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Quiet weekend and Monday lets theme pivot on upcoming speakers and US CPI later in week

Notes/observations

- No change to macro narrative over the weekend, following the beat in US nonfarm payrolls on Fri. Data focus turns towards Japan Tokyo CPI later tonight (Japan markets were closed on Mon) and US Dec CPI on Thurs, Jan 11th.

- Boeing shares fell ~8-10% in US premarket after FAA grounded 737-Max9 variant following Alaska Air door failure. Airbus trading higher.

- Overnight, LG Electronics reported preliminary Q4 figures with op significantly missing and revenue beating estimates.

- For politics, upcoming on Sat, Jan 13th is the Taiwan election, the first major vote of 2024.

- Corporate debt issuance remains elevated.

- Asia closed lower with Hang Seng under-performing at -1.9%. EU indices are -0.1% to -0.4%. US futures are -0.2% to -0.5%. Gold -0.8%, DXY +0.1%; Commodity: Brent -1.3%, WTI -1.3%, TTF -7.0%; Crypto: BTC -0.5%, ETH -1.0%.

Asia

- China Dec Foreign Reserves rise ($3.238T v $3.206Te) as gold holding increase for the 14th straight month.

- China to sanction five US defense manufacturers over US arms sales to Taiwan.

- China PBOC reiterated prudent monetary policy needs to be flexible, appropriate, precise and effective; To further optimize credit structure. Aggregate financing to rise rapidly through 2024.

- Japan prosecutors make first arrest in funding scandal of PM Kishida's ruling party (LDP).

Mid-East

- Israel stated that it had destroyed Hamas as a fighting force in north Gaza.

- US Sec of State Blinken stated that Israel-Hamas conflict could 'easily metastasize'; this was a moment of profound tension in the region.

Americas

- Fed's Logan (non-voter in 2024) stated that the Fed should slow the pace of asset runoff as the overnight reverse repurchase (RRP) balances approach a low level; Needed to maintain sufficiently restrictive financial conditions.

- Senate Democratic and House GPO leadership expect to announce a top-line spending deal. Reach agreement on $1.66T government spending level for 2024.

- House Panel Leaders reportedly sent letter to Commerce and Trade Sec's urging action against China to defuse China's dominance of older generation chips, including possible tariffs.

Energy

- Saudi Aramco cut the official selling price (OSP) of Arab light oil for Asia, US and Europe by up to $2.0/bbl m/m v the benchmark for Feb 2024.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.48% at 474.10, FTSE -0.36% at 7,661.58, DAX -0.08% at 16,580.80, CAC-40 -0.23% at 7,403.81, IBEX-35 -0.46% at 10,117.81, FTSE MIB -0.39% at 30,322.00, SMI -0.25% at 11,157.80, S&P 500 Futures -0.22%].

Market focal points/key themes: European indices open mixed with a bias to the downside and trended lower through the first hours of trading; DAX notably rising after surprise increase in German trade surplus, but losing the gains through the early part of the session; among sectors that remain buoyant are health care and technology; while sectors trending to the downside include energy and real estate; oil & gas subsector dragged by Galp following analyst action; aviation stocks affected by grounding of Boeing’s 373 MAX following incident; SoftwareOne confirms that talks with Bain are continuing; EC approves Casion Guichard-Perrachon takeover by private equity; earnings expected in the upcoming US session include Commercial Metals and Brunello Cucinelli.

Equities

- Consumer discretionary: Pandora [PNDORA.DK] +2.0% (prelim Q4 - Fri post close), Orpea [ORP.FR] -3.0% (faces fresh probe).

- Consumer staples: Casino Guichard-Perrachon [CO.FR] -2.5% (update on financial restructuring conditions).

- Financials: Plus500 [PLUS.UK] +7.0% (trading update - ahead of expectations), CMC Markets [CMCX.UK] +25.5% (trading update - raises guidance).

- Healthcare: Argenx [ARGX.BE] +3.5% (prelim Q4), Pharming Group [PHARM.NL] +8.5% (prelim FY23).

- Industrials: Airbus [AIR.FR] +1.5% (Boeing weakness).

- Technology: STMicroelectronics [STM.FR] -1.0% (LG Electronics preannouncement).

- Energy: Royal Dutch Shell [SHEL.UK] -2.5% (prelim Q4 production).

Speakers

- German HDE Retail Association: German Jan consumer expectations fell to 93.6 v 96.4 prior.

- Thailand Dep Fin Min stated that the domestic economy was in a crisis and needs a boost. Concerned that negative inflation would slow the economy. Central bank tightening was too fast and too aggressive.

Currencies/fixed income

- USD was holding steady in relatively quiet trading as the week began. Greenback did register its best weekly gain since summer with last week’s performance.

- EUR/USD drifted lower to test 1.0930 after Orders in Germany's manufacturing sector suggested a continued slump in activity.

- USD/JPY at 144.50 area as markets await some key Japanese inflation data on Tuesday. The 147 neighborhood remains key resistance.

Economic data

- (ZA) South Africa Dec Gross Reserves: $62.5B v $61.7B prior; Net Reserves: $56.9B v $56.6Be.

- (DE) Germany Nov Factory Orders M/M: 0.3% v 1.1%e; Y/Y: -4.4% v -3.4%e.

- (DE) Germany Nov Trade Balance: €20.4B v €18.0Be; Exports M/M: +3.7% v +0.5%e; Imports M/M: +1.9% v +0.4%e.

- (FI) Finland Nov Preliminary Trade Balance: €1.7B v €0.0B prior.

- (NO) Norway Nov Industrial Production M/M: +2.4% v -0.6% prior; Y/Y: -6.2% v -17.7% prior.

- (NO) Norway Nov Manufacturing Production M/M: -0.3% v +0.5% prior; Y/Y: -0.6% v -0.7% prior.

