• GLOBAL CAPITAL MARKETS OVERVIEW:

European stock markets fell to their lowest in three weeks on Tuesday, marking their biggest one-day decline in nearly two months. The outbreak's counter-attack has sparked concerns about tightening restrictions. Energy stocks and miner stocks rose due to commodity prices. And climb. The pan-European STOXX 600 index fell 1.1%, only oil and gas stocks and basic resources stocks rose. After the United States announced the release of emergency oil reserves, rising oil prices boosted energy stocks. Mining stocks also rose. Analysts pointed out that the improvement of Asian economic trends brought a boost. Technology stocks tumbled 3.4%, their biggest one-day percentage drop in two months. The prospect of rising interest rates undermined the attractiveness of high-growth sectors. On Monday, US President Biden nominated Powell for re-election as the chairman of the Federal Reserve Board (FED), which increased the US bets on interest rate hikes in 2022. Money market traders have now fully digested the European Central Bank’s expectation of a ten basis point rate hike in December 2022, and the probability of digestion on Monday is 50%. As central banks plan to cancel monetary support, concerns about the stagnation of the European recovery in the fourth wave of infections are increasing, which also pushes investors to withdraw from the stock market. The Euro STOXX 50 Volatility Index, Europe's main indicator of stock market anxiety, hit a nearly seven-week high. Travel stocks fell 1.8% after the United States advised citizens not to travel to Germany and Denmark because of the rising number of new cases in these two countries. An earlier survey revealed that the growth of corporate activity in the Eurozone unexpectedly accelerated in November. But another wave of infections and new restrictions, coupled with price pressures, seems to cause another blow to the expansion in December.The German DAX index closed down 1.11%. The French CAC-40 index closed down 0.85%, and the British FTSE index closed up 0.15%. In the first half of the trading session on Tuesday, November 23, the US stock market went into a slight minus. Tech stocks, which were the engine of growth last week, now look outsiders, while stocks in cyclical companies like energy and finance are doing the best.S&P 500 components showed mixed dynamics: 5 of the 11 main sectors of the index were growing. The best dynamics was shown by the energy sector (+ 2.32%), finance (+ 0.89%), and real estate (+ 0.71%). The main outsiders were technology companies (-0.74%), manufacturers of consumer goods (-0.73%), and telecoms (-0.67%) 51% of S&P 500 components rose in price, and 49% fell in price. The market continues to price expectations of more aggressive actions from the Fed than previously thought. The yield on US government bonds has been growing for the second day along the entire length of the curve, and futures on the federal funds rate (December 22) also take into account its growth slightly above 1% by the end of next year for the second day in a row. Atlanta Fed President Rafael Bostic said yesterday that the Fed might need to accelerate winding down its asset purchase program and start raising rates earlier. Earlier, the rhetoric was also toughened by other regulator representatives, including the vice-president of the Federal Reserve, Richard Clarida, who does not exclude that the question of the rate of curtailment of the QE program will be discussed at the December meeting. Anti-inflationary rhetoric is also heard in Europe: according to the head of the Bank of France and a member of the ECB Governing Council, François Villeroy de Halo, the European regulator is "seriously" thinking about ending the bond purchase program in March 2022. The Moscow Exchange closed 7.7% below the all-time high of 4,292.68 p.p. The topic of Russia's invasion of Ukraine remains the focus of the market and is the most popular in the media of any format. It is overgrown with other news, indicating a growing degree of tension. For example, Russian Defense Minister Sergei Shoigu said that the US Air Force's strategic bomber aviation has significantly increased activity near the Russian borders. At the same time, according to the head of the Ministry of Defense, Russia and China are increasing the intensity of joint combat training on the ground, at sea, and in the air. However, today, against such a news background, shares are growing. The situation has not fundamentally changed relative to Monday, but investors found Russian securities attractive for purchases, taking into account the realized drawdown. From an absolute peak in mid-October, the Moscow Exchange index today, at some point, decreased by 12%. In our opinion, there are three key questions: why is the topic of Russia's aggression against Ukraine actively promoted now? Who was selling Russian assets the day before? Does the realized drawdown indicate that it is now attractive to retrace long positions in Russian equities? The first question is partly rhetorical because, having answered it, it will not be possible to see the correct version on the last page of the answer book. However, it is worth considering that Russia and the United States are now preparing for talks between Vladimir Putin and Joe Biden, theoretically taking place online at the end of December. Let's consider the point of view of the President of the American University in Moscow, Eduard Lozansky, who believes that the summit is necessary for a direct military clash between the two countries. The return to the focus of an aggressor Russia with appetites for Ukraine looks like a qualitative attempt to score points before sitting down at the negotiating table. As for the scale of the decline realized the day before, when all 43 stocks in the Moscow Exchange index ended the day in the red, here, in our opinion, ETF sales contributed to the rate and scale of the decline. VanEck Vectors Russia, one of the main ETFs tracking the dynamics of Russian stocks, fell on Monday at its highest volume since the beginning of March 2020. Quotes from October highs declined by 15% and, for the first time in 12 months, tested the strength of the 200-day MA.ETF quotes of Blackrock - iShares MSCI Russia also fell to the 200-day average. They last traded below the 200-day MA a year ago. Here, the drawdown from the October high was already 17%.The third question: is the recovery on Tuesday a "bounce of a dead cat," or is it a full-fledged correction? Time will answer it correctly. We can note that today the share of the companies-components of the Moscow Exchange index, whose shares have traded above their average price over the last 200 days, amounted to 53%, which is the lowest value since June 2020. The share of those who traded above the average for 100 days dropped to 24% - at least since May 2020. Well, the share of stocks that exceeded their 50-day MA fell to 17.4% and reached their lowest level since April 2020. In our opinion, taken together, this at least unambiguously indicates that the drawdown in recent days has been excessive. The war did not start, but splinters were already flying across the financial market.Sberbank shares were among those falling below their 200-day MA, and they look quite attractive for a long-term investor's portfolio. Gazprom shares fell below their 100-day MA, and they also look attractive on the way to 300 rubles. taking into account the current situation in the energy market. The Shanghai Composite Index of China's stock market closed slightly up to 3,600 points on Tuesday. It has risen for three consecutive trading days and closed at a four-week high. Steel and coal stocks led the gains. The Shanghai Composite Index closed up 0.2% to 3,589.09 points. The Shanghai and Shenzhen 300 Index was nearly flat; the Shenzhen Growth Enterprise Market Index closed down 0.4%, and the Shanghai Science and Technology Innovation Board 50 component index closed down 0.3%. Huang Weikang, chairman and chief executive officer of Hong Kong Anli Holding Group, said that the Shanghai Composite Index has support at 3,500 points, but there is greater resistance at 3,600 points. Whether it is the Shanghai Stock Exchange Index or the Shenzhen Stock Exchange Component Index, it may not change a pattern of ups and downs.Last week, the Chinese Premier and the Central Bank’s latest monetary policy report on the domestic economy coincidentally deleted “stability while improving.” The Premier reiterated that “new downward pressure” appeared in the economy. Big". Combined with other recent policy statements, it indicates that changes in the policy balance may have begun. The China Securities Steel Index closed up 2.6%, and the China Securities Shenwan Coal Index closed up 1.5%, following the rise in futures. China's benchmark iron ore futures surged nearly 10% in early trading on Tuesday, hitting the daily limit, as steel companies will resume production after complying with government orders for strict control over the past few months. Coal and other steelmaking raw materials also rose. Huang Weikang also pointed out that investors seem to be beginning to think that the adjustment of resource stocks is close to sufficient and there is support. Still, the recovery of coal stocks may not be sustainable because there is always a central policy factor, and the profit growth of coal stocks may not be ideal. Photovoltaic stocks recovered, and the China Securities Photovoltaic Industry Index closed down 0.9%.

