European Telecom Companies Poised for Growth Amid Deregulation

Economic

Summary:

That’s in large part because the prospects for greater pricing power and industry consolidation have improved as regulators focus more on Europe’s competitiveness.

The outlook is brightening for European telecommunications companies, says Andrew Lee, head of the Technology, Media, and Telecom Group in Goldman Sach Research. That’s in large part because the prospects for greater pricing power and industry consolidation have improved as regulators focus more on Europe’s competitiveness.

This is bullish news for an industry characterized by slow or no growth for years. Since this improving outlook is not yet fully reflected in consensus forecasts or investor expectations, Lee says these developments may well serve as a catalyst for higher stock prices.

We spoke with Lee after Goldman Sachs’ European Communacopia Conference, where executives discussed the outlook for telecom growth into 2025 and the recent report on EU competitiveness by Mario Draghi, former head of the European Central Bank.

What were you hearing from telecom executives during the European Communacopia conference?

We’ve seen an acceleration in growth and an improvement in returns in the European telecom sector, driven in our view by deregulation of digital infrastructure. But investors don’t believe the acceleration is sustainable. So if we look at consensus models, they show a deterioration of growth into 2025, and share prices reflect that.

What we learned from the CEOs and CFOs of some of the most important European telecom companies who spoke is that the acceleration — the higher rate of growth they’ve been delivering — is sustainable into 2025. This is because they have seen increasing pricing power in fiber broadband, thanks to deregulation. Also, they’re better able to deliver to their potential in some of the more concentrated mobile markets in Europe.

What kind of growth numbers are we talking about?

We’re seeing 2-3% top-line growth across the most attractive companies, and 4-5% or more growth in EBITDA (earnings before interest, taxes, depreciation, and amortization), which translates to double-digit free cash flow growth. That is more growth than we’ve seen from the sector for most of the past 10 years — or pretty much in my whole career, which is 19 years.

Why has this sector’s growth been low in the past?

The low-growth reputation is well-earned! And there’s one reason only: European telecoms have been very heavily regulated. This has been on both the fixed broadband side — the connectivity you have in your home — and on the mobile side of things — your phone. There has been heavy regulation purely to keep consumer prices down.

What that has meant is direct price regulation in fixed broadband and market concentration regulation in mobile, keeping mobile phone services as a four-player commoditized space. Those two elements have basically meant zero growth, and they have driven return on invested capital in European telecoms down from double digits 15 years ago to mid-single digits today. Returns are now below the cost of capital. It’s all been about regulation.

What has changed, and why we’re bullish on the sector, is deregulation. We’re definitively seeing that in fixed broadband. And there’s a chance we may see that in mobile market concentration as well.

Why do you think market concentration regulation might be changing?

There are local market regulators, and they’re the people who have deregulated fiber broadband. For mobile, what we need are governments and, more importantly, competition authorities to understand that they need to incentivize investment as well as keep consumer prices low.

A decade ago, when we were rolling out 4G, the competition authorities could have their cake and eat it. They were able to keep consumer prices low by keeping these four-player markets, but they were still getting investment into the network because returns at that point were still above the cost of capital. Today, because returns are below the cost of capital in European mobile, operators are not investing in new networks. So the 5G rollout in Europe is lagging the 5G rollout in the US and Asia. And that is a problem.

Is this why Mario Draghi, former head of the European Central Bank, kept coming up at the conference?

Yes. Draghi was commissioned by the EU to write a report on how to improve European competitiveness. And that was the report he put out recently. What he highlighted is that we need to allow market concentration to incentivize investment to support European growth. He has laid out European mobile services as one of the areas where they can do that.

The question then is whether this will actually change anything. I think the fact that he’s been commissioned by the EU to write this is important. And it comes at the same time as the head of the EU competition authority has changed.

What did speakers at the Communacopia conference say about this?

What we heard from all our company operators is that they think things have definitively changed. They see the Draghi report as a clear sign of an understanding that we need to change the direction of European regulation to support investment.

