Plethora Of EU Data In Session Aids In Painting A Picture Of Stabilization

Notes/Observations

• Plethora of EU GDP and inflation data fail to place a fresh impetus for positions (German and Italian unemployment data did beat expectations; Euro Zone Unemployment matched decade low level; )
• Euro Zone Nov flash CPI data comes in higher-than-expected; remains far away from ECB target
• Continued uncertainties surrounding the US-China phase-one deal but markets remain optimistic of some kind of resolution or progress to be reached by year-end

Asia:

• Bank of Korea (BoK) left the 7-Day Repo Rate unchanged at 1.25% (as expected)
• South Korea Oct Industrial Production M/M: -1.7% v -0.3%e; Y/Y: -2.5% v -2.5%e
• Japan Oct Jobless Rate: 2.4% v 2.4%e
• Japan Nov Tokyo CPI Y/Y: 0.8% v 0.6%e; CPI (ex-fresh food) Y/Y: 06% v 0.6%e
• Japan Oct Preliminary Industrial Production M/M: -4.2% v -2.0%e; Y/Y: -7.4% v -5.2%e
• BOJ Gov Kuroda reiterated overall assessment that domestic economy was expanding moderately as a trend, currently appropriate to carry out policy with easing in mind. Sustaining momentum to hit 2% target and would continue with powerful easing to meet price target
• China PBoC Dep Research Head: China still had room in monetary policy; monetary policy room could not be squandered
• China Former Vice Foreign Trade Min Long Yongtu: Trump’s tweets make him ‘easy to read;’ we want him to be reelected; Trump has undermined the US-lead alliance system, which has improved China’s international environment

Europe/Mideast:

• ECB’s Villeroy (France) reiterated view that ECB should integrate climate change into economic models and risk collateral
• ECB’s Lane (Ireland, chief economist) said rate normalization can be accelerated by fiscal policy. Reiterated Council stance that unconventional measures have been highly effective

Brexit:

• UK Nov GfK Consumer Confidence: -14 v -14e
• UK PM Johnson: There’ll be no trade deal if President Trump wanted the NHS on the table

Americas:

• US President Trump made ‘surprise’ trip to Afghanistan on Thursday, said peace talks with Taliban to resume

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -0.15% at 408.64, FTSE -0.14% at 7,406.35, DAX -0.21% at 13,217.42, CAC-40 +0.01% at 5,913.50, IBEX-35 -0.03% at 9,356.00, FTSE MIB -0.12% at 23,314.44, SMI -0.22% at 10,505.50, S&P 500 Futures -0.22%]

Market Focal Points/Key Themes:

• European indices trading mixed following indices in Asia in the red and lower US futures. Ocado jumps 13% as the company signed a partnership with Japanese company Aeon. Reach rallying 10% as the company issued a trading update that showed improving results and confirmed FY outlook. Tele Columbus rising 11% on solid earnings and affirmed guidance. E.ON, Nyrstar and Laurent-Perrier shares all up on earnings. Benchmark Holdings diving 9% following trading update and lowered outlook. Northgate down 5% as the company reported earnings and proposed an all-stock merger with Redde. Elia also down slightly following results. Countrywide increasing 13% on divestment of the Lambert Smith Hampton commercial business. DNB declining on news of police launching a money laundering investigation. EOS Imaging rallying 16% as the company received 510(k) clearance from the FDA for its new generation imaging system EOSedge. Intu Properties up on media reports post market close yesterday that the company is reportedly hiring PwC to restructure its balance sheet.

