EXECUTIVE SUMMARY
- TRUMP ALLY GAETZ TAPPED FOR ATTORNEY GENERAL, RESIGNS HOUSE SEAT
- BIDEN, XI TO MEET AS WORLD LEADERS SHIFT FOCUS TO TRUMP
- PROSECUTORS SEEK PRISON & PUBLIC OFFICE BAN FOR LE PEN, RISKS 2027 RUN
- PBOC STICKS WITH YUAN SUPPORT IN FACE OF RESURGENT DOLLAR
Figure 1: CNH forwards curve shows the stress of Trump Presidency
NEWS
INVITATION: MNI Webcast with ECB's Philip Lane on Dec 18
You are invited to listen to an MNI Webcast with Philip R. Lane, Chief Economist and Member of the Executive Board of the European Central Bank. Details below:
- Topic of discussion: 'Eurozone economy and the ECB's monetary policy'
- Date: Wednesday 18 December
- Time: 1030am London / 10am - 1130am Frankfurt
- This event is on the record and will run as a Zoom Webinar
To register please go to: MNI Webcast Registration
US (BBG): Trump Ally Gaetz Tapped for Attorney General, Resigns House Seat
President-elect Donald Trump is nominating Representative Matt Gaetz to be attorney general, tapping a polarizing and embattled lawmaker to reshape US law enforcement and carry out his agenda on immigration, crime and hot-button social issues. The Florida Republican, the subject of a House inquiry into sexual misconduct allegations, promptly resigned from Congress, effectively ending that investigation because he is no longer a sitting member of the chamber. Gaetz has denied wrongdoing.
US (BBG): McCarthy Predicts Senate Will Block Gaetz’s Nomination to Be AG
Former House Speaker Kevin McCarthy predicted that President-elect Donald Trump’s nomination of Matt Gaetz to be attorney general would be rejected by the Republican Senate next year. “Gaetz won’t get confirmed, everybody knows that,” McCarthy said in an interview with Bloomberg Television at the Barclays Asia Forum in Singapore on Thursday. Gaetz, a Florida congressman who resigned from the House hours after Trump announced that he would nominate him to run the Justice Department, orchestrated McCarthy’s ouster as speaker last year. “Doesn’t matter,” McCarthy said of the nomination’s prospects. “It’s a good deflection.”
US (WSJ): Republicans Clinch House Majority but Face Narrow Margin
Republicans clinched control of the House more than a week after Election Day, with GOP lawmakers on course for another narrow majority that will test party unity as they work to pass President-elect Donald Trump’s second-term agenda. The victory in the House means Republicans have full control of Washington next year, after winning the White House and the Senate, where the GOP will have a 53-47 majority.
US/CHINA (BBG): Biden, Xi to Meet as World Leaders Shift Focus to Trump
President Joe Biden will meet his Chinese counterpart, Xi Jinping, in Peru on Saturday for the last of three in-person sit-downs between the leaders during the US president’s term in office, according to senior administration officials. Both leaders will be in Lima for the Asia-Pacific Economic Cooperation forum. They last saw each other in person a year ago at the same summit when Biden hosted Xi outside of San Francisco.
ECB (BBG): ECB’s Guindos Says Inflation Data Are Going in Right Direction
Euro-area consumer-price numbers are offering some encouragement for policymakers, according to European Central Bank Vice President Luis de Guindos. “There’s good news with inflation and not so good news on economic growth,” he said in Madrid on Thursday. “We expect services inflation to slow down in the coming months. Our expectation of inflation evolution is that it will converge in a clear and stable manner towards price stability, 2%.”
FRANCE (MNI): Prosecutors Seek Prison & Public Office Ban for Le Pen, Risks 2027 Run
Prosecutors in the trial of 25 individuals from the far-right Rassemblement National (RN) accused of embezzling EU parliamentary funds to pay party staff have requested that, if found guilty, party figurehead Marine Le Pen be sentenced to five years in prison (three of which would be suspended), be fined EUR300k, and receive a five-year ban on running for public office. The prosecution has also requested that if sentenced, the ban is applied immediately rather than after any appeal. If this were executed, Le Pen would be barred from running in the 2027 presidential election.
