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Saudi Arabia’s central bank has stepped up the use of a mechanism to pump money into the financial system as it looks to tackle a liquidity crunch that has helped push borrowing costs for lenders to the highest in decades, according to people familiar with the matter.The latest intervention is relying on open market operations, the people said, transactions that allow the central bank to provide or drain short-term liquidity in exchange for securities from lenders.Unusually for a period of high oil prices, Saudi banks are facing a shortage of liquidity. A rapid rise in lending that’s not been matched by deposit growth has left banks clamouring for funding. Meanwhile, an expected influx of government deposits from soaring crude receipts has not materialised and a previous central bank liquidity injection provided only temporary relief.The monetary authority has stepped up its use of open market operations over the past few weeks to tackle the issue, the people said, asking not be named because the information is private. The effort by SAMA, as the central bank is known, helped stabilize the interest rate banks charge one another for loans, though it remains near a record high.SAMA didn’t immediately respond to a request for comment.Policymakers are trying a new tack months after bank liquidity came under unprecedented pressure as an expansion of credit outpaced deposit growth and Saudi Arabia largely matched four successive 75 basis-point rate hikes by the US Federal Reserve to maintain its currency peg against the dollar.Around June, the Saudi central bank placed about 50b riyals ($13bn) as deposits with commercial lenders, Bloomberg reported at the time. The injection of funds at a discount to the three-month Saudi Interbank Offered Rate, or Saibor, eased liquidity conditions through the summer before they started to tighten again.The funding stress intensified last month, with the three-month Saibor peaking at a record of just under 6% in late October. It’s since dropped by nearly half a point even as Saudi Arabia followed the Fed again in November and raised its policy rates by 75 basis points.“Higher policy rates are partly to blame for the higher Saibor rates but a domestic liquidity squeeze is adding to the pressures,” said Farouk Soussa, an economist at Goldman Sachs Group Inc. “Banks are competing strongly for market share through aggressive loan-book expansion which is happening at a rate that far exceeds deposit growth.”Saudi authorities are trying to assert control over the cost of money for banks because the liquidity crunch threatens to undermine the ability to fund the kingdom’s construction pipeline estimated at over $400bn over the next five years, part of an economic makeover to diversify away from oil.Fitch Ratings warned this month that lending growth risks decelerating next year if the central bank doesn’t step in with further liquidity support. Higher interbank rates can also ricochet across the economy by boosting the cost of borrowing for consumers and businesses.Pressure in the kingdom’s banking system has been building by a degree unmatched except during periods when oil prices were crashing or global crises like the credit crunch of 2008-2009. This year, by contrast, Saudi Arabia is on track to run its first budget surplus in about a decade after seeing revenues soar on the back of a rally in oil prices above $100 and higher production.Earlier this year, the government said it would hold billions of dollars worth of windfall revenue in a current account until the end of the year and only then decide how to distribute it.Saudi banks have tried to cope by raising capital in the market and tapping more interest-bearing deposits. Lenders including Al Rajhi Bank and Riyad Bank issued about $7bn in debt this year, an amount comparable to their counterparts in the United Arab Emirates but at a higher spread.The question is if the latest intervention will leave a more lasting mark on the local interbank market as the Fed delivers further rate hikes, with a plan to raise its benchmark by 50 basis points at its final meeting of the year on December 13-14.“The rising Saibor premium appears to be driven by strong demand so an injection of liquidity by SAMA will help,” said Tarek Fadlallah, head of Nomura Asset Management’s Middle East business. “But banks may need to additionally lure substantial private-sector deposits in order to maintain the current pace of lending.”

Chair Jerome Powell cemented expectations that the Federal Reserve will step down from its aggressive pace of tightening in December and presented a case for achieving lower inflation without tipping the economy into a deep recession.Just how high rates will go and how long policymakers will hold them there depends on how the economic data rolls in as officials fight the highest inflation in 40 years.But Powell, in a speech and question-and-answer session on Wednesday, offered guarded optimism that price pressures will slow, sending US stocks sharply higher as investors cheered the lack of a sharper-edged message from the Fed chief.His remarks, as officials prepare to enter their blackout period ahead of the Fed’s December 13-14 meeting, hardened bets they will downshift to a 50 basis-point rate increase after delivering four straight 75 basis-point moves.“Powell tried to walk a fine line between signalling a possible turning point and not sounding too encouraging for risk appetite,” said Derek Tang, an economist at LH Meyer in Washington. “His main goal was to pin down a message of no easing in 2023, a signal that got across. The market was encouraged because a longer-hold strategy means not hiking too much more,” Tang added.The Fed’s actions – the most aggressive since the 1980s – have lifted the target range of their benchmark rate to 3.75% to 4% from nearly zero in March. Powell said rates are likely to reach a “somewhat higher” level than officials estimated in September, when the median projection was for 4.6% next year. Those projections will be updated at the December meeting.“The time for moderating the pace of rate increases may come as soon as the December meeting,” Powell said at the Brookings Institution in Washington. “The timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level.”He noted that goods prices had decelerated and shelter inflation was also decreasing by some measures. On the other hand, service costs remain a challenge, particularly the cost of scarce labour to deliver them.“It will take substantially more evidence to give comfort that inflation is actually declining,” he said. “The truth is that the path ahead for inflation remains highly uncertain.”The data has shown “tentative signs” of moderating labour demand he said. But more cooling is needed, and his remarks imply that the Fed will continue to raise rates until the three conditions – further deceleration of goods prices, lower shelter inflation, and softening labour demand – fall clearly into place.When asked if the Fed could reduce inflation without tipping the economy into a steep downturn, Powell said he was optimistic that it could do so.

