TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- German Oct Factory Orders handily miss expectations.
- China PBoC cuts its Overall RRR by 50bps as Chinese property sector remained in focus.
Asia
- Japan PM Kishida stated that would maintain a cautious stance on coronavirus policy and would not hesitate to provide funding to tackle coronavirus crisis.
- Property Developer Sunshine 100 [2608.HK] announced default on senior notes due in 2021.
- China property developer Evergrande [3333.HK] said to be continuing talks with offshore bondholders on Dec 7th, ahead of next payment deadline. Filed plans that it to actively engage with offshore creditors on a restructuring plan in a sign that its $300B of overseas and local liabilities have become unsustainable.
Coronavirus
- Study said to note that Omicron was possibly more infectious because it shares genetic code with common cold coronavirus.
Europe
- UK PM Johnson said to have ordered his team to de-escalate tensions with France opening the way to a new Anglo-French treaty after elections next year.
- Chancellor of the Exchequer Sunak (Fin Min) said to be preparing a 2% cut to income tax or to slash VAT rates before the next election.
- IMF Chief Georgieva stated that was likely to see some downgrades for forecasts for global growth; Had been concerned that recovery has been losing momentum even before Omicron emergence.
- Moody's affirmed Turkey B2 rating; Maintains negative outlook.
- Fitch raised Italy sovereign rating one notch to BBB from BBB-; Outlook Stable.
- Fitch affirmed Russia sovereign rating at BBB; outlook Stable.
Americas
- Goldman Sachs analyst cut 2022 US GDP growth forecast from 4.2% to 3.8%; updated outlook to incorporate omicron virus variant.
Energy
- Saudi Arabia raised oil prices for all crude grades for buyers from US and Asia.
- OPEC Sec Gen Barkindo stated that OPEC would continue with its supply adjustments to attain stability in the oil market.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 +0.64% at 465.72, FTSE +0.85% at 7,182.91, DAX +0.58% at 15,256.75, CAC-40 +0.68% at 6,811.28, IBEX-35 +1.02% at 8,325.73, FTSE MIB +1.04% at 26,207.00, SMI +0.84% at 12,277.65, S&P 500 Futures +0.50%].
Market Focal Points/Key Themes: European indices open generally higher and advanced into the green as the session progressed; sectors leading to the upside include consumer discretionary and materials; while among the laggard sectors are industrials and technology; Finland closed for holiday; EssilorLuxottica completes takeover of GrandVision; Saint-Gobain to acquire GCP; Intertrust to be acquired by CSC; earnings expected during the upcoming US session include SAIC.
Equities
- Consumer discretionary: Intertrust [INTER.NL] +7% (to be acquired).
- Financials: Deutsche Bank [DBK.DE] +3% (analyst upgrade), Amigo Holdings [AMGO.UK] -18% (scheme of arrangement).
- Healthcare: Bavarian Nordic [BAVA.DK] -4% (vaccine trial results; outlook cut).
- Industrials: Clarkson [CKN.UK] +4% (trading update), SSAB [SSABA.SE] -8% (lost order).
Speakers
- China PBoC cut the Reserve requirement ratio (RRR) by 50bps; effective Dec 15th Reiterated stance to maintain prudent monetary policy and keep liquidity reasonably ample. To step up cross cyclical adjustments. RRR cut to release CNY1.2T liquidity into banking system and Banking sector to use part of RRR funds to repay MLF.
- China Politburo noted that macro policies to be stable and effective in 2022; reiterated to continue to implement proactive fiscal policy and prudent monetary policy. Monetary policy to be more flexible and appropriate and to elevate core competitiveness of manufacturing.
- Sweden Central Bank (Riksbank) Nov Minutes noted that policy needed to give continued support to economy. Members supported the decision to retain the repo rate unchanged a 0.00% (zero) and to purchase bonds during the first quarter to compensate for principal payments. Some members advocated that purchases be tapered further in 2022 . PIF forecast seen falling back to fairly low level in 2022.
- UK PM Johnson stated that it did not see need to change guidance on omicron. Denied government acted too late in bringing back pre-departure tests amid spread of Omicron.
- Incoming German Health Min Lauterbach stated that pandemic to last longer than what many people believe.
- Russia govt spokesperson Peskov stated that President Putin and US President Biden call was scheduled at 10:00EST (15:00GMT) on Tuesday, Dec 7th. Call to review progress in relations since the Jun summit held in Geneva. Putin wanted Ukraine tensions, NATO and security guarantees in focus during call.
- China CASS researcher Xie Fuzhan said to see 2022 GDP growth around 8.0% and saw CPI higher compared to 2021 level.
