Notes/Observations
- Both German and French Nov production data showed the economies withstood the restrictions imposed in November much better than many feared
- Trump concedes election
Asia:
- Japan Fin Min Aso stated that it was difficult to forecast how economy would perform in 2021; Emergency declaration on virus to have impact on current quarter
- US Mission to the UN: US Ambassador to visit Taiwan from Jan 13-15th
Coronavirus:
- Total global cases 88.0M (+1.0% d/d); total deaths: 1.90M (+0.8% d/d)
- Pfizer (PFE) Exec: according to new study, COVID-19 vaccine appears to work against both UK and South Africa variants of coronavirus
Europe:
- Italy govt said to request €222B from EU recovery fund with the plan including €19.7B on health spending
Americas:
- President-elect Biden said to consider requesting a $3.0T tax and infrastructure package, he also supported giving Americans the balance of their $2,000 stimulus checks [equal to $1,400]
- President Trump released Video message as expected with Administration focused on smooth and orderly transition of power on Jan 20th; Expressed outraged by violence from mob
- VP Pence said to be opposed to invoking the 25th amendment and removing President Trump. House Speaker Pelosi Senate Minority Leader Schumer would call for impeachment if Cabinet takes no action
- House Speaker Pelosi said to express interest in impeachment; Trump must be removed from office and expected a quick decision from VP Pence on whether he would invoke 25th amendment – Incoming Senate Majority Leader Schumer called for Trump to be immediately removed from office; called for Pence to invoke 25th amendment
- Fed’s Mester (FOMC voter) stated that she was optimistic H2 2021 [GDP] growth ‘quite a bit stronger’ than 2020; reiterated Fed policy was ‘well calibrated’ to [her] expectations for softening in H1, stronger H2 – Fed’s Bostic stated that Fed might taper bond purchases earlier than expected. Believed that 2021 economy might showed ‘a lot more strength thank some people were projecting
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.57% at 410.80, FTSE +0.01% at 6,857.37, DAX +0.74% at 14,070.95, CAC-40 +0.33% at 5,688.68, IBEX-35 -0.02% at 8,384.00, FTSE MIB % at #, SMI % at #, S&P 500 Futures +0.31%]
- Market Focal Points/Key Themes: European indices open higher across the board but moderated gains as the session wore on (notably FTSE 100 and IBEX slip into the red); sectors leading the way higher include technology and consumer discretionary; telecom and financials sectors are among underperformers; US suspends $1.3B in tariffs on EU products; reports from chipmakers affect markets as car manufacturers warn lack of chip supply could curtail production; Cascade and Blackstone form bidco to acquire Signature Aviation; focus on the release of NFP data from US; no major earnings expected during upcoming US session
Equities
- Consumer discretionary: Reach [RCH.UK] +26% (trading update), Sodexo Alliance [SW.FR] +7% (sales), Pets At Home [PETS.UK] +9% (trading update), Marks & Spencer [MKS.UK] -1.5% (trading update)
- Financials: Credit Suisse [CSGN.CH] -2% (guides net loss)
- Technology: STMicro [STM.FR] +4% (prelim Rev)
Speakers:
- Ireland Fin Min Donohoe stated that some of the virus restrictions could be in place until end of March
- EU’s Von Der Leyen: EU agreed with Pfizer to extend contract; could purchase up to additional 300M doses
- Czech Central Bank (CNB) Dec Minutes saw no major rate debate outlook before May. No current need to use unconventional tools and saw fiscal policy as key for new forecasts
- Iran Supreme Leader Khamenei: Not in a rush for US to rejoin the 2015 nuclear deal but reiterates stance that US should remove sanctions
Currencies/Fixed Income
- USD continues its consolidation from recent multi-year lows against numerous pairs. Dealers noted that greenback medical progress and record support from monetary and fiscal policy were setting the stage for a rapid rebound in global GDP starting this spring, Fed speak from Mester and Bostic seemed to reinforce this thinking and kept upward pressure on US yields.
