Notes/Observations
- Risk appetite continues to find legs as concerns about Omicron’s severity ease (infections continue to rise sharply).
- Overall price action relatively quiet ahead of the Christmas period.
- German Nov Import Prices registers its highest annual pace since October 1974.
Asia
- Japan Govt confirmed to raise real FY22/23 GDP forecast (next fiscal year) from 2.2% to 3.2% (as speculated).
Coronavirus
- German Health Min Lauterbach stated that a lockdown was currently not necessary but could not be ruled out.
Europe
- Northern Ireland DUP party said to pressure Brexit negotiator Truss to trigger ‘nuclear option’ of triggering Article 16 in negotiations.
Americas
- President Biden announced extension of federal student loan forbearance until May 1st to start repayments.
- Canada PM Trudeau announced to temporarily expand eligibility for key programs to help people overcome losses suffered from Omicron.
Energy
- Russia’s Yamal-Europe gas pipeline flows remain in reverse for the 3rd straight day (from Germany to Poland).
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.42% at 480.36, FTSE +0.23% at 7,358.83, DAX +0.39% at 15,653.94, CAC-40 +0.20% at 7,066.21, IBEX-35 +0.84% at 8,530.22, FTSE MIB +0.24% at 26,893.00, SMI +0.13% at 12,730.37, S&P 500 Futures +0.11%].
- Market Focal Points/Key Themes: European indices open generally higher and stayed in the green as the session progressed; light trading ahead of the holiday; better performing sectors include consumer discreationary and industrials; while laggards include financials and real estate; Holcim to acquire Malarkey Roofing in the US; NewRiver sells Poole Retail Park; Flutter acquires Sisal; no major earnings scheduled for the upcoming US session.
Equities
- Consumer discretionary: Flutter Entertainment [FLTR.UK] +3% (acquisition).
- Energy: Gazprom [GAZP.UK] -1% (said to have not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec 23rd).
- Healthcare: Astrazeneca [AZN.UK] -1% (antiviral drug and vaccine booster work against Omicron), Pharming [PHARM.NL] -1.5% (agreement with Sanofi).
- Industrials: Continental [CON.DE] +2% (profit alert).
Speakers
- France European Affairs Min Beaune: EU to meet in early January to decide on legal steps against the UK over fishing licenses.
- UK PM Johnson said to be not planning on announcing any post-Christmas virus restrictions this week.
- Russia President Putin held his annual press conference and noted that 2021 GDP growth was seen at 4.5% with inflation seen at 8.0%. Not interfering into Russian Central Bank (CBR) work but added Russia could end up like Turkey without rate hikes.
- China Commerce Ministry (MOFCOM): Hope that US can create good conditions for both sides to expand trade cooperation; Both US and China maintaining normal communication.
- China Premier Li reiterates view that Trade was facing ‘rising’ uncertainties. To maintain the CNY currency (Yuan) basically stable to support trade. Sought additional agreements between trade and shipping companies.
- Reports circulate that string 2 of the Nord Stream 2 pipeline to be ready by year-end.
Currencies/Fixed Income
- USD and JPY currencies softer in session as easing fears about the omicron variant dampened demand for safe-haven assets as more studies suggest that the variant posed a smaller threat than expected.
- EUR/USD at 1.1325 by mid-session and USD/JPY at 114.25.
- GBP/USD higher in session. Money markets currently pricing 100bps of policy tightening from the BOE during 2022. Sentiment aided after UK PM Johnson noted that would not be planning on announcing any post-Christmas virus restrictions this week.
Economic data
- (FI) Finland Nov PPI M/M: 0.9% v 1.2% prior; Y/Y: 21.1 v 20.8% prior.
- (DE) Germany Nov Import Price Index M/M: 3.0% v 1.0%e; Y/Y: 24.7% v 22.3%e (highest annual pace since Oct 1974).
- (DK) Denmark Q3 Final GDP Q/Q: 1.1% v 0.9% prelim; Y/Y: 3.6% v 3.6% prelim.
