DB Today -Global/Macro

Europe - Data Flash - Peter Sidorov

    The October euro area composite PMI came in slightly down from the Septemberlevel but at a still solid level (56.0Oct vs 55.9Oct flash, 56.7Sep). Manufacturingstrength continues to compensate for the weaker momentum in services. Inputand output price sub-indices are still maintaining their gradual climb upwards.

    Europe - Data Flash - Peter Sidorov

    The Sicily regional election on Sunday (5Nov) was the last electoral test beforenext spring national elections in Italy. The latest projections suggest the centrerightcandidate finishing just ahead of the candidate of the Five Star Movementwith the centre-left in a distant third place. Although this is largely in line withprevious opinion polls, the reaction of the centre-right to its success (if this isconfirmed in the official result) and of the centre-left to their weak performancewill be interesting to see. The coalition formation for the regional assembly inSicily might also give some colour on what dynamics we could see after thenational vote, expected in four months time.

    FX Strategy - FX Daily - Gautam Kalani

    In this report, we assess the longer-term correlations between EM currenciesand local assets, namely equities and debt. This enables us to identify which EMcurrencies are more linked to equities, which are more linked to debt, and whichhave limited or large exposure to both.We find that TRY, MXN, BRL and COP havea strong relationship with both local debt and equities, rallying when equities riseor bond yields fall (Figures 1, 2and 3). On the other hand, ILS, CZK, CNY and RONhave limited exposure to local asset movements – correlations between FX andequities/bonds are relatively small.