5 things to start your day

[View in browser]( [Bloomberg]( Supply-chains dominate earnings, it’s PMI day, and Biden backs away from hiking corporate taxes. More problems Renault SA became the latest automaker to announce further cutbacks in production due to the [worsening global chip shortage](. Problems with supply chains have dominated [this earnings season](, infecting even the U.S. tech sector as Snap Inc. warned that companies are [holding back on advertising]( for products they won’t be able to deliver. That lack of supply continues to feed into inflation expectations, with the breakeven rate for five-year Treasury Inflation-Protected Securities [hitting the highest level]( since the maturity was reintroduced in 2004. Growth This morning’s Purchasing Managers Index numbers for October from Europe were also dominated by those problems, with the supply squeeze causing the [steepest decline in French manufacturing]( since the pandemic lockdown. Business activity in Germany fell to an eight-month low. For the euro-area as a whole, momentum slowed with selling prices [accelerating at the fastest pace in two decades]( as firms passed costs on to customers. in the U.K. growth unexpectedly picked up, even as firms saw the [largest increase in costs on record](. PMI data for the U.S. economy is published at 9:45 a.m. Eastern Time. Tax walkback President Joe Biden said he doesn’t think there are enough Democratic votes to push through [tax increases]( as part of his stimulus proposal. A White House official said Biden was only referring to corporate taxes in his comments. With the contents of his signature package changing from day to day as [Democrats wrangle over the details](, the American public [don’t know what’s in the plan](. While the townhall last night was meant to help provide some clarity, it seems certain that more changes are coming before [agreement is reached on all the details](. There is only a week left to Senate Majority Leader Chuck Schumer’s deadline for a [deal on the package](. Markets mixed China Evergrande Group’s last minute payment of a bond coupon ahead of tomorrow’s deadline helped lift sentiment in Asia, while trading in Europe and the U.S. remains dominated by earnings.  Overnight the MSCI Asia Pacific Index gained 0.2% while Japan’s Topix index closed 0.1% higher. In Europe the Stoxx 600 Index had risen 0.6% by 5:50 a.m. S&P 500 futures [pointed to little change at the open](, the 10-year Treasury yield was at 1.687%, oil was [close to $83 a barrel]( and gold rose. Coming up... U.S. PMI data is at 9:45 a.m. The latest Baker Hughes rig count is expected to continue its [slow move higher](. San Francisco Fed President Mary Daly discusses the Fed and climate change risk at 10:00 a.m. while Federal Reserve Chair Jerome Powell takes part in a policy panel from 11:00 a.m. Honeywell International Inc., American Express Co. and HCA Healthcare Inc. are among the companies reporting results. What we've been reading Here's what caught our eye over the last 24 hours. - Think everything is expensive now? Wait until you [see what’s next](. - What the [economics of sawdust]( can tell us about supply shortages. - Evergrande is “[living dead](” despite coupon payment, analysts say. - Some strategists see [Bitcoin at $100,000]( by year end. - Top money maker at Deutsche Bank [reaps billions]( from Singapore. - Alec {NAME} fired prop gun that [killed photography director]( on “Rust” set. - More evidence for [new fundamental physics]( from CERN. And finally, here’s what Matt’s interested in this morning Move over Bitcoin and stand aside the S&P 500. Yes, you both hit [record highs](, but this week’s most consequential market action was arguably in fixed income as inflation fears ignited and turned up the heat on bond traders from London to New York to Sydney. The palpable worry is that pandemic-era supply-chain snarls, energy costs and reviving demand will keep price pressures at levels few would have thought possible in the modern era. In the U.S., for instance, market-implied expectations for inflation are at levels not seen in over a decade: the breakeven rate for five-year Treasury inflation-protected securities [surged]( to the highest since the maturity was reintroduced in 2004. Front-end curves have steepened as traders start to price in more aggressive interest-rate hikes. But the picture at the longer end is different, showing a flattening trend. This perhaps suggests concerns that policy tightening to tackle inflation will trigger an eventual growth slowdown. “Normally, when faced with this set of data and this set of central bank communication, I think you would generally price somewhat longer cycles -- and it’s just not happening,’’ UBS Group chief economist Arend Kapteyn said in an interview. “It’s a real puzzle.” Follow Bloomberg's Matt Burgess on Twitter [@ByMattBurgess]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](