Economic Data
- (NL) Netherlands Nov Manufacturing Production M/M: -0.2% v +2.0% prior; Y/Y: -2.5% v -3.7% prior; Industrial Sales Y/Y: -4.5 v % prior
- (FI) Finland Nov Industrial Production M/M: 0.7 v 1.6% prior; Y/Y: -2.1% v -2.2% prior
- (ZA) South Africa Dec Gross Reserves: $55.0B v $53.8B prior; Net Reserves: $52.1B v $51.3B prior
- (CH) Swiss Dec Unemployment Rate: 3.5% v 3.6%e; Unemployment Rate (seasonally adj): 3.4% v 3.4%e
- (DE) Germany Nov Current Account Balance: €21.3B v €24.0Be; Trade Balance: €17.2B v €19.2Be; Exports M/M: 2.2% v 1.0%e); Imports M/M: 4.7% v 0.4%e
- (DE) Germany Nov Industrial Production M/M: 0.9% v 0.8%e; Y/Y: -2.6% v -2.3%e
- (NO) Norway Nov Industrial Production M/M: +1.8% v -3.6% prior; Y/Y: -0.7% v 0.0% prior
- (NO) Norway Nov Manufacturing Production M/M: 1.5% v 0.6% prior; Y/Y: -0.9% v -2.7% prior
- (FI) Finland Nov Preliminary Trade Balance: -€0.2B v -€0.1B prior
- (DK) Denmark Nov Gross Unemployment Rate: 4.5% v 4.6% prior; Unemployment Rate (seasonally adj): 4.0% v 4.1% prior
- (DK) Denmark Nov Industrial Production M/M: +5.9% v -5.6% prior
- (MY) Malaysia End-Dec Foreign Reserves: $107.6B v $105.7B mid-month
- (CN) Weekly Shanghai copper inventories (SHFE): 82.4K v 86.7K tons prior
- (FR) France Nov Trade Balance: -€3.6B v -€5.0Be; Current Account Balance: -€1.4B v -€3.8B prior
- (FR) France Nov Industrial Production M/M: -0.9% v -1.0%e; Y/Y: -4.6% v -5.0%e
- (FR) France Nov Manufacturing Production M/M: +0.5% v -2.0%e; Y/Y: -4.3% v -5.9%e
- (FR) France Nov Consumer Spending M/M: -18.9% v -15.9%e; Y/Y: -17.1% v -13.9%e
- (CH) Swiss Dec Foreign Currency Reserves (CHF): 891.2B v 877.0B prior
- (CZ) Czech Nov Industrial Output Y/Y: -2.2% v -0.7%e; Construction Output Y/Y: -8.4% v -10.5% prior (CZ) Czech Q3 Final GDP (3rd reading) Q/Q: 6.9% v 6.9%e; Y/Y: -5.0% v -5.0%e
- (HU) Hungary Nov Industrial Production M/M: -1.2% v +2.8% prior; Y/Y: 1.6% v 2.7% prior
- (TW) Taiwan Dec Trade Balance: $5.8B v $4.3Be; Exports Y/Y: 12.0% v 9.7%e; Imports Y/Y: 0.9% v 5.0%e
- (UK) Halifax Dec House Price Index M/M: 0.2% v 1.2% prior; Y/Y: 6.0% v 7.6% prior
- (SE) Sweden Nov Private Sector Production M/M: 0.8% v 1.2% prior; Y/Y: -1.0%v -1.7% prior
- (SE) Sweden Nov Industrial Orders M/M: 3.8% v 1.5% prior; Y/Y: 5.7% v 1.3% prior
- (SE) Sweden Nov Industry Production Value Y/Y: 0.8% v 0.6% prior; Service Production Value Y/Y: -1.8% v -2.6% prior
- (SE) Sweden Nov Household Consumption M/M: -0.6% v 0.1% prior; Y/Y: -5.0% v -4.3% prior
- (ZA) South Africa Dec Manufacturing PMI: 50.3 v 52.6 prior (8th month of expansion)
