of England raising interest rates next month increased as UK inflation surged to a 10-year high last month. October’s CPI inflation hit 4.2%, above the 3.9% estimated and well north of the Bank’s 2% target. It marked a steep acceleration from the 3.1% reading in September and underlines that inflation is becoming more of a problem, not less. Core inflation also surged to 3.4%. The good news is that pay is up 5.8%. Will the Bank raise rates next month? The MPC noted in November that the decision not to raise rates was largely because they wanted to get more information about the health of the labour market. So, coupled with the strong employment data yesterday, the case for the Bank of England to act now is compelling. That does not, however, mean a hike next month is a done deal – unreliableness breeds uncertainty even when it seems obvious.  And we must stress that there are reasons to doubt the BoE will act: 1) there are still plenty on the MPC who are wedded to the transitory narrative – the Hawks v. Doves balance favours the latter camp still as the 7-2 vote indicated, 2) does the Bank think that hiking now would amount to a policy mistake a la Trichet? If so then even if they do feel that inflation is becoming unanchored and problematic, they may chicken out of hiking due to fears of killing off the recovery, and 3) do other risks to the economic outlook like Brexit mean hiking is simply not appropriate at this time? Whatever they think, the problem for the market is in not being able to trust statements about ‘acting on inflation’.   


GBPUSD rose after the CPI was released but has pared a lot of those initial gains vs the dollar, but cable still trades mildly higher this morning. But the dollar is something of a brick wall right now so maybe not the best gauge – the pound is doing much better against the euro, hitting its best level since Feb 2020. Euro weakness is the main theme here so this is likely a much better play on sterling strength and monetary policy divergence than cable is given where Fed and ECB are right now.


European stock markets were flat/mixed at the start of the session after Wall Street rose on Tuesday following some strong retail sales numbers. We also had strong earnings from Walmart and Home Depot, which topped the Dow. Better-than-expected retail sales figures helped lift bond yields, with US 10s touching 1.65%, its highest in three weeks. Gold pulled back as a result, whilst the dollar is at its highest since July 2020. 


The FTSE 100 trades lower by around 0.1-0.2% in early trade, whilst the DAX, CAC and Euro Stoxx 50 up by a similar kind of margin. Shares in Marks and Spencer traded –2% on a downbeat note from Jefferies, which downgraded the stock to hold from buy after the recent rally. They say the ‘easy lever of outsized earnings surprises on depressed multiples has been pulled’. This goes to what we talked about on the earnings update recently – easy wins behind, but much harder yards ahead in getting the stock back to 2015-18 levels. 


Bullish note from Goldman Sachs on US equities, who forecast that the S&P 500 will climb by 9% to 5100 by the end of 2022. Kostin and co write: “The S&P 500 P/E multiple will remain roughly flat, ending 2022 at 21.6x. After two years of near-zero interest rates, the Fed will likely begin hiking in July. 10-year Treasury yields will rise to 2% by the end of next year, but be offset by a declining Equity Risk Premium as policy uncertainty declines and consumer confidence rises. Strong corporate and household demand for equities will help support valuation.” 


GS’s top tips are: “(1) Own virus- and inflation-sensitive cyclicals; (2) Avoid high labor cost firms; (3) Buy growth stocks with high margins vs. low margin or unprofitable growth stocks.” 


Tesla things … new filings showed Elon Musk sold almost $1bn more in stock as shares in Tesla rose 4%. Meanwhile, Tesla is being sued by JPMorgan for $162m over Musk’s ‘funding secured’ tweet and losses that ensued for the bank as a result of the stock price movement.


Chart: EURUSD tests key 61.8% retracement level of the move higher from March 2020 to January 2021 at around 1.1290, though the euro has pared earlier losses that saw it touch 1.1265. Nevertheless, any breaks below 1.13 keeps sellers in charge.

Why are investors not bothered about inflation?

Inflation, inflation everywhere – CPI in the US the highest in 30 years, in Japan the most in 40 years. Producer price inflation is also soaring across the board – last week’s Chinese PPI shot up to a 26-year high. Friday saw yet more evidence as German wholesale prices also jumped. In October German wholesale selling prices rose by 15.2% year-over-year. This was the highest annual rate of change since March 1974 after the first oil crisis. It also marks a steep acceleration in recent months as in September and in August the annual rates of change had been +13.2% and +12.3%, respectively. University of Michigan one year ahead consumer inflation expectations rose again to 4.9% from 4.8%. Meanwhile, the consumer sentiment figure dropped to a 10-year low – worse even than at the peak of the market panic a year and a half ago. On Friday the US 10 year break-even inflation rate rose to 2.76%, its highest since 2006. Real yields meanwhile sank to record lows.


Yet investors don’t seem that bothered, as a combination of weak consumer sentiment and higher inflation is somehow not weighing on stocks: US and European equities keep making new records. Ultimately, the market remains fairly comfortable with fundamentals as earnings growth has been better than expected, as companies seem broadly able to maintain margins by passing on their higher costs to consumers. 


Monetary policy remains incredibly accommodative and although inflation is high the market thinks a) the Fed and others won’t crack and raise rates early or more importantly, aggressively (a couple of hikes next year would still leave policy very loose) and b) inflation probably is transitory – markets are largely buying the central bank line for now as evidenced by the lack of movement in the bond market. TINA – there is no alternative – is still at work since you can’t get any real return on govt bonds – real rates are so low (negative) that you have to stick your money into equities to avoid the erosion of inflation. Inflation coupled with benign central bank policy so far seems good for stocks since the real risk-free rate is so low. The crux of it is that nominal rates should be a lot higher to compensate for inflation, but central banks are keeping them artificially low, which is suppressing everything and letting equities go higher. And longer-end yields are not marching higher since there is no great confidence in the ‘roaring twenties’ steepener trade that was talked about a lot at the start of the year but has since become overshadowed by the slower growth, stagflation narrative. 


