MNI EUROPEAN OPEN: Dollar Nudges Further Away From Lows In Asia

EXECUTIVE SUMMARY

• BIDEN TO OUTLINE FISCAL SUPPORT THAT WILL TOTAL TRILLIONS IN THE COMING WEEK
• U.S. HOUSE TO MOVE TRUMP IMPEACHMENT ARTICLES LATER THIS WEEK
• U.S. 'EXAMINING FURTHER OPTIONS' AFTER MASS ARRESTS IN HONG KONG (THE HILL)
• UK MINISTERS CONSIDER TIGHTENING LOCKDOWN RULES ON EXERCISE & FACE MASKS (TELEGRAPH)
• JAPAN FINDS NEW CORONAVIRUS VARIANT
• USD FIRMS IN ASIA WITH JAPAN ON HOLIDAY

Fig. 1: U.S. Dollar Index (DXY)

Source: MNI - Market News/Bloomberg

UK

CORONAVIRUS: Tighter coronavirus restrictions are being considered by ministers, The Telegraph understands, amid concerns the latest lockdown is not being followed strictly enough. Rules banning people from different households who are not in a support bubble from exercising together are under discussion, in a move which would bring the restrictions more closely in line with the first lockdown in March. The introduction of rules on face coverings in offices is also being mooted in Government circles, as some businesses are feared to have become lax. (Telegraph)

CORONAVIRUS: Health Secretary Matt Hancock said the U.K. is on course to meet its coronavirus vaccine target, but warned the surge in cases has left the state-run National Health Service in a "very, very serious situation." (BBG)

CORONAVIRUS: Ministers are considering a "tough crackdown" to pressure more Britons to stay at home after the daily coronavirus death toll hit a record high. (Telegraph)

CORONAVIRUS: The spread of Covid in London is "out of control" according to Sadiq Khan, who has declared a "major incident". (BBC)

CORONAVIRUS: The number of doctors, nurses and other healthcare workers who are falling ill with Covid-19 has reached crisis levels and is seriously hampering the fight against the rapidly escalating pandemic, senior figures in the NHS have warned. (Observer)

CORONAVIRUS: Rapid testing to find symptomless carriers of Covid-19 is to be launched in England this week. The aim of the programme is to identify some of the tens of thousands of infected people who are unwittingly spreading the virus across the country. (Observer)

CORONAVIRUS: The U.K. will begin clinical trials on a nasal spray aimed at reducing infection by killing the coronavirus, according to a company statement released Sunday. (BBG)

CORONAVIRUS: The number of UK vaccination "mega-centres" at locations such as sports stadiums and conference halls will be increased sevenfold in the coming weeks under plans being drawn up by the government. (FT)

BREXIT: Michael Gove has told businesses to brace for "significant disruption" at the border as France ordered its ports to crack down on lorries arriving from Britain with incorrect paperwork from Monday. (Telegraph)

BREXIT: The post-Brexit woes facing Scotland's fishing industry deepened on Saturday as its biggest logistics provider, DFDS Scotland, said it would halt exports to the European Union through one of its main services until at least Wednesday. (RTRS)

BREXIT: Supertrawlers will be free to plunder Britain's waters after Brexit, government sources have admitted, as they do not have the powers to implement a blanket ban. (Telegraph)

BREXIT: The UK will bring trading in Swiss shares back to London in the coming weeks, marking the first significant split from EU policy on financial services since the end of the Brexit transition period. British officials will launch legislation in parliament as soon as next week to reverse a previous EU ban on the practice, the Treasury said. (FT)

BREXIT: Britain's opposition leader, Keir Starmer, said there's no case for the U.K. to seek to rejoin the European Union and that his Labour Party won't try to reintroduce the freedom of movement that was ended by Brexit. (BBG)

ECONOMY: At least 250,000 small companies in the U.K. are set to close in 2021 unless the government provides more assistance, threatening a further blow to an economy heading for a double-dip recession. The warning from the Federation of Small Businesses Monday comes with the country back in lockdown to contain a resurgent coronavirus, hospitals at risk of being overwhelmed and job losses mounting. (BBG)

