Session sees EU employment, growth and inflation data

EU mid-market update: Session sees EU employment, growth and inflation data; Central bankers still resist rate cut talks; Oil prices higher ahead of OPEC+.

Notes/observations

- Softer EU employment, growth and inflation data have ECB futures fully price 25bps rate cut in Apr 2024 for the first time.

- France, Italy and Euro Zone CPI data all come in below consensus.

- Awaiting OPEC+ decision on production cuts.

Asia

- China Nov Manufacturing PMI (Govt Official): 49.4 v 49.8e (2nd month of contraction).

- Bank of Korea (BoK) left the 7-day Repo Rate unchanged at 3.50% (as expected). Statement noted it would keep policy restrictive for sufficiently long period (**Note: removed phrase for a considerable time].

- South Korea Oct Industrial Production M/M: -3.5% v +0.4%e [fastest m/m decline since Dec 2022]; Y/Y:1.1 % v 4.5%e.

- Japan Oct Retail Sales M/M: -1.6% v +0.4%e; Y/Y: 4.2% v 6.0%e.

- Japan Oct Preliminary Industrial Production M/M: 1.0% v 0.8%e; Y/Y: 0.9% v 0.4%e.

- BOJ Board member Nakamura reiterated stance that needed to continue with easing patiently; Now was not time to consider shifting policy.

Global conflict/tensions

- One day extension of truce between Israel and Hamas.

Europe

- German Fin Min Lindner noted that the country faced a €17B gap in the 2024 budget.

- UK Nov Lloyds Business Barometer: 42 v 35e.

Americas

- Federal Reserve Releases Beige Book noted that economic activity had slowed since the prior report, Consumer spending on discretionary items declined; Consumers showed more price sensitivity. Most districts expect moderate price increases to continue into next year.

- Fed’s Mester (non-voter) noted that policy was in good place to assess incoming data.

- Fed said to be not ready to start talking about interest rate cuts. Officials are poised to leave open the possibility of more tightening while keeping prospective cuts at bay.

Energy

- OPEC+ said to be considering 1M bpd extra production cuts; Looking at output options for H1 2024.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.04% at 458.92, FTSE +0.31% at 7,446.58, DAX +0.15% at 16,190.25, CAC-40 +0.13% at 7,277.26, IBEX-35 +0.22% at 10,084.27, FTSE MIB +0.12% at 29,724.00, SMI +0.10% at 10,813.70, S&P 500 Futures +0.12%].

Market focal points/key themes: European indices open generally higher and stayed upbeat through the early part of the session; among sectors trending upwards are energy and insurance; lagging sectors include materials and consumer discretionary; oil & gas subsector supported ahead of OPEC+ meeting; reportedly Ikea looking to take stake in Enel’s 3sun unit; focus on Eurozone CPI and US PCE price index to be released later in the day; earnings expected in the upcoming US session include Dell, Kroger and Cracker Barrel.

Equities

- Consumer discretionary: Remy Cointreau [RCO.FR] +5.0% (final earnings), Dr. Martens [DOCS.UK] -24.5% (earnings; cuts outlook).

- Consumer staples: Wynnstay Group [WIN.UK] -12.5% (trading update).

- Financials: Metro Bank [MTRO.UK] +8.5% (to cut jobs), ABN Amro [ABN.NL] -2.5% (Dutch govt intends to cut stake), ASR Nederland [ASRNL.NL] +11.0% (closes unit-linked life insurance file), Intesa Sanpaolo [ISP.IT] -0.5% (Italy Antitrust regulator adopts precautionary measure on Intesa, Isybank).

- Healthcare: Orpea [ORP.FR] -90.0% (results of capital increase).

- Industrials: ABB [ABBN.CH] +1.0% (raises long-term targets).

- Technology: Siltronic [WAF.DE] -2.5% (new targets).

Speakers

- ECB to pause the reinvestment during the last week of the year (Dec 20-Jan 1st) for liquidity purposes.

- Bank of England (BoE) Decision Maker Panel (DMP) Nov Survey cut the 1-year ahead CPI outlook from 4.6% to 4.4% while raising the 3-year ahead CPI from 3.1% to 3.2%.