When a pullback? The S&P 500 closed up 0.7% on Friday but did end the week slightly lower, breaking a 5-week win streak. And while lower on the week, it closed on Friday well off its lows and is just 0.8% off its all-time high. It’s a pretty mild pullback if it only lasts a couple of days. Bank of America is not so optimistic for Europe: “We expect the anti-goldilocks combination of weakening growth momentum and rising real bond yields to weigh on European equities, with a projected 10%+ downside by early next year, leaving us negative.” European stock markets are mixed at the start of trading on Monday – mild gains in Paris; London and Frankfurt flat. Rising cases and new lockdowns in Europe are something to watch, though as I said earlier consumer sentiment does not equal stock market sentiment. Nevertheless, the BofA analysis is to be considered. 


This week the focus around the inflation narrative switches to the UK with the release on Wednesday of the latest CPI data. The Bank of England could use a hot reading to finally act, but there is yet a lot of uncertainty about where the MPC is on raising rates. As I have discussed several times, it’s got a communication problem. Inflation fell to 3.1% in September from 3.2% in August but the drop was a blip – expect prices to continue to rise. Economists and the BoE think 5% is possible in the coming months. There seems be no excuse for the Bank not to pull the trigger, but the MPC remains divided. Supply chain problems can’t be solved by central banks, but I find it hard to reconcile ZIRP with inflation persistently so high. 

No relief for sterling amid BoE mess

A tale of two central banks

A key part of the central banker role is communication. Meetings take place infrequently, maybe 8 times a year, so in the gaps in-between, when trading days are long, markets lust for guidance in other forms. Policymakers are generally free between meetings to make speeches, give Q&As, do TV interviews etc. Sometimes they are compelled by lawmakers to explain their policies, too. Naturally what they say is comprehended, dissected and assessed by the market as to what their words imply for the course of monetary policy. There is never an absolute: nobody will say ‘we are going to raise rates next month’. That is why you have the meeting and produce an official statement. But you can make it clear to the market what you think about the state of things and where you think is the likely or appropriate course of monetary policy.

After an uneasy start in his job, Jay Powell, the Fed chairman, is very good at doing this. Perhaps not quite as adept as Mario Draghi at carefully steering market expectations, but close. He has spent six months painstakingly guiding the market to expect this week’s announcement on tapering asset purchases. No tantrum, barely much of a reaction even. Talk of rate hikes is scorned.

Contrast this with the performance of Andrew Bailey, the relatively new head of the Bank of England. Loose – in retrospect – remarks over recent weeks led the market to expect an interest rate rise yesterday, only to be confounded by not just a failure to deliver on that but an apparent indifference to the fact that policy was so poorly communicated. “It is not our responsibility to steer markets on interest rates,” he said. Oh, right? That’s kind of the antithesis of the job description, but you’re the man in the hot seat I suppose.

Frequently handing over to Broadbent and Ramsden to answer questions he seemed unable to tackle, Bailey’s remarks were problematic. For example, he cautioned on the scale of rate bets seen in markets – saying he thinks the market has priced in too many rate rises. Maybe he shouldn’t have been stoking those expectations with hawkish remarks on inflation. Then, in response to a later question about whether the market was right or wrong, he said: « None of us are going to endorse the market curve at any point in time.” That is just untrue. Michael Saunders on Oct 9th: “I think it is appropriate that the markets have moved to pricing a significantly earlier path of tightening than they did previously.” In response to a question about stagflation he rambled on about its etymology, said the bank doesn’t really use that word, so no before handing over to someone else to actually attempt an answer to the question. Even if you don’t use the word ‘stagflation’, you know the question is about falling growth and higher prices.

It seems like the BoE thinks ‘we’ll say something and the market can make of it what it likes, that’s not our business”. To a degree, that’s true. You can’t account for what others make of your statements. But you can be a lot more careful about those statements in the full knowledge that the market will read something into them since you are the governor of the Bank of England and not just anybody. There were several opportunities in recent weeks to lean against the aggressive market pricing, to gently nudge the market in the right direction, but the governor elected not to do that. The feeling is now that the BoE under Bailey has lost credibility and we will not be able to read as much into his remarks as we have done. This is not a good situation for a central banker to be in. I leave you with this, among the listed candidate requirements from the BoE’s job spec for Governor: “The ability to communicate with authority and credibility internally, to Parliament, the media, the markets and the wider public.”

Anyway, is the December meeting live? Citi and others think so, expecting a 15bps hike at the next meeting. Bailey said the vote at 7-2 was ‘close’, which maybe hints at several members – as I suggested may be the case yesterday – being close to swinging towards hiking but were not persuaded this week. Or not…it’s hard to tell these days. This morning on Today the governor said the BoE would not ‘bottle it’ when it came to raising rates and insisted they will rise. He also said that the Bank wants more time to assess the impact of the end of furlough on the labour market, and that this was the primary reason for not hiking rates yesterday. This could certainly indicate that Dec is ‘live’, since the Bank would not have had time to gauge the scarring, which so far looks small. But, then again, it might not.

Sterling got hit hard and is lower again this morning. GBPUSD blew through the 61.8% retracement area we’d highlighted at the start of the week and looks to retest 1.3410 September low and possible round number support at 1.340. This may mark the bottom though in the medium-term – if not then look to 1.3180, the 38.2% retracement of the 2020 low to 2021 high.

GBPUSD Chart 05.11.2021


European stock markets are mixed, showing a bit of caution ahead of today’s nonfarm payrolls print in the US. The FTSE 100 is up again and north of 7,300 as the softer pound appears to be delivering a bit of a boost as we witnessed in the aftermath of the Bank of England announcement yesterday. The DAX is flat but the Euro Stoxx 50 is up 0.3%. The dollar is firmer with DXY at 94.40, yields steady with 10s around 1.53%, and gold bashing its head against the $1,800 resistance again support by lower real rates.