A rally in US stocks and bonds powered ahead after a speech by Federal Reserve Chairman Jerome Powell on Wednesday, but some investors believe a looming recession could cap gains in both asset classes.Though asset prices have been battered by the Fed’s rate rises this year, momentum has been on the side of the bulls in recent weeks.The S&P 500 has soared nearly 14% from its October low while yields on the 10-year benchmark Treasury, which move inversely to prices, are down at around 3.6%, from a 15-year high of 4.3% earlier this year.The immediate reaction to Powell’s speech on Wednesday showcased investors’ recently optimistic mood.The S&P 500 soared more than 3% after Powell said the Fed could scale back the pace of its rate increases as soon as December, although he warned there was little clarity on how high rates will ultimately need to rise as the central bank fights the worst outbreak of inflation in decades.Still, some market participants believe the weeks-long upswing in stocks and bonds is bound to fizzle, a fate that has met a handful of other rebounds this year.The S&P 500 is down 14.4% year-to-date.Upcoming employment and inflation reports — due on December 2 and December 13, respectively — could become near-term stumbling blocks if they fail to show that the rate rises the central bank has already delivered this year have sufficiently cooled the economy.US consumer prices rose less than expected in October, supporting the view that inflation was ebbing.Further ahead, some of Wall Street’s biggest banks are now forecasting that the Fed’s monetary policy tightening will bring on a recession next year.The inversion of the US Treasury yield curve — a signal that has preceded past downturns — has lent weight to recession predictions.Yields on two-year Treasuries recently exceeded those on 10-year Treasuries by their biggest margin since the dot com bubble.“Our view is that this is not an enduring rally,” said Jake Jolly, senior investment strategist at BNY Mellon. “The odds are there’s going to be a recession next year, and that’s going to pressure risk assets like equities.”Citi’s analysts wrote that the rise in risk asset prices on Wednesday was due to “hawkish expectations that had built up ahead of Powell’s remarks, the assurance of a slowdown to a 50bp rate hike pace, and the absence of a clear escalation of the hawkish message delivered at the early November FOMC meeting.”Their takeaway: Powell is shifting his focus to non-shelter service inflation, which will be more difficult to slow, “given still very-tight labour markets.” On Wednesday, Powell noted that key price measures for services remain high.Data released earlier in the day showed there were still about 1.7 job openings for each unemployed person.“Powell seemed to come today and express that they are confident that the brakes are working,” said Jake Schumeier, a portfolio manager at Harbor Capital Advisors, referring to the Fed’s spate of jumbo 75 basis point increases aimed at slowing the economy.Over the longer term, however, “the market seems positioned for a slowdown, so that will limit the upside once we get past seasonal trends at the end of the year,” he said.Among the banks predicting a downturn is Bank of America, whose analysts see a broadly flat S&P 500 as markets deal with “recession shock.”BlackRock Investment Institute said on Wednesday that while a recession is likely, “equity valuations don’t yet reflect the damage ahead.” They are also underweight long-dated government bonds, betting that central banks are unlikely to stop cutting rates in a downturn if inflation stays high.To what degree economic worries impact the market’s near-term bullish sentiment remains to be seen.The S&P 500 on Wednesday traded above its 200-day moving average for the first time since April, a move that some chart-watching investors view as a sign of short-term equity strength.In options markets, traders appear more preoccupied with not missing out on more gains in stocks than guarding against future declines.The one-month moving average of daily trading in bearish put contracts against bullish calls on the S&P 500 index-tracking SPDR S&P 500 ETF Trust’s options is at its lowest since January 2022, according to Trade Alert data.

Elon Musk’s Neuralink Corp aims to start putting its coin-sized computing brain implant into human patients within six months, the company announced at an event at its Fremont, California headquarters on Wednesday evening.Neuralink has been refining the product, which consists of a tiny device and electrode-laced wires, along with a robot that carves out a piece of a person’s skull and implants it into the brain. Ongoing discussions with the US Food and Drug Administration have gone well enough for the company to set a target of its first human trials within the next six months, according to Musk.In typical fashion for an Elon Musk venture, Neuralink is already bounding ahead, aiming implants at other parts of the body. During the event, Musk revealed work on two major products in addition to the brain-computer interface. It’s developing implants that can go into the spinal cord and potentially restore movement in someone suffering from paralysis. And it has an ocular implant meant to improve or restore human vision.“As miraculous as that may sound, we are confident that it is possible to restore full-body functionality to someone who has a severed spinal cord,” Musk said at the event. Turning to Neuralink’s vision work, he added that “even if they have never seen before, we are confident they could see.”The goal of the brain-computer interface, known as a BCI, is initially to allow a person with a debilitating condition — such as amyotrophic lateral sclerosis (ALS) or suffering the aftereffects of a stroke — to communicate via their thoughts. The company demonstrated that with a monkey “telepathically typing” on a screen in front of it. The Neuralink device translates neuronal spikes into data that can be interpreted by a computer. Musk’s hope is that the device could one day become mainstream and allow for the transfer of information between humans and machines. He has long argued that humans can only keep up with the advances being made by artificial intelligence with the help of computer-like augmentations.“You are so used to being a de-facto cyborg,” Musk said. “But if you’re interacting with your phone, you’re limited.”As has been the case with past Neuralink events, some of the things demonstrated by Musk and his team have already been accomplished in academic settings. The company’s critics have long accused Musk of overhyping Neuralink’s advances and over-promising what the technology will be able to do in the near future, if ever. Brain-machine interface technology has been researched and advanced by academia for decades. Musk’s entry into the arena, however, has spurred a wave of investment from venture capitalists into startups and helped push the field forward at a much more rapid clip.A couple of similar startups are ahead of Neuralink when it comes to human trials. Synchron Inc, for example, has been able to implant a small stent-like device into the brains of patients in Australia and the US. The product has made it possible for patients who were unable to move or speak to communicate wirelessly via computers and their thoughts. Onward Inc has also done breakthrough work restoring some movement in people with spinal cord injuries.The type of brain surgery proposed by Neuralink is far more invasive than that of Synchron or most other competitors in the industry. A patient must have a chunk of their skull removed and allow wires to be implanted into their brain tissue. Neuralink has been doing tests for years on primates to prove that the surgery is safe and that the implant can remain inside the brain for long periods of time without causing harm.Animals rights groups have been critical of the primates’ past treatment when Neuralink relied on a partner laboratory for some of its experiments. Neuralink brought its animal husbandry programme in-house years ago and has endeavoured to make it an example for others to follow.Neuralink’s advantage over its rivals is one of processing power. Musk’s bet is that the more invasive surgery coupled with greater computing capabilities will help Neuralink’s hardware achieve better results and restore more functions in humans than competing products.Musk’s company has already missed some of the billionaire’s ambitious timelines for placing the BCI implant in people. In meetings with his team over the past several months, Musk, being Musk, urged his engineers in blunt terms to work faster and harder. “We will all be dead before something useful happens,” Musk told his team during a recent product review meeting. “We need to step it up. We need to ship useful products.” During the same meeting, Musk expressed fear that advances in AI would outpace the work being done at Neuralink, rendering the company’s efforts worthless.Some of Neuralink’s main concerns with the BCI implant have been making sure that the robot can perform surgeries quickly and with minimal harm to the body. Musk foresees a day when people get brain implants as a quick outpatient procedure.The paralysis and ocular work only started relatively recently, and Musk has been pressing his teams to advance the state-of-the-art in the technology at a record pace.