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- US: US President Joe Biden decided to extend the term of US Federal Reserve Chairman Jerome Powell for the next four years after the expiration of his contract in February 2022. Initial market expectations were associated with Lael Brainard, who is the only Democrat in the current composition of the Federal Reserve Board and stood out for her "Pigeon" looks. It was believed that under her leadership, the US Federal Reserve could pursue a softer monetary policy than it is now. However, the US president appointed Brainard as vice chairman of the US Federal Reserve, maintaining monetary policy continuity. As a result of their nomination, both candidates reported on the devastating impact of high inflation on the US economy. This could signal that bringing inflation under control is gradually becoming a priority for the Fed, and the current monetary policy is likely to change towards tightening.

- US: On Wednesday, November 24, the publication of the minutes of the November meeting of the US Federal Reserve is expected, from which the market can get signals about possible actions of the regulator regarding inflation control.

- EU: Inflation in the Eurozone will slow down, although it will last longer than expected, said ECB President Christine Lagarde. Therefore, the ECB should not tighten monetary policy as this could slow down economic recovery. However, she also hinted at the continuation of the bond buyback program next year. Inflation in the Eurozone reached 4.1% in October, driven by higher energy prices. Next year, consumer price growth is expected to remain above the ECB's 2% target due in part to supply chain problems. It is estimated that the ECB will decide on the future of the bond repurchase program at a meeting on December 16.

- EU: The preliminary value of the consolidated business activity indicator for the euro area unexpectedly rose to 55.8 points in November, compared with 54.2 points in October and the expected 53.2 points. In the UK, the composite indicator decreased to 57.7 points from 57.8 p.p. in October, although a decline to 54.1 p.p. was expected.

- JP: On Friday, the Japanese government announced an unprecedented 55.7 trillion yen ($ 487 billion) economic stimulus program that should boost the country's GDP by about 5.6%. The government has expressed the hope that the Bank of Japan will pursue appropriate monetary policy, closely monitoring the impact of the pandemic on the economy and market movements.

- RU: The data of the Central Bank of the Russian Federation showed a slight increase in gold in the gold and foreign exchange reserves of the bank as of November 1, 2021, to 74 million ounces or 2,301.7 tons.

 

• LOOKING AHEAD:

Today, investors will receive:

- USD: Flash Manufacturing PMI, Flash Services PMI, and Richmond Manufacturing Index.

- EUR: French Flash Services PMI, French Flash Manufacturing PMI, German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, and Flash Services PMI.

- GBP: Flash Manufacturing PMI, Flash Services PMI, and MPC Member Haskel Speak.

