Notes/Observations
- German Nov Wholesale Prices rose at its largest annual increase since 1962.
- UK Parliament to debate vaccine passports on Tuesday and could see a growing rebellion within the Tory party on leadership.
- Focus on numerous central bank rate decisions this week highlighted by Fed, BOE, ECB, BOJ.
Asia
- Japan Q4 Tankan Large manufacturing Index: 18 v 19e; Outlook Survey: 13v 19e.
- BOJ Official expressed some caution over latest Tankan saying the surveys probably did not consider impact of Omicron virus variant.
- BOJ to buy ¥2.0T in bonds with repurchase agreements [first operation since 2006, follows rise in Japanese repo rates].
- Reports circulated that >15 listed firms in Zhejiang (China) had temporarily halted production citing impact of rising COVID cases.
- Economists expect that China would add fiscal stimulus starting early 2022.
Coronavirus
- UK Govt raised COVID alert level to 4 from 3, cited omicron variant. Reports that over 50 Tory MPs may oppose PM Johnson’s Plan B on Tuesday, Dec 14th in a Parliamentary vote on vaccine passports.
Europe
- UK PM Johnson said not looking to remove the ECJ from their role of enforcing the Northern Ireland protocol which could help broker a deal.
- France govt said to have drop threat of trade war with UK, after Channel Islands and UK Govt agree to more fishing licenses (Note: UK issued 23 fishing licenses to French boats but key issues remain. Move seen as signaling progress toward resolving the post-Brexit dispute).
- French fisherman said to be planning on blockading Calais and other key ports in protest over the amount of permits issued by the UK. Fishermen feel they have been betrayed by the UK and abandoned by the EU.
- G7 vowed that Russia would face massive consequences and severe costs if it went ahead with any military aggression against Ukraine. Concerned about China coercive economic policies.
- S&P revised Turkey sovereign ratings outlook to Negative; Affirmed its B+ ratings.
- Fitch affirmed UK sovereign rating at AA; outlook stable.
- Fitch affirmed Spain sovereign rating at A; outlook stable.
Americas
- Some Democrats said to be preparing for President Biden’s Build back Better package to get pushed back into next year despite.
Energy
- German Foreign Min stated that Nord Stream 2 could not be certified under current conditions because it did not meet European energy rules. Still open questions about security, talks weare best course to take to avoid further escalation.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.61% at 478.46, FTSE +0.14% at 7,302.25, DAX +1.03% at 15,784.00, CAC-40 +0.38% at 7,018.45, IBEX-35 +0.34% at 8,388.55, FTSE MIB +0.63% at 26,890.00, SMI +0.13% at 12,623.86, S&P 500 Futures +0.33%].
- Market Focal Points/Key Themes: European indices open mixed; among the sectors trending higher are materials and industrials; while sectors trending lower include utilities and health care; oil and gas subsector supported following higher crud price; Rio Tinto offers to write down $2.3M to get Mongolian project moving; Vifor confirms in potential takeover talks from CSL; Piovan acquires IPEG in the US; focus on upcoming monthly OPEC report; no major earnings expected during the upcoming US session.
Equities
- Consumer discretionary: Capita [CPI.UK] -17% (trading update).
- Energy: Norsk Hydro [NHY.NO] +5% (CMD).
- Healthcare: Vifor Pharma [VIFN.CH] +14% (confirms deal discussion), Molecular Partners [MOLN.CH] +3% (drug effective against Omicron).
- Industrials: AMG Advanced Metallurgical [AMG.NL] +7% (raises outlook).
- Technology: Purplebricks Group [PURP.UK] -19% (delays results; business update).
Speakers
- Oxford University study noted that vaccines were said to induce lower levels of neutralizing antibodies against Omicron variant; Boosters might potentially prevent severe disease.
- Turkey Fin Min Nebati stated that the Govt was determined not to raise interest rates (**Reminder: TRY currency (Lira) recently moved beyond the 14.00 level against US dollar for fresh record lows).
- China Industry Ministry (MIIT) reiterates govt vow to stabilize industrial economy growth in 2022 (**Reminder: On Dec 10th China Central Economic Work Conference focused on economic stability. Work Conference sets the tone for China’s 2022’s economic priorities).
- China Premier Li reiterated confidence in meeting 2021 economic targets and put stable growth in a more prominent position.