FISCAL: Rishi Sunak is expected to shelve plans for tax rises in his March budget amid mounting concerns about the "colossal" scale of the economic fallout from coronavirus. The chancellor has repeatedly warned that the huge levels of debt built up by the government as it battles to contain the fallout from coronavirus could be unaffordable if there is a sudden rise in interest rates. (The Times)

POLITICS: More people think Boris Johnson should resign as prime minister than think he should continue in office, according to the latest Opinium poll for the Observer. The first poll of 2021 found that 43% thought he should resign, while 40% said that he should remain as leader. However, most Conservative voters (87%) think Johnson should stay on as leader, with just 7% thinking he should resign. Just 20% believed Keir Starmer should resign as Labour leader, with 52% saying he should remain as leader. There were also signs of a slight drop in support for the government's handling of coronavirus. Some 72% (+4 on the last poll) think the government has not acted fast enough, with 42% (+4) thinking they are definitely not acting fast enough. (Observer)

POLITICS: Local and mayoral elections that were scheduled for May 6 are likely to be delayed because of the coronavirus. (Sunday Times)

SCOTLAND: The pro-independence Scottish National Party (SNP) demanded on Sunday that Prime Minister Boris Johnson pay billions of pounds in compensation to Scotland for the mounting costs and disruption of Brexit.Brexit has strained the bonds that tie together the United Kingdom: England and Wales voted to leave but London, Northern Ireland and Scotland voted to stay. The SNP, which wants independence for Scotland and is pushing for a second referendum, said Scottish fishermen faced grave disruption due to Brexit. (RTRS)

EUROPE

GERMANY: Doctors and nurses in many hospitals are close to being overwhelmed, and the virus mutations intensify the level of concern, Chancellor Angela Merkel said in a podcast. With the coming weeks set to be the country's toughest yet in the pandemic, Germans need to consistently adhere to the tougher lockdown measures, she said. The tempo of vaccinations will increase and there will be enough in Germany for everyone, she added. (BBG)

GERMANY: Four in five Germans think the Covid lockdown measures are appropriate or should be strengthened (56% and 25%, respectively), according to a survey commissioned by Bild am Sonntag. (BBG)

GERMANY: German Finance Minister Olaf Scholz said a slight economic recovery is on the horizon thanks to robust state aid preventing much of the potential fallout of the pandemic, Deutsche Presse-Agentur reported. He credited Germany's fiscal stimulus and the Berlin government's shift on crisis aid at the EU level with saving jobs, the German newswire quoted Scholz as telling a virtual meeting of his Social Democratic Party. (BBG)

GERMANY: German Health Minister Jens Spahn, who won favor among conservative voters by criticizing Chancellor Angela Merkel's refugee policy, said he's out of the race for her succession. Spahn, 40, said his goal is to become a deputy chairman of the governing Christian Democratic Union, Welt am Sonntag reported, citing an interview. (BBG)

FRANCE: A majority of French people lack confidence in the government's ability to deal effectively with the coronavirus pandemic or manage the vaccination campaign, even after President Emmanuel Macron accelerated efforts to distribute the shots, according to a survey in newspaper Journal du Dimanche. (BBG)

ITALY: Italy's government will ask parliament to approve another increase in the deficit later this month to pay for vaccines, healthcare, and support for companies and workers, according to Finance Minister Roberto Gualtieri. The request will be for 24 billion euros ($29 billion), Gualtieri said in an interview with the Corriere della Sera newspaper published Sunday. That's equivalent to 1.5% of Italy's gross domestic product and the government hopes that this "will be the last time" they need to ask for more money, he said. (BBG)

RATINGS: Sovereign rating reviews of note from Friday include:

• DBRS Morningstar confirmed Malta at A (high), Stable Trend

U.S.