- France Fin Min Le Maire stated that inflation to be below 4% by end of 2023. Maintained 2024 GDP growth at 1.4%.

- Japan ruling coalition party official Wakamatsu stated that BOJ must maintain its ultra-loose monetary policy settings for the time being to support a fragile economy.

- OPEC+ said to continue to discuss additional oil production cuts between 1-2Mbpd for early 2024.

Currencies/fixed income

- USD was slightly former against the major pairs as a plethora of economic release steadily streamed in the session. Softer EU growth and inflation data has ECB futures fully price 25bps rate cut in Apr 2024 for the first time. EUR/US58D at 1/0845 area.

- EUR/USD at 1.0925 by mid-session; USD/JPY at 147.

Economic data

- (NL) Netherlands Nov Preliminary CPI Y/Y: +1.6 v -0.4% prior.

- (NL) Netherlands Nov Preliminary CPI EU Harmonized M/M: -1.5% v +0.6% prior; Y/Y: 1.4% v 1.6%e.

- (NL) Netherlands Oct Retail Sales Y/Y: 3.9% v 3.3% prior.

- (FI) Finland Q3 GDP Q/Q: -0.9% v +0.4% prior; Y/Y: -1.2% v -0.4% prior.

- (FI) Finland Oct Preliminary Retail Sales Volume Y/Y: -0.8% v -3.5% prior.

- (DE) Germany Oct Retail Sales M/M: 1.1% v 0.4%e; Y/Y: -0.1% v -1.9%e.

- (TR) Turkey Q3 GDP Q/Q: 0.3% v 1.0%e; Y/Y: 5.9% v 5.3%e.

- (SE) Sweden Sept Non-Manual Workers’ Wages Y/Y: 4.6% v 4.5% prior.

- (DK) Denmark Q3 Preliminary GDP Q/Q: -0.1% v -0.9% prior; Y/Y: 0.3% v 0.8% prior.

- (DK) Denmark Oct Unemployment Rate : 2.5% v 2.5% prior; Gross Unemployment Rate: 2.8% v 2.8% prior.

- (TH) Thailand Oct Current Account Balance: 0.7$B v $3.4B prior; Overall Balance of Payments (BoP): -$0.4B v +$0.9B prior; Trade Account Balance: $1.3B v $3.8B prior; Exports Y/Y: 7.0% v 1.0% prior; Imports Y/Y: +10.5% v -7.9% prior.

- (CH) Swiss Oct Real Retail Sales Y/Y: -0.1% v -1.2% prior.

- (HU) Hungary Oct PPI M/M: -0.6% v +1.7% prior; Y/Y: -6.6% v -2.5% prior.

- (FR) France Q3 Final GDP Q/Q: -0.1% v +0.1% prelim; Y/Y: 0.6e v 0.7% prelim.

- (FR) France Nov Preliminary CPI M/M: -0.1% v +0.1%e; Y/Y: 3.4% v 3.7%e.

- (FR) France Nov Preliminary CPI EU Harmonized M/M: -0.3% v 0.0%e; Y/Y: 3.8% v 4.1%e.

- (FR) France Oct PPI M/M: 0.0% v 0.6% prior; Y/Y: -1.2% v -1.5% prior.

- (FR) France Oct Consumer Spending M/M: -0.9% v -0.2%e; Y/Y: % v -0.2%e.

- (CH) Swiss Nov KOF Leading Indicator: 96.7 v 96.5e.

- (AT) Austria Nov Preliminary CPI M/M: 0.4% v 0.3% prior; Y/Y: 5.4% v 5.4% prior.

- (AT) Austria Oct PPI M/M: 0.2% v 0.4% prior; Y/Y: -4.0% v -3.8% prior.

- (HK) Hong Kong Oct Retail Sales Value Y/Y: 5.6% v 9.9%e; Retail Sales Volume Y/Y: 2.7% v 4.5%e.

- (DE) Germany Nov Net Unemployment Change: +22K v +20.0Ke; Unemployment Claims Rate: 5.9% v 5.8%e.

- (ES) Spain Sept Current Account Balance: €3.5B v €4.2B prior.

- (IT) Italy Oct Unemployment Rate: 7.8% v 7.4%e.