Equities

• Consumer discretionary: Ocado [OCDO.UK] +16% (partnership), Countrywide [CWD.UK] +14% (divestment), Reach [RCH.UK] +12% (trading update), Intu Properties [INTU.UK] -2% (restructuring)
• Energy: E.ON [EOAN.DE] +2% (earnings)
• Financials: Investec [INVP.UK] -1.5% (update on disposal), Benchmark Holdings [BMK.UK] -6% (trading update)
• Industrials: Northgate [NTG.UK] -3% (merger)

Speakers

• German Econ Min Altmaier: Germany 2019 GDP growth should reach 0.5%
• UK PM Johnson reiterated stance that NHS is not up for sale. UK to leave EU on Jan 31st at the latest
• Italy PM Conti said to be prepared to veto ESM reform
• Philippines Central Bank (BSP) stated that Nov inflation likely accelerated; seen between 0.9% to 1.7% and would remain watchful of evolving inflation conditions to ensure monetary policy stance
• Japan BOJ Gov Kuroda reiterated that the central bank was not considering additional easing at this time nor at the stage to consider an exit. Reiterated stance that would be necessary and possible to ease policy further if risks grow that momentum towards 2% inflation was lost. Reiterated that BOJ was not targeting FX and was desirable for FX rates to reflect fundamentals

Currencies/ Fixed Income

• Plethora of EU GDP and inflation data failed to place a fresh impetus for positions (German and Italian unemployment data did beat expectations). EUR/USD steady at 1.1000 area
• Continued uncertainties surrounding the US-China phase-one deal but markets remained optimistic of some kind of resolution or progress to be reached by year-end. USD/JPY holding near recent cycle highs around 109.50 level