FISCAL: President-elect Joe Biden on Friday called for trillions of dollars in immediate further fiscal support, including increased direct payments, after a surge in coronavirus cases caused U.S. payrolls to drop for the first time since April. "The price tag will be high," Biden said of his planned package in Wilmington, Delaware. He promised to lay out his proposals next Thursday, before taking office on Jan. 20. "It will be in the trillions of dollars." (BBG)

FISCAL: West Virginia Democratic Sen. Joe Manchin walked a fine line Sunday on whether he'd support a round of stimulus checks increasing direct aid to Americans to $2,000 per person, saying he preferred more targeted relief. "That's not a yes or no question," Manchin said on CNN's "State of the Union," when asked by host Jake Tapper whether he was on board with sending $2,000 stimulus checks to Americans who earn $75,000 or less. (POLITICO)

FISCAL: Janet Yellen tweeted the following on Saturday: "One thing is clear from the jobs report: We need to invest in small businesses. Not only will they be at the center of the recovery, they have been the hardest hit. We recognize that, and will provide assistance and focus on the businesses that serve the hardest hit communities." (MNI)

CORONAVIRUS: Reports of a highly contagious new variant in the United States, published on Friday by multiple news outlets, are based on speculative statements made by Dr. Deborah Birx and are inaccurate, according to several government officials. The erroneous report originated at a recent meeting where Dr. Birx, a member of the White House coronavirus task force, presented graphs of the escalating cases in the country. She suggested to other members of the task force that a new, more transmissible variant originating in the U.S. might explain the surge, as another variant did in Britain. Her hypothesis made it into a weekly report sent to state governors. "This fall/winter surge has been at nearly twice the rate of rise of cases as the spring and summer surges. This acceleration suggests there may be a USA variant that has evolved here, in addition to the UK variant that is already spreading in our communities and may be 50% more transmissible," the report read. "Aggressive mitigation must be used to match a more aggressive virus." Dismayed, officials at the C.D.C. tried to have the speculative statements removed, but were unsuccessful, according to three people familiar with the events. (New York Times)

CORONAVIRUS: Dr. Ashish Jha, the Dean of Brown University's School of Public Health, warned on "The News with Shepard Smith" that the U.S. is "flying blindly" and "guessing" when it comes to a highly transmissible new coronavirus variant in the country. (CNBC)

CORONAVIRUS: President-elect Joe Biden plans to release more doses of the Covid vaccines once he takes office, breaking from the Trump administration's policy of holding reserve doses to ensure there's enough for second shots and to account for manufacturing issues. (CNBC)

CORONAVIRUS: The performance of three Covid-19 tests authorized for U.S. use could be affected by the emergence of coronavirus variants, though not significantly, and the overall risk of variants -- including one that appears to be more transmissible -- affecting testing accuracy is low, the Food and Drug Administration said on Friday. (BBG)

CORONAVIRUS: New York will begin providing coronavirus vaccines to people age 75 and older on Monday, expanding eligibility beyond health-care workers on the front lines. Hospitals and pharmacies still must prioritize health-care workers, but if they have extra capacity, "fine," Governor Andrew Cuomo said in a briefing Friday. New York will also allow private doctors, ambulatory centers and pharmacies to provide vaccines in order to speed a slower-than-expected rollout, Cuomo said. Also Monday, police officers, firefighters, and other first responders will be able to get shots, along with educators, transit and public-safety workers. Hospitals have increased distribution, but it's not enough, Cuomo said. Only 23% of 2.1 million health-care workers have received shots so far. "We're not pleased with the rate," he said. (BBG)

CORONAVIRUS: Chicago's public school district, the third-largest in the U.S., is sticking with its plan to start bringing students back to classrooms on Monday, resisting pressure from a teachers' union that is demanding more safety measures to prevent the spread of Covid-19. (BBG)

POLITICS: House Speaker Nancy Pelosi said Friday that she spoke with the nation's top military officers about preventing President Trump from launching a military attack or nuclear strike in his final days in office. The conversation came as Pelosi leads an effort to remove Mr. Trump from office less than two weeks before the end of his term. "This morning, I spoke to the Chairman of the Joint Chiefs of Staff Mark Milley to discuss available precautions for preventing an unstable president from initiating military hostilities or accessing the launch codes and ordering a nuclear strike," Pelosi wrote in a letter to House Democrats. (CBS)

