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Cable Falls On Rejection Of The Latest UK Brexit Offer By The EU

Notes/Observations

  • EU officials to meet on coordination of response to new covid strain
  • UK offers concessions over fishing that reportedly advanced potential for a Brexit deal, which reportedly is deemed unacceptable.
  • UK Parliament reportedly ready to meet on Dec 30 in the advent of a deal, but EU Parliament is unlikely to return.
  • UK Final Q3 GDP revised higher
  • UK PM Johnson and French Press Macron agree on measures to restart freight services on Wednesday (details still pending)

Asia:

  • (JP) Japan said to be planning on putting coronavirus compensation into law, Law would allow local govt’s additional autonomy
  • (SG) Singapore Health Min: imposes travel restrictions on the UK, Also for travelers with travel history to New South Wales in Australia

Coronaviurs:

  • BioNTech: 9 new covid mutations in UK, unable to see if vaccine is effective; will know in two weeks
  • Reportedly UK considering closing schools during January to fight new strain of virus, which is seen spreading more quickly among children

Europe:

  • An EU official calls latest UK offer on fisheries unacceptable, UK had offered EU reduction in fisheries catches by around a third in five years; EU stance remains 25% reduction over seven years.
  • EU Brexit negotiation Barnier expected to brief on latest developments, including offer of concessions from UK.
  • (UK) Germany said to extend ban for travelers from the UK and South Africa until Jan 6th

Americas:

  • Congress passes $900B covid relief bill and a $1.4T government budget (with funds to Sept 2021, the deadline for FY22 budget needs to be approved); President Trump expected to sign today.
  • Congress planning special session if President Trump veto’s defense appropriations bill over dispute relating to repeal of Section 230 of the Communications Act (relating to responsibility of social media companies for online content), and language in the bill intended to prevent withdrawal of troops from Germany and Afghanistan.
  • Trump Admin announces further visa restrictions on China officials

Energy:

  • ConocoPhillips makes significant oil discovery in Norwegian Sea
  • Russia looking for a 500mboepd increase in global oil production starting in February

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 +0.65% at 389.22, FTSE +0.18% at 6,428.15, DAX +0.78% at 13,349.35, CAC-40 +0.74% at 5,433.13, IBEX-35 +0.72% at 7,846.00, FTSE MIB +0.74% at 21,568.50, SMI +0.59% at 10,366.21, S&P 500 Futures -0.06%]
  • Market Focal Points/Key Themes: European indices open higher across the board (FTSE 100 being the notable exception), and later advanced further into the green; better performing sectors include consumer discretionary and financials; materials and telecom sectors among underperformers; Vodafone issues tender offer for KDG holdings; EasyJet delays order of Airbus aircraft, and Airbus expected to lose another $5B in orders from AirAsia X restructuring); earnings expected during the upcoming US session include Carmax

Equities

  • Consumer discretionary: Hornbach Holding [HBH.DE] +10% (earnings)
  • Healthcare: Ultimovacs [ULTIMO.NO] +10% (trial results)
  • Information Technology: Atari [ATA.FR] -5% (placement)
  • Materials: AppleGreen [APGN.UK] +4% (to be acquired)

Speakers

  • (PL) Poland Central Bank official Sura: rates should stay on hold until end of MPC term
  • (US) Senate Majority Leader McConnell: Senate will meet on Dec 29th (Wednesday) in case President Trump vetoes the NDAA (Defense Act)
  • (FR) France Health Min Veran: Should have regulatory approval of covid vaccines before Dec 26
  • BioNTech: Could have new vaccine for UK strains within six weeks; delivery of covid 19 vaccines to EU countries to start within the next five days
  • (CN) China Banking and Insurance Regulator Official: Will roll out rules on capital management of Trust firms
  • (CN) China PBOC: China should improve cross border fund monitoring system, to steady push forward digital currency research
  • (RU) Russia’s Kremlin spokesperson: Putin and Novak to discuss energy sector, OPEC+

Currencies/Fixed Income

  • Return of risk appetite helped to pair back some of yesterday’s FX movies. EUR/USD trading lower through the session as talk of potential spread of new covid strain dominates headlines. Next support level seen at the 1.22 handle as the pair failed to break through yesterday.
  • EUR/GBP cross continues to appreciate as doubts over Brexit linger, and cross-channel cargo remains suspended. GBP/USD still worst performer among the majors with next support seen around the 1.33 handle

Economic Data

  • (DE) Germany Jan GfK Consumer Confidence: -7.3 v -6.7 prior (10th straight negative reading)
  • (UK) Q3 Final GDP Q/Q: 16.0 v 15.5% prelim; Y/Y: -8.6 v -9.6% prelim
  • (UK) Nov Public Finances (PSNCR): £23.5B v £19.8B prior; PSNB (ex-banking groups: £31.6B v £22.3B prior
  • (UK) Q3 Current Account Balance: £15.6B v -£2.8B prior
  • (NO) Norway Oct AKU Unemployment Rate: 5.2% v 5.2%e
  • (ES) Spain Oct Total Mortgage Lending Y/Y: -11.3% v -6.9% prior; House Mortgage Approvals Y/Y: -5.9% v +18.4% prior
  • (SE) Sweden Nov Consumer Confidence: 92.3 v 88.6 prior
  • (SE) Sweden Nov Retail Sales M/M: +0.8% v -0.4%e; Y/Y: 5.7% v 3.1%e
  • (SE) Sweden Nov PPI M/M: 0.2% v 0.4% prior; Y/Y: -4.4% v -4.2% prior
  • (SE) Sweden Oct Non-Manual Workers Wages Y/Y: 1.9% v 1.9% prior
  • (HK) Hong Kong Q3 Current Account Balance: $96.5B v $59.4B prior

Fixed income Issuance

Looking Ahead

  • 06:00 (IE) Ireland Nov PPI M/M: No est v 0.9% prior; Y/Y: No est v -5.1% prior
  • 06:00 (BR) Brazil Dec FGV Consumer Confidence: No est v 81.7 prior
  • 06:30 (IS) Iceland to sell Bills
  • 07:00 (BR) Brazil Mid-Dec IBGE Inflation IPCA-15 M/M: No est v 0.8% prior; Y/Y: No est v 4.2% prior
  • 07:00 (ZA) South Africa Nov Monthly Budget Balance (ZAR): No est v -49.7B prior
  • 08:00 (PL) Poland Nov M3 Money Supply M/M: No est v 1.2% prior; Y/Y: No est v 17.0% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
  • 08:30 (US) Q3 Final GDP Annualized Q/Q: 33.1%e v 33.1% prelim; Personal Consumption: No est v 40.6% prelim
  • 08:30 (US) Q3 Final GDP Price Index: 3.6%e v 3.6% prelim; Core PCE Q/Q: No est v 3.5% prelim
  • 08:55