Major cryptocurrencies recovered a bit after Binance CEO said they'd set up a recovery fund.

• Next year’s economic risks are already here.

• Global banks are quietly cutting China jobs.

• Joe Biden and Xi Jinping get down to business in Bali.

• Jeff Bezos plans to give most of his fortune away.

• The UK property market shivered as home sellers slashed asking prices in November at the quickest pace since August as a surge in mortgage costs and looming recession put a chill things.

• Joe Biden and Xi Jinping met face-to-face in Bali.

• Lael Brainard says the Fed should start slowing rates soon.

• Markets scrambled to make sense of Brainard's comments after she also emphasized the Fed's resolve to be persistent until inflation slows further. Eventually, stocks settled in the red with the S&P 500 down 0.9%.

• Amazon is set to slash about 10,000 jobs as soon as this week in its biggest headcount reduction ever.

• Major cryptocurrencies recovered a bit after Binance CEO said they'd set up a recovery fund.

• Congress returned to DC today to begin the year-end push on spending, taxes, and perhaps raising the debt limit.

• There's yet another roadblock to Biden's student debt relief plan, with a federal appeals court halting the program indefinitely.

• Berkshire Hathaway added Jefferies in a strategy tweak, as well as TSMC.

• China's economy didn't fare as well as forecast in October. Industrial output grew by 5% year on year, missing the 5.3% estimate, while retail sales unexpectedly fell by 0.5%. Fixed investment rose by 5.8%, just below consensus.

As I have mentioned, the jobs market is not as robust as it seems, and you only have look at tech companies and banks shedding staff and more sectors likely to follow. Many in their 50s are re-entering the jobs market as inflation takes it toll on their savings.

I cannot help feeling investors are once again getting too excited at the prospect that central banks will slow down their rate hikes. The economy is already damaged but central banks are determined to reset their economies to regain control of inflation. I do see less pressure from supply issues and also a mild start to the European winter may reduce the depth of recession with households spending less on energy than expected.

Global News

The Fed should reduce the size of rate hikes soon, Vice Chair Lael Brainard said, pointing to lags in the flow through of cumulative tightening. A "more deliberate and a more data-dependent pace" makes sense, she added. Investors expect policymakers to opt for a smaller, 50-bp hike in December following an earlier signal from Jerome Powell. BB

Are we really ready for EVs? Probably not. Utility company National Grid says electrifying a typical highway gas station will require as much power as a professional sports stadium—and that's mostly just for electrified passenger vehicles. By 2035, as more electric trucks hit the road, the projected power needs for a big truck stop will equal that of a small town.   BB

It’s been a miserable year for the global economy. But things can always get worse. History says the Federal Reserve’s high-speed interest-rate hikes may well tip the US into recession in 2023. Few will be surprised if spiraling natural-gas prices do the same for Europe. The double whammy of Covid Zero and a property slump threatens to bring China’s economy to a near standstill. And in an extreme downside scenario, if all those things happen at once it could wipe out some $5 trillion in global output. BB

Jeremy Hunt is considering a 40% windfall tax on the "excess returns" of electricity generators as part of this week's budget package, a person familiar said. Rishi Sunak gave his strongest hint yet that he'll protect pensioners against the impact of soaring inflation. The government plans to raise the national minimum wage to about £10.40 an hour from £9.50, The Times reported.

Investors face the biggest glut of gilts in nearly a decade, even with the new government's plans to slash spending. Government bond sales will hit £185 billion in the fiscal year to April, according to a survey of banks ahead of Thursday's announcement. Morgan Stanley's Theo Chapsalis said ongoing high supply along with lingering high inflation will weigh on the market. BB

China issued a 16-point plan to boost the real-estate market on Friday, the strongest sign yet that President Xi Jinping is turning his attention toward shoring up the world’s second-largest economy. The move pushed Chinese stocks into a bull market, even as the Hang Seng China gauge holds on to a loss of more than 25% this year. The latest MLIV Pulse survey showed 42% of 244 investors plan to increase their exposure to China in the next year, with the nation’s big-tech sector the most favored by institutional and retail respondents.  BB

“Inflation is rampant across the globe. War rages in Ukraine. Famine looms as food supplies dwindle and costs skyrocket. Broken supply chains and labor shortages have crippled output. A renewed reliance on fossil fuels threatens to put carbon-reduction targets forever out of reach.”

