Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY:
- TRUMP IMPERILS VIRUS BILL WITH LATE DEMAND FOR BIGGER CHECKS
- FRANCE'S BEAUNE: DON'T WANT BREXIT NEGOTIATIONS BEYOND YEAR-END
- U.K.'S JENRICK: GOVT TO MEET TODAY TO DISCUSS MORE AREAS MOVING TIER 4
- MNI CHINA LIQUIDITY INDEX: CONDITIONS EASE IN DECEMBER
Fig. 1: Italy Sentiment Picks Up In Dec Despite Lockdowns
Istat, MNI
NEWS:
U.S. (BBG): President Donald Trump's surprise attack Tuesday on Congress's historic coronavirus relief package left aid for millions of Americans hanging in the balance as the pandemic continues to batter the nation. The famously unpredictable president slammed the $2.3 trillion bill as a "disgrace" less than 24 hours after Congress approved the legislation with overwhelmingly bipartisan votes. Trump demanded larger stimulus payments for individuals and called for eliminating "wasteful and unnecessary items," but he didn't say whether he would veto it. Trump's last-minute demands nonetheless sent shockwaves through Washington. In addition to $900 billion in pandemic-related measures, the package includes $1.4 trillion to fund government operations through next September. If the president doesn't sign the legislation by Dec. 28, government funding would lapse after midnight that day, triggering a partial shutdown.
BREXIT (BBG): Brexit negotiations should be wrapped up in coming days, "I don't want us to go past the end of the year," French Junior European Affairs Minister Clement Beaune says in an interview with BFM Business TV on Wednesday.
U.K./COVID (BBG): Housing Secretary Robert Jenricksays the U.K. government will meet later today to discuss moving more areas of the country into the highest Tier 4-level restrictions, according to interview with Sky News. Prime Minister Boris Johnson will take decision in "next couple of days.
U.K. (RTRS): Angry truckers stranded outside the English port of Dover scuffled with police on Wednesday and demanded to cross to France. Thousands of drivers, many from across Europe, have been stuck for days in southern England. Many will miss Christmas with their families.
U.K.: UK retail footfall fell sharply on Dec 20, down 53% on the same day a year ago and down 14 percentage points on the previous day, reflecting the government's introduction of a tier 4 lockdown in London and much of south-eastern England, the Office for National Statistics said Wednesday, citing data from Springboard.
MNI CHINA LIQUIDITY INDEX: China's interbank market saw relatively loose liquidity conditions through December as the People's Bank of China kept the funds flowing to ensure no slowdown in available credit for companies and ample cash going into the calendar year end, the latest MNI Liquidity Conditions Index shows. The Liquidity Condition Index fell to 15.7 in December after November's 43.8, with 68.8% respondents reporting looser conditions, matching levels seen earlier this year when the central bank injected liquidity soon after the outbreak of Covid-19. For full analysis contact sales@marketnews.com
CRYPTOCURRENCY (RTRS): Cryptocurrency XRP tumbled 18% to a one-month low on Wednesday after the U.S. Securities and Exchange Commission (SEC) charged associated blockchain firm Ripple with conducting a $1.3 billion unregistered securities offering.
DATA:
Italy Business and Mfg Sentiment Both Higher in Dec
-ITALY Dec SA manufacturing morale 95.9 vs Nov 90.9
-Dec composite business sentiment indicator 87.7 vs Nov 83.3
-Dec capital, intermed. and consumer gds rose --Istat
-Manufacturing current orders -25.7 in Dec vs -28.6 in Nov
-3-month manuf. output outlook +0.4 vs -9.2 in Nov
-Current manufacturing inventory levels +1.2 vs +3.0 in Nov
Italy Dec Consumer Confidence Improved
- Dec SA consumer confidence 102.4 vs Nov 98.4
-Consumers' sentiment on economy ticked up to 86.0 from Nov 79.8
-Confidence in future outlook climbed to 106.6 from Nov 99.3
-Sentiment on their personal climate rose to 108.0 vs Nov 104.7
-Sentiment on the current climate ticked up to 99.2 from Nov 97.4
FIXED INCOME: Waiting patiently
- The European morning session has been uneventful with only tier two data and little to change sentiment surrounding Brexit negotiations. As we wrote earlier, fishing is seemingly the last major obstacle to an EU-UK trade deal but still proving contentious. Overnight reports have stated that rather than negotiating with Barnier, Johnson is now negotiating directly with von der Leyen who is in frequent contact with EU Heads of State. There is still hope that a deal can be agreed before Christmas although we are now also starting to see some comments from senior officials that talks can continue until the end of the year, or even in January if necessary.
- Elsewhere, there will be some focus on the US data today with personal income/spending, durable goods and weekly claims amongst the highlights of the release. In terms of US fiscal stimulus talks, Trump may be holding up agreeing to the plans as he favours larger checks for individuals.
- TY1 futures are down -0-1 today at 137-30+ with 10y UST yields up 0.3bp at 0.921% and 2y yields unch at 0.117%.
- Bund futures are up 0.22 today at 178.15 with 10y Bund yields down -0.9bp at -0.606% and Schatz yields unch at -0.743%.
- Gilt futures are up 0.09 today at 135.68 with 10y yields down -0.5bp at 0.176% and 2y yields down -0.2bp at -0.157%.
FOREX: Greenback Slipping as Trump Slows Stimulus Progress
Just ahead of the final hurdle, President Trump slowed the progress of the COVID stimulus package, demanding that direct payments be upped to $2,000 apiece from the agreed $600 payment. Equity futures were knocked lower initially, but the outlook seems more stable ahead of the NY open.
The USD is a touch weaker, with the greenback on the backfoot against most others in G10.
GBP is modestly firmer as markets seem a touch more optimistic about the prospects of a Brexit deal before year-end. Reports this morning suggest EU negotiator Barnier has been sidelined in favour of direct talks between UK PM Johnson and EU's von der Leyen, as well as Germany's Merkel and France's Macron. Fish remain the outstanding issue, but betting markets still apportion a near 70% chance of a deal by the end of the year.
A pre-Christmas deluge of data crosses Wednesday, with weekly jobless claims, personal income/spending, prelim durable goods and new home sales data all crossing. Canadian GDP could also draw interest.
EQUITIES: Moving Higher From Overnight Lows
- Asian stocks closed higher, with Japan's NIKKEI up 88.4 pts or +0.33% at 26524.79 and the TOPIX up 4.09 pts or +0.23% at 1765.21. China's SHANGHAI closed up 25.538 pts or +0.76% at 3382.32 and the HANG SENG ended 223.85 pts higher or +0.86% at 26343.1.
- European equities are higher, with the German Dax up 84.55 pts or +0.63% at 13418.11, FTSE 100 down 1.98 pts or -0.03% at 6453.16, CAC 40 up 35.27 pts or +0.65% at 5466.86 and Euro Stoxx 50 up 22.22 pts or +0.64% at 3497.49.
- U.S. futures are higher, with the Dow Jones mini up 62 pts or +0.21% at 29974, S&P 500 mini up 10 pts or +0.27% at 3687.25, NASDAQ mini up 23 pts or +0.18% at 12733.
COMMODITIES: Metals Outperform On Weaker USD
- WTI Crude up $0.01 or +0.02% at $46.4
- Natural Gas down $0.03 or -1.12% at $2.773
- Gold spot up $7.68 or +0.41% at $1867.34
- Copper up $2.95 or +0.84% at $352.65
- Silver up $0.31 or +1.25% at $25.3955
- Platinum up $9.16 or +0.91% at $1013.5
LOOK AHEAD:
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.