Notes/Observations
European market steady following holiday break – Various companies’ comments on impact from US tax reform
Asia:
China Nov Industrial Profits Y/Y: 14.9% v 25.1% prior (slowest rise since April)
PBoC: Skips OMO operation for 4th straight session; Net drain CNY40B v CNY50B drain prior
PBoC Adviser Sheng said to forecasts CNY currency (CNY) yuan consolidation after recent gains from mid-December
China delays 3-way summit with Japan and South Korea; Japan Chief Cabinet Sec Suga later stated that was aiming for summit with China and South Korea next spring
Japan Nov Annualized Housing Starts: 951K v 934Ke; Y/Y: -4.2% v -2.5%e
Europe:
Russia said to limit US open skies access, starting Jan 1st; in response to planned US curbs
Economic Data:
(CH) Swiss Nov UBS Consumption Indicator: 1.67 v 1.68 prior
(FI) Finland Dec Consumer Confidence: 24.0 v 23.0 prior; Business Confidence: 18 v 15 prior
(CZ) Czech Dec Business Confidence: 17.1 v 16.2 prior; Consumer Confidence: 7.5 v 7.8 prior,
(ES) Spain Nov Adjusted Retail Sales Y/Y: 2.0% v +0.8%e; Retail Sales (unadj) Y/Y: +2.9% v -1.2% prior
(CH) Swiss Dec Credit Suisse Expectations Survey: 52.0 v 40.7 prior
Fixed Income Issuance:
(IN) India sold total INR110B vs. INR110B indicated in 3-month, 6-month and 12-month bills
(IT ) Italy Debt Agency (Tesoro) sold €2.5B vs. €2.0-2.5B indicated range in Zero Coupon Oct 2019 CTZ bonds; Avg Yield: -0.221% v -0.337% prior; Bid-to-cover: 2.11x v 2.19x prior
(IT ) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 6-month Bills; Avg Yield: -0.457% v -0.436% prior; Bid-to-cover: 1.43x v 1.86x prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices [Stoxx50 closed, FTSE closed, DAX closed, CAC-40 closed, IBEX-35 closed, FTSE MIB closed, SMI closed, S&P 500 Futures +0.1%]
Market focal points/key themes: European stocks open mixed, but tracked higher as the session progressed; trading light in holiday session; tech stocks impacted by reports of disappointing iPhone sales; energy stocks supported as crude hovered near two-year high; materials supported by increases in commodity prices, including gold and copper (highest since 2014); IWG confirms press speculation has received a potential takeover offer; attention turning to upcoming Redbook index and pending home sales in the US
Equities
Consumer discretionary [International Workplace Group IWG.UK +30.9% (potential takeover offer)]
Energy [Saipem SPM.IT +3.3% (contract awards)]
Financials [Banca Carige CRGI.IT -3.4% (completed capital increase), Banco BPM BAMI.IT +2.7% (CEO comments)]
Healthcare [Nanobiotix NANO.FR +7.7% (IND from FDA), Poxel POXEL.FR +3.6% (initiates Phase III trial), Qiagen QIA.DE -1.2% (US tax impairment)]
Industrials [AB Volvo VOLVA.SE +0.4% (Geely acquires Cevian’s stake), Vallourec VK.FR +3.4% (analyst action)]
Technology [AMS AMS.CH -10.0% (iPhone sales), Dialog Semi DLG.DE -4.7% (iPhone sales), STMicroelectronics STM.FR -2.1% (iPhone sales)]
Speakers
France PM Macron saw labor reform impact within 18-24 months and reiterates his view that view that 2017 budget deficit to GDP ratio to comply with 3% limit
Germany Foreign Min Gabriel: Reiterates SPD won’t join coalition if Merkel blocks EU reform
Bank of Spain (BOS) Monthly Report: Sees growth losing intensity in coming years. Q4 GDP growth seen at 0.8% as exports help to offset some of the uncertainty in Catalonia
Nigeria Central Bank: Jan monetary policy meeting uncertain as MPC lacks quorum
India govt official stated that it could meet FY17/18 fiscal deficit target if central bank (RBI) and State-run banks paid an additional dividend
South Korea Ministry of Strategy and Finance Semi-annual economic outlook maintained its 2018 GDP growth forecast at 3.0% while trimming 2018 CPI from 1.8% to 1.7%
Pipeline feeding into Libya Es Sider Port said to need about a week to repair; loadings down approx 50% following the blast
Currencies
FX markets saw little price movement as quiet trading persisted in the aftermath of the Christmas holiday with overall volumes very thin. Dealer began assessing possible trends for 2018 noting that monetary policy convergence could weigh on the USD in 2018 as central banks other than the Fed had begun moving away from monetary stimulus, or started to raise interest rates.
Both the EUR/USD and GBP/USD pairs were slightly higher by 0.2%
Canadian dollar did register a 3-week high in wake of rise in oil prices aided by reports of an explosion at a Waha Oil pipeline that fed into the key Es Sider terminal in Libya
China’s off-shore Yuan currency fell for the 1st time in three sessions and off its 3-month high after PBoC Adviser Sheng suggested that CNY currency (CNY) yuan would consolidate after recent gains from mid-December
Fixed Income
Bund futures trade 161.97, up 20 ticks
Guilt futures trade 124.77, up 17 ticks
Corporate issuance – closed for the year
Looking Ahead
05.30 (UK) Weekly John Lewis LFL sales data
06:00 (RU) Russia to sell combined RUB35B in OFZ 2020 and 2024 bonds
06:30 (CL) Chile Central Bank’s Traders Survey – 06:45 (US) Daily Libor Fixing
07:00 (BR) Brazil Nov Total Formal Job Creation: +22.0Ke v +76.6K prior
07:45 (US) Weekly Goldman Economist Chain Store Sales
08:05 (UK) Baltic Dry Bulk Index
08:55 (US) Weekly Redbook Sales
08:55 (FR) France Debt Agency (AFT) to sell combined €3.3-4.5B in 3-month and 6-month BTF Bills
09:00 (MX) Mexico Nov Trade Balance: -$0.4Be v -$2.1B prior
09:00 (EU) Weekly ECB Forex Reserves:
10:00 (US) Dec Consumer Confidence: 128.0e v 129.5 prior
10:00 (US) Nov Pending Home Sales M/M: -0.5%e v +3.5% prior; Y/Y: No est v 1.2% prior
10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills
11:30 (US) Treasury to sell 2-Year Floating Rate Notes
12:00 (FR) France Nov Net Change in Jobseekers: No est v +8.0K prior, Total Jobseekers: No est v 3.484M prior
13:00 (US) Treasury to sell 5-Year Notes
14:00 (AR) Argentina Oct Economic Activity Index (Monthly GDP) M/M: No est v 0.1% prior; Y/Y: 4.7%e v 3.8% prior
16:00 (KR) South Korea Jan Business Manufacturing Survey: No est v 82 prior; Non-Manufacturing Survey: No est v 80 prior
16:30 (US) Weekly API Oil Inventories