POLITICS: Fifty-seven percent of Americans want Republican President Donald Trump to be immediately removed from office after he encouraged a protest this week that escalated into a deadly riot inside the U.S. Capitol, according to a Reuters/Ipsos poll. Most of them were Democrats, however, with Republicans apparently much more supportive of Trump serving out the final days of his term, which ends on Jan. 20. The national public opinion survey, conducted Thursday and Friday, also showed that seven out of 10 of those who voted for Trump in November opposed the action of the hardcore supporters who broke into the Capitol while lawmakers were meeting to certify the election victory of Democrat Joe Biden. (RTRS)

POLITICS: White House officials pushed Atlanta's top federal prosecutor to resign before Georgia's U.S. Senate runoffs because President Trump was upset he wasn't doing enough to investigate the president's allegations of election fraud, people familiar with the matter said. A senior Justice Department official, at the behest of the White House, called Trump-appointed U.S. Attorney Byung J. Pak and told him he needed to step down because he wasn't pursuing vote-fraud allegations to Mr. Trump's satisfaction, the people said. (WSJ)

POLITICS: Twitter permanently suspended President Donald Trump's account on Friday. The company said in a tweet it made the decision "due to the risk of further incitement of violence." (CNBC)

POLITICS: House Speaker Nancy Pelosi told the House to move ahead with impeachment if President Donald Trump does not resign after helping to stoke a mob's deadly takeover of the U.S. Capitol, she said Friday. (CNBC)

POLITICS: The House this week will take up a resolution to impeach President Donald Trump for the second time in less than two years over his actions encouraging a mob that stormed the Capitol, Speaker Nancy Pelosi said. "In protecting our Constitution and our Democracy, we will act with urgency, because this President represents an imminent threat to both," Pelosi said in a letter Sunday to House Democrats. "As the days go by, the horror of the ongoing assault on our democracy perpetrated by this President is intensified and so is the immediate need for action." Pelosi said Democratic leaders on Monday will request unanimous consent for a separate resolution urging Vice President Mike Pence to convene the cabinet to invoke the 25th Amendment to the Constitution "to declare the President incapable of executing the duties of his office." She said Pence should respond within 24 hours. (BBG)

POLITICS: A group of House Republicans who voted to accept President-elect Joe Biden's Electoral College victory asked him to persuade Speaker Nancy Pelosi to back off impeaching Donald Trump for instigating Wednesday's riot at the U.S. Capitol. The lawmakers, led by Representative Ken Buck of Colorado, warned in a letter to Biden on Saturday that Trump's impeachment would inflame his supporters anew, and damage Biden's efforts to unify the country. (BBG)

POLITICS: GOP Sen. Lisa Murkowski of Alaska said on Friday that President Donald Trump should immediately resign, offering the harshest rebuke from a senator in Trump's own party since a mob of his supporters invaded the U.S. Capitol on Wednesday. (CNBC)

POLITICS: Sen. Pat Toomey, R-Pa., joined calls from a handful of his Republican colleagues Sunday for President Donald Trump to resign for "recruiting thousands of Americans" and "inciting them to attack the Capitol building" last week. Toomey, who said Saturday that he believed Trump has committed impeachable offenses, argued that resignation is the only realistic option for Trump's departure before his term ends Jan. 20, because he doesn't believe Trump's Cabinet would remove him from office under the 25th Amendment and believes there isn't enough time for Congress to impeach him before he is set to leave office. (CNN)

POLITICS: President Donald Trump is not expected to be criminally charged — at least for now — with inciting the riot at the U.S. Capitol, a Department of Justice official said Friday. The official's comments came just a day after the top federal prosecutor in the District of Columbia did not rule out charging Trump. (CNBC)

POLITICS: President Trump urged Georgia's lead elections investigator to "find the fraud" in a lengthy December phone call, saying the official would be a "national hero," according to an individual familiar with the call who spoke on the condition of anonymity because of the sensitivity of the conversation. (Washington Post)

