UK Q3 GDP Revised Higher, PM Johnson Brexit Bill Expected To Be Backed By Parliament

Notes/Observations

• UK Q3 GDP revised higher aided by services sector
• UK Parliament expected to back PM Johnson’s Withdrawal bill today
• UK Govt confirmed that Andrew Bailey will be the next Bank of England Governor (as speculated); to begin an 8-year term in March

Asia:

• Japan Nov National CPI Y/Y: 0.5% v 0.5%e v 0.2% prior; CPI Ex-fresh food (core) Y/Y: 0.5% v 0.5%e; CPI Ex Fresh Food, Energy (core-core) Y/Y: 0.8% v 0.7%e (fastest annual rise since April 2016)
• 18:50 (JP) BOJ 3Q Money Flow
• Japan cabinet approved record $939 billion budget spending plan for fiscal year 2020/21

Europe/Mideast:

• Andrew Bailey said to have been selected to be next Bank of England governor-

Brexit:

• PM Johnson’s EU Withdrawal Agreement Bill to be voted on in Parliament later on Friday (Note: bans the govt from extending the transition period)

Americas:

• US House: voted 385-41 to pass USMCA ; the Bill moves onto Senate for a vote in Jan
• Senate sent President Trump two spending bills that would provide $1.4 trillion to fund the U.S. government through September and avoid a shutdown on Saturday. The White House said Trump will sign the bills, which already passed the House

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.27% at 415.84, FTSE -0.05% at 7,569.85, DAX +0.14% at 13,230.42, CAC-40 +0.10% at 5,978.12, IBEX-35 -0.03% at 9,614.00, FTSE MIB +0.62% at 23,856.53, SMI +0.49% at 10,626.50, S&P 500 Futures -0.06%]
• Market Focal Points/Key Themes: European indices in the green following mixed Asian Indices and slightly lower US futures. Royal Dutch Shell slightly down following Q4 trading update. Warpaint tanks 16% on FY19 profit warning. Showroomprive dives 17% on lower H2 revenue outlook. Fiat Chrysler up slightly after selling its Brazilian cast iron components business. Shares in Nexi up after acquiring payment unit from Intesa. Opus trading higher as the board has decided to recommend Ograi’s raised offer of SEK8.50/shr. Astra Zeneca up slightly on divestment of rights to Arimidex and Casodex in Europe. Poxel jumps 12% on positive study update results. Renewi rallying 24% after ban on the use of thermally treated soil (TGG) in the Netherlands has been lifted. NMC Health down on FT article that purports that the company held discussions to raise €200M in off-balance sheet debt to fund growth. Eagle Eye Solutions up on signing a new contract with its first US customer. Notable earners today include Carnival, Lamb Weston and Cal-Maine Foods.

Equities

• Consumer discretionary: Opus Group [OPUS.SE] +6% (comments on raised offer), SRP Groupe [SRP.FR] —17% (H2 outlook), Warpaint London [W7L.UK] -16% (trading update), Just Eat [JE.UK] -2% (shareholders support offer)
• Healthcare: Poxel [POXEL.FR] +12% (study results), NMC Health [NMC.UK] -6% (comments on short sell report)
• Technology: Eagle Eye Solutions [EYE.UK] +7% (contract)

Speakers

• UK Govt confirmed that Andrew Bailey to be the next Bank of England Governor (as speculated). To serve an 8-year term beginning in March 2020 (BOE Carney term as BOE chief was extended until March 2020 (from Jan))
• UK PM Johnson stated that Parliament must not allow any more Brexit delay. Ruling out extension of transition strengthened UK govt hand
• Japan Cabinet Office (Govt) Monthly Economic Report for Dec cuts overall economic assessment (4th cut in 2019). Domestic economy was recovering at a moderate pace, while weakness, mainly among manufacturers, was increasing further
• Japan PM Abe: Wanted to do all that is possible for stability in Middle East; concerned about rising tensions (comments after meeting Iran President Rouhani)
• Fitch affirmed India sovereign rating at BBB- (lowest level of investment grade); outlook stable
• China President Xi said to not attend the upcoming January World Economic Forum in Davos, Switzerland; China still planned to send Vice Premier Liu He to Washington to sign the phase-one deal in early Jan