UK (BBG): Reeves Plans Law to Make Pension ‘Megafunds’ in Growth Push
Chancellor of the Exchequer Rachel Reeves said the UK will introduce legislation next year to pool £1.3 trillion ($1.7 trillion) of pension savings into a series of “megafunds,” as the new Labour government tries to deliver on its pledge to boost private investment and economic growth. Speaking to Bloomberg TV ahead of her Mansion House speech to the City, Reeves said she wanted to replicate the Australian, Canadian and US models with “mega pension funds that achieve economies of scale, better returns for their savers, and help unlock that long term growth that we need in Britain.”
CHINA (BBG): PBOC Sticks With Yuan Support In Face of Resurgent Dollar
China moved to support the under-pressure yuan for a second day, through its daily reference rate for the managed currency. The People’s Bank of China set the so-called yuan fixing at 7.1966 per dollar, about 359 pips stronger than the average estimate in a Bloomberg survey. On Wednesday, the gap between the fixing and estimate was 445 pips, the widest since early August. The yuan has come under pressure alongside global peers as Donald Trump’s US election victory bolstered the dollar to its highest in two years.
JAPAN (BBG): Japan Plans $192 Handouts for Low-Income Households in Package
Japanese Prime Minister Shigeru Ishiba’s government is planning ¥30,000 ($192) cash handouts to help low-income households cope with higher prices as it fleshes out the details of an upcoming economic package, according to the latest draft of the plans seen by Bloomberg. In addition to the ¥30,000 handouts, the government plans to give low-income households an extra ¥20,000 per child, according to the updated proposals seen Thursday. The government also plans to reinstate subsidies for electricity and gas bills from January through March.
AUSTRALIA (AFR): Albanese Increasingly Likely to Face Voters Without a Rate Cut
Expectations are firming that interest rate cuts will come too late to restore the Albanese government’s standing with voters before the election, as Reserve Bank governor Michele Bullock warned the ongoing strength of the economy is fuelling inflation. Speaking shortly before the release of the jobs figures Ms Bullock said the economy was still operating at a level that could not be sustained without fuelling inflation.
RBA (BBG): RBA Says Trump Policy Impact Hinges on How Other Nations Respond
Australian central bank chief Michele Bullock said it’s too early to judge the impact of President-elect Donald Trump’s policies as it remains unclear what he will actually end up implementing. “We can’t be jumping at sort of shadows,” the Reserve Bank governor said during a panel discussion in Sydney on Thursday. “What ultimately happens for Australia is going to depend on the responses of other countries,” she said, adding “we don’t know how other countries are going to respond to tariffs.”
OIL (BBG): World Oil Market Faces Million-Barrel Glut in 2025, IEA Says
Global oil markets face a surplus of more than 1 million barrels a day next year as Chinese demand continues to falter, cushioning prices against turmoil in the Middle East and beyond, the International Energy Agency said. Oil consumption in China - the powerhouse of world markets for the past two decades - has contracted for six straight months through September and will grow this year at just 10% of the rate seen in 2023, the IEA said in a monthly report on Thursday. The global glut would be even bigger if OPEC+ decides to press on with plans to revive halted production when it gathers next month, according to the agency.
DATA
EUROZONE DATA (MNI): Industrial Production In-Line W/ MNI Tracking; Decreases in Sep
- EUROZONE SEP IP -2% M/M, -2.8% Y/Y
Eurozone industrial production was below consensus in September and came in in-line with our tracking based on national-level data, at -2.0% M/M (-1.4% cons) - more than reversing last month's gain of 1.5% (0.3pp downwardly revised form +1.8%). This means that IP remains on its broader downtrend in the Eurozone - the yearly growth rate has been negative every month since December 2023. Looking at a monthly comparison by main industrial groupings, developments were mixed: capital goods production saw the weakest developments at -3.8% M/M (but this is reversing the +3.8% M/M gain in August), followed by energy at -1.5%.
