News
BG: Neutral – Ruling CEDB party consolidates power after second round of presidential and municipal elections / Parliament approves a conservative draft budget for 2012 (p2)
CZ: Negative – MinFin revises its 2012 GDP forecast down to 1.0% (p2)
ES: Neutral – Sept retail trade grows at 4.0% yoy / Sept IP growth slows to 5.5% yoy (p3)
KZ: Positive – Oct CPI drops to 8.0%yoy, 200bp below consensus (p3)
LT: Positive – Preliminary 3Q GDP posts 6.6% yoy growth (p3)
LV: Positive – Sept retail sales posts 8.1% yoy growth (p3)
Today’s Events
CZ: Oct PMI, Oct Budget balance / HU: Oct PMI KZ: Oct CPI and PPI / PL: Oct PMI / RO: Oct International reserves / RU: Oct PMI / TU: Oct PMI
EEMEA Markets
* Global backdrop: following the surprise Greek referendum, poor October Chinese PMI data and amid poor liquidity conditions (due to holidays) risk is firmly off this morning. Asian equities closed 2/2.5% lower whilst EUR/USD is now 2.7% lower this week. Meanwhile Italian-German 10y spread hit EMU record at 418bp which is also very close to levels where clearing houses might raise margin requirements. CEEMEA is also opening on weak footing with Sovx CEEMEA widening to around 300bp from 285bp close yesterday. As usual in the FX space PLN is the biggest casualty in the CEEMEA region with EUR/PLN jumping more than 1% in the open. In the rates space we would normally see Hungary as most at risk but with the local market on holiday we see pressure building on other countries too. Today October PMI numbers will be in the focus with the Chinese data already surprising on the downside at 50.4. In the CEEMEA region Russia already surprised slightly on the upside (50.4 from 50). Turkey and Czech Republic are yet to publish their PMIs whilst Hungary and Poland will publish tomorrow.
* Kazakhstan printed the first October CPI from the CEEMEA region this morning and it surprised on the downside. Inflation at 8.0%yoy came lower than the consensus at 8.2% and is now within the central bank’s implicit target corridor of 6%-8%. Inflation is likely to stay within target also eop 2012 thanks to the good harvest. We expect therefore that no monetary actions will be taken while the authorities continue to reign in inflation by administrative measures such as freezing the prices of socially sensitive types of gasoline.
* South Africa bond auctions: today ZAR1bn R209 and ZAR1.1bn R213 SAGB will be auctioned. The secondary yield is around 8.80% on both papers. The long end of the SAGB curve so far failed to benefit from the improving sentiment in the last week and amid renewed deterioration we struggle to see a strong auction outcome today.
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http://www.easyforexnews.net/wp-content/uploads/2011/11/EEMEA-Daily_1nov11.pdf
Gyula Toth
UniCredit Research