POLITICS: D.C. Mayor Muriel Bowser (D) asked the Department of Homeland Security to extend federal assistance with maintaining security in the city for Joe Biden's inauguration on Jan. 20, citing "the chaos, injury, and death" that stemmed from a pro-Trump mob breaching the U.S. Capitol on Wednesday. (Axios)

POLITICS: Twitter permanently suspended President Donald Trump's account on Friday. The company said in a tweet it made the decision "due to the risk of further incitement of violence." Twitter said it feared Trump's most recent tweets were being interpreted as supporting the rioters and that plans for future armed protests had already been proliferating both on and off the platform, including a proposed attack on the U.S. Capitol and state capitol buildings on Jan. 17. (CNBC)

EQUITIES: Indonesian investigators were closing in on the flight recorders from a Boeing Co. passenger jet that crashed on Saturday and confirmed the plane was intact when it struck the Java Sea, reducing the likelihood of a terror attack. (BBG)

OTHER

U.S./CHINA: National security adviser Robert O'Brien said on Sunday that the U.S. is "examining further options" after more than 50 activists were arrested in Hong Kong. O'Brien labeled the about 55 arrests last week, the largest mass arrest since China instituted a new national security law in Hong Kong, as "politicized" and "the latest of many successive nails that Beijing has driven into the coffin of Hong Kong democracy." "The United States was the first major country with the courage and conviction to candidly acknowledge the true nature of the CCP regime," O'Brien said in a statement. "It is critical that nations around the world demand accountability from Beijing." (The Hill)

U.S./CHINA/HONG KONG: JPMorgan, Morgan Stanley and Goldman Sachs are set to delist 500 structured products listed on Hong Kong's stock exchange, as the fallout from President Donald Trump's executive order barring investment in companies with alleged links to China's military widens. (FT)

U.S./CHINA/HONG KONG: Tracker Fund of Hong Kong, an ETF fund that closely corresponds to the performance of the Hang Seng Index, will not make any new investments in U.S.-sanctioned entities effective from Jan. 11, according to statement to Hong Kong stock exchange. (BBG)

U.S./CHINA/TAIWAN: Secretary of State Mike Pompeo announced Saturday that he was lifting the "self-imposed restrictions" on the U.S.-Taiwan relationship. (Axios)

U.S./CHINA/TAIWAN: The incoming Biden administration should not underestimate China's resolve and capabilities to defend its sovereignty and territorial integrity, the China Daily said in editorial denouncing a planned trip to Taiwan by the current U.S. ambassador to the UN Kelly Craft. The lifting of U.S. restrictions on official contact with Taiwan would be met with strong opposition and countermeasures from Beijing, which considers the One China policy and a pledge from the U.S. not to officially engage with Taiwan the bedrock of bilateral relations, the official English-language newspaper said. The move is another effort by the outgoing Trump administration to hobble its successor, the Daily said. (MNI)

GEOPOLITICS: The U.S. Secretary of State and foreign ministers of the U.K., Canada and Australia expressed their "serious concern" about the arrest of 55 politicians and activists in Hong Kong, the governments said in a joint statement. (BBG)

INDIA/CHINA: A Chinese soldier was apprehended on the Indian side of the Line of Actual Control (LAC), south of the Pangong Tso lake in the Ladakh region on Friday, the Indian Army said in a statement. The Chinese soldier was taken into custody by Indian troops after crossing over the LAC, the de facto border between the two countries. The reason for the soldier's crossing of the LAC is being investigated, the statement said. (CNN)

GLOBAL TRADE: China issued new rules to block its companies and citizens from having to follow "unjustified" foreign laws and measures, in its latest riposte to U.S. restrictions on businesses like ByteDance Ltd.'s TikTok. The rules on "counteracting unjustified extra-territorial application" of foreign legislation and other measures are effective immediately and allow authorities to ban the imposition of other jurisdictions' laws on Chinese entities when it deems them inappropriate, the Ministry of Commerce said in a statement on its website on Saturday. China's move aims to protect "normal trade" and other activities, it said. (BBG)