- AUD: Flash Manufacturing PMI, Flash Services PMI, and CB Leading Index m/m.

- CAD: Corporate Profits q/q and Gov Council Member Beaudry Speaks.

- CNY: CB Leading Index m/m.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- Zoom (ZM) shares fell 14%, with the company's quarterly report reflecting a slowdown in new user growth. Other significant beneficiaries of lockdowns, such as Peloton Interactive and Teladoc Health, have also been affected by this problem. The company's capitalization peaked in October 2020 at $ 160 billion and has since lost $ 100 billion.

- Abercrombie & Fitch (ANF) shed more than 15% despite releasing better-than-expected quarterly earnings per share report. Investors may have disliked the company's comments on logistics issues.
- Analog Devices (ADI) shares fell symbolically after the release of the quarterly report, which was in line with expectations. In addition, the company announced a good forecast.
- Best Buy (BBY) shares lost 16% after the quarterly report release, which turned out to be slightly worse than expected in terms of margins. Papers may close lower for the first week of the last eight.
- Chinese electric vehicle maker Xpeng (XPEV) shares up 11% after solid quarterly revenue and a strong outlook.
- Dollar Tree (DLTR) shares up 5% after the quarterly report.
- Dick's Sporting Goods (DKS) shares lost 8.5% despite raising their full-year earnings forecast. The company's quarterly report fell short of expectations.
- Bumble Inc. shares (BMBL) up 1.5%: Evercore ISI upgrades its rating to outperform.
- Micron Technology (MU) shares up 1.1%: Mizuho Securities upgrades its rating on shares to Buy from Neutral.
- Netflix (NFLX) shares traded at zero after news that the company had agreed to buy Scanline VFX. The amount of the deal was not disclosed, but Stifel analysts like it.

- Adjusted EBITDA of Polyus in the third quarter of 2021 decreased by 11% compared to the same period last year and amounted to $ 986 million. Compared to the previous quarter, the indicator increased by 10%. Adjusted net profit of Polyus in the third quarter amounted to $ 663 million. It decreased by 8% YoY and grew by 14% QoQ. Revenue decreased by 4% YoY but increased by 12% YoY to $ 1.4 billion. Total Group Cash Costs (TCC) for Q3 2021 increased by 9%, from $ 390 per ounce in Q2 to $ 427 per ounce. This is due to a seasonal increase in production from alluvial deposits with higher costs and continuing inflation in the price of consumables and fuel. TCC for nine months of 2021 amounted to $ 403 per ounce. The ratio of net debt (including derivatives) to adjusted EBITDA fell to 0.5x at the end of the reporting period, from 0.6x in the previous quarter. This happened against the background of a decrease in net debt.

- European indices were down on growing fears that quarantine measures against COVID-19 will only expand. The Stoxx 600 lost more than 1% amid weak tech stocks, which we can attribute to rising US Treasury yields. Shares of American tech companies reacted the same way the day before. However, the decline also affected travel and hospitality stocks. The United States issued recommendations to its citizens to refrain from traveling to Germany and Denmark due to the problematic infectious situation in these countries.

- In technical terms, the Moscow Exchange index broke through the support zone of 3800–3820 points but rather briskly returned above these values, so the breakout should be considered false for now. The Moscow Exchange index corrected nearly 10.5% from its highs, removing any overbought and opening the way for a recovery.

- The yield on US Treasury bonds continues to rise, which is reflected in the dynamics of futures on major indices. The yield on 10-year US Treasuries rose to 1.65%. Futures indicated possible losses in NASDAQ at the level of about -0.15%, with a slight increase in the Dow Jones. The selection of Jerome Powell for a second term by President Joe Biden sent a signal to the markets that the US administration is inclined to take a stricter approach to inflation. Because many representatives of the FRS began to talk about an imminent reduction in the purchase of bonds for the markets, this means a worsening situation with liquidity.

 

• STOCK MARKET SECTORS:

- High: Energy, Financials, Real Estate.

- Low: Information Technology, Communication Services, Consumer Discretionary.

 

• TOP CURRENCY & COMMODITIES MARKET DRIVERS:

