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- European bourses hold on modest gains after risk appetite continued overnight following US Jolts miss, sparking bets again on rate cuts soon. Yields dropping and weaker US dollar seen. Weaker dollar giving slight tailwinds to metals. Next jobs indicator today with ADP Employment Change at 08:15 ET.

- Travel giant TUI FY23 results sees winter season volume and occupancy well ahead of prior year. Results lifted travel and leisure sector in Europe. IATA Chief provided positive outlook for airline industry in 2024.

- Crypto continues rally.

- Moody’s affirmed Hong Kong sovereign rating and cut outlook to negative, following China affirmation yesterday with cut outlook as well.

- Asia closed higher with Nikkei225 out-performing at +2.0%. EU indices are +0.1-0.6%. US futures are +0.1-0.3%. Gold +0.1%, DXY -0.1%; Commodity: Brent -0.6%, WTI -0.7%, TTF +3.5%; Crypto: BTC +5.5%, ETH +3.1%.

Asia

- Australia Q3 GDP Q/Q: 0.2% v 0.5%e; Y/Y: 2.1% v 1.9%e.

- Both S&P and Fitch affirmed China sovereign rating at 'A+' with Outlook stable (**Reminder Dec 5th Moody's lowered the China outlook from Stable to Negative while affirming the sovereign rating at "A1").

- BOJ Himino reiterated that would continue with easing patiently; did not have preset schedule in mind on the exit from easy policy. Quite possible to produce 'good' outcome from exit. Virtuous wage inflation emerging gradually.

Global conflict/tensions

- Hamas official stated that held xIsrael PM Netanyahu fully responsible for the lives of the Israeli hostages and for obstructing the completion of the exchange deal - press.

Europe

- European Finance Ministers said to be discussing debt reduction targets as part of fiscal overhaul which would include fiscal buffer of 1.5%/GDP.

Americas

- US Treasury Sec Yellen noted that was not seeing usual signs of weakening labor market that would bring fears of recession. US growth would come down but not seeing weakness on the spending side of the economy .Demand continued to be adequate to power economy forward at trend-growth-like rates.

Energy

- Weekly API Crude Oil Inventories: +0.6M v -0.8M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.18% at 468.44, FTSE +0.35% at 7,515.69, DAX +0.10% at 16,550.19, CAC-40 +0.10% at 7,394.56, IBEX-35 +0.16% at 10,254.72, FTSE MIB +0.44% at 30,214.00, SMI +0.05% at 10,970.80, S&P 500 Futures +0.23%].

Market Focal Points/Key Themes: European indices open generally higher and remained upbeat through the early part of the session; Finland closed for holiday; among sectors leading the way higher are technology and industrials; among lagging sectors are health care and consumer discretionary; travel and leisure subsector supported following Tui’s optimistic outlook; Hensoldt acquires ESG Elektroniksystem; corporate events expected in the upcoming US session include Exxon-Mobil update on corporate plan and McDonald’s investor update.

Equities

- Consumer discretionary: Orpea [ORP.FR] +3.0% (launches €1.16B capital increase at €0.0178/shr), Hennes & Mauritz [HMB.SE] +0.5% (analyst downgrade), Inditex [ITX.ES] -1.5% (analyst downgrade).

- Consumer staples: Ocado [OCDO.UK] +4.0% (analyst upgrade), British American Tobacco [BATS.UK] -8.5% (trading update; $31.5B charge), Clas Ohlson [CLASB.SE] +10.0% (Q2 results).

- Healthcare: Merck [MRK.DE] -13% (phase 3 for Evobrutinib missed primary endpoint, analyst downgrade), Orpea [ORP.FR] +3.0% (launches €1.16B capital increase at €0.0178/shr).

- Industrials: Weir Group [WEIR.UK] +4.5% (FY26 targets).

Speakers

- ECB's Kazaks (Latvia, hawk) noted that currently he saw no need to cut rates in H1 2024 but that decision could change if the situation warranted it. Inflation path remains bumpy.

- Sweden Central Bank (Riksbank) Dep Gov Floden noted that still had upside risks to inflation and prepared to hike rates if necessary. Main scenario is for domestic economy to have a soft landing.

- Czech Central Bank (CNB) Gov Mich noted that would remain hawks even if rates were cut by year-end.

- Turkey President Erdogan stated that inflation to stay high until Jun due to base effect then fall rapidly afterwards.

- Russia Upper House of Parliament said to propose Mar 17th for the Presidential election.

- Japan govt said to consider tax carryover for loss-making SME wage hikes.

- Japan MOF noted that a meeting with primary dealers suggested.

Currencies/fixed income

- FX markets continued to debate when G7 central banks would embark on easing and envision a very aggressive path of rate cuts through next year.

- EUR/USD was softer as weak German Factory orders added momentum to ECB's Schnabel hint of early ECB interest rate cuts. Markets currently pricing in total 150bps of ECB rate cuts during 2024.

- USD/JPY continued to hold above the 147 level. BOJ officials remained adamant of continuing its ultra-east monetary policy.

- Dealers noted that China's major state-owned banks had again stepped up USD selling forcefully after the Moody's statement on Tuesday.

Economic data

- (DE) Germany Oct Factory Orders M/M: -3.7% v 0.2%e; Y/Y: -7.3% v -3.7%e.

- (NO) Norway Q3 Current Account (NOK): 193.0B v 175.0B prior.