Wall Street rallied for a 6th straight day, with the S&P 500 and Nasdaq both notching fresh record highs. The Dow Jones slipped back as financials struggled, with GS and JPM leading the index lower. Broadly speaking the Fed’s patient approach and the removal of any overhanging worry around the tapering is good for risk, whilst fundamentals in the form of earnings are positive. Both US and European equities are trading at record peaks.

We said at the start of the week that the coming days were a big test for central banks. Have they passed that test? After the blowout in the bond market, the spike in front-end yields, central banks have not this week been as hawkish as some feared. Is that a failure to grasp the inflation snake? Maybe, I tend to think so, but many believe that central banks are right to be patient since the inflation is not just a function of demand this time. The transitory inflation narrative remains, and the CBs didn’t really pull the trigger and continue to err on the side of caution.

Shares in Peloton cratered by a third in after-hours trading after it reported a wider-than-expected loss. Pinterest was up 6% after a decent beat, whilst Uber fell after its loss was larger than forecast. Airbnb delivered record quarterly revenues and earnings. The firm posted $2.24bn in revenues versus the consensus of $2.05bn, whilst net income surged 280% to $834m.

The S&P 500 looks a tad overextended however and ripe for a pullback. The 20-day SMA has been a good anchor and a retreat to this area at 4530, a drop of 3% roughly, could be achieved without upsetting the longer-term trend.

S&P Chart 05.11.2021

Oil prices plunged as Saudi TV reported the country’s oil output would top 10m bpd by December. OPEC+ committed to raising output at 400k bpd, resisting calls from the White House to do more. Speculative positions are being unwound and the market is starting flip from draws to builds. Reuters reported Saudi energy minister Prince Abdulaziz bin Salman as saying that oil stocks will see « tremendous » builds at the end of 2021 and the start of next year because of slowing consumption.

Wide day for crude prices on Thursday highlighted by the $5 candle. Bearish MACD crossover still in charge.

Spot Oil Chart 05.11.2021

BoE credibility?

“Oh, the grand old Duke of York 
He had ten thousand men 
He marched them up to the top of the hill 
And he marched them down again” 


There’s been a lot of talk about loose shopping trolleys in Westminster today amid the government’s U-turn on MPs’ standards. (I didn’t know they had any?). But we need to look only to Andrew Bailey for our grand old Duke of York, happily marching markets up the hill to expect a rate hike today only to need to march them back down again. 


The Bank of England delivered a surprise by not raising rates, sending gilts and sterling into a bit of a spin. It’s really one of those moments where you have to question the communication strategy of the BoE. It had multiple occasions on which it could have gently nudged against the growing market anticipation around the November meeting being live but chose not to, and appeared to actively encourage tightening bets. Credibility is at stake, Mr Bailey. I’d said a hike was no slam dunk due to the way certain MPC members were leaning, but Bailey has been cheerleading tighter policy and didn’t vote for it himself – which suggests either he’s bad at communicating his views or there were simply not enough votes for him so he refrained from being a minority voter.


Members of the MPC voted 7-2 to keep rates at 0.1%, a move that the market had not anticipated. Recent chuntering from the members had suggested a hike was incoming but it looks like the Hawks didn’t have the votes this time – 7/2 maybe belies just how close they were to hiking today though. Dave Ramsden and Michael Saunders were the two known hawks calling for a hike, but none of the others followed in their wake. Although Catherine Mann did join those two in voting for an end to QE. 


Market reaction has been swift with sterling offered off the back of the announcement. GBPUSD moved rapidly to test the 61.8% level we’d targeted at the start of the week. The FTSE 100 popped higher on the news with lower sterling and looser monetary policy seen as positive for risk.

Cable reaction following today's BoE rate decision.


The Bank of England is sticking to the transitory line on inflation…


“CPI inflation is expected to dissipate over time, as supply disruption eases, global demand rebalances, and energy prices stop rising. As a result, CPI inflation is projected to fall back materially from the second half of next year.” 


And thinks expectations are not off the leash – despite year-ahead expectations rising to 4.4% in October. A slight fall in 5- and 10-year expectations was cited as a reason to be calm. 


“The MPC judged that inflation expectations remained well anchored in the United Kingdom at present.” 


Caution around employment just enough to warrant dovishness, it would appear.


“Initial indicators suggest that unemployment will rise slightly in 2021 Q4.” 


But tightening is still seen ahead  – the question for markets is when?


“The Committee has judged that some modest tightening of monetary policy over the forecast period was likely to be necessary to meet the 2% inflation target sustainably in the medium term.” 

Staley out, stocks up ahead of massive test for central bankers

So, farewell Jes Staley. You ran a good investment bank but are not as Teflon-like as it seemed. Back in February 2020, when news of the investigation into his historic links to Jeffrey Epstein broke, I commented how anything relating to the disgraced financier was surely toxic and said Staley should probably go. It was a reputational thing for Barclays and Staley did not have an immaculate record. After the whistleblower incident and KKR thingy with his brother-in-law it seemed the cat was on his last life; it seemed a question of judgment, or lack of it. I said: “It turns out he’s being investigated by the FCA over his known links to Jeffrey Epstein. The board says he’s been transparent enough, so he has their backing. Coming after the whistleblowing fine, it’s looking like the cat may be running out of lives. I wonder if he can survive this.” 


Today Barclays says Staley is out. It all hinges on his “characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA”. It appears his characterisation of the relationship is not exactly how the FCA and PRA see it. The board thought Staley was « sufficiently transparent” to keep his job last year – a statement at the time that already hinted a bit of a rift between CEO and board. Having seen the preliminary findings of the FCA and PRA report, either they think he wasn’t that transparent enough and/or just don’t want a mucky fight with the regulators to distract, since Staley will contest the findings. It should also be pointed out that “the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019”, the statement from the company said. The FCA and PRA simply said they “do not comment on ongoing investigations or regulatory proceedings beyond confirming the regulatory actions as detailed in the firm’s announcement”. Barclays is right to pull the plug now. It probably could have done it earlier. As I said in February last year: “He’s got to go now as he risks tarnishing Barclays’ reputation.”


