Volume stays light ahead of new years – Boeing falls on more bad press

Notes/observations

- Another quiet session between Christmas and New Year. European markets to close early tomorrow and remain closed for Wednesday 1st Jan, New Years Day.

- Wallstreet selloff on Friday causing some overflow weakness into Europe, most sectors in the red, except for Banks and Travel & Leisure.

- Boeing down 4-5% in pre-market after the Jeju Air crash in South Korea which killed 179 (2 survived) and was a Boeing 737-800, an older model before 737-Max. No cause has been confirmed, but black box has been collected and investigation to begin.

- Asia closed mixed with Nikkei225 underperforming -0.8%. EU indices are -0.3% to +0.2%. US futures are -0.2%. Gold -0.2%, DXY -0.1%; Commodity: Brent -0.2%, WTI -0.2%; Crypto: BTC -1.4%, ETH +0.4%.

Asia

- Japan Dec Final Manufacturing PMI: 49.6 v 49.5 prelim (confirmed 6th straight contraction).

- South Korea Nov Industrial Production M/M: -0.7% v -0.5%e (largest decline since July); Y/Y: 0.1% v 0.5%e.

- China PBOC Gov Pan Gongsheng reiterated stance that saw room for further RRR cuts.

- China said to be racing to secure advanced US chip materials ahead of 2025, orders to suppliers such as DuPont, Entegris and Chemours said to have 'spiked' since Nov.

Europe

- France Fin Min Lombard said to 'eye' 2025 budget deficit 'slightly above 5.0%' in order to protect growth **Note: figure would be slightly hgher than the 5.0% targeted by the last gov't].

- ECB Holzmann (Austria) noted that the General Council could consider waiting longer before the next interest rate cut.

- ECB Stournaras (Greece) noted that the Greek domestic economy was poised for growth amid challenges.

Americas

- Treasury Sec Yellen noted that 'extraordinary measures' to prevent a US default would start between Jan 14-23rd.

- Cleveland Fed’s Inflation Nowcast forecasting Dec US CPI Y/Y to accelerate again to 2.9% from 2.7%.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.28% at 505.74, FTSE -0.28% at 8,127.10, DAX -0.08% at 19,943.28, CAC-40 -0.10% at 7,348.22, IBEX-35 +0.18% at 11,546.11, FTSE MIB +0.08% at 34,188.00, SMI +0.42% at 11,632.99, S&P 500 Futures -0.25%].

Market focal points/key themes: European indices open generally lower and remained under pressure through the early part of the session; lack of risk appetite attributed to pessimism about economic outlook; last full day of trading for the year; Germany to close early for holiday; Evolva’s largest shareholder divests its stake in the company; Bayway to sell RWA unit as part of restructuring plan; no major corporate events expected in the upcoming Americas session.

Equities

- Consumer discretionary: Baywa [BYW6.DE] +23.5% (restructuring), Pierer Mobility [PMAG.AT] +13.5% (Submits restructuring plan in accordance with the Restructuring Ordinance (ReO) - post close).

- Healthcare: Siemens Healthineers [SHL.DE] -1.0% (Siemens CFO says reviewing Healthineers majority stake), Novartis [NVN.CH] +0.5% (trial meets primary endpoint), Roche [ROG.CH] -0.5% (Roche interview).

- Technology: Next Biometrics [NEXT.NO] +2.5% (MoU).

Speakers

- ECB's Knot (Netherlands) saw a serious chance of a trade war; China could export its deflation to Europe.

- India Central Bank (RBI) Gov Malhotra noted that the medium-term outlook remained challenging. Domestic economy prospects to improve after H1 slowdown but downside growth risks seen from geopolitics and market turmoil.

Currencies/fixed income

- USD continued to maintain a steady, firm tone in quiet post-holiday trading aided by higher US bond yields.

- The FX outlook to be determined on the rate path divergence. To date the BoE had been the slowest among European and North American nations to reduce interest rates this year. The BoE has reduced its key borrowing rates by 50 bps, while other peers such as Fed and the ECB pushed their borrowing rates lower by 100 bps. The Bank of Canada (BoC) and the Swiss National Bank (SNB) lowered interest rates by even more due to higher risks of inflation undershooting their respective targets.

