– Risk appetite trying to end the year on a positive note.
– China planning to drop quarantine requirements for inbound travelers.
– China to remove all covid-related quarantine regulations and lift restrictions on international flights from Jan 8th, 2023; Govt downgrades Covid-19 from category A to a category B disease.
– Japan PM Kishida announced restrictions for arrivals from China.
– Japan Nov Jobless Rate: 2.5% v 2.5%e.
– Japan Nov Retail Sales M/M: -1.1% v +0.2%e; Y/Y: 2.6% v 3.9%e.
– Japan govt sells 2-year JGB with positive yield (1st time since 2015).
– BOJ Gov Kuroda reiterated stance that recent policy change was not tightening.
– Japan PM Kishida stated that would watch economic situation to decide on next BOJ Governor; Premature to talk about reviewing BOJ-Japan govt accord; Reiterates govt stance that recent BOJ move on YCC tolerance band was not exit from easing, but way to make easing sustainable.
– North Korea drone briefly flew over South Korea’s capital Seoul city; In total, five North Korean drones crossed the border (1st time since 2017).
– Russia Pres Putin: We are ready to negotiate some acceptable outcomes on Ukraine with all parties involved in the conflict; The aim of special military operation is unification of the Russian nation.
– ECB’s Knot (Netherlands) stated that the tightening cycle had only passed halfway point and needed to be there for longer.
– Russia Dep PM Novak: Oil production to reach 490-500Mt during 2023.
Indices [Stoxx600 +0.22% at 428.40, FTSE closed, DAX +0.53% at 14,015.45, CAC-40 +0.81% at 6,557.38, IBEX-35 +0.42% at 8,304.00, FTSE MIB +0.30% at 23,949.00, SMI +0.45% at 10,853.50, S&P 500 Futures +0.65%].
Market Focal Points/Key Themes: European indices open higher across the board, but paird gains as the session wore on; UK, Ireland closed for holiday; better performing sectors include materials and financials; lagging sectors include industrials and consumer discretionary; no major corporate events expected in the upcoming US session, Canada closed for holiday.
– Financials: Banca Monte Paschi [BMPS.IT] +1% (ECB drops dividend ban).
– Healthcare: METabolic EXplorer [METEX.FR] -18% (financing; targets), Gedeon Richter [RIG2.DE] -4% (Hungary tax raise for drugmakes).
– Industrials: Volkswagen [VOW3.DE] +1% (China reopening).
– Technology: Mycronic [MICR.SE] +1.5% (order).
– Real Estate: Unibail-Rodamco-Westfield [URW.NL] -1% (divestment).
– Russia Fin Min Siluanov announced that it would only purchase Chinese yuan (CNY) for the Wellbeing fund in 2023.
– Taiwan President Tsai Ing-Wen noted that China continuous expansion had threatened regional security: Announced it would extend mandatory military service to 1 year from 2024.
– Taiwan govt extended central bank governor Yang term to Feb 2028.
– USD was on the defensive again as risk appetite rose after China announced it would scrap its COVID-19 quarantine rule for inbound travelers. The move was viewed as major step towards reopening its borders.
– USD/JPY back above 133 as various Japanese officials continued to downplay the recent tweak in BOJ policy. PM Kuroda and BOJ Gov Kuroda both downplayed any near-term exit from ultra-loose monetary policy.
– (FI) Finland Dec Consumer Confidence: -18.5 v -16.9 prior; Business Confidence: -8 v -8 prior.
– (TH) Thailand Nov Customs Trade Balance: -$1.3B v -$0.1Be.
– (NO) Norway Nov Retail Sales M/M: +0.9% v -0.2% prior.
– (CZ) Czech Dec Business Confidence: 3.9 v 4.5 prior; Consumer Confidence Index: -32.0 v -30.8 prior; Composite Confidence (Consumer & Business): -3.3 v -2.6 prior.
– (TW) Taiwan Nov Leading Monitoring Indicator: 12 v 18 prior.
– (CH) Swiss weekly Total Sight Deposits (CHF): 542.7B v 542.9B prior; Domestic Sight Deposits: 506.4B v 510.2B prior.
Fixed income issuance
– None seen.
– (RO) Romania Nov M3 Money Supply Y/Y: No est v 7.0% prior.
– 05:15 (CH) Switzerland to sell 12-month Bills; Avg Yield: % v -0.740% prior; Bid-to-cover: x v 4.25x prior.
– 05:25 (EU) Daily ECB Liquidity Stats.
– 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills; Avg Yield: % v 13.73% prior; bid-to-cover: x v 1.35x prior (Dec 20th 2022).
– 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO) (prior €1.28B with 23 bids recd).
– 06:00 (BR) Brazil Dec FGV Construction Costs M/M: 0.3%e v 0.1% prior.
– 06:45 (US) Daily Libor Fixing.
– 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
– 07:30 (BR) Brazil Nov Total Outstanding Loans (BRL): No est v 5.215T prior; M/M: No est v 1.0% prior; Personal Loan Default Rate: No est v 5.9% prior.
– 08:00 (UK) No Daily Baltic Dry Bulk Index (Boxing Day).
– 08:30 (US) Nov Advance Goods Trade Balance: -$96.3Be v -$99.0B prior.
– 08:30 (US) Nov Preliminary Wholesale Inventories M/M: 0.4%e v 0.5% prior; Retail Inventories M/M: -0.1%e v -0.2% prior.
– 09:00 (US) Oct FHFA House Price Index M/M: -0.8%e v +0.1% prior.
– 09:00 (US) Oct S&P/Case-Shiller House Price Index (20-City) M/M: -1.20%e v -1.24% prior; Y/Y: -8.00%e v 10.43% prior.
– 09:00 (US) Oct S&P/Case-Shiller House Price Index (overall) Y/Y: No est v 10.65% prior.
– 09:00 (EU) Weekly ECB Forex Reserves.
– 10:30 (US) Dec Dallas Fed Manufacturing Activity: -15.0e v -14.4 prior.
– 12:30 (BR) Brazil Nov Federal Debt Total (BRL): No est v 5.778T prior.
– 13:00 (US) Treasury to sell 52-Week Bills.
– 13:00 (US) Treasury to sell 2-Year Notes.
– 14:00 (AR) Argentina Oct Supermarket Sales Y/Y: No est v 0.8% prior; Shop Center Sales Y/Y: No est v 13.2% prior.
– 16:00 (KR) South Korea Jan Business Manufacturing Survey: No est v 69 prior; Non-Manufacturing Survey: No est v 77 prior.
– 18:50 (JP) Japan Nov Preliminary Industrial Production M/M: -0.2%e v -3.2% prior; Y/Y: -1.5%e v +3.0% prior.