Quiet trade ahead of Christmas

Notes/Observations

- Most of European markets on holiday in session (FTSE and CAC-40 have ½ day sessions).

- Europe continued to see a surge in Covid-19 cases.

Asia

- Japan Nov National CPI registered its fastest annualized pace since Feb 2020 (Y/Y: 0.6% v 0.5%e).

- Japan Nov PPI Services Y/Y: 1.1% v 1.0%e.

- Japan govt confirmed plan for FY22/23 new JGB issuance of ¥36.9T.

- China poised to miss its obligations under the Economic and Trade Agreement; said to have met just 62% of its import purchasing goal as of October.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 closed, FTSE +0.36% at 7,399.70, closed, CAC-40 +0.07% at 7,111.09, IBEX-35 closed, FTSE MIB closed, SMI closed, S&P 500 Futures closed for Christmas holiday].

Market Focal Points/Key Themes: Majority of indicies closed, with only Russia open for the whole day; early closes for Belgium, France, The Netherlands, UK and Portugal; US market closed for holiday.

Equities

- Consumer discretionary: Turkish Airlines [THYAO.TR] +5% (weakening Turkish lira).

- Energy: Gazprom [GAZP.UK] -1.5% (Russia Dep PM Novak expecting relatively high gas prices in 2022; Has not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec 24th).

Speakers

- EU Commission, said to be considering a broad set of new powers to protect the bloc’s supply chain during periods of crisis.

- RBI Dep Gov Patra stated that inflation was expected to trend lower over the next two years to converge with target.

- Russia Dep PM Novak stated that expected relatively high gas prices in 2022. Reiterated govt stance that favor long-term gas contracts. Global oil markets were balance at this time and expected global oil demand to recover. He saw oil prices around $75/barrel in 2022 and that global oil demand would be back at pre-pandemic level by end 2022. Russia 2021 oil production was at 524M tons and guided its 2022 oil production between 540-550M tons.

- China govt said to be considering to cut 2022 GDP Growth target to 5.5-6.0% (**Note: 2021 GDP Target >6%).

- China Finance Ministry said to extend tariff waivers on some US goods. To add 187 raw material items to zero-tariff list at Hainan free trade port.

Currencies/Fixed income

Quiet pre-holiday trading saw the major currency pairs stick to narrow ranges. The USD was slightly softer as dealers noted the concerns regarding the severity of the Omicron variant was fading.

Economic data

- (NL) Netherlands Q3 Final GDP Q/Q: 2.1% v 1.9% prelim; Y/Y: 5.2% v 5.0% prelim.

- (CN) Weekly Shanghai copper inventories (SHFE): 27.2K v 34.6K tons prior.

- (RU) Russia Narrow Money Supply w/e Dec 17th (RUB): 14.41 v 14.31T prior.

- (TR) Turkey Nov Foreign Tourist Arrivals Y/Y: 111.5% v 99.3% prior.

- (TW) Taiwan Nov M2 Money Supply Y/Y: 8.3% v 8.5% prior; M1 Money Supply Y/Y: 14.2% v 14.9% prior.

Fixed income issuance

- (IN) India sold total INR240B vs. INR240B indicated in 2023, 2026, 2035 and 2051 bonds (**Note: underwriters purchased INR72.7B of the amount).

Looking ahead

- 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).

- 06:30 (IN) India Weekly Forex Reserve w/e Dec 17th: No est v $635.8B prior.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (IN) India announces upcoming bill issuance (held on Wed).

- 07:00 (MX) Mexico Nov Trade Balance: -$1.7Be v -$2.7B prior.

- 07:00 (MX) Mexico Oct IGEA Economic Activity Index (Monthly GDP) M/M: +0.5%e v -0.4% prior; Y/Y: 1.0%e v 0.9% prior.

- 07:00 (CL) Chile Nov PPI M/M: No est v 5.3% prior.

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