EUROZONE FLASH Q3 GDP +0.4% Q/Q, +0.9% Y/Y (MNI)
SPAIN DATA (MNI): Spanish Core Goods Inflation Pulls Back in October
- SPAIN OCT HICP +0.4% M/M, +1.8% Y/Y
Spanish October HICP confirmed flash estimates at 1.8% Y/Y and 0.4% M/M. HICP excluding unprocessed foods and energy eased to its lowest since December 2021 at 2.5% Y/Y (vs 2.7% prior). This easing of core pressures reflected a notable pullback in core goods to 0.4% Y/Y (vs 1.1% in Sep and 0.6% in Aug). Clothing and footwear inflation eased to -0.3% Y/Y (vs 4.6% prior), with the NSA monthly rise of 2.9% smaller than the 7.8% rise in October 2023. This somewhat offsets the stronger-than-usual price pressures seen in September.
SWEDEN FINAL OCT CPIF +1.5% Y/Y (MNI)
AUSTRALIA DATA (MNI): Aussie Unemployment Holds, Employment Weakens
- AUSTRALIA OCT UNEMPLOYMENT RATE +4.1%
- AUSTRALIA OCT LABOR PARTICIPATION RATE +67.1%
- AUSTRALIA OCT EMPLOYED PERSONS CHANGE 15.9K
- AUSTRALIA OCT F-T EMPLOYED PERSONS CHANGE 9.7K
The unemployment rate remained at 4.1% in October, while the economy added 15,914 jobs, lower than the 25,000 market estimate, data released by the Australian Bureau of Statistics showed Thursday. The Reserve Bank of Australia expects unemployment to reach 4.3% by the December quarter. “While employment grew in October, the 0.1% increase was the slowest growth in recent months,” noted Bjorn Jarvis, head of labour statistics at the ABS. “This was lower than each of the previous six months, when employment rose by an average of 0.3% per month.”
FOREX: Trends Extend as USD Index Clears to YTD High
- The USD is making further progress still early Thursday, with the USD Index clearing the mid-April highs to narrow the gap with the '23 high and next key level at 107.348. Market moves here remain largely momentum-driven, as markets continue to get to grips with the incoming Trump administration and, most importantly, the likely cabinet. Reports yesterday suggested that Howard Lutnick is coming closer to the nomination for Treasury Secretary - a more pro-tariff candidate relative to his rival for the position, Scott Bessent.
- Yesterday's inflation print prompted only a minor dip in the USD, potentially providing more attractive levels at which to get long the dollar - with the extension of the trend pushing both EUR/USD and GBP/USD to new pullback lows.
- AUD is finding a more stable footing as local analysts begin to push back forecasts for RBA easing well into 2025 - the jobs data overnight was modestly softer, however the stable unemployment rate keeps inflationary dynamics alive.
- US PPI data is expected to tell a similar story to the CPI print yesterday, with gradually waning inflationary pressures leaving the Fed to progress with a 25bps rate cut in December. Weekly jobless claims will likely take precedence as markets look to gauge jobs market momentum, after last week's number saw continuing claims edge to a new post-COVID high.
EGBS: Bund Futures Consolidate Early Rally, Little Impact From GDP and IP Data
Bund futures have consolidated their early rally, but remain -9 ticks at 131.74, well short of Tuesday’s highs.
- Lower-than-expected Eurozone September industrial production (-2.0% M/M vs -1.4% cons, though in line with MNI’s tracking) was not a market mover. The second estimate of Q3 GDP was also in line with the advance read at 0.4% Q/Q.
- The German curve has twist steepened, with 2s10s up 3.2bps at 25.0bps.
- German ASW tightening has been apparent again this morning, with Bobl, Bund & Buxl vs. 3-month Euribor spreads moving back towards cycle/all-time lows.
- The 1.5% uptick in European equities has helped the BTP/Bund spread tighten 1.5bps to 122.5bps.