CORONAVIRUS: Japan's National Institute of Infectious Diseases said authorities have found a new strain of the coronavirus in four passengers arriving from Brazil. The new variant has similarities to those found in the U.K. and South Africa, the NIID said in a statement Sunday. (BBG)

CORONAVIRUS: The coronavirus is mutating and doing everything it can to survive, and it will continue to thrive if there isn't a more equitable distribution of vaccines across the globe, the head of the World Health Organization said on Friday. (CNBC)

CORONAVIRUS: As much as three-quarters of the global population is probably still susceptible to infection by Covid-19, Mike Ryan, Health Emergency Director of the World Health Organization, said at a briefing in Geneva. (BBG)

CORONAVIRUS: South African scientists are testing whether vaccines will be less effective against a COVID-19 variant first detected locally and hope for initial results within two weeks, a professor at the national communicable disease institute said. The variant, known as 501Y.V2, was identified by South African genomics experts late last year and is thought to be more contagious than older variants. (RTRS)

JAPAN: Japan's prefectures of Kyoto, Osaka and Hyogo have asked the government to declare a state of emergency in their respective regions, Kyodo News reported. (BBG)

AUSTRALIA: Australia's Queensland state will lift the three-day lockdown on its capital city Brisbane from 6pm local time after zero new coronavirus cases were recorded overnight, Premier Annastacia Palaszczuk said. Still, some restrictions will remain on the amount of people allowed in shops and restaurants, and masks must be worn in public indoor places places like libraries and supermarkets, she told reporters Monday. The fourth Australia vs. India cricket test will likely go ahead in Brisbane as planned on Friday with ground capacity halved and spectators required to wear masks unless seated, Palaszczuk said. (BBG)

RBNZ: The Reserve Bank of New Zealand – Te Pūtea Matua continues to respond with urgency to a breach of a third party file sharing service used to share information with external stakeholders. Governor Adrian Orr says the breach is contained, but it will take time to determine the impact. The analysis of the potentially affected information is being done with pace and care. "We are actively working with domestic and international cyber security experts and other relevant authorities as part of our investigation. This includes the GCSB's National Cyber Security Centre which has been notified and is providing guidance and advice." "We have been advised by the third party provider that this wasn't a specific attack on the Reserve Bank, and other users of the file sharing application were also compromised." "We recognise the public interest in this incident however we are not in a position to provide further details at this time." (RBNZ)

SOUTH KOREA: President Moon Jae-in said Monday that the government will provide all South Korean people with free-of-charge COVID-19 vaccines in phases starting next month. "(The government) will make sure that all of the people will be inoculated free of charge in accordance with priorities," he said in his New Year's address, assuring that inoculation will begin in February. Having signed contracts with some foreign vaccine makers, South Korea expects the first-batch delivery of products within the coming weeks. (Yonhap)

NORTH KOREA: Seoul plans to strengthen its alliance with the U.S. while continuing its efforts to revive talk with North Korea, South Korea's President Moon-Jae-in said during his annual New Year's address on Monday. South Korea to reaffirm principles of no war, mutual safety and shared prosperity to North Korea. (BBG)

NORTH KOREA: North Korean leader Kim Jong Un has been elected as general secretary of the ruling Workers' Party during its ongoing congress, taking over the title from his late father, state media KCNA said on Monday. (RTRS)

NORTH KOREA: North Korean leader Kim Jong Un threatened to expand his nuclear arsenal as he disclosed a list of high-tech weapons systems under development, saying the fate of relations with the United States depends on whether it abandons its hostile policy, state media reported Saturday. (Associated Press)

NORTH KOREA: South Korea's military said Monday that it has detected signs indicating that North Korea carried out a military parade in time for a ruling party congress in Pyongyang late Sunday. The North has been holding the eighth congress of the Workers' Party in Pyongyang since Tuesday, and the possibility has been raised that it could stage a military parade on the occasion. "Our military detected signs that North Korea held a military parade related to the party congress at Kim Il-sung Square in Pyongyang late at night yesterday," the Joint Chiefs of Staff (JCS) said in a release. (Yonhap)