Tata Group will merge Air India Ltd with Vistara, which it jointly holds with Singapore Airlines Ltd, creating a behemoth in one of the world’s fastest-growing aviation markets.The deal will give Singapore Air a 25.1% stake in the merged carrier for an investment of $250mn, according to an exchange filing yesterday. Both the partners have agreed to inject fresh capital if needed in the coming two years in the enlarged Air India, with Singapore Air’s share potentially as much as $615mn, according to thefiling.The integration will make Air India the country’s largest international and second-largest local carrier with a fleet of 218 aircraft, Tata Sons Pvt, group’s main holding company, said in a separate statement.The consolidation will happen after relevant approvals are received and is expected to be complete by March 2024.Bloomberg News reported earlier this month that the coffee-to-cars conglomerate is considering a plan to integrate its four airline brands under Air India and scrap the Vistara moniker while Singapore Air was evaluating the size of stake it would take in the combined entity. Air India is gearing up for a revamp under its new owner Tata, as the sprawling company prepares to recast its faltering aviation empire. The full-service carrier is considering ordering as many as 300 narrow-body jets, a transaction that would be one of the largest orders ever in commercial aviation history.Air India chief executive Campbell Wilson last month said the airline will triple its fleet of 113 aircraft over five years, with a “significant” increase in both narrow- and wide-body aircraft. The airline, which was set up by the Tata Group in 1932, then taken over by the Indian government in the 1950s before it was returned to the Tata fold in January, is planning to add 25 Airbus SE and five Boeing Co. aircraft from lessors, starting in December.Tata was selected as the winning bidder for India’s flag carrier in October last year, ending decades of attempts to privatise a money-losing and debt-laden airline that was kept alive on years of taxpayer-bailouts. The transaction marked the country’s most high-profile privatisation under Prime Minister Narendra Modi, ending decades of attempts to offload the money-losing, debt-laden carrier that survived on years of taxpayer bailouts.

Opec and its allies are expected to consider deeper supply curbs when they meet this weekend against the backdrop of a faltering global oil market.Saudi Arabia and its partners surprised traders – and drew a fierce rebuke from US President Joe Biden – when they announced a 2mn barrel-a-day cutback last month. Even so, prices have since weakened, briefly slipping to almost $80 a barrel in London as the situation in China deteriorates.Delegates from the group, who until this week had predicted they would pause to assess the impact of the cuts, now say additional reductions could be an option. Discussions within the alliance haven’t yet formally got underway before the December 4 meeting.Riyadh already sent the market an unusually clear pre-meeting signal. Last week, Saudi Energy Minister Prince Abdulaziz bin Salman said Opec+ was “ready to intervene” with further supply reductions if it was required “to balance supply and demand.”“Opec will probably choose between rollover, or further cuts,” said Amrita Sen, chief oil analyst and co-founder of consultant Energy Aspects Ltd. They “are always vigilant about supply-demand balances.”Ten of 16 traders and analysts surveyed by Bloomberg this week anticipated a new supply cutback, with estimates ranging from 250,000 to 2mn barrels a day. Consultants FGE predict the cutback may be at the upper end of the range.While the Organisation of Petroleum Exporting Countries and its partners appear to be focused on the downside risks to the market, there are countervailing forces. Brent rebounded as much as 3.4% to $86 a barrel yesterday as signs of the group’s readiness to act lends support to futures.The alliance remains under pressure from consuming nations to stave off inflation by keeping the taps open. In particular, additional cuts would run the risk of further straining relations between the Biden administration and Saudi Arabia.Global markets are by some measures tight, with inventories in developed nations at the lowest since 2004. The day after Opec+ meets, the European Union will impose a ban on seaborne imports of crude from Russia, while a price cap on the country’s oil is also under discussion by EU diplomats.Russian output stands to slump 15% early next year as these measures bite, according to the International Energy Agency. Yet the country’s oil output has proven surprisingly resilient to international sanctions since its invasion of Ukraine, and the IEA’s forecasts often too pessimistic.“Fundamental balance forecasts don’t suggest there is any urgency in cutting,” said Paul Horsnell, head of commodities at Standard Chartered Bank. “Especially as inventories are still on the low side.”Whether these considerations are ultimately eclipsed may depend on the trajectory of crude futures in the coming days.“Opec+ will seriously consider a new production cut at its upcoming meeting, particularly if crude prices fall much below their current level in the next week,” analysts at Eurasia Group including Raad Alkadiri said in a report.The outlook for key Asian markets continues to darken after protests over harsh anti-virus curbs erupted over the weekend, including demonstrations in Beijing and Shanghai. Chances are growing of a messy exit from the Covid-zero policy as infections spread and residents protest virus controls, according to banks including Goldman Sachs Group Inc.The unrest has triggered a broad sell-off in commodities. Last week, a critical gauge of Asian crude markets – the premium of Oman futures over Dubai swaps – plunged as surging virus cases threatened fuel consumption in China, the world’s biggest oil importer.The forward curves for Brent and West Texas Intermediate – the two international benchmarks – have developed a discount for near-term contracts known as a contango. The price pattern typically signals oversupply and encourages refiners to hoard unwanted barrels – often a problematic occurrence for Opec+ nations.

