UNITED STATES

US markets resumed trading on a low on Friday as investors became concerned that US-China relations would be strained by the signing of a bill supporting Hong Kong protestors. The signing of the bill by President Trump led to a summoning of the US ambassador by the Chinese government with China warning that the move could would undermine cooperation. The NASDAQ led the slide, falling 0.46% while the S&P and the DOW both shed 0.40%. Stocks however recorded the biggest monthly gains since June with the NASDAQ up 4.5% for the month, while the DOW and S&P rose 3.7% and 3.4% respectively. Yield on 10Y USTs closed higher at 1.7758%.

UNITED KINGDOM

Despite a seeming series of missteps, notably leader Jeremy Corbyn’s lacklustre BBC interview, Labour gained on the Tories in four of five polls released over the weekend. The BMG Research poll showed the narrowest gap between the two leading contenders with Tories polling 39% and Labour polling 33%; Tories slipped 5 points while Labour picked up 5 to narrow the lead to less than half the margin in the November 21 survey. The BMG poll also noted that the possibility of a hung parliament was very high following the shift in voting intentions. The findings contrast significantly with the more closely watched YouGov poll which showed a 68-seat majority for the Tories. The pound closed higher at $1.2925 while yield on 10Y and 30Y UKGs was higher at 0.697%.

EUROPEAN UNION

Eurozone inflation rebounded in November to end a run of consecutive monthly declines. A flash estimate from Eurostat showed a price increase of 1% in November YoY, higher than a Reuters poll estimate of 0.9% and up from October’s 0.7%. the increase indicates that the ECB’s monetary stimulus may be taking effect although the figure remains some way below the target of about 2%. Eurostat said the 2% increase in food and beverage prices and 1.9% increase in prices for services more than offset the 3.2% decline in energy prices. The euro closed higher at $1.1018 while yield on 10Y DBRs was about flat at -0.360%.

ASIA

Asian markets opened the week on a high on the back of better-than-expected Chinese manufacturing data. The national Bureau of Statistics’ official PMI for November came at 50.2, the first time since April the reading was in expansion territory and topping a 49.5 forecast according to a WSJ poll. The CSI however closed just in the green at 0.02% as concerns over the Hong Kong bill signed into law by President Trump continued to weigh on optimism regarding trade resolution. The NIKKEI led gains at 1.01% while the HANG SENG and the ASX closed 0.37% and 0.24% higher respectively

TURKEY

Turkey’s economy grew a modest 0.4% in Q3 from the previous quarter missing the 1.1% median estimate from a Bloomberg survey. The seasonally-adjusted figure was also some way below the 1% expansion in Q2 and the Turkstat report attributed the slowdown to a drop in consumption growth. Household spending, a key driver of the economy, expanded 1.9% down from 3.4% in Q2 while government consumption fell to 1.9% from 2.2% in the preceding quarter. The lira closed about flat at 5.7504 to the dollar while TURKEY 29s were slightly lower, trading in the high 108s.

BRAZIL

Brazil unemployment fell to its lowest in 2019 in the three months to October according to a statement by the national statistics institute on Friday. The unemployment rate fell to 11.6% from 11.8% in line with the median estimate from a Bloomberg survey. The figure remains at historic highs however as the government tries to kickstart growth. The real closed weaker at 4.2372 to the dollar while BRAZIL 50s were slightly unchanged trading in the low 97s.

RUSSIA

The latest remarks by Bank of Russia Governor Elvira Nabiullina seem to point towards an inclination to hold rates at the December 13 meeting. During a TV interview Nabiullina said monetary policy was in the neutral zone – which the bank defines as 6-7% – and there was no need to adjust it now. The governor went on to say that structural factors, not the level of the key rate, were the main limits to growth and pointed out that inflation trends, expectations will be evaluated among other data before a decision is made during next week’s meeting. The ruble closed weaker at 64.3190 to the dollar while RUSSIA 29s were just about flat trading in the low 110s.

NIGERIA

The Central Bank of Nigeria’s directive to push banks into extending more credit has seen the manufacturing sector reap the most dividends as a result. Lending to manufacturers from May to October amounted to an equivalent $1.3 billion, the most in two decades according to a statement by central bank governor Godwin Emefiele. Output from manufacturing firms was up 1.23% in Q3 contributing 8.74% to real GDP. CBN upped the loan-to-deposits ratio to 65% for Q4 from 60% previously and punished several banks for failing to meet the previous 60% target at the end of Q3. The naira closed flat at 360.73 to the dollar while NGERIA 49s were lower, trading in the high 108s.