CANADA: Justin Trudeau's government sought to assure the public it's trying to speed up delivery of vaccines amid pressure from health authorities who say they're running low on shots. Canada has ordered more doses per capita than any other country -- reserving at least 214 million shots for 38 million people -- and was the second country after the U.K. to approve the Pfizer vaccine. It has also authorized Moderna's shot. (BBG)

CANADA: Doug Ford, the leader of Canada's largest province, warned the health system is "on the brink of being overwhelmed." Ontario has nearly 1,500 people in the hospital with Covid-19; the number has tripled since mid-November and is well above peak levels of April and May. (BBG)

TURKEY: Turkey wants to "turn a new page in its relations with the EU in the new year," its President Recep Tayyip Erdoğan told European Commission President Ursula von der Leyen on Saturday, according to a statement by Erdoğan's office. "Erdoğan said that 2021 offered a productive atmosphere in terms of new cooperation to be built in the sphere of migration," according to the statement, which suggested that the 2016 EU Turkey migration deal — which seeks to control the crossing of refugees and migrants from Turkey to the Greek islands — could be updated. (Politico)

BRAZIL: The governor of Sao Paulo State in Brazil, Joao Doria, asked the federal health regulator to have a "sense of urgency" to approve the vaccine made in partnership with China's Sinovac. (BBG)

IRAN: Iran will expel United Nations nuclear watchdog inspectors unless sanctions are lifted by a Feb. 21 deadline set by the hardline-dominated parliament, a lawmaker said on Saturday. Parliament passed a law in November that obliges the government to halt inspections of its nuclear sites by the International Atomic Energy Agency and to step up uranium enrichment beyond the limit set under Tehran's 2015 nuclear deal if sanctions are not eased. Iran's Guardian Council watchdog body approved the law on Dec. 2 and the government has said it will implement it. (RTRS)

MIDDLE EAST: The United States plans to designate Yemen's Houthi movement as a foreign terrorist organization, three sources familiar with the matter said, a move that diplomats and aid groups worry could threaten peace talks and complicate efforts to combat the world's largest humanitarian crisis. (RTRS)

OIL: Opec crude production rose to an eight-month high in December amid an ongoing recovery in Libyan supply. Output climbed to 25.23mn b/d, the third consecutive monthly increase, thanks mainly to Libyan production rising to its highest level in over seven years, Argus' survey shows (see table). Libyan output has jumped by over 1mn b/d since August following a mid-September deal between warring factions to lift port and field blockades. (Argus Media)

OIL: Iraq raised pricing for all crude sales to Asia for February, after a similar move by Saudi Arabia, OPEC's biggest producer. The second-largest OPEC member, Iraq increased Basrah Light crude to buyers in Asia by 70 cents a barrel, to a $1.10 premium over the regional benchmark, according to a price list from the state oil marketer. (BBG)

OIL: The official selling price of Iranian Light crude was set at 80c/bbl premium to Oman-Dubai benchmark for February sales, according to a NIOC who asked not to be identified due to company policy. (BBG)

COMMODITIES: Commodity investors are back in full force, with record wagers that crops, metals and oil are set for a rally. A weakening dollar is making materials denominated in the currency more appealing at a time when equities are on a tear and the world is on a path to recover from the coronavirus pandemic. All of that has prompted speculators to pile back into commodity markets, boosting combined bets on rising prices to the highest in at least a decade. (BBG)

OVERNIGHT DATA

CHINA DEC CPI +0.2% Y/Y; MEDIAN 0.0%; NOV -0.5%
CHINA DEC PPI -0.4% Y/Y; MEDIAN -0.7%; NOV -1.5%

MNI DATA IMPACT: China Dec CPI Edged Up; 2020 CPI +2.5%

• China's inflation rose 0.2% y/y in December, bouncing back from the previous 11-year low of 0.5% fall and leading the CPI up 2.5% y/y for the year. The Producer Price Index, another key indicator measuring the factory gate prices, fell 0.4% on a yearly basis, helped by the ferrous and non-ferrous metal smelting and rolling industries, according to data released on Monday by the National Bureau of Statistics - on MNI Main Wire and email now - for more details please contact sales@marketnews.com.