Currencies/Fixed Income

• FX markets were quiet and confined to tight ranges as the week ended despite a steady flow of economic releases.
• EUR/USD steady at 1.1120 area; USD/JPY continued to stay below the pivotal resistance of 109.70
• GBP/USD tried to rebound from its soft tone over the course of the week. Pair holding above the 1.30 level and experiencing only a modest rebound after losing 500+ pips w/w (worst weekly performance since 2017). Markets have a cautious tone as UK Parliament debates PM Johnson’s EU withdrawal agreement bill and were expected to vote on the bill later today (Friday)

Economic Data

• (NL) Netherlands Dec Consumer Confidence Index: -2 v -2 prior
• (NL) Netherlands Oct Consumer Spending Y/Y: 1.7 v 1.9% prior
• (FI) Finland Nov Unemployment Rate: 5.9 v 6.2% prior
• (DE) Germany Jan GfK Consumer Confidence: 9.6 v 9.8e
• (DK) Denmark Q3 Final GDP Q/Q: 0.4% v 0.3% prelim; Y/Y: 2.3% v 2.2% prelim
• (DK) Denmark Dec Consumer Confidence Indicator: 2.5 v 1.4 prior
• (DK) Denmark Nov Retail Sales M/M: +0.3 v -0.1% prior; Y/Y: -0.1 v +1.2% prior
• (TR) Turkey Dec Consumer Confidence: 58.8 v 59.9 prior
• (HU) Hungary Q3 Current Account: -€0.2B v -€0.1B prior
• (CN) Weekly Shanghai copper inventories (SHFE): 129.1K v 117.3K tons prior
• (FR) France Nov Consumer Spending M/M: 0.1% v 0.2%e; Y/Y: 0.2% v 0.4%e
• (FR) France Nov PPI M/M: +0.1% v -0.1% prior; Y/Y: +1.1% v -1.4% prior
• (RU) Russia Narrow Money Supply w/e Dec 13th (RUB): 10.77T v 10.62T prior
• (TW) Taiwan Nov Export Orders Y/Y: -6.6% v -0.9%e
• (ES) Spain Oct Total Mortgage Lending Y/Y: -0.5% v -16.5% prior; House Mortgage Approvals Y/Y: -2.1% v -31.6% prior
• (SE) Sweden Nov PPI M/M: 0.3% v 0.4% prior; Y/Y: 1.2% v 0.9% prior
• (SE) Sweden Oct Non-Manual Workers’ Wages Y/Y: 2.7% v 2.6% prior
• (HK) Hong Kong Nov CPI Composite Y/Y: 3.0% v 3.1%e
• (HK) Hong Kong Q3 Current Account Balance: $74.5B v $35.0B prior; Overall Balance of Payments (BOP): -$59.9B v +$28.3B prior
• (EU) Euro Zone Oct Current Account Balance: €32.4B v €28.2B prior
• (IT) Italy Dec Consumer Confidence Index: 110.8 v 109.0e; Manufacturing Confidence: 99.1 v 99.1e; Economic Sentiment: 100.7 v 99.2 prior
• (PL) Poland Nov Retail Sales M/M: -2.3% v -3.1%e; Y/Y: 5.9% v 4.8%e; Real Retail Sales Y/Y: 5.2% v 3.9%e
• (GR) Greece Oct Current Account Balance: -€0.7B v +€0.9B prior
• (NO) Norway Dec Unemployment Rate: 2.2% v 2.2%e
• (IS) Iceland Nov Wage Index M/M: 0.2% v 0.4% prior; Y/Y: 4.2% v 4.2% prior
• (ES) Spain Oct Trade Balance: -€2.6B v -€4.3B prior
• (IT) Italy Oct Current Account Balance: €8.6B v €4.1B prior
• (UK) Q3 Final GDP Q/Q: 0.4% v 0.3%e; Y/Y: 1.1% v 1.0%e
• (UK) Q3 Final Private Consumption Q/Q: 0.3% v 0.4%e; Government Spending Q/Q: -0.6% v +0.3%e; Gross Fixed Capital Formation Q/Q: +0.2% v -0.2%e; Exports Q/Q: 7.9% v 8.1%e; Imports Q/Q: -0.3% v +0.8%e
• (UK) Q3 Final Total Business Investment Q/Q: 0.0% v 0.0%e; Y/Y: -0.5% v -0.6%e
• (UK) Q3 Current Account Balance: -£15.9B v -£15.5Be (smallest deficit since Q1 2012)
• (UK) Nov Public Finances (PSNCR): £9.9B v £0.4B prior; Public Sector Net Borrowing: £4.9B v £5.2Be; Central Government NCR: £9.6B v £0.1B prior; PSNB (ex Banking Groups): £5.6B v £6.1Be
• (GR) Greece Sept Unemployment Rate: 16.8% v 16.9% prior
• (GR) Greece Q3 Unemployment Rate: 16.4% v 16.9% prior
• (IT) Italy Nov PPI M/M: -0.2% v 0.0% prior; Y/Y: -2.5% v -4.1% prior

