Holiday market keeps participation low

Notes/Observations

- Price action largely listless with major European markets closed for Christmas/Boxing Day holiday

- Russia Gold and Forex Reserve w/e Dec 19th fall by $15B w/w to dip below the $400B level for first time in 5 years

- Japan Nov Jobless Rate (inline) at 3.5%e and matched lowest level since 2008

- Japan Nov National CPI comes in lower than expected (YoY: 2.4% v 2.5%e); Excluding the direct impact of the April consumption tax hike, the Nov core CPI 0.7% vs. 0.9% in Oct; 10-year Japanese government JGB bond fell to a record low of 0.300%

Economic data

- (SG) Singapore Nov Industrial Production data (missed); M/M: -1.4% v +0.4%e; Y/Y: -2.8% v +0.3%e

- (RU) Russia Narrow Money Supply w/e Dec 19th: 9.23T v 8.43T prior

- (CN) Weekly Shanghai Weekly copper Stockpiles: 105.5K v 92.8K prior

- (TH) Thailand Nov Customs Trade Balance (missed): -$0.1B v +$0.2Be

Fixed Income:

- (IN) India sold total INR140B in 2022, 2026, 2030 and 2040 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities Indices**

[Stoxx50 closed, FTSE 100 closed, DAX closed, CAC-40 closed, IBEX-35 closed, FTSE MIB closed, SMI closed,

Speakers

- Japan Rating Agency JCR cuts Russia sovereign rating to BBB-; puts on credit monitor negative

- China Academy of Social Sciences (CASS) issued its Yellow Book for 2015 outlook and noted that US and China to lead global growth next year. It also stressed that 2-way CNY currency (Yuan) rate movement to be the 'new normal' and USD might strengthen while JPY and EUR might weaken during in 2015

- China Premier Li: Central govt fully recognized Hong Kong Chief CY Leung's work in keeping overall stability

- China Securities Regulatory Commission (CSRC) said to study further easing of Qualified foreign institutional investor (QFII) criteria

- India Fin Min Jaitley: FY16 GDP growth seen above 6.0% further easing of Qualified foreign institutional investor (QFII) criteria

- India Junior Fin Min Sinha: Country needed to improve the tax-to-GDP ratio as India's current tax-to-GDP ratio is 15% was well below the avg of over 30% in OECD countries

- Thailand Central Bank again cut its 2014 and 2015 growth and inflation outlook. Domestic recovery was slower than forecasts due to weak exports and slow public spending. Depressed commodity prices to impact exports and tourism restrained by drop in Russia and Europe. It noted that monetary policy to remain accommodative to support growth. Country would not face deflation despite low inflation and would propose a new inflation target

- Belarus Foreign Min official: No new Ukraine talks being held in Minsk today

- Ukraine separatists rebels said to swap first group of prisoners by Tuesday, Dec 30th

Currencies

The USD remained within narrow ranges against the major currencies during slow holiday trade on Friday. Overall analysts continued to believe that the greenback had more room to gain in 2015 on diverging central bank policy

- EUR/USD holding below the 1.22 area while USD/JPY stays above 120 handle.

Political/In the Papers:

- (PH) Philippines might build more naval bases near disputed waters

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)

- 06:30 (IN) India Weekly Forex Reserves w/e Dec 19th: No est v $316.8B prior

- 07:30 (TR) Turkey Dec Real Sector Confidence (Seasonally Adj): No est v 108.4 prior; Real Sector Confidence (unadj): No est v 102.7 prior

- 07:30 (TR) Turkey Dec Capacity Utilization: No est v 74.5% prior

- 08:30 (US) Weekly USDA Net Export Sales

- 09:00 (MX) Mexico Nov Preliminary Trade Balance: No est v $143.0M prior

- 16:00 (KR) South Korea Jan Business Manufacturing Survey: No est v 75.0 prior; Non-Manufacturing Survey: No est v 70.0 prior

- 20:30 (CN) China Nov Industrial Profits Y/Y: No est v -2.1% prior