Notes/Observations
- Tories still set for majority but lead narrows in upcoming UK election according to a key yougov poll
- FOMC expected to keep rates unchanged with focus on its rate forecast through 2022
Asia:
- Australia Dec Consumer Confidence Index: 95.1 v 97.0 prior
- Japan Q4 BSI Large All Industry Q/Q: -6.2 v +1.1 prior; Large Manufacturing Q/Q: -7.8 v -0.2 prior
- Bank of Japan (BOJ) said to expect sizable impact from PM Abe economic package. BOJ seen raising GDP forecast in January
- New Zealand Treasury issued its Half-Year Economic and Fiscal Update which cut its 2020 GDP growth forecast from 3.2% to 2.3%; announced NZ$12B extra spending on mostly infrastructure
- Asian Development Bank (ADB) cut China’s 2020 GDP growth forecast to below 6.0%; There has been prior press speculation that China might set its 2020 growth target at around 6.0% at the Central Economic Work Conference
Brexit:
- Yougov/Time MRP Poll: Tories on track for 28 seat majority in House of Commons (Conservatives: 339 seats; Labour: 231 seats) (Note: Less positive than the Nov 27th poll)
Americas:
- White House Trade Advisor Navarro: No indication that Dec tariffs won’t be put into place; China was trying to shape the narrative on the trade talks; it was up to China as to whether or not we get a deal
- US Sen Maj Leader McConnell (R-KY): Senate will not be finishing USMCA deal this year; USMCA will have to follow any impeachment trial
- White House insists it will ‘push hard’ for passage of USMCA deal by end of the year
- Mexico deputy foreign minister for North America Seade: Mexico Senate might need until January to get USMCA changes passed
Energy:
- Weekly API Oil Inventories: Crude: +1.4M v -3.7M v prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -0.15% at 404.74, FTSE -0.01% at 7,212.97, DAX +0.13% at 13,087.15, CAC-40 -0.13% at 5,840.31, IBEX-35 +0.19% at 9,339.00, FTSE MIB -0.04% at 23,113.53, SMI -0.35% at 10,353.50, S&P 500 Futures -0.02%]
- Market Focal Points/Key Themes: European indices mixed following indices in Asia mostly up and slightly lower US futures. Aurubis, Inditex and Stagecoach all rise on earnings results. Hornbach also up on earnings results released after market close yesterday and raised FY earnings forecasts. Safilo dives 17% after cutting FY20 revenue and profitability targets yesterday after market close. Savannah Petroleum jumps on trading update and new mining concession in Mozambique. Also reporting trading updates, AA shares higher and Sopheon tanking 11%. Credit Suisse and Credit Agricole both issued long term-targets that failed to impress the market as shares are trading slightly down. Telefonica Deutschland down on unveiling longer term guidance and dividend cut due to investment program. JD Sports down on shareholder Pentland Group selling 24M of company’s shares. Gensight rallies 31% on study update. Aramco IPO was priced at SAR 32/shr and opened up 10%. Notable earners today include American Eagle Outfitters, Children’s Place and United Natural Foods.
Equities
- Consumer discretionary: Inditex [ITX.ES] +2% (earnings), Hornbach [HBH.DE] +8% (raises outlook), JD Sports Fashion [JD.UK] -9% (stake sold)
- Financials: AA [AA.UK] +6% (trading update), Credit Suisse [CSGN.CH] -0.5% (investor update)
- Healthcare: Gensight [SIGHT.FR] +33% (study results)
- Industrials: Stagecoach [SGC.UK] +8% (earnings)
- Technology: Sopheon [SPE.UK] -11% (trading update)
- Telecom: Telefonica Deutschland [O2D.DE] -2% (investor day)
Speakers
- Italy PM Conte state in parliament that he sought a comprehensive Euro reform package; reiterated stance that govt opposed restrictions on sovereign debt holdings noting that risk weighting would be negative. EU trade talks with UK would be difficult; hoped UK elections would yield an orderly Brexit
- Czech Central Bank’s Holub (chief economist): Leaning towards voting for a rate increase at upcoming meeting. Board might view stronger CZK currency (Crown) as delivering policy tightening
- BOJ Gov Kuroda stated that positive signs were seen for global economy; outlook for 2020 looked relatively bright
- Thailand PM Prayuth Chan-Ocha called for ‘calm’ if the election commission sought the breakup of the Future Forward Party (opposition)
- S&P affirmed Thailand sovereign rating at BBB+; revised outlook from stable to positive
- North Korea might lift freeze related to ICBM tests
Currencies/Fixed Income
- Focus on key events in the coming sessions.