- Precious Metals: Prices for precious metals showed negative dynamics under the influence of toughening of the rhetoric of the US Federal Reserve officials concerned about high inflation rates. Economic statistics released this week also showed that inflation is far from slowing down. The regulator may reconsider plans to cut asset buyback programs to contain growing inflationary risks and even move to an earlier start of interest rate hikes at some point. However, the major negative impact on the markets was the extension by the US President of the term of incumbent FRS Chairman Jerome Powell for the next four years. Since the COVID-19 pandemic, Jerome Powell has pursued a soft monetary policy, but investors always want more. Investors also watched the unfolding wave of COVID-19 in Europe and the resumption of lockdowns, which could support precious metals markets. The current week will be shortened due to Thanksgiving in the United States, market liquidity will decrease, and volatility may increase. On the back of high prices, demand for physical gold in Asian hubs remained subdued in the previous week. In India, dealers were selling gold at a $ 2.5 / oz discount to London prices as the festival period ended. Jewelers postponed buying gold in anticipation of a decline in prices. According to dealers, there is a great deferred demand due to quarantine restrictions and postponed weddings in 2020. The total volume of gold imports to India in 2021 is about 30% above the level of 2019 and 25% above the average long-term value, notes Metals Focus. In China, premiums for buying gold dropped to $ 1.0-4.0 / oz, while demand for gold remained weak on the back of high prices. China's demand growth is slower than in India, but import volumes increased in the 2nd half of 2021. In 2021, gold imports were 23% higher than in 2019 and 6% higher than the average long-term value. Gold demand will remain strong ahead of the lunar New Year in early 2022. The data of the Swiss customs showed that the export of gold from the country in October amounted to 142.7 tons (+ 21.6% m / m, +57.7 y / y). Exports to China rose to their highest since June 2018 at 58.5 tonnes. Exports to Hong Kong in October 2021 amounted to 16.7 tons against 53 kg a year ago. Exports to India amounted to 40.9 tons versus 24.3 tons a year ago. In Hong Kong, gold was offered at a premium of $ 1.0 / oz. In Singapore, premiums rose to $ 1.6 / oz on the back of strong bullion demand. In Japan, demand for gold remained low. Silver prices last week in correlation with the gold market fell from $ 25.20 / oz to $ 23.80 / oz. The price ratio between gold and silver was 75.51 (5-year average - 79.50). The platinum/silver ratio was 41.89 (the 5-year average was 57). The Silver Institute and Metals Focus report showed that the silver market excluding ETF demand in 2021 would become scarce for the first time since 2015. The metal deficit will be about 7 million ounces. Considering investment demand from ETFs, the deficit will be 157 Moz, which is 37.5% below the 2020 deficit. World silver consumption in 2021 is actively recovering: industrial consumption of metal will grow by 8% YoY, jewelry - by 18% YoY, silverware production - by 25% YoY, demand in photography - by 4% YoY. y, investment demand - by 32% YoY. Silver investments are growing in the major metal consumption markets in the US and India, fueled by high inflation and economic recovery. India imported 987 tonnes of silver bullion in October, the highest monthly volume since July 2019. World silver production in 2021 will recover by 6% y / y, and the largest growth will be shown by Mexico, Peru, Bolivia, which have suffered the most from lockdowns. Secondary metal supply will grow by 5% YoY amid high prices. Metals Focus expects an average annual silver price of $ 25.40 / oz in 2021. According to Definitive, the volume of funds managed by the largest ETFs investing in gold increased by 0.5% over the past week, while those investing in silver remained unchanged. Platinum prices last week fell from $ 1,070 / oz to $ 997 / oz in correlation with the gold market. The spread between gold and platinum was $ 793.5 / oz, between palladium and platinum - $ 942.5 / oz. The price of palladium fell from $ 2012 / oz to $ 1915 / oz during the week, driven by the fall in prices for other precious metals. According to ACEA, the registration of new cars in October 2021 in the EU countries decreased by 30.2% y / y to 665 thousand units due to rising prices and a shortage of semiconductors. The decline in Germany was 34.9% y / y, in Italy - 35.7% y / y, in Spain - 20.5% y / y, in France - 30.7% y / y. For ten months. In 2021, 8.2 million units were sold, up 2.2% over the same period in 2020. Falling new car registrations in the world's largest auto market put pressure on platinoid prices. Investments in the largest ETFs investing in platinum and palladium have remained unchanged over the past week, according to Refinitive.

- CURRENCY: The dollar was trading steadily. From the traditional risk currencies, we note the weakening of the New Zealand dollar by almost 0.4%. The weakness of the NZ currency can be attributed to the 8.1% drop in retail sales in the third quarter. Turkish President Recep Erdogan has once again devalued the lira, saying that a tight monetary policy will not slow inflation. As a result, the lira exchange rate fell by almost 9% to 12.49 per dollar. Since the beginning of the year, the Turkish currency has already lost 40% of its weight. The previous head of the Central Bank of the Russian Federation, who lost his job just over a month ago, called for a return to a standard policy that supports the lira exchange rate. "This irrational experiment must be stopped immediately," Sami Tumen wrote on his Twitter account.

 

• CHART OF THE DAY:

At the beginning of this week, Gold prices fell from $ 1870 / oz to $ 1800 / oz, having passed it down. The strengthening of the US dollar and the growth of treasury bond yields against the background of the expected acceleration of the Fed's monetary policy tightening harmed the metal price. At the same time, it is unlikely that a sharp shift in the regulator's behavior can be expected; instead, a slight acceleration in the reduction rate of asset buyback programs to curb inflation is likely. The next wave of COVID-19 in Europe may boost demand for gold. Strong demand for metal in Asia will also support the market in early 2022. A possible shift inaccurate rates towards growth is also not expected yet, which will keep prices in the medium term. Additional intrigue remains in the ongoing change in the composition of the Board of Governors of the US Federal Reserve, where three more candidates are to be changed. Risks of falling gold prices remain in a possible accelerated reduction in the US Federal Reserve's asset repurchase programs and a sudden rise in long-term bond yields. Strong support levels look like $ 1790-1770 / ounce, and resistance levels are $ 1850-1870 / ounce.•  SPDR Gold Trust ETF (GLD)  - D1, Resistance around ~ 171.60,  Support (target zone) around  ~ 165.20 & 162.78