Shares in Barclays fell more than 1% after the announcement, whilst peers rose – Lloyds rallied about 2% and NatWest over 1%. CS Venkatakrishnan, previously head of global markets, will take the reins. A safe pair of hands but we probably need to see a bit more. Today’s release mentions that “the Board has had succession planning in hand for some timewhich if you had Jes Staley as your CEO would have been a prudent step to take.  


Stocks are higher in early trade on Monday, with the Stoxx 600 in Europe hitting a record high. The FTSE 100 trades up 0.5% or so amid a generally positive start to the session, the first of the month. Wall Street closed out Friday with its best month since November 2020 as all three major averages hit fresh all-time highs. Bets that central banks will raise rates to fight inflation may have caused a wipe-out in the shorter end of the bond market last week, but the gyrations are not affecting stock markets too much at the moment. Corporate earnings are strong with about 80% of US firms reporting delivering profits ahead of expectations. A slew of key central bank decisions this week has the potential to up-end the sense of calm but so far, we think policy moves are reasonably well telegraphed. Nevertheless, there are lots of questions facing the central bankers this week. 


The Bank of England faces a big test of credibility after a series of hawkish messages from key policymakers in recent weeks. As noted a couple of weeks ago, the situation is finely balanced. Senior policymakers like governor Bailey and chief economist Huw Pill have chucked some fairly hawkish words around. Others remain sensitive to what many believe would be a policy mistake in raising rates into a period of economic slowdown and higher taxes. The BoE will be keen to bill any hike as a dovish one that is designed to get ahead of the inflationary impulse and show it means business, but is not about to start an aggressive tightening cycle. It will be about reducing some of the distortions created post-pandemic and the need to act early before inflation expectations are off the leash and inflation itself becomes more persistent. Sterling is struggling to catch much in the way of a lift from the BoE’s apparent hawkishness and now GBPUSD looking to turn lower with a bearish MACD on the daily chart.


The Federal Reserve looks set to announce tapering of bond purchases but will be leaning hard on any notion that tapering is tightening. Powell is likely to reiterate that « a different and substantially more stringent test » is required for interest rates to move up. The team sticky and team transient inflation match is still happening, though team sticky is clearly winning easily and the referee should call it off shortly. On Friday data showed US inflation running at its hottest in 30 years – headline PCE at 4.4% and core at 3.6%.


The Reserve Bank of Australia will need to figure out if it wants to abandon yield curve control. Last week saw a broad bond market selloff that saw the yield on Australian 3-yr paper jump above 1.25%, miles above the 0.1% target. It’s all but given up on this, it seems, though the RBA has still been active in 5- and 7-year paper to drive down yields. The question is whether the ditching of YCC begets a change in forward guidance – does it surrender to market expectations and signal it will likely raise rates before 2024? 

La semaine à venir : La masse salariale non agricole peut-elle renverser la vapeur ?

Les cinq prochains jours forment une grosse semaine pleine de grandes réunions. Sur les données, c’est l’heure de la paie non agricole. Assistera-t-on à un retournement de situation pour les marchés du travail américains ? Nous avons également des réunions de banque centrale sous la forme de sommets de la Banque d’Angleterre et de la Réserve fédérale. Un nouveau mois signifie également une nouvelle réunion OPEP-JMMC.

Livres de paie non agricoles – une oscillation et un échec ou un retour à la forme ?

La publication de données la plus importante de la semaine est celle d’octobre sur les salaires non agricoles aux États-Unis.

Cela a été quelques mois difficiles pour les emplois aux États-Unis. Les PFN ont été bien loin du marché au cours des deux derniers mois. Les chiffres de septembre ont enregistré 194 000 nouveaux emplois contre 500 000 attendus. Août devait ajouter 366 000 rôles. 720 000 étaient prévus ce mois-ci.

Les emplois sont une mesure clé pour la diminution. Nous nous attendons toujours à ce que le FOMC annonce une réduction ce mercredi lors de sa réunion mensuelle, mais il est clair que le président de la Fed Powell voit le secteur du travail loin de ce qu’il doit être.

Une chose qui sera intéressante à court ou moyen terme est l’impact des suppressions d’emplois record. Plus de 4,3 millions d’Américains ont quitté leur emploi en août. Les raisons sont multiples (épargne accumulée, retraite anticipée, insatisfaction générale au travail, etc.). Le nombre de travailleurs américains quittant leur emploi pourrait entraîner la création de nouveaux rôles, c’est une bosse NFP – mais cela pourrait entraîner plus d’échecs comme nous l’avons vu récemment.

Le FOMC confirme-t-il la diminution ?

Quel que soit l’état du marché du travail, Jerome Powell affirme que la diminution est « en bonne voie ».

Comme mentionné ci-dessus, les marchés s’attendaient à ce que la réduction du programme d’assouplissement quantitatif massif des États-Unis commence en novembre. Cela n’a toujours pas été confirmé à 100 %, mais nous pourrions le voir lors de la réunion du FOMC de cette semaine.

Actuellement, la Fed achète des titres d’une valeur de 120 milliards de dollars par mois dans le cadre de ses mesures extraordinaires de soutien budgétaire en cas de pandémie.

Avec un secteur de l’emploi apparemment plus faible et une inflation galopante, aucune hausse des taux n’est encore attendue. Mais, selon Powell, commencer à se relâcher sur l’assouplissement quantitatif permettra à la Fed de s’attaquer à ces deux problèmes.

