ON DECK FOR MONDAY, NOVEMBER 3
KEY POINTS:
- A fresh week kicks off with risk-on sentiment
- US ISM-mfrg may remain in contraction…
- …as vehicle sales fall post-EV credits
- BoC’s Macklem unlikely to say anything new today…
- …but he might in his post-Budget parliamentary testimony
- CHF slips on weak Swiss CPI, but markets still lean against SNB going negative
- Why the world needs more Blue Jays
- Global Week Ahead — Everyone’s Doing It (reminder here)
A new trading week is off to a risk-on start. Equities are broadly higher across N.A. futures and European cash markets. Sovereign bonds are little changed. Most currency movements are small with the only slight stand out being a weaker Swiss franc after CPI landed weaker than expected (chart 1). Markets are still not pricing material odds that the SNB turns to negative rates in December or afterward perhaps because the franc’s appreciation until June has largely given way to a sideways trend since then. Other overnight developments were very thin with only minor releases ahead of light US data.
COOLER US DATA ON TAP
A pair of second and third tier US macro releases is on tap. ISM-manufacturing has been in contraction for seven months judging by the headline reading and October could add an eighth (10amET). Watch the prices gauge that when combined with the coming ISM-services-prices measure serves as a leading indicator of future inflation (chart 2). We won’t get construction spending because of the government shutdown. US vehicle sales are expected to sharply fall in the first full month after the expiration of EV credits (e.o.d.). Chart 3.
BoC’S MACKLEM MAY NOT SAY ANYTHING NEW—UNTIL POST-BUDGET PARLIAMENTARY TESTIMONY
Canada updates S&P’s manufacturing PMI that rarely gets much attention (9:30amET).
Then BoC Governor Macklem participates in a fireside chat (1:30pmET) but it’s hard to imagine him saying anything materially different from last Wednesday’s communications. On GDP, he’s likely to say their forecasts are on track as argued here.
That difference might arise when he delivers two rounds of Parliamentary testimony on Wednesday and Thursday after Tuesday’s federal Budget. He is sure to be grilled by MPs about what the BoC thinks will be the Budget’s impact. He might simply say they’ll wait until it’s passed and fully incorporate its effects in the next forecasts in January and perhaps offer limited views beforehand. Nevertheless, the clear message from the BoC’s communications last week was that they are done for the foreseeable future.
Canada might also update vehicle sales during October sometime today.
THE WORLD NEEDS MORE BLUE JAYS
Congrats to the Dodgers, you played well all season and won the World Series, though it was tight and could’ve easily gone the other way. Both teams gave us a fantastic series full of ups and downs in a close contest. Enjoy your parade and visit to the torn down White House.
But in my books, the Blue Jays were the true winners in terms of character and the leadership examples they set. I’ll tell you what they won beyond the hearts of Canadians—the class contest, and for that, they and their supporters should be super proud.
Honouring a Dodgers pitcher who couldn’t be there due to a family emergency was top notch sportsmanship and pure class. Class and commitment were on full display by playing through obvious injuries and being there for the team (Springer, Bichette); what a great example for the kids to always try their best. Class was not having a manager who claimed he was being held up at the border for nefarious reasons, only to retract the claim when he realized the delay was due to US immigration. Not having at least a pair of headhunting pitchers out to injure opposing batters is what one should expect but sadly it was only the Jays who held to such standards. It wasn’t a Blue Jay stepping off the mound and gallingly mouthing disgusting profanities at the batter after one such occasion. Not being the ones to trigger a bench-clearing brawl with impressionable kids watching was class.
Class was getting to the World Series without lobbying the league to create the rigged Ohtani Rule which sets a double standard. Class was not jeopardizing the league’s future by abusing deferrals to spend billions and buy two championships that some think could be the path to a lockout and lost season by 2027’s negotiations as other teams cry foul. Talk about abusing the intent of the league’s competitiveness framework while sacrificing the common good which is an all-too-common trait these days.
It’s all the type of class that is all too often missing these days among groups of lesser men including in leadership roles. The world needs more Blue Jays—they’d make it a better place during our divisive, spiteful, petty, excuse-riddled and corrupt times.
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