• GLOBAL CAPITAL MARKETS OVERVIEW: European stock markets fell to their lowest in three weeks on Tuesday, marking their biggest one-day decline in nearly two months. The outbreak's counter-attack has sparked concerns about tightening restrictions. Energy stocks and miner stocks rose due to commodity prices. And climb. The pan-European STOXX 600 index fell 1.1%, only oil and gas stocks and basic resources stocks rose. After the United States announced the release of emergency oil reserves, rising oil prices boosted energy stocks. Mining stocks also rose. Analysts pointed out that the improvement of Asian economic trends brought a boost. Technology stocks tumbled 3.4%, their biggest one-day percentage drop in two months. The prospect of rising interest rates undermined the attractiveness of high-growth sectors. On Monday, US President Biden nominated Powell for re-election as the chairman of the Federal Reserve Board (FED), which increased the US bets on interest rate hikes in 2022. Money market traders have now fully digested the European Central Bank’s expectation of a ten basis point rate hike in December 2022, and the probability of digestion on Monday is 50%. As central banks plan to cancel monetary support, concerns about the stagnation of the European recovery in the fourth wave of infections are increasing, which also pushes investors to withdraw from the stock market. The Euro STOXX 50 Volatility Index, Europe's main indicator of stock market anxiety, hit a nearly seven-week high. Travel stocks fell 1.8% after the United States advised citizens not to travel to Germany and Denmark because of the rising number of new cases in these two countries. An earlier survey revealed that the growth of corporate activity in the Eurozone unexpectedly accelerated in November. But another wave of infections and new restrictions, coupled with price pressures, seems to cause another blow to the expansion in December.The German DAX index closed down 1.11%. The French CAC-40 index closed down 0.85%, and the British FTSE index closed up 0.15%. In the first half of the trading session on Tuesday, November 23, the US stock market went into a slight minus. Tech stocks, which were the engine of growth last week, now look outsiders, while stocks in cyclical companies like energy and finance are doing the best.S&P 500 components showed mixed dynamics: 5 of the 11 main sectors of the index were growing. The best dynamics was shown by the energy sector (+ 2.32%), finance (+ 0.89%), and real estate (+ 0.71%). The main outsiders were technology companies (-0.74%), manufacturers of consumer goods (-0.73%), and telecoms (-0.67%) 51% of S&P 500 components rose in price, and 49% fell in price. The market continues to price expectations of more aggressive actions from the Fed than previously thought. The yield on US government bonds has been growing for the second day along the entire length of the curve, and futures on the federal funds rate (December 22) also take into account its growth slightly above 1% by the end of next year for the second day in a row. Atlanta Fed President Rafael Bostic said yesterday that the Fed might need to accelerate winding down its asset purchase program and start raising rates earlier. Earlier, the rhetoric was also toughened by other regulator representatives, including the vice-president of the Federal Reserve, Richard Clarida, who does not exclude that the question of the rate of curtailment of the QE program will be discussed at the December meeting. Anti-inflationary rhetoric is also heard in Europe: according to the head of the Bank of France and a member of the ECB Governing Council, François Villeroy de Halo, the European regulator is "seriously" thinking about ending the bond purchase program in March 2022. The Moscow Exchange closed 7.7% below the all-time high of 4,292.68 p.p. The topic of Russia's invasion of Ukraine remains the focus of the market and is the most popular in the media of any format. It is overgrown with other news, indicating a growing degree of tension. For example, Russian Defense Minister Sergei Shoigu said that the US Air Force's strategic bomber aviation has significantly increased activity near the Russian borders. At the same time, according to the head of the Ministry of Defense, Russia and China are increasing the intensity of joint combat training on the ground, at sea, and in the air. However, today, against such a news background, shares are growing. The situation has not fundamentally changed relative to Monday, but investors found Russian securities attractive for purchases, taking into account the realized drawdown. From an absolute peak in mid-October, the Moscow Exchange index today, at some point, decreased by 12%. In our opinion, there are three key questions: why is the topic of Russia's aggression against Ukraine actively promoted now? Who was selling Russian assets the day before? Does the realized drawdown indicate that it is now attractive to retrace long positions in Russian equities? The first question is partly rhetorical because, having answered it, it will not be possible to see the correct version on the last page of the answer book. However, it is worth considering that Russia and the United States are now preparing for talks between Vladimir Putin and Joe Biden, theoretically taking place online at the end of December. Let's consider the point of view of the President of the American University in Moscow, Eduard Lozansky, who believes that the summit is necessary for a direct military clash between the two countries. The return to the focus of an aggressor Russia with appetites for Ukraine looks like a qualitative attempt to score points before sitting down at the negotiating table. As for the scale of the decline realized the day before, when all 43 stocks in the Moscow Exchange index ended the day in the red, here, in our opinion, ETF sales contributed to the rate and scale of the decline. VanEck Vectors Russia, one of the main ETFs tracking the dynamics of Russian stocks, fell on