- (NO) Norway Central Bank (Norges) Dec Daily FX Purchases (NOK): 1.4B v 1.4B prior.

- (IS) Iceland Q3 GDP Q/Q: -3.8% v +1.6% prior; Y/Y: 1.1% v 4.7% prior.

- (IS) Iceland Oct Final Trade Balance (ISK): -53.0B v -50.5B prelim.

- (PL) Poland Q3 Final GDP Q/Q: 1.5% v 1.4% prelim; Y/Y: 0.5% v 0.4% prelim.

- (PL) Poland Nov Preliminary CPI M/M: 0.7% v 0.7%e; Y/Y: 6.5% v 6.6%e.

- (CZ) Czech Oct M2 Money Supply Y/Y:8.0 % v 8.2% prior.

- (ZA) South Africa Oct PPI M/M: 1.0% v 1.1%e; Y/Y: 5.8% v 5.8%e.

- (PT) Portugal Nov Preliminary CPI M/M: -0.3% v -0.2% prior; Y/Y: 1.6% v 2.1% prior.

- (PT) Portugal Nov Preliminary CPI EU Harmonized M/M: -1.0% v -0.4% prior; Y/Y:2.3 % v 3.2% prior.

- (EU) Euro Zone Nov Advance CPI Estimate Y/Y: 2.4% v 2.7%e; CPI Core Y/Y: 3.6% v 3.9%e.

- (EU) Euro Zone Oct Unemployment Rate: 6.5% v 6.5%e.

- (IT) Italy Nov Preliminary CPI M/M: -0.4% v -0.2%e; Y/Y: -0.8% v 1.0%e.

- (IT) Italy Nov Preliminary CPI EU Harmonized M/M: -0.4% v -0.1%e; Y/Y: 0.7% v 1.1%e.

- (BE) Belgium Q3 Final GDP Q/Q: 0.4% v 0.5% prelim; Y/Y: 1.4% v 1.5% prelim.

- (BE) Belgium Oct Unemployment Rate: 5.6% v 5.4% prior.

- (GR) Greece Oct Unemployment Rate: 9.6% v 10.3% prior.

- (GR) Greece Sept Retail Sales Value Y/Y: -3.3% v -3.3% prior; Retail Sales Volume Y/Y: 3.3% v 2.7% prior.

Fixed income issuance

- (SE) Sweden sold total SEK500M vs. SEK500M indicated in 2026 and 2032 I/L Bonds.

Looking ahead

- OPEC+ meeting

- (AR) Argentina Nov Consumer Confidence: No est v 45.1 prior.

- (MX) Mexico Oct YTD Budget Balance (MXN): No est v -665.2B prior.

- (PT) Portugal Debt Agency (IGCP) bond buy back (reverse auction).

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

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds.

- 05:30 (IN) India Oct Fiscal Deficit (INR): No est v 590.4B prior.

- 06:00 (PT) Portugal Q3 Final GDP Q/Q: No est v -0.2% prelim; Y/Y: No est v 1.9% prelim.

- 06:01 (NZ) New Zealand Nov CoreLogic House Prices Y/Y: No est v -5.7% prior.

- 06:30 (IN) India Oct Eight Infrastructure (Key) Industries: No est v 8.1% prior.

- 07:00 (ZA) South Africa Oct Trade Balance (ZAR): 8.1Be v 13.1B prior.

- 07:00 (ZA) South Africa Oct Monthly Budget Balance (ZAR): -48.0Be v -14.6B prior.

- 07:00 (CA) Canada Nov CFIB Business Barometer: No est v 47.2 prior.

- 07:00 (MX) Mexico Oct Unemployment Rate: 2.8%e v 2.9% prior.

- 07:00 (BR) Brazil Oct National Unemployment Rate: 7.6%e v 7.7% prior.

- 07:00 (CL) Chile Oct Manufacturing Production Y/Y: +2.6%e v -1.1% prior; Industrial Production Y/Y: 0.7%e v 1.5% prior; Total Copper Production: No est v 457.4K prior.

- 07:00 (CL) Chile Oct Retail Sales Y/Y: -8.8%e v -5.4% prior; Commercial Activity Y/Y: No est v -3.7% prior.