- The accounts of the ECB's October monetary policy meeting (1230GMT) are unlikely to provide many fresh signals for markets, with more focus on today’s US data (PPI, jobless claims).
GILTS: Holding Lower, Gilt/Bunds Test Cycle Highs, BoE Comments Eyed
Gilts are lower on the day, taking cues from Tsys since yesterday’s close.
- Futures -38 at 93.08, 92.97-93.28 session range.
- The bearish technical trend remains intact.
- Initial meaningful support and resistance levels located at 92.53/94.73.
- Yields little changed to 4bp higher, steepening.
- 2s tested November highs, before fading.
- 2s10s sticks with the multi-month range in place since mid-Aug benchmark roll, last ~5.6bp.
- 5s30s 52.2bp after closing at the lowest level since March on Wednesday (49.8bp).
- 10-Year gilt/Bund spread ~3bp wider at 215.7bp, testing the cycle closing high 215.8bp.
- Swap spreads tighten again today.
- BoE-dated OIS prices 59bp of cuts through Dec ’25, ~2bp more dovish on the day.
- Comments from BoE hawk Mann are due later, although she already spoke on Wednesday, so shouldn’t offer much new.
- The text of Governor Bailey’s Mansion House speech will be released at 18:00 London, ahead of his evening appearance.
- Coming so soon after the November MPR and press conference it would be unusual for him to provide a notably different tone on monetary policy.
- Chancellor Reeves will also speak at that event. Reeves has already outlined her intention to alter the UK pension landscape, in a bid to boost private investment and generate economic growth.
EQUITIES: Eurostoxx 50 Futures Recover From Wednesday's Lows
A bearish condition in Eurostoxx 50 futures remains intact and this week’s extension reinforces current conditions. The sell-off confirms a resumption of the downtrend that started Sep 30. Price has breached 4746.94, the 61.8% retracement of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, Nov high, where a break would highlight a reversal. The trend condition in S&P E-Minis remains bullish and the contract is trading just below its recent highs. A key short-term support has been defined at 5724.25, the Nov 4 low. The latest rally resulted in a breach of the bull trigger at 5927.25, Oct 17 high, confirming a resumption of the primary uptrend. The 6000.0 psychological handle has been pierced. Sights are on 6070.16, a Fibonacci projection. Initial support is at 5927.25, the Oct 17 high.
- Japan's NIKKEI closed lower by 185.96 pts or -0.48% at 38535.7 and the TOPIX ended 7.2 pts lower or -0.27% at 2701.22.
- Elsewhere, in China the SHANGHAI closed lower by 59.439 pts or -1.73% at 3379.839 and the HANG SENG ended 387.64 pts lower or -1.96% at 19435.81.
- Across Europe, Germany's DAX trades higher by 226.51 pts or +1.19% at 19227.12, FTSE 100 higher by 3.38 pts or +0.04% at 8033.71, CAC 40 up 58.22 pts or +0.81% at 7275.05 and Euro Stoxx 50 up 61.83 pts or +1.3% at 4802.17.
- Dow Jones mini up 52 pts or +0.12% at 44160, S&P 500 mini up 5 pts or +0.08% at 6021, NASDAQ mini up 9 pts or +0.04% at 21166.5.
Time: 09:55 GMT
COMMODITIES: Long-Term Trend Condition in Gold Unchanged and Bullish
A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high, reinforces current conditions. The move down exposes $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.70, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance is $72.88, the Nov 7 high. The long-term trend condition in Gold is unchanged, it remains bullish and the latest pullback appears corrective. However, recent weakness has resulted in a breach of the 20- and 50-day EMAs, and the metal is trading lower again, today. The breach of the EMAs signals scope for a deeper retracement and sights are on $2547.0 next, the Sep 18 low. Firm resistance is seen at $2678.4, the 20-day EMA.