With the change of the competition commissioner as well, we think there’s a high likelihood that we will see attempts at consolidation to test this apparent new regulatory stance in the coming months and years. Markets where we might see that include Italy, the Nordic countries, Sweden, and Denmark, and maybe even Germany.

How bullish is this for the stocks?

We’ve had a lot of positive data points on the scope for in-market consolidation. That is the thing that can change the dynamic of growth and returns for European mobile. While we don't know how this is going to play out, it’s as positive as it’s ever been. Investors are not paying for any of that improvement right now. So we think it offers upside.

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Warren Takunda

Stocks

December S&P 500 E-Mini futures are up +0.36%, and December Nasdaq 100 E-Mini futures are up +0.40% this morning, signaling a partial rebound from yesterday’s slump, while investors awaited further comments from Federal Reserve officials, with all eyes on Thursday’s key U.S. inflation report and the start of earnings season.

In yesterday’s trading session, Wall Street’s major indexes closed lower. Amazon.com fell over -3% after Wells Fargo Securities downgraded the stock to Equal Weight from Overweight. Also, insurance companies offering property and casualty insurance in Florida slumped as Hurricane Milton strengthened to a Category 5 storm, with Heritage Insurance Holdings plummeting more than -23% and HCI Group plunging over -17%. In addition, Apple dropped more than -2% after Jefferies downgraded the stock to Hold from Buy with a price target of $212.92. On the bullish side, Super Micro Computer surged over +15% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the server company reported strong shipments of its graphics processing units, fueled by artificial intelligence demand. Also, Pfizer rose more than +2% after the Wall Street Journal reported that activist investor Starboard Value acquired a roughly $1 billion stake in the drugmaker.

Economic data released on Monday showed that U.S. consumer credit rose +$8.93B in August, weaker than expectations of +$11.80B.

Minneapolis Fed President Neel Kashkari stated on Monday that he believes the economy remains resilient and the labor market, despite showing some signs of softening, is still strong, with the Fed’s rate cuts intended to maintain these conditions. “The balance of risks has shifted away from high inflation towards maybe higher unemployment,” Kashkari said. “And that’s why I thought dialing back policy was the right move.” Also, St. Louis Fed President Alberto Musalem said he backed the U.S. central bank’s decision to lower interest rates by a half point last month but emphasized that he would prefer any further reductions to be gradual. “I believe it will likely be appropriate to further reduce the target range for the federal funds rate over time toward a neutral posture,” Musalem said. In addition, Fed Governor Adriana Kugler stated on Tuesday that the central bank should maintain its focus on returning inflation to its 2% target, albeit with a “balanced approach” that prevents an “undesirable” slowdown in employment growth and economic expansion. Kugler said she would support further cuts “if progress on inflation continues as I expect.”

U.S. rate futures have priced in an 88.7% chance of a 25 basis point rate cut and an 11.3% chance of no cut at the conclusion of the Fed’s November meeting.

Meanwhile, the crisis in the Middle East continued to unsettle investors, with fighting intensifying on Monday on multiple fronts after a year of war. The Israel Defense Forces stated that they intercepted the majority of a barrage of rockets launched toward Tel Aviv by Hamas and other groups backed by Iran.

Market participants are keenly awaiting U.S. inflation data, the Fed’s minutes from the September meeting, and the start of the third-quarter earnings season this week.

Financial sector earnings begin on Friday, with reports from JPMorgan Chase, Wells Fargo, and Blackrock. Food and beverage giant PepsiCo is set to announce its Q3 earnings results today.

Today, investors will also focus on U.S. Trade Balance data, which is set to be released in a couple of hours. Economists forecast this figure to stand at -$70.10B in August, compared to the previous figure of -$78.80B.

In addition, market participants will be anticipating speeches from Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, and Fed Vice Chair Philip Jefferson.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.018%, down -0.28%.