- 07:00 (IN) India Q3 GDP Y/Y: 6.8%e v 7.8% prior; GVA Y/Y: 6.8%e v 7.8% prior.

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

- 08:00 (RU) Russia Gold and Forex Reserve w/e Nov 24th: No est v $581.2B prior.

- 08:01 (AU) Australia Nov CoreLogic House Prices M/M: No est v 0.9% prior.

- 08:30 (US) Oct Personal Income: 0.2%e v 0.3% prior; Personal Spending: 0.2%e v 0.7% prior; Personal Spending (PCE): 0.1%e v 0.4% prior.

- 08:30 (US) Oct PCE Deflator M/M: 0.1%e v 0.4% prior; Y/Y: 3.0%e v 3.4% prior.

- 08:30 (US) Oct PCE Core Deflator M/M: 0.2%e v 0.3% prior; Y/Y: 3.5%e v 3.7% prior.

- 08:30 (US) Initial Jobless Claims: 218Ke v 209K prior; Continuing Claims: 1.87Be v 1.840M prior.

- 08:30 (CA) Canada Sept GDP M/M: 0.0%e v 0.0% prior; Y/Y: 0.8%e v 0.9% prior; Q3 Quarterly GDP Annualized +0.1%e v -0.2% prior.

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

- 08:30 (EU) ECB chief Lagarde at banking forum.

- 09:45 (US) Nov Chicago Purchase Manager’s Index (PMI): 46.0e v 44.0 prior.

- 10:00 (US) Oct Pending Home Sales M/M: -2.0%e v 1.1% prior; Y/Y: -8.8%e v -13.1% prior.

- 10:00 (MX) Mexico Oct Net Outstanding Loans (MXN): No est v 5.86T prior.

- 10:00 (CO) Colombia Oct National Unemployment Rate: No est v 9.3% prior; Urban Unemployment Rate: 9.5%e v 9.6% prior.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (UK) BOE’s Greene.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

-12:00 (EU) ECB’s Nagel (Germany).

- 16:00 (NZ) New Zealand Nov ANZ Consumer Confidence: No est v 88.1 prior.

- 17:00 (AU) Australia Nov Final PMI Manufacturing: No est v 47.7 prelim.

- 18:30 (JP) Japan Oct Jobless Rate: 2.6%e v 2.6% prior; Job-To-Applicant Ratio: 1.29e v 1.29 prior.

- 18:50 (JP) Japan Q3 Capital Spending (capex) Y/Y: 3.4%e v 4.5% prior; Capital Spending (ex-software) Y/Y: 3.4%e v 4.4% prior; Company Profits Y/Y: 13.8%e v 11.6% prior; Company Sales Y/Y: 4.5%e v 5.8% prior.

- 19:00 (KR) South Korea Nov Trade Balance: $1.0Be v $1.6B prior; Exports Y/Y: 5.3%e v 5.1% prior; Imports Y/Y: -8.6%e v -9.7% prior.

- 19:30 (JP) Japan Nov Final PMI Manufacturing: No est v 48.1 prelim.

- 19:30 (KR) South Korea Nov PMI Manufacturing: No est v 49.8 prior.

- 19:30 (TW) Taiwan Nov PMI Manufacturing: No est v 47.6 prior.

- 19:30 (ID) Indonesia Nov PMI Manufacturing: No est v 51.5 prior.

- 19:30 (PH) Philippines Nov PMI Manufacturing: No est v 52.4 prior.

- 19:30 (MY) Malaysia Nov PMI Manufacturing: No est v 46.8 prior.

- 19:30 (TH) Thailand Nov PMI Manufacturing: No est v 47.5 prior.

- 19:30 (VN) Vietnam Nov PMI Manufacturing: No est v 49.6 prior.

- 20:01 (IE) Ireland Nov PMI Manufacturing: No est v 48.2 prior.

- 20:45 (CN) China Nov Caixin PMI Manufacturing: 49.6e v 49.5 prior.

- 21:00 (ID) Indonesia Nov CPI M/M: 0.2%e v 0.2% prior; Y/Y: 2.7%e v 2.6% prior; CPI Core Y/Y: 1.9%e v 1.9% prior.

- 21:35 (CN) China to sell 6-month bills.

- 22:30 (JP) Japan to sell 3-Month Bills.