Economic Data

• (FI) Finland Q3 GDP Q/Q: 0.7% v 0.8% prior; Y/Y: 2.2% v 1.4% prior (revised from 1.2%)
• (ZA) South Africa Oct M3 Money Supply Y/Y: 7.3% v 6.5%e; Private Sector Credit Y/Y: 7.3% v 6.6%e
• (DE) Germany Oct Retail Sales M/M: -1.9% v +0.2%e; Y/Y: 0.8% v 3.0%e
• (DK) Denmark Q3 Preliminary GDP Q/Q: 0.3% v 0.3%e; Y/Y: 2.2% v 2.6% prior
• (DK) Denmark Oct Gross Unemployment Rate: 3.7% v 3.7%e; Unemployment Rate (Seasonally Adj): 3.1% v 3.1% prior
• (NO) Norway Oct Retail Sales M/M: -0.8% v +0.2%e
• (TR) Turkey Oct Trade Balance: -$1.8B v -$1.8Be
• (FI) Finland Sept Final Trade Balance: -€0.2B v -€0.2B prelim
• (TH) Thailand Oct Current Account Balance: $2.9B v $2.5Be; Overall Balance of Payments (BOP): $1.1B v $1.0B prior; Trade Account Balance: $2.1B v $2.7B prior; Exports Y/Y: -5.0% v -1.5% prior; Imports Y/Y: -9.2% v -4.5% prior
• (CN) Weekly Shanghai copper inventories (SHFE): 120.2K v 135.0K tons prior
• (FR) France Q3 Final GDP Q/Q: 0.3% v 0.3%e; Y/Y: 1.4% v 1.3%e
• (FR) France Nov Preliminary CPI M/M: 0.1% v 0.0%e; Y/Y: 1.0% v 1.0%e
• (FR) France Nov Preliminary CPI EU Harmonized M/M: 0.1% v 0.0%e; Y/Y: 1.2% v 1.1%e
• (FR) France Oct Consumer Spending M/M: 0.2% v 0.3%e; Y/Y: -0.2% v -0.3%e
• (FR) France Oct PPI M/M: -0.1% v +0.1% prior; Y/Y: -1.4% v -1.1% prior
• (ES) Spain Sept Total Mortgage Lending Y/Y: -16.5% v -22.8% prior; House Mortgage Approvals Y/Y: -31.6% v -29.9% prior
• (CH) Swiss Nov KOF Leading Indicator: 93.0 v 95.0e
• (CZ) Czech Q3 Preliminary GDP (2nd reading) Q/Q: 0.4% v 0.3%e; Y/Y: 2.5% v 2.5%e
• (HU) Hungary Q3 Final GDP Q/Q: 1.1% v 1.1%e; Y/Y: 5.0% v 5.0%e
• (HU) Hungary Sept Average Gross Wages Y/Y: 11.8% v 11.4%e
• (RU) Russia Narrow Money Supply w/e Nov 22nd (RUB): 10.62T v10.67 T prior
• (AT) Austria Q3 Final GDP Q/Q: 0.1% v 0.1% prelim; Y/Y: 1.5% v 1.5% prelim
• (AT) Austria Oct PPI M/M: 0.0% v 0.0% prior; Y/Y: -1.4% v -1.1% prior
• (TW) Taiwan Q3 Final GDP Y/Y:3.0 % v 2.9%e
• (SE) Sweden Q3 GDP Q/Q: 0.3% v 0.2%e; Y/Y: 1.6% v 1.7%e
• (SE) Sweden Sept Non-Manual Workers Wages Y/Y:2.6% v 2.6% prior
• (DE) Germany Nov Unemployment Change: -16.0K v +6.0Ke; Unemployment Claims Rate: 5.0% v 5.0%e
• (IT) Italy Oct Preliminary Unemployment Rate: 9.7% v 9.8%e
• (ES) Spain Sept Current Account Balance: €0.7B v €3.3B prior
• (NO) Norway Nov Unemployment Rate: 2.1% v 2.2%e
• (NO) Norway Central Bank (Norges) Dec Daily FX Purchases (NOK): -700M v -700M prior
• (IS) Iceland Q3 GDP Q/Q: -0.7% v +3.1% prior; Y/Y: -0.1% v 2.0% prior
• (PL) Poland Q3 Final GDP Q/Q: 1.3% v 1.3% prelim; Y/Y: 3.9% v 3.9% prelim
• (PL) Poland Nov Preliminary CPI M/M: 0.1% v 0.1%e; Y/Y: 2.6% v 2.6%e
• (CZ) Czech Oct M2 Money Supply Y/Y: 8.1% v 7.9% prior
• (IS) Iceland Oct Final Trade Balance (ISK): 0.4B v 2.7B prelim
• (UK) Oct Net Consumer Credit: £1.3B v £0.9Be; Net Lending: £4.3B v £3.8Be
• (UK) Oct Mortgage Approvals: 64.6K v 65.4Ke
• (UK) Oct M4 Money Supply M/M: 0.0% v 0.7% prior; Y/Y: 3.6% v 4.0% prior; M4 Ex IOFCs 3M Annualized: 4.2% v 7.8% prior
• (PT) Portugal Nov Preliminary CPI M/M: -0.1% v 0.0% prior; Y/Y: 0.3% v 0.0% prior
• (PT) Portugal Nov Preliminary CPI EU Harmonized M/M: -0.7% v -0.4% prior; Y/Y: +0.2% v -0.1% prior
• (SL) Sri Lanka Nov CPI Y/Y: 4.4% v 5.3%e
• (EU) Euro Zone Nov Advance CPI Estimate Y/Y: 1.0% v 0.9%e; CPI Core Y/Y: 1.3% v 1.2%e; CPI M/M: -0.3% v -0.4%e
• (EU) Euro Zone Oct Unemployment Rate: 7.5% v 7.5%e
• (IT) Italy Nov Preliminary CPI M/M: 0.0% v -0.2%e; Y/Y: 0.4% v 0.3%e
• (IT) Italy Nov Preliminary CPI EU Harmonized M/M: -0.1% v -0.2%e; Y/Y: 0.4% v 0.3%e
• (GR) Greece Sept Retail Sales Value Y/Y: 5.1% v 2.2% prior; Retail Sales Volume Y/Y: 4.5% v 2.5% prior
• (BE) Belgium Oct Unemployment Rate: 5.6% v 5.6% prior

Fixed Income Issuance

• (IN) India sold total INR160B vs. INR160B indicated in 2024, 2031, 2043 and 2049 bonds
• (ZA) South Africa sold total ZAR1.04B vs. ZAR1.04B indicated in 2025, 2033 and 2050 I/L bonds

