Time Running Short On The Brexit Negotiating Front

Notes/Observations

• EU-UK to resume face-to-face Brexit talks as time was running short

Asia:

• Japan Nov Tokyo CPI data registered the largest drop in Headline and Core CPI since 2012 (CPI YoY: -0.7% v -0.5%e; CPI (ex-fresh food) Y/Y: -0.7% v -0.6%e
• China Oct Industrial Profits Y/Y: +28.2% v 10.1% prior (6th straight rise)
• South Korea Spy Agency stated that North Korea advised its overseas missions to not provoke the US
• China Commerce Ministry (MOFCOM): announced it would collect a temporary anti-dumping deposits on Australia Wine equal to ~107-212.1% starting Saturday, Nov 28th

Coronaviurs:

• Total global cases 60.9M (+0.9% d/d); total deaths: 1.43M (+0.7% d/d)

Europe:

• ECB Panetta (Italy) stated that there should be no doubt on inflation commitment; Reiterated stance that General Council would l re-calibrate measures in Dec after reassessing the macroeconomic outlook
• EU and UK ready to resume face-to-face Brexit talks that were stalled due to COVID cases. EU side preparing to travel to London. Chief negotiator Barnier to brief EU ambassadors and Fishing Ministers Friday
• EU Chief Negotiator Barnier said to hold urgent meeting with EU fishing ministers on Sat, Nov 27th to discuss the state of play in the trade discussions (Insight: Recent rhetoric from both UK and EU have shown that both sides are still far apart on fishing and negotiators have made no new progress)
• Scotland First Minister Sturgeon said to be targeting new independence vote early in next parliament
• Turkey Central Bank (CBRT) raised banks reserve ratio requirements (RRR) related to TRY-denominated and FX deposits; effective Dec 11th

Americas:

• President Trump tweeted that he would give up power if electoral college voted for Biden in December (adds that it would be a mistake but would leave the White House)

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -0.05% at 391.46, FTSE -0.77% at 6,313.93, DAX +0.17% at 13,309.65, CAC-40 +0.27% at 5,581.89, IBEX-35 +0.13% at 8,115.00, FTSE MIB +0.26% at 22,259.50, SMI -0.15% at 10,482.50, S&P 500 Futures +0.18%]
• Market Focal Points/Key Themes: European indices open slightly lower (AEX notable exception) but later turned around to trade modestly higher; better performing sectors include energy and financials; technology and utilities among the worst performers; AstraZeneca announces further trial of covid vaccine; SBB launches takeover of Entra in competition with Castellum; Sabadell terminated merger discussions with BBVA; reportedly CdP looking to increase Nexi stake; light US session expected due to early close for holidays

Equities

• Consumer discretionary: Reach [RCH.UK] +5% (trading update)
• Financials: BBVA [BBVA.ES] +2% (terminate stock with Sabadell), Sabadell [SAB.ES] -13% (terminate talks with BBVA)
• Healthcare: AstraZeneca [AZN.UK] -1% (says new trial is needed on vaccine)
• Industrials: Saint-Gobain [SGO.FR] +1% (dividend)

Speakers:

• ECB’s Villeroy (France) stated that Crisis tools have been proportionate and effective. ebt cancellation would be a dangerous path
• EU Chief Negotiator Barnier said to have informed the EU-27 envoys that he was not sure if a trade deal was possible
• EU Chief Negotiator Barnier tweeted that sme significant divergences persisted and confirmed that he was travelling to London this evening to continue talks
• EU Diplomat stated that Barnier informed the EU envoys that differences still persisted on the three controversial issues; Only a few days left for further Brexit negotiations
• Turkey Central Bank (CBRT) Financial Stability Review noted that the domestic banking sector was resilient to liquidity shocks. Pandemic related macro uncertainties had decreased
• Taiwan Govt updated its Staff Forecasts: which raised 2020 GDP growth from 1.6% to 2.5% while cutting 2021 GDP growth from 3.9% to 3.8%. it cut 2020 CPI from -0.2% to -0.3% while raising 2021 CPI from 1.1% to 1.2%
• Russia Dep PM Novak said to hold informal meeting with Saudi King Salman regarding OPEC+ JMMC on Sat, Nov 28th
• Nigeria Fin Min Ahmed: Govt has NOT considered leaving OPEC. Reiterated central bank stance that expect Nigeria to exit recession in Q4

Currencies/Fixed Income

• USD maintained a soft tone and was at a 3-month low compared to a basket of currencies. The latest headwind for the greenback came after Wed’s FOMC Mnutes which suggested policymakers might be considering additional stimulus via asset purchases. The USD was re-approaching some key support levels in numerous pairs.
• EUR/USD was holding above the 1.19 level again and around 1.1925 by mid-session . Price action edging back towards the key 1.20 verbal intervention area. P
• GBP/USD at 1.3360 and holding steady despite some talks that progress in Brexit talks seemed to have stalled. The 1.36 level remains pivotal resistance in the pair