« Personne ne devrait douter que nous utiliserons ces outils pour ramener l’inflation à 2 % au fil du temps », a déclaré Powell lors d’un événement organisé par la Banque de réserve sud-africaine vendredi dernier. « En même temps, nous pensons que nous pouvons être patients et permettre à la reprise d’avoir lieu et de permettre au marché du travail de guérir ».

Quelques membres du FOMC ont confirmé qu’ils soutiendraient la diminution lors de la réunion de cette semaine. Les gouverneurs de la Fed Randal Quarles et Christopher Waller font partie des voix les plus bellicistes au sein du conseil.

« Cette action ne devrait pas resserrer les conditions financières, puisqu’une réduction plus tard en 2021 a déjà été prévue par la plupart des participants », a déclaré Waller la semaine dernière.

Banque d’Angleterre : augmenter ou ne pas augmenter ?

Lorsque la Banque d’Angleterre se réunira jeudi, elle sera confrontée à un dilemme. Le Comité de politique monétaire (MPC) de la banque centrale est toujours divisé par les faucons et les colombes, mais il semble que les faucons pourraient gagner le combat.

Mais une hausse des taux est-elle à venir ? Et est-ce le bon moment pour la Banque d’Angleterre de commencer à jouer avec les taux ? L’inflation est toujours élevée, malgré une légère baisse le mois dernier, et la croissance stagne.

Le gouverneur Bailey semble certainement belliciste. Plus tôt dans le mois, le chef de la BoE a déclaré que la banque devrait agir pour contenir l’inflation. L’un des outils à sa disposition est la notation des hausses.

Cependant, d’autres ne sont pas encore sûrs de la validité d’une augmentation des taux par rapport à leurs creux historiques. Silvana Tenreyro, une responsable politique de la BoE, a indiqué que les taux n’augmenteraient pas avant Noël. Silvana, comme beaucoup des voix les plus conciliantes du Conseil de la Banque, parie qu’une inflation élevée n’est qu’une transition.

L’économiste en chef de la BoE, Huw Pill, semble pencher davantage pour les faucons.

Dans ses premiers commentaires publics depuis qu’il a pris ses fonctions, Pill a déclaré : « À mon avis, cet équilibre des risques évolue actuellement vers de grandes inquiétudes concernant les perspectives d’inflation, car la force actuelle de l’inflation semble devoir durer plus longtemps que prévu ».

Lors de la session d’octobre, le MPC a voté à l’unanimité pour maintenir les taux stables. Il sera intéressant de voir si le collectif du groupe reste uni, ou si les faucons vont commencer à dominer.

Réunion OPEP+ – dire le cap ?

C’est un nouveau mois, ce qui signifie une nouvelle série de réunions OPEP-JMMC.

L’OPEP+ ne cherche pas à renverser le système ici. Il est très clairement resté fidèle à ses armes au cours des deux derniers mois et a maintenu l’augmentation de la production à 400 000 b/j par mois.

Le cartel a été confronté à des appels de grands consommateurs de pétrole brut, notamment des États-Unis, pour ouvrir davantage les robinets. Ceci malgré le fait que les États-Unis reposent sur des millions de barils de schiste et pourraient se tourner vers leurs propres ressources, mais c’est une question distincte.

Non, l’OPEP+ et son président l’Arabie saoudite sont assez satisfaits de l’évolution des marchés pétroliers. Les prix du pétrole brut ont augmenté d’environ 50 % en glissement annuel en 2021. Et, selon l’Arabie saoudite, un excédent est en vue pour 2022.

Alors, pourquoi l’OPEP et ses alliés voudraient-ils changer les choses ? Le prix du baril de brut monte en flèche. Ces pays dépendent des prix élevés du pétrole pour leur prospérité. 40 % des revenus du gouvernement russe proviennent par exemple des hydrocarbures.

A ce titre, ne vous attendez pas à de grosses surprises lors de la réunion OPEP-JMMC de ce jeudi.

La saison des résultats de Wall Street maintient les rapports du troisième trimestre à venir

N’oubliez pas que nous sommes encore plongés dans la saison des résultats. Wall Street est en vie, les mégacaps publient leurs résultats financiers du troisième trimestre.

Les grands noms qui rapportent cette semaine incluent ActivisionBlizzard, Uber, Pfizer et Airbnb. Pour voir quelles entreprises déclarent et à quel moment, n’oubliez pas de consulter notre calendrier de la saison des bénéfices aux États-Unis.

Données économiques majeures

Date Time (GMT+1) Asset Event
Mon 01-Nov 2:00pm USD ISM Manufacturing PMI
Tue 02-Nov 3:30am AUD RBA Rate Statement
  3:30am AUD Cash Rate
  8:00pm NZD RBNZ Financial Stability Report
  9:45pm NZD Employment Change q/q
  9:45pm NZD Unemployment Rate
Wed 03-Nov 8:00am EUR Spanish Unemployment Change
  12:15pm USD ADP Non-Farm Employment Change
  2:00pm USD ISM Services PMI
  2:30pm OIL Crude Oil Inventories
  6:00pm USD FOMC Statement
  6:00pm USD Federal Funds Rate
  6:30pm USD FOMC Press Conference
Thu 04-Nov 10:00am EUR EU Economic Forecasts
  All Day OIL OPEC-JMMC Meetings
  12:00pm GBP Asset Purchase Facility
  12:00pm GBP BOE Monetary Policy Report
  12:00pm GBP MPC Asset Purchase Facility Votes
  12:00pm GBP MPC Official Bank Rate Votes
  12:00pm GBP Monetary Policy Summary
  12:00pm GBP Official Bank Rate
  12:30pm USD Unemployment Claims
  02.30pm GAS US Natural Gas Inventories
Fri 05-Nov 12:30am AUD RBA Monetary Policy Statement
  12:30pm CAD Employment Change
  12:30pm CAD Unemployment Rate
  12:30pm USD Average Hourly Earnings m/m
  12:30pm USD Non-Farm Employment Change
  12:30pm USD Unemployment Rate
  2:00pm CAD Ivey PMI