Monday at its highest volume since the beginning of March 2020. Quotes from October highs declined by 15% and, for the first time in 12 months, tested the strength of the 200-day MA.ETF quotes of Blackrock - iShares MSCI Russia also fell to the 200-day average. They last traded below the 200-day MA a year ago. Here, the drawdown from the October high was already 17%.The third question: is the recovery on Tuesday a "bounce of a dead cat," or is it a full-fledged correction? Time will answer it correctly. We can note that today the share of the companies-components of the Moscow Exchange index, whose shares have traded above their average price over the last 200 days, amounted to 53%, which is the lowest value since June 2020. The share of those who traded above the average for 100 days dropped to 24% - at least since May 2020. Well, the share of stocks that exceeded their 50-day MA fell to 17.4% and reached their lowest level since April 2020. In our opinion, taken together, this at least unambiguously indicates that the drawdown in recent days has been excessive. The war did not start, but splinters were already flying across the financial market.Sberbank shares were among those falling below their 200-day MA, and they look quite attractive for a long-term investor's portfolio. Gazprom shares fell below their 100-day MA, and they also look attractive on the way to 300 rubles. taking into account the current situation in the energy market. The Shanghai Composite Index of China's stock market closed slightly up to 3,600 points on Tuesday. It has risen for three consecutive trading days and closed at a four-week high. Steel and coal stocks led the gains. The Shanghai Composite Index closed up 0.2% to 3,589.09 points. The Shanghai and Shenzhen 300 Index was nearly flat; the Shenzhen Growth Enterprise Market Index closed down 0.4%, and the Shanghai Science and Technology Innovation Board 50 component index closed down 0.3%. Huang Weikang, chairman and chief executive officer of Hong Kong Anli Holding Group, said that the Shanghai Composite Index has support at 3,500 points, but there is greater resistance at 3,600 points. Whether it is the Shanghai Stock Exchange Index or the Shenzhen Stock Exchange Component Index, it may not change a pattern of ups and downs.Last week, the Chinese Premier and the Central Bank’s latest monetary policy report on the domestic economy coincidentally deleted “stability while improving.” The Premier reiterated that “new downward pressure” appeared in the economy. Big". Combined with other recent policy statements, it indicates that changes in the policy balance may have begun. The China Securities Steel Index closed up 2.6%, and the China Securities Shenwan Coal Index closed up 1.5%, following the rise in futures. China's benchmark iron ore futures surged nearly 10% in early trading on Tuesday, hitting the daily limit, as steel companies will resume production after complying with government orders for strict control over the past few months. Coal and other steelmaking raw materials also rose. Huang Weikang also pointed out that investors seem to be beginning to think that the adjustment of resource stocks is close to sufficient and there is support. Still, the recovery of coal stocks may not be sustainable because there is always a central policy factor, and the profit growth of coal stocks may not be ideal. Photovoltaic stocks recovered, and the China Securities Photovoltaic Industry Index closed down 0.9%.   • REVIEWING ECONOMIC DATA: Looking at the last economic data: - US: US President Joe Biden decided to extend the term of US Federal Reserve Chairman Jerome Powell for the next four years after the expiration of his contract in February 2022. Initial market expectations were associated with Lael Brainard, who is the only Democrat in the current composition of the Federal Reserve Board and stood out for her "Pigeon" looks. It was believed that under her leadership, the US Federal Reserve could pursue a softer monetary policy than it is now. However, the US president appointed Brainard as vice chairman of the US Federal Reserve, maintaining monetary policy continuity. As a result of their nomination, both candidates reported on the devastating impact of high inflation on the US economy. This could signal that bringing inflation under control is gradually becoming a priority for the Fed, and the current monetary policy is likely to change towards tightening. - US: On Wednesday, November 24, the publication of the minutes of the November meeting of the US Federal Reserve is expected, from which the market can get signals about possible actions of the regulator regarding inflation control. - EU: Inflation in the Eurozone will slow down, although it will last longer than expected, said ECB President Christine Lagarde. Therefore, the ECB should not tighten monetary policy as this could slow down economic recovery. However, she also hinted at the continuation of the bond buyback program next year. Inflation in the Eurozone reached 4.1% in October, driven by higher energy prices. Next year, consumer price growth is expected to remain above the ECB's 2% target due in part to supply chain problems. It is estimated that the ECB will decide on the future of the bond repurchase program at a meeting on December 16. - EU: The preliminary value of the consolidated business activity indicator for the euro area unexpectedly rose to 55.8 points in November, compared with 54.2 points in October and the expected 53.2 points. In the UK, the composite indicator decreased to 57.7 points from 57.8 p.p. in October, although a decline to 54.1 p.p. was expected. - JP: On Friday, the Japanese government announced an unprecedented 55.7 trillion yen ($ 487 billion) economic stimulus program that should boost the country's GDP by about 5.6%. The government has expressed the hope that the Bank of Japan will pursue appropriate monetary policy, closely monitoring the impact of the pandemic on the economy and market movements. - RU: The data of the Central Bank of the Russian Federation showed a slight increase in gold in the gold and foreign exchange reserves of the bank as of November 1, 2021, to 74 million ounces or 2,301.7 tons.   • LOOKING AHEAD: Today, investors will receive: - USD: Flash Manufacturing PMI, Flash Services PMI, and Richmond Manufacturing Index. - EUR: French Flash Services PMI, French Flash Manufacturing PMI, German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, and Flash Services PMI. - GBP: Flash Manufacturing PMI, Flash Services PMI, and MPC Member Haskel Speak. - AUD: Flash Manufacturing PMI, Flash Services PMI, and CB Leading Index m/m. - CAD: Corporate Profits q/q and Gov Council Member Beaudry Speaks. - CNY: CB Leading Index m/m.   • KEY EQUITY & BOND MARKET DRIVERS: - Zoom (ZM) shares fell 14%, with the company's quarterly report reflecting a slowdown in new user growth. Other significant beneficiaries of lockdowns, such as Peloton Interactive and Teladoc Health, have also been affected by this problem. The company's capitalization peaked in October 2020 at $ 160 billion and has since lost $ 100 billion. - Abercrombie & Fitch (ANF) shed more than 15% despite releasing better-than-expected quarterly earnings per share report. Investors may have disliked the company's comments on logistics issues. - Analog Devices (ADI) shares fell symbolically after the release of the quarterly report, which was in line with expectations. In addition, the company announced a good forecast. - Best Buy (BBY) shares lost 16% after the quarterly report release, which turned out to be slightly worse than expected in terms of margins. Papers may close lower for the first week of the last eight. - Chinese electric vehicle maker Xpeng (XPEV) shares up 11% after solid quarterly revenue and a strong outlook. - Dollar Tree (DLTR) shares up 5% after the quarterly report. - Dick's Sporting Goods (DKS) shares lost 8.5% despite raising their full-year earnings forecast. The company's quarterly report fell short of expectations. - Bumble Inc. shares (BMBL) up 1.5%: Evercore ISI upgrades its rating to outperform. - Micron Technology (MU) shares up 1.1%: Mizuho Securities upgrades its rating on shares to Buy from Neutral. - Netflix (NFLX) shares traded at zero after news that the company had agreed to buy Scanline VFX. The amount of the deal was not disclosed, but Stifel analysts like it. - Adjusted EBITDA of Polyus in the third quarter of 2021 decreased by 11% compared to the same period last year and amounted to $ 986 million. Compared to the previous quarter, the indicator increased by 10%. Adjusted net profit of Polyus in the third quarter amounted to $ 663 million. It decreased by 8% YoY and grew by 14% QoQ. Revenue decreased by 4% YoY but increased by 12% YoY to $ 1.4 billion. Total Group Cash Costs (TCC) for Q3 2021 increased by 9%, from $ 390 per ounce in Q2 to $ 427 per ounce. This is due to a seasonal increase in production from alluvial deposits with higher costs and continuing inflation in the price of consumables and fuel. TCC for nine months of 2021 amounted to $ 403 per ounce. The ratio of net debt (including derivatives) to adjusted EBITDA fell to 0.5x at the end of the reporting period, from 0.6x in the previous quarter. This happened against the background of a decrease in net debt. - European indices were down on growing fears that quarantine measures against COVID-19 will only expand. The Stoxx 600 lost more than 1% amid weak tech stocks, which we can attribute to rising US Treasury yields. Shares of American tech companies reacted the same way the day before. However, the decline also affected travel and hospitality stocks. The United States issued recommendations to its citizens to refrain from traveling to Germany and Denmark due to the problematic infectious situation in these countries. - In technical terms, the Moscow Exchange index broke through the support zone of 3800–3820 points but rather briskly returned above these values, so the breakout should be considered false for now. The Moscow Exchange index corrected nearly 10.5% from its highs, removing any overbought and opening the way for a recovery. - The yield on US Treasury bonds continues to rise, which is reflected in the dynamics of futures on major indices. The yield on 10-year US Treasuries rose to 1.65%. Futures indicated possible losses in NASDAQ at the level of about -0.15%, with a slight increase in the Dow Jones. The selection of Jerome Powell for a second term by President Joe Biden sent a signal to the markets that the US administration is inclined to take a stricter approach to inflation. Because many representatives of the FRS began to talk about an imminent reduction in the purchase of bonds for the markets, this means a worsening situation with liquidity.   • STOCK MARKET SECTORS: - High: Energy, Financials, Real Estate. - Low: Information Technology, Communication Services, Consumer Discretionary.   • TOP CURRENCY & COMMODITIES MARKET DRIVERS: - Precious Metals: Prices for precious metals showed negative dynamics under the influence of toughening of the rhetoric of the US Federal Reserve officials concerned about high inflation rates. Economic statistics released this week also showed that inflation is far from slowing down. The regulator may reconsider plans to cut asset buyback programs to contain growing inflationary risks and even move to an earlier start of interest rate hikes at some point. However, the major negative impact on the markets was the extension by the US President of the term of incumbent FRS Chairman Jerome Powell for the next four years. Since the COVID-19 pandemic, Jerome Powell has pursued a soft monetary policy, but investors always want more. Investors also watched the unfolding wave of COVID-19 in Europe and the resumption of lockdowns, which could support precious metals markets. The current week will be shortened due to Thanksgiving in the United States, market liquidity will decrease, and volatility may increase. On the back of high prices, demand for physical gold in Asian hubs