- (IT) Italy Q3 YTD Budget Deficit to GDP Ratio: 10.1% v 10.5% prior
- (EU) Euro Zone Nov Unemployment Rate: 8.3% v 8.5%e
- (IT) Italy Nov Preliminary Unemployment Rate: 8.9% v 10.0%e
- (BE) Belgium Nov Unemployment Rate: 6.1% v 6.3% prior
- (GR) Greece Nov Industrial Production Y/Y: +8.6% v -3.5% prior
Fixed income Issuance
- (IN) India sold total INR308.6B vs. INR270B indicated in 2022, 2025, 2030 and 2060 bonds
Looking Ahead
- 06:00 (IE) Ireland Nov Retail Sales Volume M/M: No est v -0.7% prior; Y/Y: No est v 8.1% prior
- 06:00 07 (IE) Ireland Dec Live Register Monthly Change: No est v -6.9K prior; Live Register Level: No est v 203.9K prior
- 06:00 (PT) Portugal Nov Trade Balance: No est v -€1.0B prior
- 06:00 (BR) Brazil Dec FGV Inflation IGP-DI M/M: 0.9%e v 2.6% prior; Y/Y: 23.3%e v 24.3% prior
- 06:00 (CL) Chile Dec CPI M/M: +0.2%e v -0.1% prior; Y/Y: 2.8%e v 2.7% prior
- 06:00 (UK) DMO to sell £4.0B in 1-month, 3-month and 6-month bills (£1.0B, £1.0B and £2.0B respectively)
- 06:30 (IN) India Weekly Forex Reserve w/e Jan 1st: No est v $580.8B prior
- 06:45 (US) Daily Libor Fixing – 07:00 (IN) India announces upcoming bill issuance (held on Wed)
- 07:00 (BR) Brazil Nov Industrial Production M/M: 1.4%e v 1.1% prior; Y/Y: 3.3%e v 0.3% prior
- 07:00 (MX) Mexico Dec Consumer Confidence: No est v 36.7 prior
- 07:00 (MX) Mexico Dec Vehicle Production: No est v 312.2K prior; Exports: No est v 287.7K prior
- 07:00 (MX) Mexico Nov Leading Indicators M/M: No est v 0.36 prior
- 08:30 (US) Dec Change in Nonfarm Payrolls: +50Ke v +245K prior; Change in Private Payrolls: +13Ke v +344K prior; Change in Manufacturing Payrolls: +16Ke v +27K prior (**Note: would be the 1st decline since Apr)
- 08:30 (US) Dec Unemployment Rate: 6.8%e v 6.7% prior; Underemployment Rate: No est v 12.0% prior; Labor Force Participation Rate: 61.5%e v 61.5% -prior
- 08:30 (US) Dec Average Hourly Earnings M/M: 0.2%e v 0.3% prior; Y/Y: 4.5%e v 4.4% prior; Average Weekly Hours: 34.8e v 34.8 prior
- 08:30 (CA) Canada Dec Net Change in Employment: -37.5Ke v +62.1K prior; Unemployment Rate: 8.7%e v 8.5% prior; Full Time Employment Change: No est v +99.4K prior; Part Time Employment Change: No est v -37.4K prior; Participation Rate: 65.0%e v 65.1% prior; Hourly Wage Rate Y/Y: 5.0%e v 4.8% prior
- 10:00 (US) Nov Final Wholesale Inventories M/M: -0.1%e v -0.1% prelim; Wholesale Trade Sales M/M: No est v 1.8% prior
- 11:00 (EU) Potential sovereign ratings after European close
- 15:00 (US) Nov Consumer Credit: $9.0Be v $7.2B prior
- (CO) Colombia Dec Consumer Confidence Index: -10.6e v -13.6 prior