Les rapports sur les résultats

Mon 1 Nov Tue 2 Nov Wed 3 Nov Thu 4 Nov
Pfizer (PFE) Ball Corp (BLL)
Arista Networks (ANET) Activision Blizzard (ATVI) Qualcomm Inc (QCOM) Lumentum Holdings (LITE)
Mondelez (MDLZ) Moderna (MRNA)
The Trade Desk (TTD)
Airbnb (ABNB)
Illumina (ILMN)
Liberty Global Class A (LBTYA)
Peloton (PTON)
Roku Inc (ROKU)
Square Inc (SQ)
Uber Technologies (UBER)


UK Autumn Budget 2021: the key talking points

Chancellor Rishi Sunak says his latest budget will deliver a strong economy for the UK. Here are a few select takeaways from today’s announcement.

Autumn budget 2021

Inflation to reach 4% in 2022

Firstly, inflation projections. The Office of Budget Responsibility (OBR) says inflation will run to 4% across 2022.

This sort of runs counter to the Bank of England’s thoughts that the high numbers we’re seeing are all transitionary. CPI inflation did drop a smidge in September, but, as the OBR forecasts, it will continue to run hot for the foreseeable future.

In a post-budget statement, the OBR even suggested inflation could rise as high as 5% across the next year.

Regarding inflation, Chancellor Sunak said that these pressures are global in nature. The UK may not be equipped to deal with them on their own, but the Chancellor said the government would move to protect UK households.

Hot inflation might be enough to push the BoE’s Monetary Policy Council into hiking rates. Governor Bailey has previously said the central bank will have to act to contain it if it continues to spiral, so a hike could be on the cards if the hawks in the MPC can overcome the doves.

UK economy will grow 6.5% this year

Next on the menu is the UK’s growth prospects.

OBR predictions put full-year GDP growth at 6.5% for 2021. According to the Chancellor, the UK won’t be back to its pre-pandemic economic self by 2022.

Looking to the future, the OBR predicts the following:

  • 6% GDP growth in 2022
  • 2.1% GDP growth in 2023
  • 1.3% GDP growth in 2024
  • 1.5% GDP growth in 2025

Onwards and upwards then? The UK is still reeling from the effects of the COVID-19-induced recession of 2020. The economy contracted at its highest level for three centuries last year, dropping 9.9% in total.

The Office of Budget Responsibility has actually increased its GDP outlook. 4.4% growth was the figure touted in March of this year.

Brexit could still lead to a slump in economic output. According to the OBR, the UK will drop trade with the EU by 15% in the coming years, causing productivity to fall by 4%.

Overall, the UK’s growth prospects are better than expected – at least according to these projections. The chancellor may have more wriggle room to spend as necessary going forward. We may not have to get out our flares, kipper ties, and disco records just yet as a return to the dire economic straits of the 70s seems gone for now.

That said, Sunak has been clear he doesn’t like heavy government spending, pointing out borrowing had reached 50% of GDP last year.

Largest spending increase this century on the way?

He may not like it, but he’s got to go along with it.

According to his latest budget, government spending will increase 3.8% across the year. Departmental spending will rise by £150bn.

“If anybody still doubts it, today’s budget confirms it. The Conservatives are the real party of public services,” the Chancellor said. Well, quite – but you did also drastically slash pretty much all departments to the bone over 11 years of Conservative rule.

It’s a bit like breaking every bone in someone’s body, offering them a foot cast, and saying “see, we told you we are looking out for you” to the unfortunate victim.

The Institute for Fiscal Studies estimates average real-term annual growth in departmental resource budgets was higher in previous years. It was above 4% under Tony Blair’s New Labour in 2000 and 2002 and 4.1% under the Conservatives in 2019.

Given that some were fearing more departmental budget cuts, up to £2bn a year in some cases, these terms are certainly more generous than most.

Business rates get tweaked, bank rates cut

Confirming expectations, Chancellor Sunak announced a reduction in the bank levy. It will drop from 8% down to 3%.

Business rates will also be adjusted in a bid to boost the UK’s flatlining high streets. Next year’s planned business rate hike is now off the table, saving an alleged £4.6bn over the next half-decade.

There is also an added £750m in incentives for new businesses to buy property across their initial 12 months of existence.

Additionally, companies in the hospitality, retail, and leisure sectors will see their business rates slashed by 50% (up to a maximum of £110,000).

Staying with the high street, changes to draught beer and cider duties, as well as a reduction in the sparkling wine duty, have been introduced. It’s good news for pub and restaurant chains, some of which have popped on the news. Wetherspoons, for example, was up 5% after the announcement.

Levelling up means big spending

A combined £67bn will be allocated to developing road and rail networks across the UK going forward. Although the numbers are promising, this is Britain we’re talking about. The Crossrail and HS2 debacles should be enough to make anyone wary of such grandiose promises.

The chancellor also announced that the government’s target for hitting research and development spending will reach £22bn by 2026-27. That’s two years ahead of schedule, so maybe some things can actually be done on time here.

The government will invest £20bn in R&D by 2024-25. According to Sunak, this is a “record investment to secure the UK’s future as a global science superpower”.

Extra funds have also been allocated to the Conservative’s slightly patronisingly titled Levelling Up fund too. This programme hopes to improve public amenities in some of the UK’s more underprivileged towns and cities.

£1.7bn will be added to help build or renovate museums, galleries, libraries, and other public spaces, to essentially pave over the cracks caused by Tory cuts in the first place.

Transport networks will also see sustained investment in a bid to create what Sunak calls London-style public transport networks.

What to make of this year’s Autumn Budget?