Looking Ahead

• (MX) Mexico Oct YTD Budget Balance (MXN): No est v -160.2B prior
• 06:00 (IT) Italy Q3 Final GDP Q/Q: 0.1%e v 0.1% prelim; Y/Y: 0.3%e v 0.3% prelim
• 06:00 (PT) Portugal Q3 Final GDP Q/Q: No est v 0.3% prelim; Y/Y: No est v 1.9% prelim
• 06:00 (PT) Portugal Oct Industrial Production M/M: No est v -2.3% prior; Y/Y: No est v -5.2% prior
• 06:00 (PT) Portugal Oct Retail Sales M/M: No est v -2.4% prior; Y/Y: No est v 3.8% prior
• 06:00 (UK) DMO to sell €6.0B in 1-month, 3-month and 6-month bills (£0.5B, £2.5B and £3.0B respectively)
• 06:30 (IN) India Weekly Forex Reserve w/e XXX: No est v $448.3B prior
• 07:00 (IN) India Q3 GDP Y/Y: 4.5%e v 5.0% prior; GVA Y/Y: 4.4%e v 4.9% prior
• 07:00 (ZA) South Africa Oct Trade Balance (ZAR): -1.2Be v +5.2B prior
• 07:00 (ZA) South Africa Oct South Africa Budget (ZAR): -40.9Be v -0.6B prior
• 07:00 (BR) Brazil Oct National Unemployment Rate: 11.6%e v 11.8% prior
• 07:00 (BR) Brazil Oct PPI Manufacturing M/M: No est v 1.1% prior; Y/Y: No est v -1.2% prior
• 07:00 (CL) Chile Oct Manufacturing Production Y/Y: -7.7%e v +2.1% prior; Industrial Production Y/Y: -6.2%e v -0.2% prior; Total Copper Production: No est v 488.7K prior
• 07:00 (CL) Chile Oct Unemployment Rate: 7.2%e v 7.0% prior
• 07:00 (MX) Mexico Sept Gold Production: No est v 7.2K kilograms; Silver Production: No est v 327.3K kilograms; Copper Production: No est v 40.6K tons
• 07:00 (IN) India announces upcoming bill issuance (held on Wed)
• 07:30 (BR) Brazil Oct Primary Budget Balance (BRL): +8.0Be v -20.5B prior; Nominal Budget Balance: -14.5Be v -45.9B prior; Net Debt to GDP: 55.5%e v 55.3% prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance
• 08:30 (CA) Canada Sept GDP M/M: 0.1%e v 0.1% prior; Y/Y: 1.4%e v 1.3% prior; Q3 Quarterly GDP Annualized: 1.3%e v 3.7% prior
• 08:30 (CA) Canada Oct Industrial Product Price M/M: 0.0%e v -0.1% prior; Raw Materials Price Index M/M: -2.0%e v 0.0% prior
• 08:30 (US) Weekly USDA Net Export Sales
• 09:00 (BE) Belgium Q3 Final GDP Q/Q: No est v 0.4% prelim; Y/Y: No est v 1.6% prelim
• 10:00 (MX) Mexico Oct Net Outstanding Loans (MXN): No est v 4.663T prior
• 10:00 (CO) Colombia Oct National Unemployment Rate: No est v 10.2% prior; Urban Unemployment Rate: 10.2%e v 10.1% prior
• 11:00 (EU) Potential sovereign ratings after European close
• (DK) Denmark Sovereign Debt to be rated by Moody’s
• (CH) Switzerland Sovereign Debt to be rated by Moody’s
• (IE) Ireland Sovereign Debt to be rated by S&P
• 11:10 (FR) ECB’s Villeroy (France) in Paris
• 12:30 (ES) ECB’s De Guindos (Spain)
• 20:00 (CN) China Nov Manufacturing PMI: 49.5e v 49.3 prior; Non-manufacturing PMI: 53.1e v 52.8 prior; Composite PMI: No est v 52.0 prior