- (HU) Hungary Oct Industrial Production M/M: -0.6% v 1.2% prior; Y/Y: -2.8% v -2.1%e.

- (HU) Hungary Oct Retail Sales Y/Y: -6.5% v -6.3%e.

- (AT) Austria Nov Wholesale Price Index M/M: -1.0% v -1.1% prior; Y/Y: -4.6% v -6.5% prior.

- (CZ) Czech Oct Retail Sales (ex-auto) Y/Y: -1.4% v -1.9%e.

- (TW) Taiwan Nov CPI Y/Y: 2.9% v 2.8%e; CPI Core Y/Y: 2.4% v 2.5% prior; PPI Y/Y: -0.7% v -0.4% prior.

- (DE) Germany Nov Construction PMI: 36.2 v 38.3 prior (lowest since May 2020).

- (UK) Nov Construction PMI: 45.5 v 46.9e.

- (GR) Greece Q3 GDP Q/Q: 0.0% v 1.1% prior; Y/Y: 2.1% v 2.6% prior; GDP NSA (unadj) Y/Y: 1.8% v 2.8% prior.

- (EU) Euro Zone Oct Retail Sales M/M: 0.1% v 0.2%e; Y/Y: -1.2% v -1.1%e.

Fixed income issuance

- (IN) India sold total INR240B vs. INR240B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark old total DKK1.4B in 2025 and 2033 DGB bonds.

- (SE) Sweden sold total SEK2.5B vs. SEK2.5B indicated in 2031 and 2033 bonds.

- (UK) DMO sold £3.0B in 0.875 July 2033 Green Gilts; Avg Yield: 4.091% v 4.315% prior; bid-to-cover: 2.66x v 2.56x prior; Tail: 1.3bps v 1.3bps prior.

- (NO) Norway sold total NOK2.0B in 2028 and 2033 Bonds.

Looking ahead

- (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 5.75%.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (UK) Bank of England (BOE) Financial Stability Report.

- 05:30 (DE) Germany cancelled to sell €3.0B in 2030 Bunds.

- 05:30 (GR) Greece Debt Agency (PDMA) to sell €625M in 12-month Bills.

- 06:00 (IE) Ireland Nov Unemployment Rate: No est v 4.8% prior.

- 06:00 (BR) Brazil Nov FGV Inflation IGP-DI M/M: 0.6%e v 0.5% prior; Y/Y: -3.5%e v -4.3% prior.

- 06:00 (UK) BOE Financial Stability Report press conference.

- 06:00 (EU) EU Commission to sell combined €2.5B in 3-month and 6-month bills.

- 06:00 (RU) Russia OFZ Bond auction (if any).

- 06:30 (BR) Brazil Oct Nominal Budget Balance (BRL): -48.3Be v -99.8B prior; Primary Budget Balance: +17.0Be v -18.1B prior; Net Debt to GDP Ratio: 59.9%e v 60.0% prior.

- 07:00 (US) MBA Mortgage Applications w/e Dec 1st: No est v 0.3% prior.

- 07:00 (CL) Chile Oct Nominal Wage Y/Y: No est v 8.9% prior.

- 07:00 (MX) Mexico Nov Consumer Confidence: 46.0e v 46.0 prior.

- 07:00 (MX) Mexico Nov Vehicle Production: No est v 378.1K prior; Vehicle Exports: No est v 316.4K prior.

- 07:00 (UK) Weekly PM Question time in House.

- 08:00 (HU) Hungary Central Bank (MNB) Nov Minutes.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:15 (US) Nov ADP Employment Change: +130Ke v +113K prior.

- 08:30 (US) Q3 Final Nonfarm Productivity: 4.9%e v 4.7% prelim; Unit Labor Costs: -0.9%e v -0.8% prelim.

- 08:30 (US) Oct Trade Balance: -$64.2Be v -$61.5B prior.

- 08:30 (CA) Canada Oct Int'l Merchandise Trade (CAD): 1.8Be v 2.0B prior.

- 08:30 (CA) Canada Q3 Labor Productivity Q/Q: -0.6%e v -0.6% prior.

- (PL) Poland Central Bank (NBP) Interest Rate Decision.

- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 5.00%.

- 10:00 (CA) Canada Nov Ivey Purchasing Managers Index (seasonally adj): No est v 53.4 prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 19:30 (AU) Australia Oct Trade Balance (A$): 7.5Be v 6.8B prior; Exports M/M: No est v -1.4% prior; Imports M/M: No est v 7.5% prior.

- 20:00 (PH) Philippines Oct Unemployment Rate: No est v 4.5% prior.

- 21:00 (JP) Japan Nov Tokyo Avg Office Vacancies: No est v 6.1% prior.

- 22:00 (TH) Thailand Nov CPI M/M: -0.1%e v -0.3% prior; Y/Y: -0.3%e v -0.3% prior; CPI Core Y/Y: 0.6%e v 0.7% prior.

- 22:00 (ID) Indonesia Nov Foreign Reserves: No est v $133.1B prior.

- 22:30 (JP) Japan to sell 6-Month Bills.

- 22:35 (JP) Japan to sell 30-year JGB Bonds.

- 23:00 (TH) Thailand Nov Consumer Confidence: No est v 60.2 prior; Economic Confidence: No est v 54.5 prior.

- 23:30 (TW) Taiwan to sell NT$30 Billion 10-Year Bonds.

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