remained subdued in the previous week. In India, dealers were selling gold at a $ 2.5 / oz discount to London prices as the festival period ended. Jewelers postponed buying gold in anticipation of a decline in prices. According to dealers, there is a great deferred demand due to quarantine restrictions and postponed weddings in 2020. The total volume of gold imports to India in 2021 is about 30% above the level of 2019 and 25% above the average long-term value, notes Metals Focus. In China, premiums for buying gold dropped to $ 1.0-4.0 / oz, while demand for gold remained weak on the back of high prices. China's demand growth is slower than in India, but import volumes increased in the 2nd half of 2021. In 2021, gold imports were 23% higher than in 2019 and 6% higher than the average long-term value. Gold demand will remain strong ahead of the lunar New Year in early 2022. The data of the Swiss customs showed that the export of gold from the country in October amounted to 142.7 tons (+ 21.6% m / m, +57.7 y / y). Exports to China rose to their highest since June 2018 at 58.5 tonnes. Exports to Hong Kong in October 2021 amounted to 16.7 tons against 53 kg a year ago. Exports to India amounted to 40.9 tons versus 24.3 tons a year ago. In Hong Kong, gold was offered at a premium of $ 1.0 / oz. In Singapore, premiums rose to $ 1.6 / oz on the back of strong bullion demand. In Japan, demand for gold remained low. Silver prices last week in correlation with the gold market fell from $ 25.20 / oz to $ 23.80 / oz. The price ratio between gold and silver was 75.51 (5-year average - 79.50). The platinum/silver ratio was 41.89 (the 5-year average was 57). The Silver Institute and Metals Focus report showed that the silver market excluding ETF demand in 2021 would become scarce for the first time since 2015. The metal deficit will be about 7 million ounces. Considering investment demand from ETFs, the deficit will be 157 Moz, which is 37.5% below the 2020 deficit. World silver consumption in 2021 is actively recovering: industrial consumption of metal will grow by 8% YoY, jewelry - by 18% YoY, silverware production - by 25% YoY, demand in photography - by 4% YoY. y, investment demand - by 32% YoY. Silver investments are growing in the major metal consumption markets in the US and India, fueled by high inflation and economic recovery. India imported 987 tonnes of silver bullion in October, the highest monthly volume since July 2019. World silver production in 2021 will recover by 6% y / y, and the largest growth will be shown by Mexico, Peru, Bolivia, which have suffered the most from lockdowns. Secondary metal supply will grow by 5% YoY amid high prices. Metals Focus expects an average annual silver price of $ 25.40 / oz in 2021. According to Definitive, the volume of funds managed by the largest ETFs investing in gold increased by 0.5% over the past week, while those investing in silver remained unchanged. Platinum prices last week fell from $ 1,070 / oz to $ 997 / oz in correlation with the gold market. The spread between gold and platinum was $ 793.5 / oz, between palladium and platinum - $ 942.5 / oz. The price of palladium fell from $ 2012 / oz to $ 1915 / oz during the week, driven by the fall in prices for other precious metals. According to ACEA, the registration of new cars in October 2021 in the EU countries decreased by 30.2% y / y to 665 thousand units due to rising prices and a shortage of semiconductors. The decline in Germany was 34.9% y / y, in Italy - 35.7% y / y, in Spain - 20.5% y / y, in France - 30.7% y / y. For ten months. In 2021, 8.2 million units were sold, up 2.2% over the same period in 2020. Falling new car registrations in the world's largest auto market put pressure on platinoid prices. Investments in the largest ETFs investing in platinum and palladium have remained unchanged over the past week, according to Refinitive. - CURRENCY: The dollar was trading steadily. From the traditional risk currencies, we note the weakening of the New Zealand dollar by almost 0.4%. The weakness of the NZ currency can be attributed to the 8.1% drop in retail sales in the third quarter. Turkish President Recep Erdogan has once again devalued the lira, saying that a tight monetary policy will not slow inflation. As a result, the lira exchange rate fell by almost 9% to 12.49 per dollar. Since the beginning of the year, the Turkish currency has already lost 40% of its weight. The previous head of the Central Bank of the Russian Federation, who lost his job just over a month ago, called for a return to a standard policy that supports the lira exchange rate. "This irrational experiment must be stopped immediately," Sami Tumen wrote on his Twitter account.   • CHART OF THE DAY: At the beginning of this week, Gold prices fell from $ 1870 / oz to $ 1800 / oz, having passed it down. The strengthening of the US dollar and the growth of treasury bond yields against the background of the expected acceleration of the Fed's monetary policy tightening harmed the metal price. At the same time, it is unlikely that a sharp shift in the regulator's behavior can be expected; instead, a slight acceleration in the reduction rate of asset buyback programs to curb inflation is likely. The next wave of COVID-19 in Europe may boost demand for gold. Strong demand for metal in Asia will also support the market in early 2022. A possible shift inaccurate rates towards growth is also not expected yet, which will keep prices in the medium term. Additional intrigue remains in the ongoing change in the composition of the Board of Governors of the US Federal Reserve, where three more candidates are to be changed. Risks of falling gold prices remain in a possible accelerated reduction in the US Federal Reserve's asset repurchase programs and a sudden rise in long-term bond yields. Strong support levels look like $ 1790-1770 / ounce, and resistance levels are $ 1850-1870 / ounce.•  SPDR Gold Trust ETF (GLD)  - D1, Resistance around ~ 171.60,  Support (target zone) around  ~ 165.20 & 162.78