The Euro Stoxx 50 futures are down -0.80% this morning, tracking an overnight drop on Wall Street, while China’s pledge to bolster its economy disappointed investors hoping for new stimulus. Mining and luxury stocks tumbled on Tuesday. Data from the Federal Statistical Office showed on Tuesday that Germany’s monthly industrial production increased at its fastest pace this year in August, primarily driven by a recovery in the automotive industry. Meanwhile, the European Central Bank is set to meet next week and is widely expected to ease policy again, having already cut rates twice this year in response to easing inflationary pressures. Bundesbank President Joachim Nagel said on Monday that he is open to considering another ECB rate cut during next week’s meeting. In corporate news, Vistry Group Plc plummeted over -28% after the British homebuilder slashed its full-year profit guidance.

Germany’s Industrial Production data was released today.

The German August Industrial Production came in at +2.9% m/m, stronger than expectations of +0.8% m/m.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +4.59%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.00%.

China’s Shanghai Composite Index closed sharply higher today as trading resumed after a week-long holiday, with investor sentiment remaining upbeat. The benchmark index extended a historic rally that began in late September when China introduced its most aggressive monetary stimulus package since the COVID-19 pandemic to bolster the economy. Semiconductor and software stocks led the gains on Tuesday. Data from the Ministry of Culture and Tourism released Tuesday showed that tourists in China made 765 million domestic trips during the just-ended seven-day National Day holiday, marking a 5.9% increase from the previous year and 10.2% higher than the same period in 2019, while tourism revenue reached 700.82 billion yuan, up 6.3% year-over-year and 7.9% above the pre-pandemic level in 2019. Meanwhile, Chinese officials at the National Development and Reform Commission said Tuesday they would speed up spending while largely reaffirming plans to boost investment and provide more direct support for low-income groups and new graduates, though they refrained from introducing additional stimulus. They stated that China would continue to issue ultra-long sovereign bonds next year to fund major projects and invest 100 billion yuan ($14 billion) in key strategic areas. In other news, Goldman Sachs upgraded Chinese stocks to Overweight, with strategists including Tim Moe highlighting a further 15% to 20% upside potential. In corporate news, COSCO Shipping gained over +5% after the shipping group provided a robust Q3 net profit forecast.

Japan’s Nikkei 225 Stock Index closed lower today, snapping a three-day winning streak and tracking overnight losses on Wall Street. Japanese stocks also retreated as the yen regained some losses amid lingering uncertainty about the Bank of Japan’s monetary policy. Automobile and bank stocks led the declines on Tuesday. Meanwhile, data from the Ministry of Health, Labour and Welfare released Tuesday showed that Japan’s inflation-adjusted wages and household spending fell in August. However, analysts noted that underlying trends suggest a gradual recovery in pay and consumption, which should bolster the BOJ’s plans for further rate increases. Separately, data released by the Finance Ministry showed that Japan’s current account surplus reached a record high in August, marking the 19th consecutive month of surplus in the current account. Investor attention is now directed toward earnings reports from major Japanese firms set for later this week, including AEON, Fast Retailing, and Seven & I Holdings. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +11.10% to 33.54.

The Japanese August Household Spending stood at +2.0% m/m and -1.9% y/y, stronger than expectations of +0.5% m/m and -2.6% y/y.

The Japanese August Current Account n.s.a. came in at 3.804T yen, stronger than expectations of 2.921T yen.

The Japanese September Economy Watchers Current Index arrived at 47.8, weaker than expectations of 49.3.

Pre-Market U.S. Stock Movers

DocuSign climbed over +5% in pre-market trading after S&P Dow Jones Indices announced that the company would replace MDU Resources Group in the S&P MidCap 400 index, effective October 11th.

Qualcomm fell more than -1% in pre-market trading after KeyBanc downgraded the stock to Sector Weight from Overweight.

Affirm gained over +4% in pre-market trading after BTIG upgraded the stock to Buy from Neutral with a $68 price target.

Source: Barchart

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Warren Takunda

Economic

Reducing interest rates in October wouldn’t mean that the European Central Bank is certain to do so again at its final meeting of the year, according to Governing Council member Bostjan Vasle.

