A UK recession has probably started.

• A UK recession has probably started.

• FTX empire files for bankruptcy in stunning downfall.

• Wall Street looks beyond London for new hires.

• The beleaguered crypto exchange FTX filed for Chapter 11 bankruptcy

• US stocks log their best week since June on upbeat inflation data.

• A federal judge ruled against Biden’s student loan forgiveness plan, and financial advisers say borrowers should prepare to make payments.

• China eases quarantine, ends flight bans in “Covid zero” shift.

• Binance reserves show almost half of holdings are its own tokens.

• Covid bailouts are a big reason why Americans have $5 trillion in cash.

• Xi and Biden are set to meet.

• Chinese property stocks jump on rescue plan. 

• Rising virus cases test Beijing's will to ease curbs.

Sorry, everyone, no YouTubes today due to suffering from an eye infection and need to rest it! Sadly, this also means no chart levels this week!

Crypto remains under pressure following the collapse of FTX.

Electricity forward prices in Europe continue to drop with the temperature well above average and predictions of a mild winter. This should be reflected in electricity prices, however, corporate greed could slow down any savings to households.

I am surprised China is changing policy on Zero Covid, considering the spike in cases they are seeing. Have they decided just to live with it!

Global News

China has made the most significant overhaul to its strict Covid Zero policy since the pandemic began, inching toward a reconnection with the world.

Just as the bearish clouds were growing ever darker, the prospect of China beginning to reopen and a moderation in US inflation come as a double dose of sunshine for an otherwise bleak global economic outlook. 

China reduced the amount of time that travelers and close contacts must spend in quarantine and pulled back on testing, among the 20 new measures meant to guide officials in their Covid control efforts. 

This week UK chancellor Jeremy Hunt will deliver his Autumn Statement. Exactly how the fiscal deficit will be closed remains uncertain –there will be more noticeable cuts to investment spending. Data-wise, October's CPI reading is due. ING

The UK economy shrank in the third quarter, marking the start of what's expected to be a protracted recession.

· Output fell 0.2% from the prior quarter, less than expected but the first contraction since the start of 2021.

· This means the UK is the only G-7 economy that's yet to fully recover from the pandemic.

· Consumer spending and business investment fell during the three months, but there was support from an improvement in trade. BB

The euro area faces a grim winter. EU officials slashed forecasts for growth next year, predicting barely any expansion, and raised inflation projections. They reckon the economy is now shrinking and will keep contracting during the first quarter. BB

Wall Street is hiring outside London as it targets cheaper costs and a deepening talent pool in other UK cities. Goldman signed a lease on premises in Birmingham's Paradise development that can house up to 1,000. Manchester, Chester and Glasgow are also welcoming more finance jobs. BB

The best week since June. That’s what US stocks delivered, as investors soaked up the prospect of falling inflation and a potential downshifting in the Federal Reserve’s rate hike cycle. The S&P advanced 0.93%, while the tech-heavy Nasdaq 100 climbed climbed more than 1.5%, notching its best week in two years.BB

Ukrainian troops entered the southern city of Kherson after Russian forces abandoned the regional capital and fled across a major waterway, a significant setback for Moscow. “Today is a historic day,” Ukraine President Volodymyr Zelenskiy said. “We are returning the south of our country. We are returning Kherson.” BB

Beijing is taking big steps on real estate and virus controls, the headwinds for the country's slowing economy. The 16 property rules range from addressing developers' liquidity crises to loosening down-payment requirements. A new playbook will seek to cut the economic impact of Covid Zero by refining the policy. Any further shift in virus policy will come in small steps, officials said. BB

Strategies that seek to profit from interest-rate differences between higher-yielding currencies and lower-yielding ones are producing the biggest returns when funded by the Australian dollar, data compiled by Bloomberg show.

· EM carry trades funded by the Aussie have returned an average 3.1% since the RBA slowed the pace of its hikes on Oct. 4. BB

Economists expect the ECB to receive somewhere between €200 billion and €1.5 trillion in early repayments of long-term loans. Those payments may come this month after officials toughened the terms of the loan program. Banks have until Wednesday to notify the ECB if they want to return cash. There's a total of €2.1 trillion outstanding. BB

"We've still got a ways to go." Christopher Waller said the Fed will continue to hike, but he echoed colleagues in suggesting the pace may soon slow. He welcomed last week's slower-than-expected CPI print, though he said the data will have to become a trend before policy changes. The IMF is more pessimistic about global economic prospects than it was a month ago, one its economists said in a blog. BB

There's long been a strong case for abolishing the UK's non-dom tax regime on both fairness grounds and in the interest of simplification, Therese Raphael writes. But Rishi Sunak may be wary of triggering an exodus from the City of London after thousands of jobs left post-Brexit. If non-doms respond to a change in incentives by leaving, Britain could drive away much-needed talent and revenue.BB  (perhaps he should ask his wife! CJT)

Germany’s biggest labor union is locked in talks with employers over a pay deal for about 3.9 million workers, in one of the most significant domestic showdowns so far of Europe’s energy crisis. The result will serve as an indicator of how pay might develop across the region’s largest economy, and the negotiations will be closely watched by European Central Bank officials worried that significantly higher pay might entrench inflation already at a historic high. BB

Commodities

India can buy as much Russian oil as it wants, outside price cap, Yellen says - The United States is happy for India to continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of Western insurance, finance and maritime services bound by the cap, U.S. Treasury Secretary Janet Yellen said on Friday. The cap would still drive global oil prices lower while curbing Russia's revenues, Yellen said in an interview with Reuters on the sidelines of a conference on deepening U.S.-Indian economic ties. Russia will not be able to sell as much oil as it does now once the European Union halts imports without resorting to the capped price or significant discounts from current prices, Yellen added. 

