Notes/Observations
US President to sign new US Tax Bill on Jan 3rd
Japan, Taiwan keep rates on hold
UK Public Sector Net borrowing comes ahead of expectations
Catalonia goes to the polls in a closely watched regional election called by Spain following a controversial independence referendum
Asia:
BOJ voted 8-1 to keep rates unchanged as expected; Said will make policy adjustments as appropriate based on economy, prices and financial conditions
Taiwan Central Bank leaves interest rates unchanged for the 6th straight time
Europe:
Catalonia regional elections take place today with first exit polls expected around 20.00 CET.
UK Deputy PM Damian Green resigns from cabinet after admitting he lied about the presence of pornographic images on his House of Commons computer. This marks the third cabinet minister to step down since early November
UK PM May to allow a delay from Britain’s departure from the EU in exceptional circumstances. This is a compromise with rebellious pro-EU lawmakers against the idea of setting a fixed exit day.
Americas:
US House voted 224-201 in favor to pass the Republican tax overhaul, with the bill now going to the President to be signed into law
President Trump is said to plan to sign the tax bill on Wed, Jan 3rd, according to a financial press report.
Economic Data:
(FR) FRANCE DEC BUSINESS CONFIDENCE: 112 V 111E; MANUFACTURING CONFIDENCE: 112 V 113E
(UK) NOV PUBLIC FINANCES (PSNCR): £12.9B V -£3.8B PRIOR; PUBLIC SECTOR NET BORROWING: £8.1B V £8.3BE
(SE) SWEDEN DEC CONSUMER CONFIDENCE: 108.2 V 106.6E; MANUFACTURING CONFIDENCE: 116.8 V 121.9E
(CH) SWISS NOV TRADE BALANCE (CHF): 2.6B V 2.3B PRIOR
(ES) Spain Oct House Mortgage Approvals Y/Y: 8.2% v 9.2% prior; Total Mortgage Lending Y/Y: 26.2% v 10.6% prior
(DK) Denmark Nov Retail Sales M/M: +1.3% v -0.8% prior; Y/Y: +2.5% v -1.9% prior
Fixed Income Issuance:
None seen
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices [Stoxx600 -0.2% at at 387.7, FTSE flat at 7529, DAX -0.3% at 13030, CAC-40 -0.2% at 5339, IBEX-35 -0.2% at 10188, FTSE MIB +0.2% at 22158, SMI +0.1% at 9328 , S&P 500 Futures +0.1%]
Market Focal Points/Key Themes: European Indices trade mixed this morning in quiet trade as volumes thin ahead of the holidays. News flow has been quiet with Earnings from Buwog and Hornbach; On the M&A front Gener8 Maritime confirmed over night press speculation in announcing a merger with Euronav, Balfour Beaty shares rise after divesting stake in Connect Plus. Elsewhere Nokia trades higher after signing a patent license agreement with Huawei. Looking ahead notable earners include Accenture, Carmax, Conagra and Finish Line.
Equities
Consumer Discretionary [McCarthy & Stone [MCS.UK] -10% ( Response to media commentary on ground rents)]
Healthcare [Summit Therapeutics [SUMM.UK] +9% (Enters into exclusive licence and commercialization agreement ), Basilea [BSLN] +2.2% (Reports that ceftobiprole received QIDP designation from US FDA for the treatment of SAB)]
Industrials [Euronav [EURN.BE] +4.0% (confirms merger agreement with Gener8), Balfour Beaty [BBY.UK] +2.5% (Divests stake in Connect Plus)]
Telecoms [Nokia [NOKIA.FI] +2.6% (Signs patent license agreement with Huawei)]
Speakers
(EU) ECB’s Vasiliauskas (Lithuania): now is a good time to discuss the end of QE debate; discussion will continue in 2018
comments from Vilnius
(JP) BoJ Gov Kuroda: Reiterates to keep easy policy until inflation is stable over 2%; do not think its necessary to change yield curve control (YCC) policy now
Post Rate Decision Press Conference
Currencies
Most major pairs are unchanged and are trading in very tight ranges
Fixed Income
Bund futures trade 161.66 down 20 ticks, as markets return their focus to Catalonia’s Parliamentary elections. Upside sees 162.75 then 163.25. A reversal targets 161.50 then 160.38.
Gilt futures trade at 125.09 down 27 ticks after UK PM May lost her deputy, one of her closest allies, in a divided cabinet, as she heads into the next phase of the Brexit negotiations. Continued upside eyeing 126.25 then 126.85. Downside targets include 124.75 then 124.25.
Thursday’s liquidity report showed Wednesday’s use of the marginal lending facility fell to €180M from €203M prior.
Corporate issuance – Primary expected to close for the year
Looking Ahead
06:00 (BR) Brazil Dec IBGE Inflation IPCA-15 M/M: 0.4%e v 0.3% prior; Y/Y: 2.9%e v 2.8% prior
06:00 (IE) Ireland Nov PPI M/M: No est v 1.3% prior; Y/Y: No est v -2.3% prior
06:00 (IL) Israel Oct Manufacturing Production M/M: No est v -0.4% prior
06:00 (IL) Israel Nov Unemployment Rate: No est v 4.2% prior
07:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave Repurchase Rate unchanged at 0.50%
08:00 (PL) Poland Central Bank (NBP) Dec Minutes
08:00 (RU) Russia Gold and Forex Reserve w/e Dec 15th: No est v $429.3B prior
08:05 (UK) Baltic Dry Bulk Index
08:30 (US) Dec Philadelphia Fed Business Outlook: 21.0e v 22.7 prior
08:30 (US) Q3 Final GDP Annualized Q/Q: 3.3%e v 3.3% prelim; Personal Consumption: 2.3%e v 2.3% prelim
08:30 (US) Q3 Final GDP Price Index: 2.1%e v 2.1% prelim; Core PCE Q/Q: 1.4%e v 1.4% prelim
08:30 (US) Nov Chicago Fed National Activity Index: 0.50e v 0.65 prior
08:30 (US) Initial Jobless Claims: 233Ke v 225K prior; Continuing Claims: 1.90Me v 1.886M prior
08:30 (US) Weekly USDA Net Export Sales
08:30 (CA) Canada Nov CPI M/M: 0.2%e v 0.1% prior; Y/Y: 2.0%e v 1.4% prior; CPI Core- Common Y/Y: No est v 1.6% prior, CPI Core- Trim Y/Y: No est v 1.5% prior, CPI Core- Median Y/Y: No est v 1.7% prior, Consumer Price Index: 131.1e v 130.9 prior
08:30 (CA) Canada Oct Retail Sales M/M: 0.3%e v 0.1% prior; Retail Sales Ex Auto M/M: 0.4%e v 0.3% prior
09:00 (US) Oct FHFA House Price Index M/M: 0.4%e v 0.3% prior
09:00 (MX) Mexico Oct IGAE Economic Activity Index (Monthly GDP) Y/Y: 1.3%e v 0.5% prior
10:00 (US) Nov Leading Index: 0.4%e v 1.2% prior
10:00 (EU) Euro Zone Dec Advance Consumer Confidence: 0.2e v 0.1 prior
10:30 (US) Weekly EIA Natural Gas Inventories
14:00 (AR) Argentina Q3 Current Account: -$7.0Be v -$6.0B prior