- UAE Energy Min Mazrouei stated that UAE was committed to OPEC process.
Currencies/Fixed Income
- Focus on a plethora of central bank rate decisions during the week. Fed expected to double the pace of taper. ECB to provide details on future of emergency QE. The BOE, SNB and BOJ all seen keeping policy steady.
- EUR/USD unable to sustain moves above 1.13 ahead of Thursday’s ECB meeting. where the central bank was expected to provide details on future of emergency QE.
- GBP/USD at 1.32 50 area. Markets continue to watch virus developments in the country. Over the weekend PM Jphnson noted a “tidal wave” of the Omicron coronavirus variant and expressed concern that two vaccine doses would not be enough to contain it. UK Parliament to vote on the vaccine passport on Tuesday and could see a growing rebellion within the Tory party.
- TRY currency (Lira) moved beyond the 14.60 level against US dollar for fresh record lows in the aftermath of Friday’s S&P revision of Turkey sovereign outlook to negative. TRY currency moved off its record low on reports Turkey Central Bank (CBRT) again intervened in the FX market.
Economic data
- (NL) Netherlands Oct Trade Balance: €4.0B v €5.5B prior.
- (SE) Sweden SEB Housing-Price Indicator: 43 v 44 prior.
- (FI) Finland Oct Current Account Balance: -€2.0B v +€1.2B prior.
- (DE) Germany Nov Wholesale Price Index M/M: 1.3% v 1.6% prior; Y/Y: 16.6%e v 15.2% prior.
- (RO) Romania Nov CPI M/M: 0.0% v 0.4%e; Y/Y: 7.8% v 8.2%e.
- (TR) Turkey Oct Current Account Balance: $3.2B v $2.5Be.
- (TR) Turkey Oct Industrial Production M/M: +0.6% v -0.1%e; Y/Y: 8.5% v 8.6%e.
- (ES) Spain Oct House transactions Y/Y: 22.2% v 40.6% prior.
- (HK) Hong Kong Q3 Industrial Production Y/Y: 7.8% v 5.6% prior.
- (HK) Hong Kong Q3 PPI Y/Y: -0.9% v +2.7% prior.
- (IT) Italy Q3 Unemployment Rate: 9.2% v 9.4%e.
- (CH) Swiss weekly Total Sight Deposits (CHF): 722.7B v 720.3B prior; Domestic Sight Deposits: 646.8B v 645.7B prior.
Fixed income Issuance
- (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in 12-month bills; Avg Yield: 0.90% v 0.47% prior; Bid-to-cover: 1.39x v 2.36x prior.
Looking ahead
- (MX) Mexico Nov ANTAD Same-Store Sales Y/Y: No est v 11.6% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 ((DE) Germany to sell combined €6.0B in 3-month and 12-month BuBills.
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.5-3.0B in 1-month, 3-month and 6-month bills.
- 06:00 (IL) Israel to sell bonds.
- 06:00 (IE) Ireland Oct Industrial Production M/M: No est v 3.5% prior; Y/Y: No est v 44.6% prior.
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 06:30 (PT) ECB’s Centeno (Portugal).
- 06:45 (US) Daily Libor Fixing.
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 07:00 (TR) Turkey to sell 2-year Bonds.
- 07:00 (IN) India Nov CPI Y/Y: 5.1%e v 4.5% prior.
- 07:20 OPEC Monthly Oil Report.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 09:00 (FR) France Debt Agency (AFT) to sell €3.5-4.7B in 3-month, 6-month and 12-month bills.
- 16:00 (KR) South Korea Import Price Index M/M: No est v 4.8% prior; Y/Y: No est v 35.8% prior.
- 16:00 (KR) South Korea Export Price Index M/M: No est v 1.6% prior; Y/Y: No est v 25.3% prior.
- 16:45 (NZ) New Zealand Nov Food Prices M/M: No est v -0.9% prior.
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 107.5 prior.
- 19:30 (AU) Australia Nov Business Confidence: No est v 21 prior; Business Conditions: No est v 11 prior.
- 23:30 (JP) Japan Oct Final Industrial Production M/M: No est v 1.1% prelim; Y/Y: No est v -4.7% prelim; Capacity Utilization M/M: No est v -7.4% prior.
- 23:30 (HK) Hong Kong to sell 6-month Bills.