Global recession a bigger risk to Russia’s oil revenue than price cap - Russia's oil export revenues are at much greater risk from a global economic recession than the price cap being planned by the United States and the European Union. Recession is a sure-fire way to reduce Russia’s earnings from the export of crude, diesel and other refined products

Malaysia warns uncertainties, volatility in palm oil market to persist in 2023 - Malaysia's palm oil board on Monday warned of a tough 2023 for the market for the world's most consumed edible oil, with the persistence of global uncertainties in weather, geopolitics and economics that have caused wide price swings this year. The edible oils market has grappled with volatility triggered by recession fears, Russia's invasion of Ukraine and governments' curbing exports to protect domestic food supplies.

India's wheat planting gathers momentum, acreage up nearly 10% - Indian farmers have planted wheat on 4.5 million hectares since Oct. 1, when the current sowing season began, up 9.7% from a year ago, the latest data from the farm ministry showed on Friday. The Ministry of Agriculture & Farmers' Welfare will keep updating the provisional crop sowing figures as it gathers more information from state governments.

Indian miners seek higher import tax on aluminium, zinc, copper products - India's top mining industry federation is seeking higher import taxes on metals such as zinc, copper and aluminium to help halt a tide of cheaper imports, especially from China, according to a note it sent to the government and seen by Reuters. The government should raise import taxes to 10%-15% on several aluminium products, including scrap to 10% from 2.5%, the Federation of Indian Mineral Industries (FIMI) said in the note addressed to the Ministry of Finance. The federation provided Reuters with summary of its points in the note.

LME will not ban Russian metal from its system - The London Metal Exchange (LME) said on Friday it will not ban Russian metal from being traded and stored in its system because a significant portion of the market is still planning to buy the country's metal in 2023. Russia is a major producer of aluminium and nickel. These metals and the companies that produce them have not been targeted by sanctions imposed on some Russian companies after the Kremlin sent troops into Ukraine.

Indonesia, ADB launch first coal power plant retirement deal - Indonesia, the Asian Development Bank and a private power firm are teaming up to refinance and prematurely retire a coal-fired power plant, the first such project under a ground breaking carbon emissions reduction programme, they announced on Monday. The 660-megawatt Cirebon 1 power plant in West Java would be refinanced in a $250 million to $300 million deal on condition that it be taken out of service 10 to 15 years before the end of its 40- to 50-year useful life under a memorandum of understanding (MOU), Asian Development Bank (ADB) officials said.

Turkey's Black Sea gas field still to go online next year, Erdogan says - Turkey's Black Sea gas field is on track to go online next year as promised and work has sped up to connect it to the national infrastructure, President Tayyip Erdogan said on Saturday. Addressing a natural gas pipeline opening in the northern Kastamonu province, Erdogan said drilling at 9 of the ten wells in the first phase of the seabed Sakarya gas field was complete.

Russia says no agreement yet to extend Black Sea grain deal - Russia said on Saturday there was no agreement yet to extend a deal allowing Ukraine to export grain via the Black Sea, repeating its insistence on unhindered access to world markets for its own food and fertiliser exports. Deputy Foreign Minster Sergei Vershinin was quoted by state news agency TASS as saying talks with U.N. officials in Geneva on Friday had been useful and detailed but the issue of renewing the deal - which expires in one week - had yet to be resolved.

Argentina's wheat exports to fall sharply as drought shrinks crop - Argentina's wheat exports this season will not quite reach half of last season's shipments, the Rosario Grains Exchange (BCR) said on Friday, with only 7 million tonnes of exports expected after months of dry weather halved the 2022/2023 harvest. During the previous 2021/2022 crop, the South American agricultural powerhouse exported 14.5 million tonnes of wheat.

Crypto/Digital

Institutional investors were souring on cryptocurrencies even before Sam Bankman-Fried’s FTX.com crumbled. Now their prospects of ever being included in mainstream portfolios may be dead in the water. While plenty of industry die-hards remain, many professional money managers are saying the case for crypto as a portfolio diversifier or digital gold has been debunked. The losses are too great and the market structure is too risky, they say. With FTX now facing a criminal misconduct probe, the big question right now is, will its customers get their money back? It’s unlikely. BB

 The Bahamian police and regulators are investigating whether there was any criminal misconduct in the collapse of FTX. Sam Bankman-Fried was questioned Saturday in the Bahamas. Other developments:

• About $477 million vanished in unauthorized withdrawals after FTX filed for bankruptcy, according to Elliptic.

• FTX's "free fall" bankruptcy has been chaotic and fast—more than 130 related firms sought court protection at the end of last week.

• FTX Trading held $900 million in liquid assets against $9 billion of liabilities the day before Friday's bankruptcy filing, people familiar said. BB

Market levels (all analysis is based on CME futures contracts)

 DISCLAIMER.

The content of this daily newsletter should only be considered a guide and views, opinions or content contained in this email is provided solely for information purposes and does not constitute investment advice or a solicitation to trade or invest.

Chris Tubby

Senior Director Trading and Education

Symax Fintech