- (MY) Malaysia end-Dec Foreign Reserves: $113.5B v $112.8B prior.

- (CH) Swiss Dec CPI M/M: 0.0% v -0.1%e; Y/Y: 1.7% v 1.6%e.

- (CH) Swiss Dec CPI EU Harmonized M/M: +0.3% v -0.5% prior; Y/Y: 2.1% v 1.6% prior; CPI Core Y/Y: 1.5% v 1.4%e.

- (CH) Swiss Nov Real Retail Sales Y/Y: +0.7% v -0.3% prior.

- (HU) Hungary Nov Retail Sales Y/Y: -5.4% v -6.5% prior.

- (CZ) Czech Nov Industrial Output (unadj) Y/Y: -2.7% v -1.5%e; Construction Output Y/Y: -6.5% v -0.9% prior.

- (CZ) Czech Nov National Trade Balance (CZK): 30.8B v 10.1Be.

- (CH) Swiss weekly Total Sight Deposits (CHF): 468.8B v 462.9B prior; Domestic Sight Deposits: 457.1B v 453.2B prior.

- (ZA) South Africa Dec Manufacturing PMI: 50.9 v 48.2 prior (1st expansion in 11 months).

- (SG) Singapore Dec Foreign Reserves: $351.0B v $345.5B prior.

- (EU) Euro Zone Jan Sentix Investor Confidence: -15.8 v -15.8e.

- (EU) Euro Zone Dec Economic Confidence: 96.4 v 94.2e; Industrial Confidence: -9.2 v -9.5e; Services Confidence: 8.4 v 5.2e; Consumer Confidence (final): -15.0 v -15.1 advance.

- (EU) Euro Zone Nov Retail Sales M/M: -0.3% v -0.3%e; Y/Y: -1.1% v -1.5%e.

Fixed income issuance

- (EU) EFSF opened its book to sell EUR-denominated 5-year and 14-year bonds.

Looking ahead

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

- 05:30 ((DE) Germany to sell€2.0B in 6-month BuBills.

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell 3-month and 6-month Bills.

- 05:30 (EU) European Union to sell combined €5.0B in 5-year and 11-year 5-year and 11-year bonds.

- 06:00 (CL) Chile Dec CPI M/M: -0.1%e v 0.7% prior; Y/Y: 4.5%e v 4.8% prior.

- 06:00 (CL) Chile Dec CPI (ex-volatile items) M/M: No est v 0.5% prior; Y/Y: No est v 6.0% prior.

- 06:00 (IL) Israel to sell combined ILS3.5B in 2026, 2029, 2031, 2035, 2037 and 2052 bonds.

- 06:00 (RO) Romania to sell RON500M in 8% Apr 2030 bonds.

- 06:00 (RO) Romania to sell RON400M in 6-month bills.

- 06:00 (TR) Turkey to sell 2025 and 2034 bonds.

- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 06:30 (CL) Chile Dec Trade Balance: $1.9Be v $1.3B prior; Exports: No est v $7.7B prior; Imports: No est v $6.4B prior.

- 06:30 (CL) Chile Dec International Reserves: No est v $43.2B prior.

- 06:30 (CL) Chile Central Bank Traders Survey.

- 07:00 (MX) Mexico Dec Vehicle Production: No est v 329.4K prior; Vehicle Exports: No est v 281.3K prior.

- 07:00 (MX) Mexico Dec Consumer Confidence: No est v 47.3 prior.

- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).

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

- 09:00 (FR) France Debt Agency (AFT) to sell €4.9-6.5B in 3-month, 6-month and 12-month bills.

- 09:30 (TR) Turkey Dec Cash Budget Balance (TRY): No est v 95.3B prior.

- 11:00 (US) NY Fed Dec 1-Yr Inflation Expectations: No est v 3.4% prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 12:00 (US) Fed's Bostic on the Economic Outlook.

- 14:00 (AR) Argentina Nov Industrial Production Y/Y: No est v -0.8% prior; Construction Activity Y/Y: No est v 3.0% prior.

- 15:00 (US) Nov Consumer Credit: $9.0Be v $5.1B prior.

- 18:00 (KR) South Korea Nov Current Account Balance: No est v $6.8B prior; Balance of Goods (BoP): No est v $5.4B prior.

- 18:30 (JP) Japan Dec Tokyo CPI Y/Y: 2.5%e v 2.7% prior (revised from 2.6%); CPI (Ex-Fresh Food) Y/Y: 2.1%e v 2.3% prior; CPI (Ex-Fresh Food, Energy) Y/Y: 3.5%e v 3.6% prior.

- 18:30 (JP) Japan Nov Household Spending Y/Y: -2.3%e v -2.5% prior.

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 81.8 prior.

- 19:01 (UK) Dec BRC Sales LFL Y/Y: 2.4%e v 2.6% prior.

- 19:30 (AU) Australia Nov Retail Sales M/M: +1.2%e v -0.2% prior.

- 19:30 (AU) Australia Nov Building Approvals M/M: -2.0%e v +7.5% prior; Private Sector Houses M/M: No est v 2.2% prior.

- 20:00 (PH) Philippines Nov Unemployment Rate: No est v 4.2% prior.

- 20:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years and 10~25Years maturities.

- 21:30 (KR) South Korea to sell KRW1.2T in 2-year bonds.

- 22:00 (TH) Thailand to sell THB60B in 3-month bills.

- 22:30 (JP) Japan to sell ¥4.00T in 6-Month Bills.

- 22:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills.

Author

TradeTheNews.com Staff

TradeTheNews.com Staff

TradeTheNews.com

Trade The News is the active trader’s most trusted source for live, real-time breaking financial news and analysis.

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