Quiet Session, Debt Issuance Continues To Be Heavy

Notes/Observations

• Euro Zone Sentix investor Confidence turns positive for the 1st time in almost a year
• Debt issuance continue to be heavy in early Jan

Asia:

• China Dec CPI Y/Y: 0.2% V 0.0%E
• IMF cut China 2021 GDP growth forecast from 8.2% to 7.9%
• RBNZ disclosed data system breach, but does not think it was specific to RBNZ. The 3rd party file sharing service used by RBNZ was illegally accessed & the breach has been contained
• Nikkei 225 closed for holiday

Coronavirus:

• Total global cases 90.3M (+2.5% vs. Fri); total deaths: 1.9M (+1.9% vs. Fri)
• UK Govt said to be considering increasing/tightening lockdown measures citing concerns the current lockdown was not being followed strictly enough

Europe:

• Italy Finance Min Gualtieri said to be considering a new stimulus package of €24B to aid virus-hit economy. Govt considering a package worth 1.5% of GDP
• Chancellor of the Exchequer Sunak (Fin Min) said to be looking to delay tax rises and end the stamp duty holiday until autumn at the earliest in his March budget

Americas:

• House Speaker Pelosi told lawmakers that they would first vote on a resolution this week calling on VP Pence and the cabinet to remove Trump from office before moving to impeachment
• Rep Clyburn: Impeachment articles could be on House Floor either by Tuesday or Wednesday’
• President-elect Biden said to be urged by advisors to stay clear of the impeachment debate and focus his public comments this week on fighting Covid-19
  US govt posted updated list of companies connected to Chinese Military; List did not include Alibaba or Tencent but added CNOOC (from US Friday)

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -0.36% at 409.70, FTSE -0.52% at 6,837.25, DAX -0.49% at 13,981.25, CAC-40 -0.52% at 5,677.59, IBEX-35 -0.16% at 8,394.00, FTSE MIB -0.49% at 22,681.50, SMI -0.02% at 10,795.50, S&P 500 Futures -0.55%]
• Market Focal Points/Key Themes: European indices open modestly lower (SMI and AEX exceptions trading marginally in the green at the open) and continued to slide further into the red as the session progressed; better performing sectors include consumer discertionary and technology; utilities and financials sectors among those leading to the downside; PSA-FCA merger approved, dragging on automotive sector; Signature Aviation to be acquried by GIP; Sanofi acquires Kymab; reportedly Deutsche Telekom looking to sell Dutch unit; earnings expected during the upcoming US session include Commercial Metals, Brunello Cucinelli and Carnival

Equities

• Consumer discretionary: JD Sports Fashion [JD.UK] +4% (trading update), Smith & Nephew [SN.UK] -3% (trading update)
• Industrials: Signature Aviation [SIG.UK] +8% (new offer)
• Technology: TeamViewer [TMV.DE] -2% (billings)
• Materials: SIG [SHI.UK] +8% (trading update)

Speakers

• Spain Econ Min Calvino stated that itsQ4 GDP forecast was unchanged at this time
• China Foreign Ministry spokesperson Zhao Lijoan reiterated its opposition to countries joint statement on Hong Kong
• China said to be planning to allow some commercial banks to start selling non-performing personal loans to distressed asset managers as soon as Jan
• Japan’s govt said to be considering declaring a state of emergency for Osaka, Kyoto and Hyogo prefectures in the Kansai region in western Japan

Currencies/Fixed Income

• USD continued to be supported by its recent rise in Treasury yield aide by the expectations of more fiscal stimulus under the Biden Administration. Price action was highlighted by traders scaling back bearish bets versus the greenback.
• EUR/USD tested a 2-week low of 1.2155 by mid-session.
• USD/JPY holding above 104.00 aea.