Currencies/Fixed Income
- USD was steady despite last week’s soft payroll report. Dealers noted that Fed policymakers continued to signal a faster withdrawal of asset purchases at the upcoming mid-December meeting despite the emergence of the Omicron coronavirus variant.
Economic data
- (DE) Germany Oct Factory Orders M/M: -6.9% v -0.3%e; Y/Y: -1.0% v +5.5%e.
- (CZ) Czech Q3 Average Real Monthly Wage Y/Y: 1.5% v 1.4%e.
- (CZ) Czech Oct Retail Sales Y/Y: +0.3% v -1.1%e; Retail Sales (ex-auto) Y/Y: 5.6% v 4.7%e.
- (AT) Austria Nov Wholesale Price Index M/M: 1.0% v 2.6% prior; Y/Y: 16.6% v 15.8% prior.
- (TW) Taiwan Nov Foreign Reserves: $547.3B v $546.7B prior.
- (DE) Germany Nov Construction PMI: 47.9 v 47.7 prior.
- (SE) Sweden Q3 Current Account Balance (SEK): 63.0B v 85.7B prior.
- (IT) Italy Oct Retail Sales M/M: 0.1% v 0.3%e; Y/Y: 3.7% v 4.0%e.
- (CH) Swiss weekly Total Sight Deposits (CHF): 720.3B v 719.4B prior; Domestic Sight Deposits: 645.7B v 646.9B prior.
- (UK) Nov New Car Registrations Y/Y: +1.7% v -24.6% prior.
- (UK) Nov Construction PMI: 55.5 v 54.2e (10th month of expansion).
- (EU) Euro Zone Dec Sentix Investor Confidence: 13.5 v 12.5e.
- (GR) Greece Q3 GDP Q/Q: 2.7% v 0.9%e; Y/Y: 13.4% v 16.2% prior; GDP NSA (unadj): Y/Y: 13.7% v 16.4% prior.
Fixed income Issuance
- (LT) Latvia to sell Jan 2030 sustainable notes; guidance seen low 30bps area to mid-swaps.
Looking ahead
- (UR) Ukraine Nov Official Reserve Assets: No est v $29.7B prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell combined €6.0B in 6-month and 12-month BuBills.
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 3-month and 6-month bills.
- 06:00 (SE) Sweden Central bank (Riksbank) Skingsley.
- 06:00 (IL) Israel to sell bonds.
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 06:30 (UK) BOE's Broadbent.
- 06:30 (TR) Turkey Nov Real Effective Exchange Rate (REER): No est v 60.37 prior.
- 06:45 (US) Daily Libor Fixing.
-07:00 (TR) Turkey to sell Floating Bonds.
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 07:00 (MX) Mexico Nov Consumer Confidence: No est v 43.6 prior.
- 07:00 (MX) Mexico Nov Vehicle Production: No est v 257.8K prior; Vehicle Exports: No est v 224.5K prior.
- 07:00 (CL) Chile Oct Nominal Wage M/M: No est v 0.4% prior; Y/Y: No est v 5.7% prior.
- 08:00 (BR) Brazil Nov Vehicle Production: No est v 177.9K prior; Vehicle Sales: No est v 162.4K prior; Vehicle Exports: No est v 29.8K prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 09:00 (FR) France Debt Agency (AFT) to sell €3.8-5.0B in 3-month, 6-month and 12-month bills.
- 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (3-7 years).
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 106.0 prior.
- 18:00 (KR) South Korea Oct Current Account Balance: No est v $10.0B prior; Balance of Goods (BOP): No est v $9.5B prior.
- 18:30 (JP) Japan Oct Labor Cash Earnings Y/Y: 0.4%e v 0.2% prior; Real Cash Earnings Y/Y: -0.5%e v -0.6% prior.
- 18:30 (JP) Japan Oct Household Spending Y/Y: -0.6%e v -1.9% prior.
- 19:01 (UK) Nov BRC Sales Like-For-Like Y/Y: No est v -0.2% prior.
- 19:30 (AU) Australia Q3 House Price Index Q/Q: 5.0%e v 6.7% prior; Y/Y: 21.7%e v 16.8% prior.
- 20:00 (PH) Philippines Oct Unemployment Rate: No est v 8.9% prior.
- 20:00 (PH) Philippines Nov CPI Y/Y: 4.0%e v 4.6% prior.
- 22:00 (ID) Indonesia Nov Foreign Reserves: No est v $145.5B prior.
- 22:30 (AU) RBA Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 0.10%.
- 22:30 (HK) Hong Kong to sell 3-month and 6-month Bills.
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