Egypt’s newly flexible currency is still too tame for a market that’s bracing for more disruption ahead.Although Egypt has allowed the pound to slide more than almost every other currency in the world this quarter, investors are questioning whether authorities would completely loosen their grip if it comes under more pressure. They may not need to wait long for answers.Among developing peers, Egypt is the economy most vulnerable to a currency crisis over the next 12 months, according to a Nomura Holdings Inc gauge that’s predicted past selloffs. HSBC Holdings Plc, which previously expected the pound to stabilise around 24 per dollar, now tentatively envisions a move toward 26, which implies a depreciation of around 5.5% from current levels.At stake is the willingness of foreign investors to plough money back into the one-time darling of emerging markets. Their reluctance so far has contributed to a steep rise in the yields on Egypt’s Treasury bills, which reached the highest since early 2019 at the latest auctions.“Right now there is a lot of confusion as to whether we are in a truly flexible regime,” said Farouk Soussa, an economist at Goldman Sachs Group Inc in London. “Whether the pound will be more flexible in the face of external shocks going forward and act as an automatic stabiliser to the external accounts is yet to be tested.”The North African nation devalued the pound by 18% in late October and signalled it’s shifting to a more flexible foreign-exchange regime as the economy grapples with the fallout from Russia’s invasion of Ukraine. The currency has weakened about 20% against the dollar to record lows this quarter, the worst performer in the world after Ghana’s cedi.But a recent bout of dollar weakness globally served to cushion the pound’s fall to around 2% this month. Emerging-market currencies have jumped almost 3% in November as the dollar retreated.One-week historical volatility in the dollar-pound - which measures how far traded prices move away from their average - has fallen back to levels seen before the latest sharp devaluation.“After an initial sharp move at the time the IMF deal was concluded, the Egyptian pound has been little changed against the dollar, at a time when other EM currencies have been more volatile,” Simon Williams, chief economist at HSBC Holdings Plc for Central & Eastern Europe, the Middle East and Africa, said in a report.“If the status quo persists and the FX market struggles to clear, the likelihood of a deeper downward shift in the value of the pound will rise,” Williams said.The backdrop meanwhile remains difficult for Egypt. It scored the highest among emerging counterparts in Nomura’s early warning indicator of exchange-rate crises. The nation is one of four developing countries “not yet out of the woods” even after experiencing a currency selloff, according to the Tokyo-based bank.For now, Egypt is set to allow for “some accelerated depreciation” ahead of an expected approval next month of a $3bn loan from the International Monetary Fund, which favours a more flexible exchange rate as a condition of financial support, according to Gordon Bowers, a London-based analyst at Columbia Threadneedle Investments.Looking ahead, Egypt faces several pressure points.The central bank plans by end-December to remove a requirement for importers to acquire letters of credit to buy some goods abroad. The country also needs to clear a backlog of requests - estimated at over $5bn - from importers and companies to access hard currency, another move that could add pressure on the pound.“It seems like the authorities want to manage this clearing process, and once the backlog is at manageable levels we could see more flexibility,” Bowers said. “But until then, I think it’s too soon to get a sense of how truly flexible the new exchange rate regime will be.”Concerns about inflation and social stability may be putting constraints on policy in a country where the majority is vulnerable to price shocks. While Egypt is adding instruments for investors and corporates to hedge against foreign-exchange risks, trading in the local derivatives market is still thin.In the offshore market, derivatives traders have stepped up bets that the pound will additionally depreciate over 13% in the next 12 months.The pound will remain under pressure until there are more dollar inflows from Gulf allies that have rushed to Egypt’s aid with pledges of deposits and investments, according to Carla Slim, an economist at Standard Chartered Plc.

Saudi Aramco Base Oil Co., a unit of the state-owned oil producer, has received regulatory approval for an initial public offering in Riyadh, as the world’s biggest crude producer looks to list some of its subsidiaries.The IPO will consist of the sale of 50mn shares – a 29.7% stake – in the company, Saudi Arabia’s Capital Market Authority said on Thursday. The unit, also known as Luberef, makes base oils used in lubricants for motor vehicles, ships and industrial machinery.The refinery business, with operations in Saudi industrial cities Jeddah and Yanbu, is 70% owned by Saudi Aramco, while the rest is held by local private equity firm Jadwa Investment. Citigroup Inc, HSBC Holdings Plc and SNB Capital have been hired to advise on the offering that could raise about $1bn, Bloomberg reported in June.Aramco is separately considering selling a stake in its oil trading business, people familiar told Bloomberg. It’s already sold off stakes in units that lease its oil and gas pipelines to private equity investors.The energy-rich Gulf has been one of the world’s IPO hotspots this year, accounting for almost half the proceeds from new share listings across Europe, the Middle East and Africa. While share sales elsewhere have dried up amid aggressive interest rate rises, Middle Eastern markers have benefited from high oil prices, and Saudi Arabia alone has seen a record 27 IPOs this year, according to data compiled by Bloomberg.Saudi Aramco this month reported its second-highest earnings as a listed company, although its downstream unit, responsible for refining, chemicals and fuel distribution, made a pretax loss of $1.1bn, versus almost $4bn in profits a year earlier.Jadwa, which is expected to sell a stake in the IPO, had acquired its Luberef holding in 2007 from Exxon Mobil Corp. Exxon had originally invested in the refinery in 1978.

Egypt’s finances remain in a precarious state despite two major currency devaluations this year and a brand new $3bn International Monetary Fund rescue package, economists say.With debt interest payments set to soak up over 40% of the government’s revenues next year and a lack of foreign currency still hurting the economy, investors remain cautious despite a post-IMF bounce in sentiment.Bankers in north Africa’s largest economy point out that the Egyptian pound’s black market rate of 26-26.5 per dollar is still 8% below the 24.53 official rate despite a 36% overall devaluation this year.Foreign exchange traders, meanwhile, seem convinced it will be 28 to the dollar this time next year and Japanese bank Nomura has just put Egypt top of its list of countries at high risk of a currency crisis..“The Egyptian pound will likely remain under pressure until more US dollar inflows from GCC (Gulf nations) and committed foreign direct investment materialises,” said Carla Slim at Standard Chartered Bank.Last month’s IMF deal has provided some respite.Egypt’s soon-to-pay-out government bonds have rallied some 15% and the premiums demanded by investors to hold them rather than US Treasuries have shrunk by almost a third.Bonds that won’t have to be paid for another 15-20 years have also gained sharply, although at 65-70 cents in the dollar and a third below their face value, analysts stress they still indicate danger.“Egypt has got a high debt load and arguably it is more vulnerable even than Pakistan in terms of debt payments as a share of revenues,” said Renaissance Capital’s chief economist Charlie Robertson.“But the difference is, it has been proactive and been quick to go to the IMF,” Robertson added, noting Egypt also has strong support from rich Gulf countries.Sales of Egyptian short-term treasury bills to foreigners — a key source of government finance until the Ukraine crisis — have also remained relatively stagnant at around 4bn-6bn Egyptian pounds ($163mn-$244mn), two bankers in Egypt who requested anonymity for this story estimated.This is partly because of the government’s reluctance to raise the interest rate — or yield — on the bills above the rate of inflation, particularly when another sharp currency devaluation is being priced in.Egypt’s swollen current account deficit and $33.9bn of international debt payments due for the three years to mid-2025 leave Egypt vulnerable, ratings agency Fitch said this month when it slapped a downgrade warning on the country’s credit rating.Only default-stricken Sri Lanka and soon-to-default Ghana spend more than the 41% of government revenues Egypt is forecast to spend on interest payments on its debt next year.With very limited amounts of dollars and other foreign exchange available in Egypt, importers continue to face problems financing goods from abroad, creating bottlenecks for factories and retailers, bankers say.Farouk Soussa, an economist at Goldman Sachs, said a backlog of corporate demand for foreign exchange and tight liquidity in the system would continue to push the pound weaker if it were allowed to trade freely.“Fundamental valuation models suggest the pound is undervalued by as much as 10% at the moment,” Soussa said, while James Swanston of Capital Economics said the pound probably had to weaken to at least 25 to the dollar to account for the inflation differential with Egypt’s main trading partners.Egypt’s IMF negotiations dragged on for seven months and drove its second big devaluation of the year.The central bank continues to allow the pound to weaken incrementally by 0.01 or 0.02 pounds each trading day.Many Egyptians on the street view the strength of the currency as a barometer of how well the economy is managed, and as a result the government has long been reluctant to allow it to weaken rapidly, analysts say.Authorities also fear a fully free-floating currency could overshoot, prompt businesses to hike their prices and ramp up inflation already at a four-year high.

