Notes/Observations
- Markets upbeat following Brexit deal on Christmas Eve and President Trump signing covid relief bill overnight
- Light holiday-week trading, with Commonwealth countries closed for Boxing Day bank holiday.
Asia:
- BOJ Summary of Opinions sees economy likely to improve but warns of potential impact from covid
- China FinMin official Wenxiu: Average annual GDP for this year an next around 5%
Coronaviurs:
- Several Asian countries increase restrictions to slow spread of covid-19
- South Korea discloses finding new strain of covid-19, adding to growing list of countries already detecting virus, including Denmark, Canada, France and Italy.
- AstraZeneca announces their vaccine candidate is effective against new strain; expects vaccine to be approved in the UK later today
- NSW Premier extends lockdowns in Northern Beaches area
Europe:
- Brexit agreement details revealed on Saturday, with no major surprises for the market. Agreement expected to be voted on in the UK parliament on Wednesday.
- German 2020 new car registrations ~2.9M, -20% y/y
Americas:
- President Trump signs covid stimulus bill, although requests review of certain elements, saying he had secured a commitment from the Senate to consider increasing checks to $2,000. Spokesperson for McConnell declined to comment on potential legislation; Senate to return on Tuesday.
- House Speaker Pelosi says will introduce legislation for $2,000 checks later today.
Energy:
- Expected cold weather in China puts pressure on securing imports
- Iraq seeking to increase capacity of crude exports at ports
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.70% at 398.24, FTSE closed, DAX +1.41% at 13,778.75, CAC-40 +0.98% at 5,575.88, IBEX-35 +0.54% at 8,155.00, FTSE MIB +0.89% at 22,326.50, SMI +1.24% at 10,541.41, S&P 500 Futures +0.63%]
- Market Focal Points/Key Themes: European indices open higher across the board and continued into the green; FTSE 100 closed for holiday; reportedly BMW to double it’s EV production capacity by 2023; Canada closed for holidays; no major earnings expected in upcoming quiet US session
Equities
- Healthcare: AstraZeneca [AZN.SE] +3% (Reportedly COVID-19 vaccine will be granted UK approval on Monday, Dec 28th; to be rolled out starting Jan 4th), Orphazyme [ORPHA.DK]
- 10% (FDA extends review)
- Industrials: Volkswagen [VOW3.DE] +1% (German car registrations)
Speakers
- (KR) South Korea President Moon: South Korea has secured enough vaccines, will continue to import more
- (HU) Hungary Central Bank Gov Matolcsy: Reiterates stance that prepared to use appropriate tools to support economic recovery
- (CN) China Foreign Min Zhao: US is disregarding facts in calling for release of 12 Hong Kong fugitive
- (UK) Govt official Gove: The majority of businesses are ready for the end of the transition period
- (KR) South Korea Vice Fin Min Hong: to announce COVID relif measures tomorrow, Dec 29th
- (JP) Japan PM Suga: Asks ministers to thoroughly implement coronavirus restrictions with sense of urgency
Currencies/Fixed Income
- In a general risk-on environment with Commonwealth countries closed for holidays, the Euro is one of the better performers among the majors. EUR/USD up over 50 pips in the session, heading towards the 1.2270 resistance at the month’s high (and the highest it’s been since 2018).
- Pound fades some of its Brexit gains during the session, with the EUR/GBP cross being among the best performers
- Energy demand concerns weigh on USD/CAD, with the market closed in Canada
Economic Data
- (NL) Netherlands Dec Producer Confidence: -0.4 v -3.8 prior
- (FI) Finland Dec Consumer Confidence: -4.6 v -4.8 prior; Business Confidence: -5 v -13 prior
- (NO) Norway Nov Retail Sales M/M: 2.9% v 1.2% prior
- (ES) Spain Nov Adjusted Retail Sales Y/Y: -4.3% v -4.0%e; Retail Sales (unadj) Y/Y: -5.8% v 5.3%e
- (CZ) Czech Dec Consumer Confidence: -14.5 v -22.5 prior; Business Confidence:-1.0 v -7.2 prior
- (TW) Taiwan Nov Monitoring Indicator: 30 v 28 prior (highest since 2011)
- (CH) Swiss weekly Total Sight Deposits (CHF): 703.9B v 705.0B prior
Fixed income Issuance
- n/a
Looking Ahead
- 06:00 (IL) Israel to sell bonds
- 06:00 (IL) Israel Nov Unemployment Rate: No est v 4.7% prior
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey
- 06:30 (CL) Chile Central Bank Traders Survey
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 09:00 (FR) France Debt Agency (AFT) to sell €B in 3-month, 6-month and 12-month bills (unconfirmed)
- 09:45 (EU) ECB weekly QE bond buying update
- 10:30 (US) Dec Dallas Fed Manufacturing Activity Index: No est v 12 prior
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills
- 13:00 (US) Treasury to sell 2-Year and 5-Year Notes
- 14:00 (AR) Argentina Oct Supermarket Sales Y/Y: No est v -2.3% prior; Shop Center Sales Y/Y: No est v -81.4% prior
- 16:00 (KR) South Korea Dec Consumer Confidence: No est v 97.9 prior