“Even if the ECB happens to decide to lower rates next week, that wouldn’t automatically mean another cut is coming in December,” he told Bloomberg, describing a cut this month as “an option.”

The comments could be seen as pushback against investor bets that the ECB will lower its deposit rate six times by the end of 2025 — including at the next two meetings — bringing it to 2% from 3.5% now. He warned that while such wagers may be a natural reaction to Europe’s stuttering economy, officials won’t be bullied into any course of action.

“The markets aren’t dictating our moves,” said the Slovenian official, whose central bank is hosting the ECB’s Oct. 16-17 gathering. “However they are valuable information to our deliberations.” ECB Cut Next Week Wouldn’t Guarantee December Move, Vasle Says_1

ECB Cut Next Week Wouldn’t Guarantee December Move, Vasle Says_1

Markets and analysts now expect quicker monetary easing after business surveys showed a marked deterioration in the euro zone’s 20-nation economy and inflation dipped below the 2% target. Officials have indicated that an October step is likely, though several stress that the battle to tame the region’s historic spike in prices isn’t won yet.

Inflation risks are abating, according to Vasle, but he still sees some pockets of uncertainty — namely in the labor market, services prices and geopolitics. September’s reading of 1.8% — the lowest since June 2021 — was due in part to one-off effects, and a temporary uptick is likely over the coming months, he cautioned.

In remarks published earlier Tuesday, ECB Executive Board member Frank Elderson said recent data suggest that downside risks to the economy are “already materializing.” Policymakers “will need to carefully assess whether this has any implications for our inflation outlook,” he told Slovenia’s Delo newspaper.

Latvian central-bank chief Martins Kazaks, meanwhile, told reporters in Riga that while data point to an October rate cut, inflation is not yet defeated.

ECB Cut Next Week Wouldn’t Guarantee December Move, Vasle Says_2

Looking ahead, Vasle said the direction of monetary policy is clear — should the ECB’s baseline scenario materialize.

“The main question is the dynamic of rate cuts,” Vasle said. He expects borrowing costs to be lowered to neutral levels that neither constrict nor stimulate the economy by end-2025.

That’s more than other officials are committing to, with most simply saying that for now the ECB needs to reduce the level of restrictiveness.

Source: Bloomberg

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Owen Li

Economic

For the first time since 2007, the deposit level in Malaysia’s foreign currency account (FCA) saw a significant drop in the month of August.

Based on Bank Negara Malaysia’s data, the deposits declined by RM11 billion to RM246 billion in that month. Prior to August, deposits in the FCA, which are primarily the proceeds brought back into the system by Malaysian exporters but not converted into ringgit, always rose.

Bank Negara’s historical data shows that the FCA level was only RM21.4 billion in January 2007. Ten years later, it had swelled to RM146 billion in January 2017. In January this year, the amount stood at RM247 billion and rose in the next few months before tapering off.

FCA deposits have dropped before, especially when the global economy slowed and the US dollar was weak. One instance was a few months in 2016, when the US-China trade war erupted. However, the quantum then was not as large as the RM11 billion recorded this August.

Generally, the deposits in the FCA have risen because exporters tend to keep their proceeds in US dollars for ease of taking the money out with minimal Bank Negara approvals. As such, the sharp decline in August does not indicate a trend.

But going forward, exporters are likely to convert more of their proceeds into ringgit considering the weakening US dollar.

According to one exporter, Bank Negara played a role in encouraging exporters to convert their proceeds in the FCA. It is learnt that the central bank gave assurances of easy approval for the ringgit to be converted back into foreign currency should there be a need to do so.

The weakening US dollar, Malaysia’s political stability and Bank Negara’s action in encouraging exporters to convert their proceeds are among the main reasons for the ringgit’s strengthening against the greenback.

The dollar’s weakness is a reflection of the slowing US economy, which has prompted the Federal Reserve to cut interest rates. The Fed lowered rates by 50 basis points last month and is expected to reduce them further to a band of between 4.5% and 4.75%.

