RBNZ maintained the Official Cash Rate at 1.75% as expected and kept guidance unchanged until 2020, while it sees OCR at 2.41% in December 2021 (Prev. 1.8%). RBNZ stated that the timing and direction of any future rate OCR moves remain data dependent and that the pick up in GDP growth in Q2 partially due to temporary factors, while it noted that CPI is expected to gradually rise to 2% midpoint. (Newswires)
RBNZ Governor Orr stated that they are not taking a rate cut off the table and that they would consider reducing rates if GDP falls short of projection. (Newswires)
US President Trump said he will try to make a deal with China. In separate news, the US Commerce Department is set to impose final anti-dumping and anti-subsidy duties of 96.3% to 176.2% on Chinese common aluminium sheet, according to sources, (Newswires)
UK PM May is said to have invited key ministers to look over a “nearly there” Brexit draft, while reports noted that the draft withdrawal agreement does not include Irish backstop as that has not yet been agreed and that emergency meeting now looking like next week, according to No.10 sources. (Newswires)
EU’s Chief Negotiator Barnier said talks with UK remain intensive, while he added Brexit is a lose-lose situation and without a backstop on the Irish border there will be no Brexit deal. (Newswires)
ITV political correspondent Paul Brand tweeted “source close to PM seems pretty clear with me that cabinet won’t meet until next week to sign off Brexit deal. And thinking about it, would they want it to look like an emergency (ie panic) cabinet?”. (Twitter)
US EIA Weekly Crude Stocks w/e 5.783M vs. Exp. 2.433M (Prev. 3.217M). (Newswires)
OPEC delegates said Russia and Saudi are responsible for USD 15/bbl drop in oil price and they should cut 1mln BPD immediately. In related news, there were source reports that Russia and Saudi Arabia are to start discussing oil production cuts in 2019. (Newswires)
Russia is looking to raise crude output next year by 300k BPD unless a deal is struck with Saudi Arabia according to sources. (FT)
US President said he does not like the OPEC monopoly. (Newswires)
US President Trump said he hopes to work with the Democrats on infrastructure and drug prices, as well as trade and economy, while he said he is not ruling out a government shutdown over border wall funding. (Newswires)
US Attorney General Jeff Sessions has resigned at US President Trump’s request, while Matthew G. Whitaker – previously Sessions’ Chief of Staff – will become acting Attorney General with a permanent replacement to be nominated at a later date. There were also comments by US House Majority leader Pelosi that Trump’s firing of AG Sessions is a “blatant” attempt to try to end the Russia probe. (Newswires)
Anadarko Petroleum (APC) and Noble Energy (NBL) were top movers today after the state of Colorado voted for policies that didn’t restrict the co’.s oil drilling. Healthcare stocks also made gains today as election results came in as expected with WellCare Health Plans (WCG), Centene (CNC) and Anthem (ANTM) all trading higher. Michael Kors (KORS) bagged itself a loss today following a miss on revenue and cutting its EPS guidance. Coty (COTY) and DXC Technologies (DXC) also reported earnings where both missed revenue estimates making them bottom movers. Several utility names also traded lower today such as General Electric (GE) and Emerson Electric (EMR). SPX +2.12% at 2814, NDX +3.07% at 7203, DJI +2.13% at 26181.
Treasuries drifted lower in post-elections trade as the Republicans kept the majority in Senate and Democrats retained control of the House, as expected, with the complex unreactive to US Attorney General Sessions resignation. The curve saw some modest bear-flattening as short-dated yields were higher by c.2bps while the long end showed yields below 1bps at settlement. 2s30s and 2s30s narrowed by c.3bps. The US Treasury sold 19bln in 30yr bonds, at a high yield of 3.344% tailing by 2.3bps. Demand was significantly weak with the bid-to-cover at the lowest level since February 2009. Looking at the breakdown, directs were awarded the smallest portion since September 2009, indirects took the smallest share since March and dealers were left with the largest slice since August 2015. US T-note futures (Z8) settled half-a-tick lower at 117-31+.