With Chinese markets prone to sharp turning points followed by long and powerful trends, timing when to buy is almost as important as choosing what to purchase. Investors who jumped into Chinese stocks on November 11 when Beijing cut Covid-19 quarantine periods and dialled back testing have shared in a rally that’s added almost $370bn to the value of equities in the MSCI China Index.Others are still waiting for clearer signals after Wall Street got it so wrong this time last year. Goldman Sachs Group Inc, JPMorgan Chase & Co and BlackRock Inc were among those who recommended piling into the market then, only to see more than $4tn in value destroyed over the 10 months through October.“Chinese policies are like a giant freight train coming down the track,” said John Lin, a fund manager for China equities at AllianceBernstein in Singapore. “What you do first is get out of the way. Don’t stay on the track! Then the instant that you can, jump onto the train.”China’s benchmark CSI 300 Index has risen about 8% from this year’s low set in late October even as Covid cases have been rising. Daily infections climbed above 30,000 for the first time on Thursday as officials struggle to contain outbreaks that have triggered new restrictions in some of the largest cities. Abrdn Plc is among those who already see opportunities in the nation’s corporate bonds after the Covid policy changes and a sweeping package of measures to aid the property sector.Investors can also position right away to take advantage of a likely steepening in China’s government bond yield curve as the economy reopens from Covid, according to Ray Sharma-Ong, a fund manager for multi-asset and investment solutions at abrdn. “Go along on the front-end of the curve while going short on the back-end,” Sharma-Ong said. A better outlook for growth will push up back-end rates, while China’s supportive monetary policy will contain front-end rates, he said.Dollar-denominated Chinese corporate bonds already offer opportunities with yields around 8%, he said. Investing in local currency corporate debt comes with a bonus of 2% positive carry after investors hedge back the yuan to the dollar, according to Sharma-Ong, who expects the yuan to keep strengthening.M&G Investments (Singapore) Pte and Eastspring Investments Singapore Ltd are in the market buying Chinese stocks. Eastspring says they can’t get much cheaper, while M&G favours domestic-facing consumer brand names, original equipment manufacturers for electric and traditional vehicles, and factory automation. “We are very close to trough valuations and very, very close to trough assumptions on earnings as well,” said Bill Maldonado, chief investment officer at Eastspring, which oversees $222bn. “You’d be buying now and expecting things to kind of rebound on a three-to-six-month basis.”Catherine Yeung, investment director at Fidelity International, said so much negative newsflow has already been factored into the price of Chinese stocks that the worst is likely over for investors.For those still on the sidelines, a Politburo meeting in early December, followed by the annual Central Economic Work Conference, may offer useful signals.Jason Liu at Deutsche Bank AG’s international private bank plans to keep an eye on state media around this time. News from the closed-door work conference, which will bring policymakers together to review the economy this year and set goals and tasks for 2023, may be a catalyst for further re-opening trades. “We may see some signals from the top leadership,” said Liu, who expects near-term volatility in Chinese assets and a “very gradual” shift away from Covid Zero over the next few quarters.Liu recommends looking past the likely choppiness and taking a broad position in Chinese equities, including the technology sector, to benefit from a gradual shift in sentiment. He also sees the yuan as attractive given likely appreciation through the first half of next year. Liu doesn’t recommend credit at the moment, saying it may take longer for the property market to improve.Morgan Stanley is among those with high hopes for an acceleration of China’s economic opening in spring, when the weather turns more friendly, vaccinations may increase and the National People’s Congress in March looms as a key event for market-moving developments. Investors who have been underweight in Chinese assets may shift to neutral around this time, according to Andrew Sheets, chief cross-asset strategist at Morgan Stanley. China’s domestically-focused consumer companies stand to benefit, according to the investment bank.“If investors are presented with a pausing Fed and China reopening, and growth being stronger in the second half of 2023, I think they’ll view that as a positive backdrop for a lot of different emerging-market assets,” Sheets said. Reopening of the economy from Covid may drive a positive swing of inflows into China’s equities in 2023 equivalent to 1% of gross domestic product, according to Bloomberg macro strategist Simon Flint. This in turn will buoy the yuan, he said.James Leung, head of multi-asset for Asia Pacific at Barings, recommends aligning China stock portfolios with the government’s policy priorities by investing in the electric vehicle sector, renewable energy and the hardware technology supply-chain.AllianceBernstein sees stocks in energy and technology security as low-hanging fruit for investors, so long as the companies are aligned with the government’s goals.The market has changed from the era before the pandemic and the regulatory crackdown, when investors would hunt for the latest tech and biotech darlings “and then watch the money grow 10 times, 100 times,” AllianceBernstein’s Lin said. “Now you can still find growth, but it has to be policy-sensitive kind of search.”