- USD was broadly steady against the major pair. FOMC was expected to keep rates unchanged later today with focus zooming in on its rate forecast through 2022
- GBP/USD was slightly softer in the session after a closely-watched YouGov opinion poll projected that the Conservatives would win a majority in Thursday’s election of 28 seats, less than half the 68 seats projected in the previous poll. Price action likely to consolidate at those levels until the early results
Economic Data
- (RO) Romania Nov CPI M/M: 0.2% v 0.2%; Y/Y: 3.8% v 3.7%e
- (TR) Turkey Oct Current Account Balance: $1.6B v $1.6Be
- (ZA) South Africa Nov CPI M/M: 0.1% v 0.1%e ; Y/Y: 3.6% v 3.6%e
- (ZA) South Africa Nov CPI Core M/M: 0.1% v 0.1%e; Y/Y: 3.9% v 3.8%e
- (SE) Sweden Nov CPI M/M: 0.1% v 0.0%e; Y/Y: 1.8% v 1.7%e; CPI Level: 336.36 v 336.26e
- (SE) Sweden Nov CPIF M/M: 0.1% v 0.0%e; Y/Y: 1.7% v 1.6%e
- (SE) Sweden Nov CPIF (ex-energy) M/M: 0.0% v -0.1%e; Y/Y: 1.8% v 1.7%e
- (IS) Iceland Central Bank (Sedibanki) left the 7-Day Term Deposit Rate at 3.00%
- (IS) Iceland Nov International Reserves (ISK): 813B v 838B prior
Fixed Income Issuance
- (DK) Denmark sold total DKK1.14B in 3-month and 6-month bills
- (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills
- (SE) Sweden sold SEK5.0B vs. SEK5.0B indicated in 6-month bills; Avg Yield: -0.3309% v -0.5022% prior; bid-to-cover: 1.91x v 3.41x prior
- (IT) Italy Debt Agency (Tesoro) sold €6.0B vs. €6.0B indicated in 12-month Bills; Avg Yield: -0.191% v -0.135% prior; Bid-to-cover: 1.50x v 1.58x prior
- (VN) Vietnam sold totalVND4.5T v VND4.5T in 10-year, 15-year and 20-year bonds
- (CH) Switzerland sold CHF196.6M in Jun 2039 bonds; Avg Yield: -0.273% v -0.050% prior
Looking Ahead
- 05:30 (UK) DMO to sell 0.125% Inflation-linked 2048 Gilts (UKTei)
- 06:00 (IL) Israel Nov Trade Balance: No est v -$2.2B prior
- 06:00 (ZA) South Africa Oct Retail Sales M/M: 0.2%e v 0.5% prior; Y/Y: 0.6%e v 0.2% prior
- 06:00 (PT) Portugal Nov Final CPI M/M: No est v -0.1% prelim; Y/Y: No est v 0.3% prelim
- 06:00 (PT) Portugal Nov Final CPI EU Harmonized M/M: No est v -0.7% prelim; Y/Y: No est v 0.2% prelim
- 06:00 (BR) Brazil Dec IGP-M Inflation (1st Preview): 0.6%e v 0.1% prior
- 06:00 (RU) Russia to sell 2027 OFZ bonds
- 07:00 (US) MBA Mortgage Applications w/e Dec 6th: No est v -9.2% prior
- 07:00 (BR) Brazil Oct Retail Sales M/M: 0.0%e v +0.7% prior; Y/Y: 3.7%e v 2.1% prior
- 07:00 (BR) Brazil Oct Broad Retail Sales M/M: 0.2%e v 0.9% prior; Y/Y: 4.0%e v 4.4% prior
- 07:00 (BR) Brazil Oct IBGE Services Sector Volume Y/Y: No est v 1.4% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:30 (US) Nov CPI M/M: 0.2%e v 0.4% prior; Y/Y: 2.0%e v 1.8% prior
- 08:30 (US) Nov CPI Ex-Food/Energy M/M: 0.2%e v 0.2% prior; Y/Y: 2.3%e v 2.3% prior
- 08:30 (US) Nov CPI NSA Index: 257.215e v 257.346prior; CPI Core Index SA: 265.460e v 265.011 prior
- 08:30 (US) Nov Real Avg Hourly Earning Y/Y: No est v 1.2% prior; Real Avg Weekly Earnings Y/Y: No est v 0.9% prior
- 08:30 (CA) Canada Q3 Capacity Utilization Rate: No est v 83.3% prior
- 10:30 (US) Weekly DOE Oil Inventories
- 14:00 (US) FOMC Interest Rate Decision: Expected to leave Interest Rates unchanged between 1.50-1.75% range; Leave Interest Rate on Excess Reserves (IOFR) unchanged at 1.55%
- 14:00 (US) Nov Monthly Budget Statement: -$205.1Be v -$134.5B prior
- 14:00 (AR) Argentina Oct Capacity Utilization: No est v 57.7% prior
- 14:30 (US) Fed Chair Powell holds post rate decision press conference
- 16:20 (BR) Brazil Central Bank (BCB) Interest Rate Decision: Expected to cut Selic Target Rate by 50bps to 4.50%
- 16:45 (NZ) New Zealand Oct Net Migration: No est v 3.4K prior
- 16:45 (NZ) New Zealand Nov Food Prices M/M: No est v -0.3% prior
- 18:50 (JP) Japan Oct Core Machine Orders M/M: +0.5%e v -2.9% prior; Y/Y: -1.9%e v +5.1% prior
- 19:00 (AU) Australia Dec Consumer Inflation Expectation Survey: No est v 4.0%
- 19:01 (UK) Nov RICS House Price Balance: -5%e v -5% prior
- 20:05 (NZ) New Zealand to sell NZD250M in 3.00% 2029
- 20:30 (JP) BOJ Dep Gov Amamiya
- 21:00 (JP) Japan Nov Tokyo Avg Office Vacancies: No est v 1.63 prior
- 23:00 (MY) Malaysia Oct Industrial Production Y/Y: 1.6%e v 1.7% prior (revised from 1.8); Manufacturing Sales Value Y/Y: No est v 2.9% prior