Well, the growth outlooks are brighter than expected. Public spending is also a lot higher than perhaps even Chancellor Sunak is personally comfortable with. A lot of the measures seem fine on the surface, but the country has been burned before.

UK Autumn Budget 2021 preview: What to watch this week

Chancellor Rishi Sunak presents his Autumn Budget this Wednesday. We profile some of the big issues to watch out for this October in this budget preview.

UK budget preview

The UK’s economic health

The budget is a time to reflect on where the UK has gone, economically, and where it’s going. Chancellor Sunak will be on hand to let us know the headline stats regarding employment, GDP growth, and inflation.

We know the UK economic recovery is also beginning to slow. Supply chain issues, rising unemployment in some industries, such as hospitality, and rising inflation, are all conspiring to inhibit growth.

The GDP has dropped 10% since the start of the pandemic. Bank of England forecasts suggest 2% growth in Q3 2021. Consumer price inflation stands at 4.5%.

This will fit into Sunak’s thinking and planning.

« Inflation, interest rates – those are two of the factors which I have to think about as I determine what’s the appropriate fiscal policy, what’s the right level of tax and borrowing and spending,” Sunak told the Radio Times in a recent interview.

The Office of Budget Responsibility is thought to be preparing GDP growth figures outstripping its 4% rebound shared in March. Whether this is true or not remains to be seen.

Blonde Money CEO and macroeconomics guru Helen Thomas has shared here thoughts on what could be a « Halloween horror show » for the UK this autumn:

How will the pound perform this budget?

Forex traders and general economic observers will be interested to see where sterling goes from here.

At the time of writing, GBP/USD was floating around the 1.375 level. Resistance was formed around 1.385.

Watch for where the pound goes. A strong budget could strengthen sterling against other currencies, but one that shows slumping economic growth may cause it to fall.

Taxes, taxes, taxes

With record levels of borrowing, in excess of £320bn, to keep the country running in light of the pandemic, the real question is who is going to pay for it?

The answer could be more personal taxes. Chancellor Sunak has already increased National Insurance, with contributions increasing by 1.25% from April 2022 onwards. It’s unlikely this will be enough to foot the government’s pandemic-led spending.

We could be about to see more higher levels of personal tax. There has been talk of an online sales tax percolating for a while now. It might not come this Wednesday, but it could be that the Autumn budget gets the ball rolling in this area.

There have also been calls from sectors to raise inheritance and capital gains tax too. The tax on dividends is probably going up to 1.25% too. Sunak may become the most tax-happy Chancellor in post-war Britain, but I guess extreme circumstances call for extreme measures.

Unless you’re a bank. KMPG has said it understands that Sunak will be dropping the Bank Levy from 8% to 3% by 2023. It’s a move to keep the City competitive in light of Brexit.

Although with rising fuel costs, one mooted plan to protect consumers would be a dropping of VAT on household energy bills.

That said, the government also has a green agenda to pursue. If it wants the UK to go net-zero by the middle of the century, then grants, loans, and so on will need to be put in place. How else can the government level up its green credentials? It’s estimated that the UK will lose £37bn in fuel duties every year if/when petrol-powered cars leave the roads.

Spending and borrowing

The conclusion to the UK’s 2021 Spending Review will coincide with this week’s budget too.

The Chancellor has had a lot to review. All of the UK’s support and spending programmes that originated during the Pandemic will no doubt be under the magnifying glass.

With GBP 68bn in Covid spending planned for 2021/22, the Chancellor has left little to no allowance for pandemic spending next fiscal year. COVID has not gone anywhere. In fact, it may be starting to ramp up again in the UK as the winter months roll in.

If Sunak has not left any spare cash available to anticipate a rise in COVID-19 cases, then that seems irresponsible. He may have to find some from the Spending Review or from the extra taxes and levies we discussed earlier.

There’s also the question of green spending. In order to reach that mythical net-zero status by 2050, the UK will have to spend at least £55bn a year. That means sustained solid investment in renewable energy projects and other things like proper house insulation and boiler replacement.

COP26 is looming so perhaps we’ll see more money allocated to green projects as a way of paying lip service to the UK’s climate goals.

But where there is spending there must also be cuts.

Sunak tasked all government departments to find 5% in savings going forward under this 2021/22 Spending Review.

“The scale of efficiency savings will be of immense interest when looking at the potential scale of fiscal consolidation over the next few years,” KPMG said in its Autumn Budget preview.

Tesla stuff, Squid Games

Tesla stuff: Haters hate, regulators regulate: don’t confuse the two. Duke University engineering and computer science professor Missy Cummings is set to become a new senior adviser for safety at the National Highway Traffic Safety Administration. Many Tesla fanboys and girls are crying foul. Cummings, a former pilot and robotics expert, is seen as ‘anti-Tesla’. Now that’s kind of interesting in the first place: you’re either definitely for Tesla or definitely a hater. No room for a middle ground. That’s kind of odd for a carmaker. Most people are not anti or pro Ford, or GM. They maybe like/dislike their cars, think they’re doing a good/bad job with the tech and think management are capable/useless. No one would say they’re anti-Ford. They might have an objective, rational view on the cars and/or the stock, but not a creed. But rational objectivity and Tesla seldom go hand in hand. And I’m not sure if you could say she’s anti-Tesla per se, just sceptical about the level of technology that is being touted around by some companies. But, particularly Tesla. 


For instance, last year she tweeted“LMAO…there is NO WAY Tesla will have a viable robo-taxi service this year. My lab has been running controlled experiments on Tesla Autopilot & I can say with certainty that they are not even close to being ready. My student on this project should get hazardous duty pay.”  In one 2018 tweet she said “The only killer robot out there is @elonmusk’s Tesla.” There are lots of examples on the feed.


It’s fair to say Cummings is a vocal critic of the ability of self-driving systems to cope with bad weather, and authored plenty of research that calls into question some of the main claims that companies like Tesla make when they market their ‘full self-driving’ systems. There are numerous papers, some choice tweets and essentially you can say she doesn’t buy the tech being anything like close enough to be objectively safe for the roads.  