That’s the stark backdrop outlined ahead of the fifth annual Bloomberg  New Economy Forum, BB

Time and again, Europe's leaders have pledged to address a looming threat: excessive government debt, Bloomberg's editors write. Yet events—first the pandemic, now a war-related energy shock—have undermined their plans, making the problem larger. This can't go on forever. At some point, a major government will probably end up insolvent. The EU needs to be much better prepared. BB

The UK took the lead among major developed economies in moving away from cash in everyday payments, but even so, most people are reluctant to go fully digital. A poll showed 57% of people rarely or never use cash. Still, more than two-thirds didn't want to lose access to cash altogether. BB

Joe Biden and Xi Jinping agreed to goodwill gestures intended to improve ties, with Antony Blinken to visit China early next year. The two nations will resume cooperation on issues including climate and food security, and jointly criticized Russia for nuclear threats.

· Biden said a new Cold War isn't necessary, and he doesn't expect an imminent Chinese invasion of Taiwan.

· Xi said the world is big enough for both nations to prosper. He'll meet Australian PM today and Japan's Fumio Kishida on Thursday. BB

 The EU announced fresh sanctions on Iran’s security forces as Tehran continues its crackdown against protesters and resumed air strikes on northern Iraq. The bloc has been expanding sanctions against Iran for the past month, citing police violence and the country’s sale of military drones to Russia for use in its war on Ukraine. BB

Germany moved to nationalize a second major gas company in two months as Berlin seeks to secure supplies for the winter and contain the financial shock from Russia’s squeeze on European energy. The takeover of SEFE, the former European trading and supply unit of Gazprom, was forced by concerns about a collapse that could set off a chain reaction through the economy. BB

Price Cap | Commission President Ursula von der Leyen told us on the sidelines of the G-20 in Bali that the EU is “ready to go” with an effort to impose a price cap on Russian oil. The summit kicked off today after a tense day of negotiations on a proposed communique to put to leaders. Diplomats agreed on a draft statement despite rifts over Russia given its invasion of Ukraine.  BB

The European Central Bank shouldn’t rule out raising interest rates to a level that puts the brakes on the economy, but it should first do careful analysis to determine if that’s warranted, according to Executive Board member Fabio Panetta. He warned excessive tightening may leave hard-to-heal scars. The ECB is a month away from deciding on its next rate increase. BB

Channel Deal | The UK and France have struck a deal to raise the number of border officials patrolling the beaches of northern France by 40% in an attempt to disrupt the flow of migrants across the Channel. France had resisted requests to allow Britain’s Border Force officers to join French patrols because of concerns over sovereignty, but has now agreed to embed UK officials under the new accord.  BB

Commodities

Russia’s grain-export pace is accelerating, just as Ukraine shipments are hit by uncertainty over whether a landmark Black Sea deal will be extended. Russia’s exports over past six weeks have jumped 42% from last year. Meanwhile, flows from Ukraine are slowing as the end of the original safe-corridor deal looms on Saturday. BB

U.S. Permian oil output to hit record in December, but gains are slow - Oil output in the Permian Basin is set to hit another record of 5.499 million barrels per day in December, but production is rising very slowly in the biggest U.S. shale oil basin even though U.S. prices have surged in 2022. Overall U.S. crude oil output in shale regions is due to rise by a mere 91,000 bpd to 9.191 million bpd in December, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in its monthly productivity report on Monday.