The ringgit has been the best performer among emerging market currencies so far this year, appreciating almost 10% against the US dollar.

The writing was on the wall for the weakening US dollar in March. Nevertheless, the speed at which the ringgit gained strength against the greenback caught even the most optimistic of exporters off guard.

Among those already feeling the impact are firms in the electrical and electronics sector, oil and gas companies and selected manufacturers. The sharp rise of the ringgit will show in their results in the next few months.

What’s ironic is that while the local currency’s appreciation against the US dollar is generally welcomed by Malaysians and is a positive for the government, it will hurt the economy in the long term. This is because Malaysia’s export sector plays a large part in the country’s economic growth.

In the second quarter, the local economy recorded a growth rate of 5.9%, among the highest in Asia. The strong second quarter growth has prompted some economists to forecast a full-year economic growth of 5%.

One of the reasons for the strong growth is the buoyant export sector, which grew 8.4% in the second quarter, compared with 5.2% in the first.

If the ringgit continues to rise at the current pace, it could have an impact on the economy a year from now. And regulators, in particular Bank Negara which is the guardian of the ringgit, know that. Towards this end, currency traders say the central bank has been buying dollars in exchange for the ringgit to stabilise the local currency at current levels.

Does this mean the ringgit’s appreciation against the US dollar has reached its peak for now? In all probability, it has.

If anybody is expecting the ringgit to continue to strengthen and return to the RM3.80 level against the US dollar, they will have to wait much longer.

Going forward, everything points to the ringgit appreciating further in the next one year, unless there is a change in the local political landscape.

Sentiment on the dollar is weak due to the slowing US economy. Another reason is the US presidential election. Donald Trump advocates a weak dollar to export the US out of a slowdown and if he wins, the fear of a global trade war is real.

The ringgit should also appreciate in the longer term as Malaysia is fast becoming a draw for foreign investments. Another reason is the government’s commitment to fiscal reforms. There is no denying that Prime Minister Datuk Seri Anwar Ibrahim has been the best salesman for Malaysia since 2018, and he has maintained good ties with both the US and China.

There are reports of the ringgit reaching RM3.55 against the US dollar by the end of next year. Nobody should be surprised if that happens as in 1996, the exchange rate was RM2.50 to the US dollar.

But the appreciation of the ringgit should be a gradual process in line with the growth of the economy, reforms in government policies and growth of higher-value export items. A sharp appreciation, such as that witnessed in the last six weeks, is not healthy for the economy.

Source: The edge markets

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UBS

Energy

Economic

Highlights

Improving real estate’s sustainability profile is pivotal to addressing climate change, as the sector contributes some 40% of global greenhouse gas emissions. But improving this sustainability profile isn’t just a ‘save the world’ exercise. For building owners and associated stakeholders it is also vital to establish the necessary long-term action plans towards net zero to protect income streams and value and manage costs.

The current trend is towards publishing net zero pathways

Investors are demanding more precise disclosures to compare different investment products, not only in terms of returns or risks, but also progress towards reducing greenhouse gas emissions.

Net zero pathways represent a product’s timeline of the ‘path to net zero’ based on the underlying real estate asset’s operating emissions. Therefore, such pathways are helpful tools for comparing investment products’ climate ambitions and progress over time. Additionally, net zero pathways help make the long-term decarbonization trajectory tangible, enabling real estate managers to review the impact of their planned decarbonization measures regularly.

While real estate managers in most countries have yet to publish net zero pathways for real estate investment products, large institutional real estate managers in Switzerland are already disclosing their pathways. Moreover, we expect this to prevail across other markets in the near term. As is so often the case, disclosure and transparency are the first necessary steps before we can assess actual progress and performance.