AUSTRALIA NOV, F RETAIL SALES +7.1% M/M: MEDIAN +7.0%; OCT +1.4%

AUSTRALIA DEC MELBOURNE INSTITUTE INFLATION +1.5% Y/Y; NOV +1.4%
AUSTRALIA DEC MELBOURNE INSTITUTE INFLATION +0.5% M/M; NOV +0.3%

SOUTH KOREA JAN. 1-10 EXPORTS -15.4% Y/Y
SOUTH KOREA JAN. 1-10 IMPORTS -22.9% Y/Y

CHINA

CORONAVIRUS: China's coronavirus cases have surpassed 100 for the first time since last July, as the outbreak in northern Hebei province continues to grow. (FT)

CORONAVIRUS: Amid growing concerns of another round of COVID-19 infections over the upcoming Spring Festival travel rush, a number of provinces and cities in China have issued requirements specifying that people from low-risk areas should also provide negative nucleic acid test results valid within seven days upon their return. (Global Times)

CORONAVIRUS: Shijiazhuang will soon have the second round of citywide nucleic acid tests to spot all potential COVID-19 infections: local authorities. (Global Times)

CORONAVIRUS: Dingzhou, N China's Hebei Province, is requiring all residents to remain at home for 7 days after completing COVID-19 screening on Saturday, becoming the third city in the province to adopt home isolation after Shijiazhuang and Xingtai. (Global Times)

POLICY: An annual central conference for China's judicial, prosecution and public security work promised to strengthen law enforcement and judicial work against monopolies and unfair competition in 2021. The meeting was held Saturday and Sunday in Beijing, according to a statement on the WeChat account of the Commission for Political and Legal Affairs of the Communist Party Central Committee. (BBG)

FISCAL: China should ensure the sustainability of its fiscal policies, avoid abrupt changes and allow major projects to be properly funded, the People's Daily reported citing Bai Yanfeng, dean of the Central University of Finance and Economics. China should improve the transparency and efficiency of its bond market to tackle hidden local government debt risks, said Bai. China should also train monetary policy tools to better guide financial institutions in supporting target areas, the newspaper reported citing Zeng Gang, the deputy director of National Institution for Finance and Development. (MNI)

FISCAL: China may issue a lower CNY3 trillion quota in new special local government bonds in 2021, down from last year's 3.75 trillion as control over the coronavirus outbreak allows the government to scale back borrowing and tackle the risk of ballooning debts, the Securities Daily reported cited Zhang Yiqun, a member of the Society of Public Finance of China affiliated with the Ministry of Finance. China should relax the time limit for special bond issuance, expand the scope of usage, and redirect funds according to the needs of specific projects, the newspaper said citing Minister of Finance Liu Kun. (MNI)

FINTECH: Ant Group will reorganize much of its operations under the umbrella of a financial holding company for transparency at the behest of Chinese regulators, a source with knowledge of the situation told Nikkei. (Nikkei)

CHINA MARKETS

PBOC NET DRAINED CNY15 BILLION VIA OMOS MONDAY

The People's Bank of China (PBOC) injected CNY5 billion via 7-day reverse repos with the rate unchanged on Monday. This resulted in a net drain of CNY15 billion given the maturity of CNY20 billion of reverse repos today, according to Wind Information.

PBOC SETS YUAN CENTRAL PARITY AT 6.4764 MON VS 6.4708 FRI

The PBOC started setting daily central parity rates on Jan 4, 2007. On July 21, 2005, China switched to a managed-float formula against a basket of currencies, weakening the yuan's peg to the dollar.

MARKETS

UP TODAY (Times GMT/Local)