Green light for pivot?
OVERNIGHT NEWS
# Dollar off lows, bond yields steady before US CPI. Euro 10y IRS on 2.925% (50dma support). Asian stocks trade risk-off, CNY weakens for fourth day on crypto contagion as FTX (crypto exchange) warns of bankruptcy, Binance withdraws takeover bid.
# Day ahead: US CPI, SG forecast core +0.5% m/m, 6.5% yoy. Banxico forecast +75bp. CPI for Brazil. Fed speakers Harker, Logan, Daly, Mester, George. ECB’s De Cos, Schnabel, Kazimir, and Vasle. BoE’s Ramsden. Bond auctions in the US, the UK, and Italy.
# Norway CPI accelerates to 7.5% yoy in October from 6.9% in September, above forecast. Underlying climbs to 5.9% from 5.3%.
# Nikkei -1%, EUR 10y IRS unchanged at 2.94%, Brent crude -0.4% at $92.4/b, Gold -0.4% at $1,706/oz.
US CPI slowing? SG forecast core +0.5% m/m
COP – COP rallied and continued yesterday’s strong performance. USDCOP is hitting below 4900 level at the time of print. Flow wise, our trader Santiago Calvache has seen inflows mainly from RM in this morning session. For central bank news, Banrep purchased COP3.5tn in TES in October. The CB confirmed that they bought around USD700mn in TES for their permanent portfolio, saying that the objective was to align monetary base supply and demand and for IBR to better reflect the monetary policy rate. These purchases were discussed in the most recent monetary policy meeting press conference, with Villar noting that they did not represent a form of yield curve control or response targeting TES rates in light of recent market moves. Banrep’s TES portfolio currently stands at COP32tn (USD6.4bn).
