Macro-News round-up:

#MarketNews

  • According to a business survey, Japan’s service sector expanded at the slowest pace in October, raising concerns about the economy’s growth.
  • The Bank of Japan is planning to exit from its easy monetary policy next year, but it will need some good fortune to do so successfully.
  • The US job market is showing signs of cooling down, which could make it easier for the Federal Reserve to do its job. Worse labour market data, released in the US on Friday, have encouraged stock markets, assuming an end to the policy of rising interest rates.
  • Traders are betting that the European Central Bank will be the first major central bank to cut interest rates, according to analysis. Traders now price in over an 80% chance of a 25 basis-points (bps) ECB cut by April, which had been fully priced for July last week.
  • A soft jobs report in Canada has reinforced expectations that the country’s central bank will hold interest rates steady for the rest of the year.
  • Saudi Arabia and Russia have confirmed that they will continue with their additional voluntary supply cuts through until the end of this year. The Saudis have made additional cuts of 1MMbbls/d since July, while Russia has cut exports by 300Mbbls/d. The oil market saw a second consecutive week of declines with the market becoming less concerned over supply disruptions from the ongoing Israel-Hamas conflict.
  • Recent numbers from Ukraine’s Agriculture Ministry show that total grain exports dropped 32% YoY to 9.5mt so far in the 2023/24 season. Ukraine’s wheat exports fell 9.3% YoY to 4.7mt, while corn exports stood at 3.94mt (-47% YoY). These weaker exports are obviously due to the suspension of the Black Sea Grain Initiative earlier in the year.
  • Supply cuts in crude oil and grain could be new triggers for future inflation in the coming months.

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