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BOND SUMMARY

EGB/Gilt: Risk-Driven Bear Steepening

US 10YR FUTURE TECHS

(U1)‌‌ Consolidating

COMMODITIES

LEVELS UPDATE: Oil down but metals higher

EZ ESI Edges Higher in December

EUROZONE DATA

Economic Sentiment Indicator (ESI): 90.4; Prev (Nov): 87.7

Consumer: -13.9 (Nov: -17.6); Industry: -7.2 (Nov: -10.1); Services: -17.4 (Nov: -17.1); Retail: -13.1 (Nov: -12.7); Construction: -7.9 (Nov: -9.3)

  • The EZ ESI rose 2.7pt to 90.4 in Dec, coming in slightly above market expectations (BBG: 89.5) but remaining well below pre-crisis levels
  • The index rose to a two-month high in Dec, almost offsetting the drop seen in Nov, as several countries eased some of their strict lockdown measures.
  • Among the largest EZ economies, the ESI saw the largest increase in Italy (+6.8pt to 88.3) following by Spain (+3.3pt to 90.8).
  • Consumer sentiment registered in line with the flash result, showing an uptick to a three-month high of -13.9.
  • Industrial confidence increased to the highest level since Feb, rising by 2.9pt to -7.2.
  • Sentiment in the service and retail trade sector deteriorated in Dec as tight social distancing measures remained in place.
  • Service confidence dropped to -17.4, down 0.3pt, while retail trade sentiment fell by 0.4pt to -13.1 in Dec.
  • The construction sector saw an improvement in sentiment by 1.4pt to -7.9, which is the highest level since Mar.
  • The employment expectations index edged up 1.4pt to 88.3 in Dec after falling to 86.9 in the previous month.