- WTI Crude down $0.09 or -0.13% at $68.36
- Natural Gas down $0.03 or -0.91% at $2.957
- Gold spot down $30.3 or -1.18% at $2542.24
- Copper down $7.5 or -1.84% at $400.95
- Silver down $0.53 or -1.74% at $29.771
- Platinum down $4.37 or -0.47% at $934.16
Time: 09:55 GMT
| Date | GMT/Local | Impact | Country | Event |
| 14/11/2024 | 1200/0700 |  US | Fed Governor Adriana Kugler | |
| 14/11/2024 | 1230/1330 |  EU | Publication of the ECB MonPol meeting account | |
| 14/11/2024 | - |  GB | Rachel Reeves’ debut Mansion House dinner speech as chancellor | |
| 14/11/2024 | 1300/1300 | GB | BOE's Mann at Revitalising the global economy event | |
| 14/11/2024 | 1330/0830 | *** | US | Jobless Claims |
| 14/11/2024 | 1330/0830 | *** | US | PPI |
| 14/11/2024 | 1415/0915 | US | Richmond Fed's Tom Barkin | |
| 14/11/2024 | 1530/1030 | ** | US | Natural Gas Stocks |
| 14/11/2024 | 1600/1100 | ** | US | DOE Weekly Crude Oil Stocks |
| 14/11/2024 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 14/11/2024 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 14/11/2024 | 1830/1930 | EU | ECB's Schnabel in panel on "Reassessing policy tools" | |
| 14/11/2024 | 1900/1400 | *** |  MX | Mexico Interest Rate |
| 14/11/2024 | 2000/1500 | US | Fed Chair Jerome Powell | |
| 14/11/2024 | 2100/2100 | GB | BOE's Bailey speech at Mansion House | |
| 14/11/2024 | 2115/1615 | US | New York Fed's John Williams | |
| 15/11/2024 | 2350/0850 | *** |  JP | Japan GDP 1st Estimate |
| 15/11/2024 | 0200/1000 | *** |  CN | Fixed-Asset Investment |
| 15/11/2024 | 0200/1000 | *** | CN | Retail Sales |
| 15/11/2024 | 0200/1000 | *** | CN | Industrial Output |
| 15/11/2024 | 0200/1000 | ** | CN | Surveyed Unemployment Rate M/M |
| 15/11/2024 | 0430/1330 | ** | JP | Industrial Production |
| 15/11/2024 | 0700/0800 | ** |  SE | Unemployment |
| 15/11/2024 | 0700/0700 | ** | GB | UK Monthly GDP |
| 15/11/2024 | 0700/0700 | *** | GB | GDP First Estimate |
| 15/11/2024 | 0700/0700 | ** | GB | Index of Services |
| 15/11/2024 | 0700/0700 | *** | GB | Index of Production |
| 15/11/2024 | 0700/0700 | ** | GB | Output in the Construction Industry |
| 15/11/2024 | 0700/0700 | ** | GB | Trade Balance |
| 15/11/2024 | 0730/0730 | GB | DMO to publish FQ4 (Jan-Mar) gilt operations calendar | |
| 15/11/2024 | 0745/0845 | *** |  FR | HICP (f) |
| 15/11/2024 | 0800/0900 | * |  CH | CH Flash GDP |
| 15/11/2024 | 0900/1000 | ** |  IT | Italy Final HICP |
| 15/11/2024 | 1330/0830 | ** | US | Import/Export Price Index |
| 15/11/2024 | 1330/0830 | ** |  CA | Monthly Survey of Manufacturing |
| 15/11/2024 | 1330/0830 | ** | CA | Wholesale Trade |
| 15/11/2024 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 15/11/2024 | 1330/0830 | *** | US | Retail Sales |
| 15/11/2024 | 1330/0830 | ** | US | Empire State Manufacturing Survey |
| 15/11/2024 | 1400/0900 | * | CA | CREA Existing Home Sales |
| 15/11/2024 | 1415/0915 | *** | US | Industrial Production |
| 15/11/2024 | 1500/1000 | * | US | Business Inventories |
| 15/11/2024 | 1500/1600 | EU | ECB's Lane at seminar on Fragmenting Trading System | |
| 15/11/2024 | 1515/1615 | EU | ECB's Cipollone in discussion on productivity |