Economic Data

• (NL) Netherlands Nov Producer Confidence Index: -3.8 v -5.6 prior
• (FI) Finland Q3 GDP Q/Q: +3.3% v -3.9% prior; Y/Y: -2.7% v -6.5% prior
• (FI) Finland Nov Consumer Confidence: -4.8 v 3.3 v -6.9 prior; Business Confidence: -14 v -15 prior
• (DE) Germany Oct Import Price Index M/M: 0.3% v 0.1%e; Y/Y: -3.9% v -4.1%e
• (NO) Norway Oct Retail Sales M/M: 1.2% v 0.5%e
• (TR) Turkey Nov Economic Confidence: 89,5 v 92.8 prior
• (CN) Weekly Shanghai copper inventories (SHFE): 92.9K v 96.8K tons prior
• (FR) France Q3 Final GDP Q/Q: 18.7% v 18.2%e; Y/Y: -3.9% v -4.3%e
• (FR) France Nov Preliminary CPI M/M: 0.2% v 0.0%e; Y/Y: 0.2% v 0.1%e
• (FR) France Nov Preliminary CPI Harmonized M/M: 0.2% v 0.0%e; Y/Y: 0.2% v 0.0%e
• (FR) France Oct PPI M/M: 0.1% v 0.3% prior; Y/Y: -2.0% v -2.3% prior
• (FR) France Oct Consumer Spending M/M: 3.7% v 3.5%e; Y/Y: 2.7% v 1.8%e
• (ES) Spain Oct Adjusted Retail Sales Y/Y: -2.7% v -3.3% prior; Retail Sales (unadj) Y/Y: -2.4% v -2.2% prior
• (RU) Russia Narrow Money Supply w/e Nov 20th (RUB): 13.46T v 13.48T prior
• (HU) Hungary Oct Unemployment Rate: 4.3% v 4.6%e
• (TW) Taiwan Oct Monitoring Indicator: 28 v 27 prior
• (SE) Sweden Q3 GDP Q/Q: 4.9% v 4.3%e; Y/Y: -2.5% v -3.6%e
• (SE) Sweden Oct Trade Balance (SEK): 4.7B v 3.5B prior
• (SE) Sweden Oct Retail Sales M/M: 0.5% v 0.1%e; Y/Y: 3.6% v 3.7%e
• (IT) Italy Nov Consumer Confidence Index: 98.1 v 99.0e; Manufacturing Confidence: 90.2 v 93.0e; Economic Sentiment: 82.8 v 92.2 prior
• (NO) Norway Nov Unemployment Rate: 3.9% v 4.0%e
• (IS) Iceland Nov CPI M/M: 0.0% v 0.4% prior; Y/Y: 3.5% v 3.6% prior
• (TW) Taiwan Q3 Preliminary GDP Y/Y: 3.9% v 3.3%e
• (EU) Euro Zone Nov Economic Confidence: 87.6 v 86.0e; Industrial Confidence: -10.1 v -10.9e; Services Confidence: -17.3% v -16.3e; Consumer Confidence (final):-17.6 v -17.6 advance
• (IT) Italy Oct PPI M/M: 0.9% v 0.3% prior; Y/Y: -2.9% v -3.8% prior

Fixed income Issuance

• (IN) India sold total INR280B vs. INR280B indicated in 2022, 2025, 2030 and 2060 bonds
• (DK) Denmark sold total DKK6.88B in 3-month, 6-month, 9-month and 12-month Bills
• (ZA) South Africa sold total ZAR2.0B vs.ZAR2.0B indicated in I/L 2025, 2033 and 2038 Bonds
• (IT) Italy Debt Agency (Tesoro) sold total €5.5B vs. €4.5-5.5B indicated range in 5-year and 10-year BTP Bonds
• Sold €2.5B vs. €2.0-2.5B indicated range in 0.50% Feb 2026 BTP bonds; Avg Yield: 0.01% (record low) v 0.23% prior; Bid-to-cover: 1.91x (2-year high) v 1.46x prior
• Sold €3.0B vs. €2.5-3.0B indicated range in 0.90% Apr 2031 BTP; Avg Yield: 0.59% v 0.79% prior; bid-to-cover: 1.57x v 1.33x prior
• (IT) Italy Debt Agency (Tesoro) sold €2.5B vs. €2.0-2.5B indicated range in Apr 2026 CCTeu (floating rate Notes); Avg Yield: -0.02%; Bid-to-cover: 1.56x

Looking Ahead

• (BE) Belgium Nov CPI M/M: No est v 0.2% prior; Y/Y: No est v 0.7% prior
• (CO) Colombia Central Bank Interest Rate Decision: Expected to leave Overnight Lending Rate unchanged at 1.75%
• 06:00 (IE) Ireland Oct Retail Sales Volume M/M: No est v 1.5% prior; Y/Y: No est v 9.7% prior
• 06:00 (BR) Brazil Nov FGV Inflation IGPM M/M: 3.2%e v 3.2% prior; Y/Y: 24.4%e v 20.9% prior
• 06:00 (UK) DMO to sell £3.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £1.5B respectively)
• 06:30 (N) India Oct Eight Infrastructure (key) Industries: No est v -0.8% prior
• 06:30 (IN) India Weekly Forex Reserve w/e Nov 20th: No est v $572.8B prior
• 06:30 (IS) Iceland to sell 6-month and 9-month Bills
• 06:45 (US) Daily Libor Fixing
• 07:00 (IN) India announces upcoming bill issuance (held on Wed)
• 07:00 (MX) Mexico Oct Trade Balance: $3.4Be v $4.4B prior
• 07:00 (IN) India Q3 GDP Y/Y: -8.2%e v -23.9% prior; GVA Y/Y: -7.7%e v -22.8% prior
• 07:00 (BR) Brazil Sept National Unemployment Rate: 14.8%e v 14.4% prior
• 07:00 (CL) Chile Oct Unemployment Rate: 11.8%e v 12.3% prior
• 07:30 (BR) Brazil Oct Total Outstanding Loans (BRL): No est v 3.810B prior; M/M: No est v 1.9% prior; Personal Loan Default Rate: No est v 4.6% prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:30 (US) Weekly USDA Net Export Sales
• 11:00 (EU) Potential sovereign ratings after European close
• (CO) Colombia Central Bank Interest Rate Decision