After news of her appointment broke Elon Musk tweeted today: “Objectively, her track record is extremely biased against Tesla.”  


Tesla’s self-driving technology is already being investigated by the NHTSA. The company must provide the regulator with extensive data about its Autopilot system by Friday. Tesla has been getting away with marketing ‘Full Self Driving’ technology for a while; Cummings could mark time for a much tougher stance. Steven Cliff, deputy administrator since February, has also been nominated by the White House to lead the NHSTA. He’s currently in charge of the Tesla investigation. Another Tesla ‘hater’, according to many. Regulators are maybe finally going to regulate.


Meanwhile, in other Tesla ‘stuff’. Get a load of Elon Musk, who told a customer apparently not impressed with the look of the side mirrors on the cyber truck, that it’s OK to remove them. “They’re required by law, but designed to be easy to remove by owners,” he tweeted. I am ‘absolutely sure’ that is not irresponsible or unsafe…


Tesla earnings are due out today: the company hit record deliveries in Q3 as it found chips no one else seems to be able to find. EPS is seen around $1.50, on revenues of $13.6bn. Looking for updates on the Berlin Gigafactory, competition in China, internal chip production, Cyber truck and Semi releases, and, of course, the beta FSD progress. Let’s hope for some analyst questions around the NHSTA today.


Squid Games: Netflix posted solid subscriber growth in the third quarter of 4.4m, well ahead of the 3.84m expected. A deluge of hit new content that had been delayed by the pandemic is helping to drive interest such that the company anticipates 8.5m net adds next quarter. Earnings per share were a handsome beat at $3.19 vs $2.56 expected. In Q3, revenue grew 16% year over year to $7.5 billion, while operating income rose 33% vs. the prior year quarter to $1.8 billion. Content and subscribers are in good shape, but free cash flow remains elusive as it reported a second consecutive quarter of negative free cash. Still when you have low-cost, high margin content in multiple languages, you think Netflix will be able to drive non-US subscriber growth substantially in the coming years. Shares fell slightly in after-hours trade.


Markets: Stocks are flat again this morning in early trade in Europe, with the FTSE 100 hovering around the 7,200, looking like it has decent support.  The S&P 500 rallied three-quarters of one percent yesterday to close within 0.4% of its record high. Megacap tech had a decent day despite rising bond yields. If it’s stagflation then growth is still a premium.  


US 10-year rates rose to a 5-month at 1.67% as the Fed’s Waller said tapering should start in November and that if inflation keeps rising « a more aggressive policy response » might be required in 2022. Bitcoin at or around all-time highs post the ProShare ETF launch.


Inflation: UK inflation has fallen! But before we rejoice too much, it’s probably a one-off. CPI fell to 3.1% in September from 3.1% in August. The end of the Eat Out to Help Out scheme at the end of August last year, which led to restaurants raising prices in September, is a big factor. The surge in energy prices and ongoing supply chain problems are still expected to drive inflation to 4% this year. Moreover, the RPI rose 4.9%. 


As we said in yesterday’s note on Will the Bank of England actually raise rates in November?, the reading of the inflation print is important: the consensus remains firmly on the MPC voting to raise rates in two weeks’ time. But, as stressed in the same commentary, it’s not a slam dunk given the make-up of the MPC right now. 

Meanwhile, German produce price inflation surged – rising 2.3% month-on-month vs the +1% expected. That took the annual rate to 14.2%. Supply chain and capacity problems abound. Underlines that rising cost pressures are not going away. 


Sterling just eased back on the inflation miss. GBPUSD retreated to test the support offered at 1.3770, the OCt 15th swing high, where sits the 50hr SMA. Recent price action indicates this is the chief support before resumption of the uptrend, though we are less convinced that GBP can rally with rate expectations now they are baked in. However, I do see further dollar weakness likely to support further gains for cable following the topping pattern on the last 3 weekly candles.


  • Les fonds des clients sont conservés dans des comptes bancaires distincts
  • Compensation des investisseurs FSCS jusqu’à 20 000 EUR.
  • Couverture d’assurance de 1 000 000 €**
  • Protection contre les soldes négatifs


  • CFD
  • Share dealing
  • Quantranks, exploité par Safecap Investments Limited (« Safecap »). Agréé par la CySEC sous la licence n° 092/08 et la FSCA sous la licence n° 43906.


  • Fonds des clients conservés dans des comptes bancaires distincts.
  • Vérification électronique.
  • Protection contre les soldes négatifs
  • Couverture d’assurance de 1 000 000 $**


  • CFD
  • Créateur de stratégie, exploité par Finalto (BVI) Limited (“Finalto BVI”). Régulé par la Commission des services financiers de BVI (« FSC ») sous la licence n° SIBA/L/14/1067.


  • Les fonds des clients sont conservés dans des comptes bancaires distincts
  • Compensation des investisseurs FSCS jusqu’à 85 000 GDP. *selon critères et éligibilité.
  • Couverture d’assurance de 1 000 000 £**
  • Protection contre les soldes négatifs


  • CFD
  • Paris sur spread
  • Créateur de stratégie, opéré par Finalto Trading Limited Réglementée par la Financial Conduct Authority (« FCA ») sous le numéro de licence 607305.


  • Fonds des clients conservés dans des comptes bancaires distincts.
  • Vérification électronique.
  • Protection contre les soldes négatifs
  • Couverture d’assurance de 1 000 000 $**


  • CFD, exploité par Finalto (Australia) Pty Limited. Possède une licence des Services financiers australiens n° 424008 et est réglementé pour la fourniture de services financiers par la Commission australienne des valeurs mobilières et des investissements (« ASIC »)

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**Les conditions générales s’appliquent.Voir la police complète pour plus de détails.

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