But, the devil is in the detail. Disclosure alone is not enough

Currently, there are no binding industry-wide standards for calculating and presenting net zero pathways. Thus, real estate managers and investors can only loosely compare real estate products’ pathways as approaches, parameters and assumptions vary by product. Until industry-wide standards are established, investors should scrutinize the detailed assumptions and parameters applied by real estate managers in their net zero pathways. Not all pathways (and disclosures) are created equal.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Bitcoin has been unable to sustain levels above $66,000 since July 31, despite achieving a 5.2% gain between Oct. 3 and Oct. 7. Some analysts assert that Bitcoin benefits from the ever-growing United States federal debt; however, while this correlation appears valid, it has minimal influence on short-term price trends.

In reality, socio-political events seem to be the primary driver of Bitcoin’s limited upside, considering that the global monetary base (M2) has expanded from $104 trillion in June to $108 trillion in October, while Bitcoin was rejected multiple times at the $68,000 resistance level. This suggests that the rally to $64,000 is unlikely to be rooted in the US fiscal situation. Bitcoin Price Falters at $64K Again — Here’s Why_1

Bitcoin Price Falters at $64K Again — Here’s Why_1

Bitcoin/USD vs. global monetary base (M2, billion). Source: TradingView

Additional evidence weakening this relationship is that the US dollar has strengthened against other major global currencies, as measured by the DXY index—which rose to 102.5 on Oct. 7, up from 100.4 on Sept. 30. If investors fear that US government debt is spiraling out of control, why are they cashing out of euros, British pounds, or Swiss francs?

Recent US macro data was not favorable for Bitcoin’s price

To understand why Bitcoin’s price has consistently failed to sustain levels above $66,000 over the past eight weeks, one should begin by analyzing what is limiting the improvement of investor sentiment. For example, uncertainties regarding global economic growth, the escalating Middle East conflict, and the impact of the upcoming November US Presidential elections are significant factors.

The stronger-than-expected September US jobs data released on Oct. 4 reduced the odds of an economic recession. However, it also caused the implied probability of a 0.50% interest rate cut to drop to 0%, down from 40% just two weeks earlier, according to the CME FedWatch tool. Higher interest rates for a longer period make investors more risk-averse, which is detrimental to Bitcoin’s price.

Moreover, current macroeconomic data has led investors to raise their expectations for positive third-quarter corporate earnings, prompting global investment bank Goldman Sachs to increase its year-end 2025 S&P 500 target to 6,300, according to Reuters. Goldman noted that a “recovery in the semiconductor industry cycle” will further support earnings momentum.

Regardless of Bitcoin bulls’ views on how BTC price will react to a potential global economic recession, the latest stimulus measures announced by China significantly reduce the need for alternative hedges. The Hong Kong stock market index reached a 32-month high on Oct. 7, closing 9.3% above levels from Sept. 30, while the S&P 500 is trading 0.5% below its all-time high.

Bitcoin derivatives metrics and spot ETF outflows

Despite the overall bullishness in global stock markets, Bitcoin’s price has been unable to sustain levels above $66,000, and more importantly, derivatives traders’ sentiment remains neutral. The monthly BTC futures market's annualized premium serves as a primary gauge of bullishness.

In neutral markets, those derivative contracts typically trade at a 5% to 10% annualized premium to compensate for the longer settlement period. However, if the demand for leveraged longs (buy) increases, this premium can easily surpass 15% or 20%. Conversely, periods of bearishness result in negative premiums, also known as backwardation.

Bitcoin Price Falters at $64K Again — Here’s Why_2

Bitcoin 2-month futures contract premium. Source: Laevitas.ch

Notice that the BTC futures annualized premium has remained at 8%, indicating that demand for leverage is relatively balanced between bulls and bears. Part of traders’ lack of conviction stems from recent flows in Bitcoin spot exchange-traded funds (ETFs), which have seen $335 million in net outflows since Oct. 1, according to Farside Investors data.

Ultimately, the reasons for Bitcoin being pinned below $64,000 are primarily due to a macroeconomic environment that has favored the stock market and investors seeking protection in cash positions ahead of socio-political uncertainties.