- (NO) Norway Oct AKU Unemployment Rate: 3.6% v 3.6% prior.
- (TW) Taiwan Nov Industrial Production Y/Y: 12.2% v 9.9%e.
- (ES) Spain Q3 Final GDP Q/Q: 2.6% v 2.0% prelim Y/Y: 3.4% v 2.7% prelim.
- (HK) Hong Kong Q3 Current Account Balance: $96.7B v$69.2B prior; Overall Balance of Payments (BOP): +$27.2B v -$37.6B prior.
- (HU) Hungary Central Bank raised its One Week Deposit Rate by another 20bps to 3.80% (more-than-expected and 6th straight weekly increase).
- (IT) Italy Dec Consumer Confidence Index: 117.7 v 116.3e; Manufacturing Confidence: 115.2 v 115.3e; Economic Sentiment: 113.1 v 114.8 prior.
- (PL) Poland Nov Unemployment Rate: 5.4% v 5.4%e.
- (GR) Greece Q3 Unemployment Rate: 13.0% v 15.8% prior.
Fixed income Issuance
- None seen.
Looking ahead
- (IL) Israel Nov Leading ‘S’ Indicator M/M: No est v 0.3% prior.
- (BE) Belgium Dec CPI M/M: No est v 1.3% prior; Y/Y: No est v 5.6% prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
- 06:00 (BR) Brazil Dec FGV Construction Costs M/M: 0.4%e v 0.7% prior.
- 07:00 (BR) Brazil mid-Dec IBGE Inflation IPCA-15 M/M: 0.8%e v 1.2% prior; Y/Y: 10.5%e v 10.7% prior.
- 07:00 (MX) Mexico Nov Unemployment Rate NSA (unadj): 3.7%e v 4.0% prior; Unemployment Rate (Seasonally adj): No est v 3.9% prior.
- 08:00 (RU) Russia Gold and Forex Reserve w/e Dec 17th: No est v $625.5B prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Initial Jobless Claims: 205Ke v 206K prior; Continuing Claims: 1.84Me v 1.845M prior.
- 08:30 (US) Nov Personal Income: 0.4%e v 0.5% prior; Personal Spending: 0.6%e v 1.3% prior; Real Personal Spending (PCE): 0.2%e v 0.7% prior.
- 08:30 (US) Nov PCE Deflator M/M: 0.6%e v 0.6% prior; Y/Y: 5.7%e v 5.0% prior.
- 08:30 (US) Nov PCE Core Deflator M/M: 0.4%e v 0.4% prior; Y/Y: 4.5%e v 4.1% prior.
- 08:30 (US) Nov Preliminary Durable Goods Orders: +1.8%e v -0.4% prior; Durables (ex-transportation): 0.6%e v 0.5% prior; Capital Goods Orders (non-defense/ex-aircraft): 0.7%e v 0.7% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.7%e v 0.4% prior.
- 08:30 (CA) Canada Oct GDP M/M: 0.8%e v 0.1% prior; Y/Y: 3.6%e v 3.4% prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 09:00 (BE) Belgium Dec Business Confidence: No est v 4.0 prior.
- 10:00 (US) Dec Final University of Michigan Confidence: 70.4e v 70.4 prelim.
- 10:00 (US) Nov New Home Sales: 770ke v 745K prior.
- 10:30 (US) Weekly EIA Natural Gas Inventories.
- 13:00 (US) Weekly Baker Hughes Rig Count.
- 14:00 (AR) Argentina Nov Trade Balance: No est v $1.6B prior.
- 14:00 (AR) Argentina Oct Economic Activity Index (Monthly GDP) M/M: No est v 1.2% prior; Y/Y: No est v 11.6% prior.
- 18:30 (JP) Japan Nov National CPI Y/Y: 0.5%e v 0.1% prior; CPI ex-fresh food (core) Y/Y: 0.4%e v 0.1% prior; CPI ex-fresh food/energy (core-core) Y/Y: -0.7%e v -0.7% prior.
- 18:50 (JP) Japan Nov PPI Services Y/Y: 1.0%e v 1.0% prior.