Economic Data

• (SE) Sweden SEB Housing-Price Indicator: 54 v 50 prior
• (NO) Norway Dec CPI M/M: 0.4% v 0.4%e; Y/Y: 1.4% v 1.4%e
• (NO) Norway Dec CPI Underlying M/M: -0.1% v -0.1%e; Y/Y: 3.0% v 3.1%e
• (NO) Norway Dec PPI M/M: 1.6% v 4.5% prior; Y/Y: -5.7% v -3.4% prior
• (DK) Denmark Nov Current Account Balance (DKK): 15.2B v 12.7B prior; Trade Balance: 1.9B v 5.1B prior
• (DK) Denmark Dec CPI M/M: -0.2% v -0.1% prior; Y/Y: 0.5% v 0.5%e
• (DK) Denmark Dec CPI EU Harmonized M/M: -0.2% v -0.2% prior; Y/Y: 0.4% v 0.4% prior
• (TR) Turkey Oct Unemployment Rate:12.7 % v 12.7% prior
• (TR) Turkey Nov Current Account Balance: -$4.1B v -$3.6Be
• (ES) Spain Nov Industrial Production M/M: -0.9% v +0.2%e; Y/Y: -3.8% v -2.5%e; Industrial Output NSA (unadj) Y/Y: -2.0% v -6.2% prior
• (CZ) Czech Dec Unemployment Rate: 4.0% v 3.8% prior
• (HU) Hungary Nov Preliminary Trade Balance: €0.8B v €0.7Be
• (CH) Swiss weekly Total Sight Deposits (CHF): 702.4B v 702.7B prior; Domestic Sight Deposits: 628.9B v 631.5B prior
• (IS) Iceland Nov Final Trade Balance (ISK): -10.8B v -5.5B prelim
• (EU) Euro Zone Jan Sentix Investor Confidence: 1.3 v 1.9e (1st positive reading in 11 months)

Fixed income Issuanc

• (EU) EFSF opened its book to sell combined €4.5B in 10-year and 31-year bonds via syndicate
• (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month bills; Avg Yield: 0.09% v 0.05% prior; Bid-to-cover: 2.85x v 1.72x prior

Looking Ahead

• (EU) Daily ECB Liquidity Stats
• 06:00 (IL) Israel to sell bonds
• 06:25 (BR) Brazil Central Bank Weekly Economists Survey
• 06:45 (US) Daily Libor Fixing
• 07:00 (MX) Mexico Nov Industrial Production M/M: 0.8%e v 2.0% prior; Y/Y: -4.2%e v -3.3% prior; Manufacturing Production Y/Y: -2.4%e v -1.3% prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• (MX) Mexico Dec Nominal Wages: No est v 5.2% prior
• 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)
• 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance
• 08:50 (FR) France Debt Agency (AFT) to sell €4.8-6.0B in 3-month, 6-month and 12-month bills
• 09:00 (UK) BOE’s Tenreyo
• 09:30 (UR) Ukraine Dec CPI M/M: 0.7%e v 1.3% prior; Y/Y: 4.8%e v 3.8% prior
• 09:30 (EU) ECB chief Lagarde on panel
• 09:45 (EU) ECB weekly QE bond buying update
• 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (3-7 years)
• 10:30 (CA) Bank of Canada (BOC) Q4 Overall Business Outlook Survey: No est v -2.2 prior; Business Outlook Future Sales : No est v 39 prior
• 10:30 (UK) Chancellor of the Exchequer Sunak (Fin Min) update on Economy in Parliament
• 11:30 (US) Treasury to sell 13-Week and 26-Week Bills
• 12:00 (US) Fed’s Bostic
• 13:00 (US) Treasury to sell 3-year notes
• 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 111.2 prior (last on Dec 14th)
• 18:00 (US) Fed’s Kaplan (non-voter)
• 18:50 (JP) Japan Nov Current Account Balance: ¥1.552Te v ¥2.145T prior; Adjusted Current Account Balance: ¥1.998Te v ¥1.983T prior; Trade Balance (BoP Basis): ¥474.6Be v ¥971.1B prior
• 18:50 (JP) Japan Dec Bank Lending Y/Y: No est v 6.3% prior; Bank Lending (ex-trusts) Y/Y: No est v 6.0% prior
• 19:01 (UK) Dec BRC Sales Like-For-Like Y/Y: No est v 7.7% prior
• 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month Bills