China pork imports set to rise amid questions around hog herd size - China is set to increase pork imports in the coming months, industry participants said, after losses for farmers last year in the world's top pork producer caused a reduction in hog output that appears larger than official data suggests. Pork is by far China's favourite meat and surging prices have driven up inflation in the world's second-largest economy at a time of slowing growth. 

India's state wheat stock halves from a year ago - Indian wheat stocks held in government warehouses were half the level of a year ago on Nov. 1, government data showed on Monday, but inventories were marginally higher than the official target. Wheat reserves in state stores totalled 21 million tonnes at the start of this month, down from 42 million tonnes on Nov. 1, 2021, but still slightly higher than the official target of 20.5 million tonnes for the quarter ending Dec. 31.

No surge of Russian metal into LME warehouses-exchange - London Metal Exchange approved warehouses have not seen a surge of Russian metal after unfounded worries that the bulk of consumers would shun the metal, the LME said. The exchange released new data showing there was no major change in the amounts of Russian metal in LME warehouses last month, supporting its decision announced late on Friday not to ban Russian metal from its system. 

China October steel output drops 8.3% on previous month - China's October steel output fell 8.3% from the previous month, official data showed on Tuesday, as ongoing COVID curbs and a deepening crisis in the country's property sector hit demand, leading some mills to start maintenance outages early. The world's top steelmaking country produced 79.76 million tonnes of the metal last month, according to data from the National Bureau of Statistics, down from 86.95 million tonnes in September.

Billionaire climate activist wins board fight at Australia's AGL Energy - Shareholders in AGL Energy, Australia's largest power producer, on Tuesday defied their board and approved all four directors proposed by the company's top shareholder, tech billionaire Mike Cannon-Brookes. At the same time, in a surprise outcome, more than 25% of shareholders rejected the executive pay plan, final votes showed.

Rich nations stick to coal phase-out plans as China builds new projects - Rich nations have stuck to pledges to phase-out coal power despite the war in Ukraine to help reach their climate targets but expansion of China’s coal fleet risks counteracting the impact of the closures, a report said on Tuesday. Countries within the Organization for Economic Cooperation and Development (OECD) policy forum and the European Union are on track to close more than 75% of their coal power capacity from 2010 to 2030, the report by the Powering Past Coal Alliance (PPCA) said.

Brazilian port operator CLI concludes acquisition of Santos terminal from Rumo - Brazilian port operator CLI concluded the payment of 1.4 billion reais ($263.43 million) on Monday to railway company Rumo SA for control of a grain terminal in Santos port, the company said. The deal is being funded by the acquisition of a 50% stake in CLI, formally Corredor Logistica e Infraestrutura, by Australia's Macquarie infrastructure Partners from Brazilian private equity firm IG4. 

Ukraine grain exports down 30.6% to 15.1 mln T so far 2022/23 -ministry - Ukraine has exported almost 15.1 million tonnes of grain so far in the 2022/23 season, down 30.6% from the 21.8 million tonnes exported by the same stage of the previous season, agriculture ministry data showed on Monday. Grain exports have slumped since Russia invaded Ukraine in February and closed off its neighbour's Black Sea ports, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

Crypto/Digital

Major cryptocurrencies bounced after Binance Chief Executive Officer Changpeng Zhao said the world’s largest digital-asset exchange plans to set up an industry recovery fund. That comes after a tumultuous weekend for rival FTX, which was once seen as among the best-run exchanges but has filed for Chapter 11 bankruptcy. Worrying details that have emerged include the fact that just before filing for bankruptcy, FTX Trading International held just $900 million in liquid assets against $9 billion of liabilities, according to sources familiar with the matter.  BB

Investing in the metaverse. Nike is opening an online store and trading platform for virtual sneakers. It'll release its own goods on the .Swoosh platform, and users will be able to collect and show off their items on it. The digital products will include various types of tie-ins and some may unlock access to physical items, make them available in video games or provide entry to real-life events. Registration opens Nov. 18 with first collection set to debut in January. 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