Fixed Income Issuance

• (DK) Denmark sold total DKK2.5B in 3-month and 6-month Bills
• (IN) India sold total INR160B vs. INR160B indicated in 2021, 2026, 2029. 2039 and 2059 bonds

Looking Ahead

• 06:00 (IE) Ireland Nov PPI M/M: No est v -8.5% prior; Y/Y: No est v -3.9% prior
• 06:00 (BR) Brazil Dec FGV Consumer Confidence : No est v 88.9 prior
• 06:00 (BR) Brazil Dec FGV Construction Costs M/M: 0.0%e v 0.2% prior
• 06:00 (UK) DMO to sell €5.0B in 1-month, 3-month and 6-month bills (£2.0B, £1.0B and £2.0B respectively)
• 06:30 (IN) India Weekly Forex Reserve w/e w/e Dec 13th: No est v $453.4B prior
• 06:30 (IS) Iceland to sell 6-month Bills
• 07:00 (BR) Brazil Mid-Dec IBGE Inflation IPCA-15 M/M: 0.9%e v 0.1% prior; Y/Y: 3.8% v 2.7% prior
• 07:00 (ZA) South Africa Nov Budget Balance (ZAR): -22.6Be v -42.3B prior
• 07:00 (MX) Mexico Oct Retail Sales M/M: -0.3%e v +0.9% prior; Y/Y: 2.2%e v 2.4% prior
• 07:00 (IN) India announces upcoming bill issuance (held on Wed)
• 07:30 (BR) Brazil Nov Current Account Balance: -$3.8Be v -$7.9B prior; Foreign Direct Investment (FDI): $7.4Be v $6.8B prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance
• 08:30 (US) Q3 Final GDP Annualized (3rd reading) Q/Q: 2.1%e v 2.1% prelim; Personal Consumption: 2.9%e v 2.9% prior
• 08:30 (US) Q3 Final GDP Price Index: 1.8%e v 1.8% prelim; Core PCE Q/Q: 2.1%e v 2.1% prelim
• 08:30 (CA) Canada Oct Retail Sales M/M: +0.5%e v -0.1% prior; Retail Sales (ex-auto) M/M: 0.2%e v 0.2% prior
• 09:30 (UK) PM Johnson Brexit bill to be voted on in Parliament
• 10:00 (US) Nov Personal Income: 0.3%e v 0.0% prior; Personal Spending: 0.4%e v 0.3% prior; Real Personal Spending (PCE): 0.2%e v 0.1% prior
• 10:00 (US) Nov PCE Deflator M/M: 0.2%e v 0.2% prior; Y/Y: 1.4%e v 1.3% prior
• 10:00 (US) Nov PCE Core Deflator M/M: 0.1%e v 0.1% prior; Y/Y: 1.5%e v 1.6% prior
• 10:00 (US) Dec Final University of Michigan Confidence: 99.2e v 99.2 prelim
• 10:00 (EU) Euro Zone Dec Advance Consumer Confidence: -7.0e v -7.2 prior
• 11:00 (US) Dec Kansas City Fed Manufacturing Activity: -3e v -3 prior
• 11:00 (EU) Potential sovereign ratings after European close
• 13:00 (US) Weekly Baker Hughes Rig Count
• (BR) Brazil Nov Total Federal Debt (BRL): No est v 4.121T prior
• (AR) Argentina Nov Budget Balance (ARS): No est v 8.5B prior
• (CO) Colombia Nov Industrial Confidence: No est v 5.7 prior
• (CO) Colombia Nov Retail Confidence: No est v 24.9 prior
• (CO) Colombia Central Bank Interest Rate Decision: expected to leave Overnight Lending Rate unchanged at 4.25%