The Bank of England (BoE) will press on with interest rate rises to battle inflation even though Britain is heading into a long albeit shallow recession, with consumers facing an extended cost of living crisis, a Reuters poll of economists found.Finance Minister Jeremy Hunt announced more pain in an autumn financial statement last week, with tax rises now and spending cuts further ahead, so any relief on borrowing costs would have been welcomed by indebted households.After adding 75 basis points to bank rate earlier this month, the Monetary Policy Committee will add a more modest 50 basis points on December 15, taking it to 3.50%, the November 18-22 poll found.In an October poll, the rate was expected to end this year at 3.75%. Over 75% of respondents, 43 of 56, opted for 50 basis points while 13 said 75.“In terms of being able to pivot back to 50 I think there was enough in the autumn statement to calm some of the fears at the Bank of England on the outlook for next year,” said James Smith at ING.Hunt’s budget plan came after the blow dealt to Britain’s fiscal reputation by former prime minister Liz Truss’ unfunded tax cuts, which sent the pound to an all-time low against the US dollar and forced the BoE to prop up bond markets.“When you listen to what some of the MPC have been saying, they tried to send a very strong dovish signal in November and that was to try and take some of the heat into what is priced into markets.It does also depend a little on the Fed,” said ING’s Smith.At the November 3 meeting Governor Andrew Bailey told investors, who were pricing in a peak around 4.70%, their rate hike bets looked too big.The United States Federal Reserve has made four consecutive 75 basis point increases but was expected to shift down the pace to a 50 basis point move next month.December’s move by the BoE will be followed by another 75 basis point lift across its two meetings next quarter, with the poll suggesting the bank will then pause at 4.25%, matching the terminal rate given last month.But when asked about the risk to their terminal rate forecast, 15 said it was that it would come later and be higher than they expect and seven said that it would come earlier and be lower.The bank’s dilemma is inflation is running at more than five times its mandated 2% target — 11.1% in October — and was not expected to reach the goal until at least 2025, yet it is raising interest rates as the country enters recession.Britons have been hit by soaring energy prices following Russia’s invasion of Ukraine, food prices rising at the fastest pace since 1980, and disruptions to supply chains exacerbated by Britain’s departure from the European Union.Asked how long before the cost of living crisis eases significantly, six said it would be 6-12 months while ten said it would be 1-2 years.One said it would be over two years.When asked about the probability of a recession within a year, poll respondents gave a median response of 90%, sharply higher than the 75% given in October. Quarterly gross domestic product (GDP) forecasts supported that number, with the economy predicted to shrink 0.4% this quarter and next and 0.3% in the following one.A 0.2% contraction was pencilled in for last quarter.Across next year the economy was expected to contract 0.9% while in 2024 it will expand 0.9%, the median view from the poll of 60 economists predicted.Inflation will peak at 10.7% this quarter, the poll found.It will then gradually fall, dipping to 10.0% next quarter and then to 7.7%, 6.5% and 4.5% in the following quarters.

Three of China’s biggest commercial banks have agreed to provide fundraising support to property developers, including industry giant Vanke, in a co-ordinated effort to support the country’s embattled property sector.It marks one of the latest moves by state-owned banks to respond to Beijing’s call to ease pressure on debt-laden developers and reverse a housing slump.The property sector makes up about a quarter of China’s economy.Bank of Communications Co Ltd (BoCom) said it agreed to provide a 100bn yuan ($13.98bn) line of credit to Vanke and a 20bn yuan line of credit to Midea Real Estate Holding Ltd, two separate statements issued by the bank have said.Under the agreements, BoCom will be likely to offer the two developers property development loans, loans for M&A deals and bond investments.The agreement is part of BoCom’s efforts to implement 16 measures outlined by Chinese regulators that aim to boost liquidity in the property sector, the bank said in the statements.“BoCom will continue to fulfil the responsibility of a state-owned bank, (and) accurately promote high-quality economic development with high-quality financial services,” it said.Also on Wednesday, Agricultural Bank of China Ltd (AgBank) said it has signed strategic agreements to provide fundraising support to five property companies, including Vanke, Longfor Group Holdings Ltd and China Resources Land Ltd.The bank did not give further details on the scale of the support. Bank of China Ltd also said on Wednesday it agreed to provide a line of credit of up to 100bn yuan to Vanke.Vanke is the country’s second-largest developer by sales.China’s property sector, once a pillar of growth, has slowed sharply this year due to government efforts to restrict excessive borrowing by developers.The clampdown has triggered falls in property investment, sales and prices, and a growing number of bond defaults.Construction of many housing projects has stalled, scaring away potential home buyers.Chinese authorities have announced a flurry of fiscal measures recently to ease the developers’ liquidity crisis.In the latest policy move, China’s central bank will provide 200bn yuan in loans to six commercial banks for housing completions, according to a deputy central bank official quoted by the state-run Economic Daily on Monday.In response to Beijing’s policy guidance, more banks are expected to sign agreements with developers to increase real estate loan issuance, said Liu Shui, an analyst at China Index Academy.Many analysts, however, believe the property market will take a long time to recover. “(A) broad recovery in new-home sales remains the key for a sustained improvement in developers’ liquidity profiles,” a Fitch Ratings report said yesterday.“We expect no material improvement in the operating environment, as homebuyers’ confidence remains fragile amid weak economic prospects and uncertainty surrounding delivery of pre-sold properties,” the Fitch report said.

Turkiye’s central bank cut its policy rate by 150 basis points to 9% as expected yesterday and said it decided to halt its easing cycle, in line with President Recep Tayyip Erdogan’s call for a single-digit rate by year-end despite inflation above 85%.The lira weakened to a record low of 18.66 to the dollar after the move and stood at 18.63 at 1107 GMT.Yesterday’s cut brings the cumulative easing in four months to 500 basis points.The central bank repeated the stimulus is necessary given signs of economic slowdown, even as central banks around the world race in the other direction.“It is critically important that financial conditions remain supportive...in a period of increasing uncertainties regarding global growth as well as further escalation of geopolitical risks,” the bank’s policy committee said. “Considering the increasing risks regarding global demand, the Committee evaluated that the current policy rate is adequate and decided to end the rate cut cycle that started in August.”Inflation has surged since autumn 2021, stoked by an unorthodox easing cycle that sparked a currency crisis late last year.Liam Peach, senior emerging markets economist at Capital Economics, said there is still a risk of further cuts in coming months.“After all, growth will continue to slow, inflation will fall sharply from December once the effects of last year’s currency crisis fall out of the annual price comparison,” he said in a note.Six of seven economists polled by Reuters expected a pivot in 2023 to tightening that would bring the policy rate to a range of 16% and 35% by the end of next year.Analysts say policy will likely remain steady until the election in May or June.The central bank expects inflation to drop to 65.2% by end-2022, thanks largely to base effects in December, compared to a median estimate of 70.25% in the latest Reuters poll.Governor Sahap Kavcioglu has said two prerequisites for price stability were achieving a lasting current account surplus and the dominance of the lira in households, firms and banks’ balance sheets.

