Quiet Start to Holiday-Shortened Trading Week

Fundamental analysis of Forex market


  • China to adjust import tariffs for some products starting on Jan 1st 2020: To allow 859 items with preferential tariffs
  • Japan Chief Cabinet Sec Suga: Has not eased export controls on South Korea; changes to controls are just procedural


  • ECB’s Knot (Netherlands): Council needed to reassess its monetary policy. Should be in in depth review of inflation causes, rising wages are not translating into higher prices anymore


  • Pres ident Trump said to have invited PM Johnson to visit the US in New Year (Note: no date has been set but mid Jan has been suggested)


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  • President Trump: Just achieved a breakthrough on the US/China trade deal and we will be signing it very shortly
  • White House spokesperson Deere: President Trump signed $1.4T spending package to avert shutdown (as expected)
  • Brazil President Bolsonaro: President Trump told me the US would NOT levy additional import tariffs on steel and aluminum
  • Argentina President Fernandez announced emergency bill; Senate granted extraordinary powers to renegotiate debt terms with creditors and increase taxes. Argentina delayed payments on $9.0B USD-denominated debt
  • Energy:
  • Russia Foreign Min Lavrov: Nord Stream 2 and Turk Stream gas pipeline projects would be launched despite US sanctions



Indices [Stoxx600 0.00% at 418.42, FTSE +0.15% at 7,593.65, DAX -0.18% at 13,294.59, CAC-40 -0.01% at 6,021.10, IBEX-35 -0.21% at 9,655.00, FTSE MIB -0.55% at 23,872.53, SMI +0.29% at 10,709.50, S&P 500 Futures +0.07%]

Market Focal Points/Key Themes: European indices mixed following mixed indices in Asia and slightly higher US futures. Virbac shares jump after raising FY19 outlook on Friday after market close. Gresham Technologies up 13% on trading update and raised guidance, as well as new contract award. Koenig & Bauer down after cutting FY19 outlook on Friday after market close and Nichols shares plunge 19% on FY20 profit warning. Neste shares up on reinstatement of US blender’s tax credit, which will have a positive impact on earnings. Atlantia shares fall after Italian government changes motorways concession rules. Seadrill outperforming +17% after being awarded West Phoenix rig contract. Schmolz+Bickenbach up on share offering on Friday after market close. NMC shares rallying as the company will launch an independent review of its books.


  • Consumer discretionary: Nichols [NICL.UK] -16% (trading update)
  • Financials: Credit Suisse [CSGN.CH] -1% (investigation), Intu Properties [INTU.UK] -0.5% (divestment)
  • Industrials: Koenig & Bauer [B5A.DE] -10% (profit warning)
  • Technology: Gresham Technologies [GHT.UK] +18% (trading update; contract), ams [AMS.CH] +1% (divestment


  • Russia Energy Min Novak: To complete Nord Stream 2 in near future
  • China Presidential office: China, South Korea should help North Korea and US sustain dialogue. China was willing to enhance its ties with Japan to a new level

Currencies/Fixed Income

  • FX turnover in session was low with interest said to be even lower. Little in terms of data and news was exhibited in the session.
  • EUR/USD at 1.1085 and USD/JPY at 109.35 area
  • GBP/USD steady after last’s week 500 pip sell-off.

Economic Data

  • (FI) Finland Nov Preliminary Retail Sales Volume Y/Y: 1.0% v 3.3% prior
  • (FI) Finland Nov PPI M/M: -0.2% v 0.0% prior; Y/Y: -0.8% v -0.9% prior
  • (DE) Germany Nov Import Price Index M/M: % v 0.4%e; Y/Y: % v -2.3%e – (TW) Taiwan Nov Industrial Production Y/Y: 2.2% v 0.6%e
  • (TW) Taiwan Nov Unemployment Rate: 3.7% v 3.7%e
  • (HU) Hungary Oct Final Trade Balance: €0.5B v €0.5B prior
  • (ES) Spain Nov PPI M/M: -0.5% v +0.5% prior; Y/Y: -2.3% v -2.8% prior
  • (AT) Austria Oct Industrial Production M/M: 0.7% v 0.2% prior; Y/Y: -1.0% v -0.5% prior
  • (CH) Swiss Nov M3 Money Supply Y/Y: 1.3% v 1.9% prior
  • (CH) Swiss Total Sight Deposits w/e Dec 20th (CHF): 585.8B v 586.8B prior; Domestic Sight Deposits:498.9 B v 499.8B prior
  • (PL) Poland Nov Unemployment Rate: 5.1% v 5.1%e
  • (PL) Poland Nov Construction Output Y/Y: % v -4.0% prior
  • (SL) Sri Lanka Nov National CPI (NCPI) Y/Y: 4.1% v 5.6% prior

**Fixed Income Issuance**

  • (IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 6-month bills; Avg Yield: -0.221% v -0.215% prior; Bid-to-cover: 1.47x v 1.51x prior
  • (IT) Italy Debt Agency (Tesoro) sold €2.0B vs. €1.5-2.0B indicated in 2-year CTZ Bonds; Avg Yield: -0.005% v -0.033% prior; bid-to-cover: 1.48x v 1.82x prior

Looking Ahead

  • (IL) Israel Nov Leading ‘S’ Indicator M/M: No est v 0.3% prior
  • (UR) Ukraine Central Bank Dec Minutes
  • (BE) Belgium Dec CPI M/M: No est v 0.1% prior; Y/Y: No est v 0.4% prior
  • (RU) Russia Central Bank (CBR) quarterly monetary report
  • 05:30 (EU) ECB 7-day Main Refinancing Operation Result (MRO)
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-Month Bills
  • 06:00 (IL) Israel Nov Unemployment Rate: No est v 3.4% prior
  • 06:25 (BR) Brazil Central Bank Weekly Economists Survey
  • 06:30 (CL) Chile Central Bank Dec Minutes
  • 07:00 (MX) Mexico Q3 Aggregate Supply and Demand: No est v -1.0% prior
  • 07:00 (ES) Spain Nov YTD Budget Balance: No est v -€6.3B prior
  • 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)
  • 07:00 (CY) Cyprus to sell 3-month Bills
  • 08:00 (PL) Poland Nov M3 Money Supply M/M: No est v 1.2% prior; Y/Y: No est v 9.3% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Nov Preliminary Durable Goods Orders: 1.5%e v 0.5% prior; Durables (ex-transportation): 0.2%e v 0.5% prior; Capital Goods Orders (Non-defense/ex-aircraft): 0.0%e v 1.1% prior; Capital Goods Shipments (Non-defense/ex-aircraft): No est v 0.8% prior
  • 08:30 (US) Nov Chicago Fed National Activity Index: No est v -0.71 prior
  • 08:30 (CA) Canada Oct GDP M/M: No est v 0.1% prior; Y/Y: No est v 1.6% prior
  • 10:00 (US) Nov New Home Sales: 730Ke v 733K prior
  • 11:30 (US) Treasury to sell 13-week and 26-week bills
  • 13:00 (CO) Colombia Central Bank Minutes
  • 13:00 (US) Treasury to sell 2-year Notes
  • 14:00 (CO) Colombia Oct Economic Activity Index (Monthly GDP)
  • 14:00 (AR) Argentina Oct Economic Activity Index (Monthly GDP) M/M: No est v -1.6% prior; Y/Y: No est v -2.1% prior
  • 14:00 (AR) Argentina Nov Trade Balance: No est v $1.8B prior; Total Exports: No est v $5.9B prior; Total Imports: No est v $4.1B prior
  • 18:50 (JP) BOJ Oct Minutes