MNI China Daily Summary: Friday, December 27

MNI BRIEF: BOJ: Rate Hike Chance Nearing; Mull Patiently

MNI: PBOC Net Injects CNY6.2 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1893 Fri; -2.12% Y/Y

MNI JAPAN NOV FACTORY OUTPUT DROPS 2.3% M/M; OCT +2.8%

MNI JAPAN NOV JOBLESS RATE AT 2.5%, UNCHANGED FROM OCT

US EIA:NAT GAS STORAGE -93 BCF TO 3,529 BCF DEC 27 WK

MNI: US JOBLESS CLAIMS -1K TO 219K IN DEC 21 WK

MNI: US REDBOOK: DEC STORE SALES +5.0% V YR AGO MO

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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BRAZIL: Spending Cuts to Total 70B Reais as BRL Posts Record Low Close

BRAZIL
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  • After USDBRL posted its highest daily close on record at 5.9340, Finance Minister Haddad unveiled the outline of the government’s proposal for a structural fiscal adjustment Wednesday night in a TV briefing. He said the measures announced will improve the budget by 70 billion reais in 2025 and 2026 combined, but he did not provide details or the estimated impact of each measure. There remains scepticism whether the steps go far enough to shore up investor confidence.
  • Notably, Haddad also announced what he described as "the biggest income reform in our history," proposing to raise the tax-free threshold to 5,000 reais ($842) per month from 2,824 reais per month. Early reports that this was in the works was a key ingredient behind the BRL weakness late Wednesday, however, Haddad made it clear that the lost revenue would be offset by higher taxes on those earning over 50,000 reais.
  • Bloomberg noted that absent from the package were changes to the unemployment insurance program that the government had been mulling, according to press reports. However, the government has announced a press conference on Thursday, 8am local time, to detail the package.
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  • After USDBRL posted its highest daily close on record at 5.9340, Finance Minister Haddad unveiled the outline of the government’s proposal for a structural fiscal adjustment Wednesday night in a TV briefing. He said the measures announced will improve the budget by 70 billion reais in 2025 and 2026 combined, but he did not provide details or the estimated impact of each measure. There remains scepticism whether the steps go far enough to shore up investor confidence.
  • Notably, Haddad also announced what he described as "the biggest income reform in our history," proposing to raise the tax-free threshold to 5,000 reais ($842) per month from 2,824 reais per month. Early reports that this was in the works was a key ingredient behind the BRL weakness late Wednesday, however, Haddad made it clear that the lost revenue would be offset by higher taxes on those earning over 50,000 reais.
  • Bloomberg noted that absent from the package were changes to the unemployment insurance program that the government had been mulling, according to press reports. However, the government has announced a press conference on Thursday, 8am local time, to detail the package.