Source: Cointelegraph

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Warren Takunda

Economic

Tuesday was supposed to be a 'big bang' moment for Chinese-linked assets as authorities announced a package of spending and investment initiatives that would complement already-announced monetary stimulus.

Instead, officials in the National Development and Reform Commission (NDRC), the country’s economic planning agency, only committed to speeding up spending and reiterating plans to boost investment and increase direct support for low-income groups and new graduates.

"AUD/USD fell by more than 50pips because there wasn’t any meaningful additional fiscal stimulus announced by Chinese authorities today," says Kristina Clifton, a market strategist at Commonwealth Bank of Australia.

The big fiscal input was the last piece of a package being put together by authorities to create a convincing package of measures that would boost growth an ensure the official growth target is achieved.

When it became clear this was something of a damp squib, Chinese stocks rapidly erased and then reversed significant gains that were being built ahead of the announcement.

The Chinese-linked Australian Dollar came under pressure too: the Pound to Australiab Dollar exchange rate rallied half a per cent to 1.9462, the Australian Dollar fell 0.45% on the day to 0.6726.

Investment bank GBP/AUD consensus forecasts: The end-2024 and 2025 guide from Corpay has been released. Featuring the median, mean, high and low points forecasted by over 30 investment banks.

The price action shows AUD's recent run of outperformance was highly reliant on expectations for China to juice its economy.

The disappointment will now call into question that run of outperformance and leave pairs like GBP/AUD looking better protected on the downside. Australian Dollar: Where's the Big Bang?_1

Australian Dollar: Where's the Big Bang?_1

The NDRC said China would continue to issue ultra-long sovereign bonds next year to support major projects and bring forward a 100BN yuan ($14BN) investment in key strategic areas originally budgeted for 2025 to this year.

"We are fully confident in achieving the annual economic and social development targets," said Zheng Shanjie, Chairman of the NDRC.

The disappointment with the Chinese stimulus came on the same day the Reserve Bank of Australia (RBA) took a small yet meaningful step towards lowering interest rates.

The minutes from the RBA's September policy decision removed a commitment that "it was unlikely that the cash rate target would be reduced in the short term".

Economists at CBA say this is consistent with their belief the central bank will cut interest rates for the first time in December.

The AUD has been held aloft amidst expectations that the RBA would be the last of the major central banks to cut interest rates (BoJ aside) owing to the low starting point of interest rates and still-high inflation.

However, the RBA looks as though it doesn't want to wait too long and thinks leaving the job until 2025 would be unwise.

The bringing forward of rate cut expectations would naturally weigh on Aussie bond yields and the Aussie Dollar.

Source: Poundsterlinglive

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European Telecom Companies Poised for Growth Amid Deregulation

What were you hearing from telecom executives during the European Communacopia conference?

What kind of growth numbers are we talking about?

Why has this sector’s growth been low in the past?

Why do you think market concentration regulation might be changing?

Is this why Mario Draghi, former head of the European Central Bank, kept coming up at the conference?

What did speakers at the Communacopia conference say about this?

How bullish is this for the stocks?

Stock Index Futures Climb Ahead of Fed Speak, U.S. Inflation Data and Earnings Awaited

Pre-Market U.S. Stock Movers

Source: Barchart

ECB Cut Next Week Wouldn’t Guarantee December Move, Vasle Says

Source: Bloomberg

Why The Ringgit’s Appreciation is Losing Its Momentum for Now

Source: The edge markets

Not all Net Zero Pathways are Created Equal

Highlights

The current trend is towards publishing net zero pathways

But, the devil is in the detail. Disclosure alone is not enough

Bitcoin Price Falters at $64K Again — Here’s Why

Bitcoin/USD vs. global monetary base (M2, billion). Source: TradingView

Recent US macro data was not favorable for Bitcoin’s price

Bitcoin derivatives metrics and spot ETF outflows

Bitcoin 2-month futures contract premium. Source: Laevitas.ch

Source: Cointelegraph

Australian Dollar: Where's the Big Bang?

Source: Poundsterlinglive

Risk Disclosure