- EUR/USD hovering just above the 1.04 level as a pickup in Dec CPI readings helping to dispel any chance of aggressive rate cuts from the ECB in coming months.

- USD/JPY held steady just under the 158 area and languishing near 5-month lows for the yen currency.

Economic data

- (FI) Finland Dec Consumer Confidence: -8.6 v -7.4 prior; Business Confidence: -9 v -7 prior.

- (FI) Finland Nov Retail Sales Y/Y: -2.6 v -2.3% prior.

- (FI) Finland Nov House Price Index M/M: -1.5% v +0.8% prior; Y/Y: -2.7% v 0.0% prior.

- (SE) Sweden Nov Household Lending Y/Y: 1.6% v 1.4% prior.

- (TR) Turkey Dec Economic Confidence: 98.8 v 97.1 prior.

- (ES) Spain Dec Preliminary CPI M/M: 0.4% v 0.2%e; Y/Y: 2.8% v 2.6%e; Core Y/Y: 2.6% v 2.4%e.

- (ES) Spain Dec Preliminary CPU EU Harmonized M/M: 0.4% v 0.3%e; Y/Y: 2.8% v 2.6%e.

- (CH) Swiss Dec KOF Leading Indicator: 99.5 v 101.0e.

- (AT) Austria Nov PPI M/M: 0.4% v 0.3% prior; Y/Y: -2.0% v -2.3% prior.

- (HK) Hong Kong Nov Trade Balance (HK$): -43.4B v -31.5Be; Exports Y/Y: 2.1% v 4.1%e; Imports Y/Y: 5.7% v 4.9%e.

- (CH) Swiss weekly Total Sight Deposits (CHF): 445.7B v 456.5B prior; Domestic Sight Deposits: 436.4B v 448.0B prior.

- (NO) Norway Central Bank (Norges) Jan Daily FX Purchases: 250M v 150M prior.

Fixed income issuance

- None scheduled.

Looking ahead

- (MX) Mexico Nov Public Balance (MXP): No est v -1039.3B prior.

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

- 05:30 (CH) Switzerland to sell 3-month Bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 06:00 (PT) Portugal Dec Preliminary CPI M/M: No est v -0.2% prior; Y/Y: No est v 2.5% prior.

- 06:00 (PT) Portugal Dec Preliminary CPI EU Harmonized M/M: No est v -1.0% prior; Y/Y: No est v 2.7% prior.

- 06:00 (PT) Portugal Nov Retail Sales M/M: No est v -2.7% prior; Y/Y: No est v 4.3% prior.

- 06:00 (PT) Portugal Nov Industrial Production M/M: No est v 3.1% prior; Y/Y: No est v 4.4% prior.

- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 06:30 (BR) Brazil Nov Nominal (overall) Budget Balance: -73.1Be v -74.7B prior; Primary Budget Balance (BRL): -7.0Be v +36.9B prior; Net Debt to GDP: 62.1%e v 62.1% prior.

- 07:00 (ZA) South Africa Nov Monthly Budget Balance (ZAR): No est v -46.1B prior.

- 07:00 (CL) Chile Nov Unemployment Rate: 8.4%e v 8.6% prior.

- 08:00 (UK) No Daily Baltic Dry Bulk Index this week.

- 09:45 (US) Dec Chicago Purchase Manager’s Index (PMI): 43.0e v 40.2 prior.

- 10:00 (US) Nov Pending Home Sales M/M: 0.8%e v 2.0% prior; Y/Y: 7.9%e v 6.6% prior.

- 10:30 (US) Dec Dallas Fed Manufacturing Activity: -3.0e v -2.7 prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 83.9 prior.

- 18:00 (KR) South Korea Dec CPI M/M: +0.2%e v -0.3% prior; Y/Y: 1.7%e v 1.5% prior; CPI (Ex Food and Energy) Y/Y: 1.9%e v 1.9% prior.

- 20:30 (CN) China Dec Manufacturing PMI (Govt Official): 50.2e v 50.3 prior; Non-manufacturing PMI: 50.2e v 50.0 prior; Composite PMI: No est v 50.8 prior.

- 21:00 (SG) Singapore Nov M2 Money Supply Y/Y: No est v 4.6% prior; M1 Money Supply Y/Y: No est v 6.1% prior.