Emirates, the world’s largest long-haul airline, said it’s expecting a surge in global travel on a scale beyond anything seen for many years once China fully reopens to overseas flights.While most aviation markets are already “rebounding at pace,” the dropping of Covid-related curbs in the world’s second-largest economy will trigger a “tsunami” of bookings, Emirates president Tim Clark said on Wednesday.“At some point, China will unleash demand for travel the likes of which we will not have seen for a long, long time,” Clark said in Berlin. “The longer they press the cork down in the water, the greater the velocity of return.”Emirates is heavily dependent on Asian traffic flows, with its business based around inter-continental flights that link the region with the Americas, Europe, Africa and the Middle East via its hub in Dubai. Even so, the group was able to post a record first-half profit equivalent to more than $1bn through September amid the upswing in travel after two years of Covid disruption.Clark said Emirates flights to Asian destinations that have already reopened, such as Thailand, Malaysia and Hanoi and Ho Chi Minh City in Vietnam, are essentially full.Capacity cuts at carriers including Hong Kong-based Cathay Pacific Airways Ltd and PT Garuda Indonesia will mean the industry could struggle to cope with pent-up demand for the next few years, he said.For the time being, the situation on the ground in China remains tense as the government seeks to stamp out a surge in virus cases. China is seeing near-record numbers of Covid outbreaks, spurring major cities from Beijing to Shanghai to revert to broad restrictions on people’s movements.Emirates is expecting an update on engine issues afflicting Boeing Co’s long-delayed 777X widebody on December 6, Clark said. A glitch discovered about a month ago halted testing, with a turbine sent to its manufacturer GE Aviation in Cincinnati for analysis.If the problem is diagnosed as a manufacturing or component issue, tests could resume as early as January, according to Clark, who said Boeing should have enough slack built into the 777X’s revised delivery date of July 2025 to cope with a delay, “provided it is not a design issue.”Still, Clark said it’s possible Emirates could consider pulling 777X orders if the model, already five years late, suffers further delays. He added that the company is continuing to assess a possible role for the largest A350-1000 variant of Airbus SE’s biggest current airliner, which competes with the 777X.“If it continues to be late, or the regulator is unhappy, our patience will be truly tested,” he said of the Boeing jet. “We’ve got a business to run, we have an ageing fleet that needs to be replaced, we want to continue to innovate.”Clark has said previously that the A350-1000 must demonstrate the reliability of its Rolls-Royce Holdings Plc engines before Airbus considers an order.

World economic growth is slowing due to decades-high inflation, the OECD said yesterday, calling for “essential” further monetary policy tightening and “more targeted” government support.Global GDP is set to grow 3.1% this year — nearly half the rate for last year, the Organisation for Economic Co-operation and Development said.The slide is due to continue next year, with global growth falling to 2.2% before rebounding “to a relatively modest 2.7% in 2024”, the Paris-based organisation said.Amid the effects of Russia’s war in Ukraine, “growth has lost momentum, high inflation is proving persistent, confidence has weakened, and uncertainty is high”, it said in its latest forecasts.OECD chief economist Alvaro Santos Pereira said the global economy was “reeling from the largest energy crisis since the 1970s”. The energy shock has pushed inflation up “to levels not seen for many decades” and is hitting economic growth around the world, he added.Inflation had already been on the rise before the conflict due to bottlenecks in the global supply chain after countries emerged from Covid lockdowns.But the OECD said that inflation was set to reach 8% in the fourth quarter of this year in the Group of 20 top economies, falling to 5.5% in 2023 and 2024.In a positive sign, several factors driving inflation have eased in the past year.Supply chains that were disrupted during the pandemic have been restored, and maritime freight costs which had spiked have fallen back.“Our central scenario is not a global recession but a significant growth slowdown for the world economy in 2023, as well as still high, albeit declining, inflation in many countries,” Santos Pereira said.Fighting inflation is a “top policy priority”, the OECD said, as soaring prices erode people’s purchasing power worldwide.It recommended tightening monetary policy in countries where price rises remained high and targeted support for families and firms to avoid exacerbating inflationary pressures, with energy costs “likely to remain high and volatile for some time”.“In these difficult and uncertain times, policy has once again a crucial role to play: further tightening of monetary policy is essential to fight inflation, and fiscal policy support should become more targeted and temporary,” the OECD said.The 38-member group called for an acceleration in investment in adopting and developing clean energy sources and technology to help diversify supply.Gas and oil deliveries from major producer Russia have been severely disrupted following its invasion of Ukraine.Western allies sanctioned its energy exports and Russia slashed supplies in the stand-off over the conflict.The upheaval has sent energy costs spiralling and fuelled decades-high inflation in major economies, leading central banks to hike interest rates in a bid to tame runaway prices.But the tighter monetary policies have stoked fears of hampered economic growth as borrowing becomes more expensive for businesses and individuals.The OECD warned that the northern hemisphere faced a “challenging” winter even though Europe has made efforts to replenish its natural gas reserves and curb demand.High gas prices or supply disruptions would bring “significantly weaker growth and higher inflation” in the world in the next two years, the OECD report said, emphasising that securing and diversifying supplies was “imperative”.

Japan has warned that global competition for liquefied natural gas is set to intensify over the next three years due to an underinvestment in supply.Long-term LNG contracts that start before 2026 are sold out, according to a survey of Japanese companies conducted by the trade ministry and released on Monday. These types of contracts are essential for buyers, as they offer stable pricing and reliable supply for many years.Countries around the world are scrambling to secure shipments of the power plant and heating fuel from major exporters like Qatar and the US, but there is little new supply coming online before 2026. Meanwhile, Europe is racing to replace Russian pipeline gas with LNG, further exacerbating the global shortage of fuel.This means importers will be forced to depend more on the volatile and expensive spot market, which is currently trading nearly three times higher than long-term contracts. Roughly 30% of all LNG deliveries were via the spot market last year, according to the International Group of Liquefied Natural Gas Importers.Japanese ministry officials and energy company executives met on the same day to discuss LNG procurement plans. Japan is poised to be the world’s biggest LNG importer this year, and the fuel is the nation’s top choice for power generation.A lack of investment in LNG export projects means that supply will be very tight for years, the trade ministry document said. If Russian pipeline gas to Europe is cut completely, the world could see a shortage of 7.6mn tonnes of LNG in January 2025, equivalent to one month’s worth of imports to Japan, according to the document.Japan has been taking steps to ramp up energy security by enabling the government to purchase LNG from the spot market in the event companies cannot.

