Markets wind down for Christmas

Notes/observations

-All sectors across European equities are green, FX is flat, gold and oil a little higher. Europe is only partially open as Christmas holiday is celebrated; For major bourses, UK, France and Spain are open but will close early. Germany, Italy and Switzerland are fully closed.

-Despite quiet session with most markets closed tomorrow, BOJ Gov Ueda will speak tomorrow and Japan Fin Min will visit China.

-Special note: TTN European coverage will be limited over next 48 hours due to Boxing/St. Stephens Day on Dec 26th
Asia closed mixed with Shanghai outperforming +1.3%. EU indices (partially open) are +0.1-0.5%. US futures are +0.1-0.2%. Gold +0.0%, DXY +0.1%; Commodity: Brent +0.5%, WTI +0.5%; Crypto: BTC -2.0%, ETH +2.0%.

Asia

- South Korea Dec Consumer Confidence: 88.4 v 100.7 prior [largest decline in 16 years].

- Reserve Bank of Australia (RBA) Dec Minutes noted that if the economy developed as expected it would further increase their confidence that inflation was declining sustainably towards target and then be appropriate to begin relaxing the degree of monetary policy tightness.

- China authorities said to agree to issue CNY3.0T in Special Treasury Bonds in 2025.

- Japan Fin Min Kato reiterated concerned about recent FX moves regarding seeing one-sided and sharp FX moves. Reiterated important for currencies to move stably, reflecting economic fundamentals.

Mid-East

- Israel PM Netanyahu noted that “progress” was being made toward a deal with Hamas to release hostages held captive in Gaza for more than a year.

Europe

- France govt selected Eric Lombard to lead Finance Ministry. Amelie de Montchalin to be named France Budget Minister.

- French Fin Min Lombard: Must cut deficit without destroying growth.

Americas

- Bank of Canada (BOC) Summary of Deliberations: Would likely be considering further reductions in policy rate at future meetings, and would take each decision one meeting at a time. Decision to cut by 50bps reflected weaker than expected growth outlook and fact that monetary policy no longer needed to be clearly restrictive.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [FTSE +0.5% at 8142, CAC-40 +0.6% at 7314, IBEX-35 +0.2% at 11454, S&P 500 Futures +0.2%].

Market Focal Points/Key Themes: Some European indices open for shortened trading hours, starting the day in the green with light volume and remained upbeat through the early part of the session; Germany, Italy, Switzerland, Austria and Scandinavian bourses closed for the holiday; energy and consumer discretionary among sectors leading the way higher; lagging sectors include financials an utilities; health care sector buoyed ager Novo Nordisk analyst actions and drug approvals; Carlyle to take over Schneider-Neureither; no major event expected in the upcoming shorted US trading session.

Speakers

- Turkey Fin Min Simsek reiterated lower budget deficit in 2025 would support disinflation.

- Japan PM Ishiba stated that govt would step up measures or raising the minimum wage.

Currencies/fixed income

- USD was steady into holiday trading.

- EUR/USD stayed below the 1.04 level with little Impetus for new positions into year end. EUR currency on track for the biggest quarterly loss in almost a decade with losses around 7% since Sept. The pair hurt by expectations that the ECB would need to cut interest rates considerably due to weak European economic growth and political turmoil.

- USD/JPY hovered around the 157 level as Japanese officials continued verbal intervention on the FX from regarding ‘one-way’ price action.

Economic data

- (NL) Netherlands Q3 Final GDP Q/Q: 0.8% v 0.8% prelim; Y/Y: 1.7% v 1.7% prelim.

Fixed income issuance

None scheduled.

Looking ahead

- (IL) Israel Dec Leading ‘S’ Indicator M/M: No est v -0.1% prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 07:00 (CL) Chile Nov PPI M/M: No est v 3.2% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:30 (US) Dec Philadelphia Fed Non-Manufacturing Activity: No est v -5.9 prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 10:00 (US) Dec Richmond Fed Manufacturing Index: -11e v -14 prior.

- 11:30 (US) Treasury to sell 2-Year FRN Reopening.

- 13:00 (US) Treasury to sell 5-Year Notes.

- 16:30 (US) Weekly API Oil Inventories.

- 18:50 (JP) Japan Nov PPI Services Y/Y: 3.0%e v 2.9% prior.

- 21:00 (CN) China PBOC Setting: Expected to leave 1-year Medium-Term Lending Facility (MLF) unchanged at 2.00%; Prior injection of CNY900B.