China’s financial regulators have asked banks to stabilise lending to property developers and construction firms, the latest effort by policymakers to turn around the real-estate crisis and bolster economic growth.Authorities support the “reasonable” extension of existing real estate development loans and trust loans, according to a statement posted on the People’s Bank of China (PBoC)’s website after a Monday meeting with commercial banks. The gathering was jointly organised by the central bank and the banking regulator.The regulators reiterated that the “reasonable” demand of home buyers for mortgages will be met. A key financing support programme must be “used well” to help private property developer sell bonds, while legal protection and regulatory policy support for special loans aimed at ensuring housing project delivery will be improved to promote the stable and healthy development of the market, the statement said.The call is the latest in a slew of actions taken by the government to try to stop the more than year long slump in the real estate market that’s dragging down China’s economic growth and undermining local government income. Bond defaults by cash-strapped developers have sent shockwaves across the financial markets, while delays in property project delivery have driven homebuyers to stop mortgage payment in protest.In a possible sign of willingness to shift away from the previous tightening stance on the real estate sector, PBoC Governor Yi Gang emphasised yesterday that the industry is critical for the economy. “The property sector is linked to many upstream and downstream industries and its healthy operating cycle is significant for the economy,” Yi said at a financial forum in Beijing.Adding to the positive messages sent by the authorities, Yi Huiman, chairman of the China Securities Regulatory Commission, said at the same event that his agency will support property developers’ reasonable bond financing needs and support mergers and acquisitions in the sector.The details in yesterday’s meeting are similar to a 16-point package authorities rolled out earlier this month to help embattled developers, who have at least $292bn of onshore and offshore borrowing maturing through the end of next year. The push followed regulators’ orders for banks to dole out hundreds of billions of yuan in financing for developers in the remainder of this year.The remarks by Yi Gang are “a rare recognition of the property sector’s irreplaceable significance” by a top financial official, according to Lu Ting, chief China economist at Nomura in Hong Kong. The government’s recent supportive policies “demonstrate that Beijing is willing to reverse most of its financial tightening measures,” he added.At the meeting on Monday, the PBoC and the China Banking and Insurance Regulatory Commission also urged banks to expand medium- and long-term lending to help policy bank financing drive effective investment. Credit demand from manufacturers and service providers should be supported via the special relending loan programme for equipment upgrading, the regulators added.

Investors are slowly coming to terms with the sheer size of the UK government’s borrowing needs over the next few years and it doesn’t look pretty.Net gilt supply in the next fiscal year is likely headed for an all-time record, according to bank estimates. For Citigroup Inc strategists, the increase means the market needs to find twice as much new private cash to absorb it as it has over the last eight years combined.According to the Debt Management Office, the UK’s gross financing projection over the next four fiscal years will rise almost 50% to £1tn ($1.2tn), in what Barclays Plc is calling a “significant deterioration” of the medium-term picture.While the market initially cheered Chancellor of the Exchequer Jeremy Hunt’s package of tax increases and spending cuts on Thursday, the reality is that a staggering amount of bonds coming online may pressure the market.Concerns are already starting to mount over the challenge of finding buyers, particularly given the Bank of England (BoE) is now shrinking, rather than expanding its holdings.“This is an issuance challenge without precedent,” Jamie Searle, rates strategist at Citigroup, wrote in a note. “While we have been discussing the looming jump in gilt issuance for some time now, the market is yet to feel it directly. That all changes from now.”Ten-year bonds fell for a second day Friday. At one point, yields were up more than 20 basis points from a low on Thursday, the biggest jump since late-October. While they have fallen from over 4.50% since anxiety over the Liz Truss administration’s fiscal plan was at its peak, the supply outlook points to further weakness down the line. NatWest Markets sees 10-year yields hitting 4.3% by the second half of next year, more than a full percentage point north of where they were trading on Friday.“It’s hard to see an environment where the usual buyers of gilts - foreigners and LDI - feel compelled to increase demand to keep pace with supply,” said Imogen Bachra, NatWest’s head of UK rates strategy, referring to Liability Driven Investment strategies widely used by pension funds. “Natural buyers, at these yield levels, may be hard to find.” The DMO is set to issue fresh debt as soon as this week with an index-linked bond sale. While the deal may do well given there’s going to be less supply of these securities in the near term, strategists still see challenges in the years ahead.Adding to the headwinds are gilt sales by the Bank of England as it moves to reduce its bloated balance sheet. Its portfolio includes £835bn of gilts acquired over more than a decade of quantitative easing, as well as the £19bn it bought to stabilise the bond market after September’s meltdown.There may be reasons to be less bearish on the outlook for gilts if a UK recession and easing inflation pressures enable the BoE to slow or pause its hiking cycle, according to Rohan Khanna, rates strategist at UBS Group AG.“On the other hand, if we are wrong on monetary policy and rates have to keep rising through next year, then taking down this issuance would indeed be challenging,” Khanna said in emailed comments. The OBR cut its growth forecast to 1.4% in 2023 from 1.8% previously. It also sees inflation falling to 9.1% this year and 7.4% in 2023, though that’s way above the central bank’s 2% target.After years of borrowing at rock-bottom rates, described as a “false paradise” by an official with the Office for Budget Responsibility, the government now has to contend with steeper financing needs and rising interest rates. “The market has just recovered from the pension fund liquidity crisis and now it may be rolling into a debt funding crisis,” said Craig Inches, head of rates and cash at Royal London Asset Management. “Even with tax rises and spending cuts, the borrowing picture is even worse than before.”It’s another busy week for central bank policymakers with scheduled speeches including from European Central Bank Executive Board member Isabel Schnabel, who speaks at the Bank of England Watchers’ Conference.BoE’s Dave Ramsden and Catherine Mann will also be speaking at this event. The ECB publishes the accounts of its October policy meeting. Manufacturing and services PMI numbers for November from the euro area, Germany and the UK will offer investors clues on the state of economic sentiment as will German Ifo figures.Bond sales from Germany and Italy are set to total around €8bn ($8.3bn) according to Citigroup, which also estimates UK gilt offerings will amount to £5.5bn. That includes an inflation-linked note sale maturing in 2073 via banks.