About us 
Notes/observations
– Risk appetite was on following the great monetary pivot, further dovish international central bank commentary in session.
– EU and US bond yields collapse after Fed decision. Multiple global indices at or approaching all-time highs with Dow Jones Industrial Average closing at record level yesterday.
– ECB and BOE rate decisions in focus, with market pricing for 2024 rate cuts increasing after Fed commentary and dot plot projections. Analysts watching for ECB and BoE members pushing back against expectations. Both are expected to leave policy unchanged.
– Earlier, NOK (krone) currency stronger after Norges Bank surprised with 25bps hike (consensus was unchanged). Swiss National Bank left policy unchanged and affirmed ready to be active in FX markets as necessary.
– Asia closed mixed with ASX200 out-performing at +1.7%. EU indices are +0.3-1.9%. US futures are +0.2-0.3%. Gold +0.3%, DXY -0.3%; Commodity: Brent +1.9%, WTI +1.8%, TTF -2.0%; Crypto: BTC +4.1%, ETH +5.0%.
Asia
– Australia Nov Employment Change: +61.5K v +11.5Ke; Unemployment Rate: 3.9% v 3.8%e.
– Australia Dec Consumer Inflation Expectations: 4.5% v 4.9% prior.
– New Zealand Q3 GDP Q/Q: -0.3% v +0.2%e; Y/Y: -0.6% v 0.5%e.
– Japan Oct Core Machine Orders M/M: +0.7% v -0.4%e; Y/Y: -2.2% v -5.6%e.
Global conflict/tensions
– Israel PM Netanyahu stressed that it would continue its war on Hamas even if it lost international support.
Europe
– Nov RICS House Price Balance: -43% v -57%e v -63% prior (Most optimistic survey since January 2022).
Americas
– FOMC policy statement noted that it assessed the extent of “any” additional firming needed. Inflation has eased over the last year but remained elevated. Economic growth had slowed from its strong pace in Q3.
Fed Chair Powell post rate decision press conference noted that was thinking and talking about when it will be appropriate to cut rates. was a general expectation on the FOMC that rate cuts will be a topic of conversations going forward.
– Fed Dot Plots cuts Median forecast for end-2024 rate 4.625% (prior 5.125%) and cut Median forecast for end-2025 rate 3.625% (prior 3.875%). Cut the midpoint 2024 GDP 1.2-1.7% (prior 1.2-1.8%).
– Brazil Central Bank (BCB) cut Selic Target Rate by 50bps to 11.75% (as expected). Decision to cut by 50bps was unanimous and provided forward guidance that the next rate cut seen being the same size (50bps).
– House of Representatives voted to formally authorize impeachment inquiry into Pres Biden (as expected) with the vote being 221-212 along party lines.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +1.33% at 478.76, FTSE +2.00% at 7,700.10, DAX +0.65% at 16,874.25, CAC-40 +0.94% at 7,602.12, IBEX-35 +0.66% at 10,162.95, FTSE MIB +0.34% at 30,398.00, SMI +0.79% at 11,277.50, S&P 500 Futures +0.20%].
Market focal points/key themes: European indices open higher across the board and advanced through early trading; the upbeat tone in markets follows Fed rate decision yesterday; among sectors leading the way higher are real estate and consumer discretionary; laging sectors include financials and communication services; travel & leisure subsector supported after Air France-KLM outlook; Vivendi proposes break-up plan; OnePoint raises stake in Atos; focus on upcoming rate decisions from the BOE and ECB; earnings expected in the upcoming US session include Costco. Jabil and Lennar.
Equities
– Consumer discretionary: Curry’s [CURY.UK] +10.5% (H1 results), Metro AG [B4B.DE] +4.5% (earnings), Air France-KLM [AF.FR] +7.5% (raised medium-term guidance – investor day).
– Financials: Serco [SRP.UK] +5.5% (trading update – affirms/raised guidance).
– Healthcare: Morphosys [MOR.DE] -6.5% (placement).
– Real Estate: Vonovia [VNA.DE] +7.5% (analyst action).
– Technology: Atos [ATO.FR] +4.5% (stake), Ams-Osram [AMS.CH] +9.0% (analyst upgrade).
– Telecom: Vivendi [VIV.FR] +7.5% (considering splitting up into multiple entities).
Speakers
– Swiss National Bank (SNB) Policy Statement reiterated stance to remain active in foreign exchange markets. To continue to monitor the development of inflation closely and adjust its monetary policy if necessary to ensure inflation remained within the range consistent with price stability over the medium term. (**Note: removed language on possible more rate hikes).
– SNB President Jordan post rate decision press conference noted that was not discussing rate cuts now; Policy stance was appropriate at this time. Stressed that SNB was no longer focusing on FX sales. Would adjust policy if needed for price stability.
– Norway Central Bank (Norges) Policy Statement noted that raising rates at this time reduced risk of inflation remaining high for the long-term. Reiterates view that likely needed to maintain tight stance for some time ahead. Policy rate might be lowered earlier than currently seen (**Note: Removed forward guidance of raising rates). But saw policy rate remaining steady around 4.5% until autumn 2024.
– Russia Pres Putin annual press conference noted that his main aim for next election campaign was to strengthen Russia’s sovereignty. Saw 2023 GDP growth at 3.5% with inflation at 7.5-8.0%
– Hungary PM Orban commented ahead of the EU Leader Summit that saw no reason to negotiate Ukraine membership at this time.
– German IFO Institute cut its 2024 GDP growth forecast from 1.4% to 0.9% while raising the 2025 GDP growth forecast from 1.2% to 1.3%.
– Philippines Central Bank Policy Statement noted that it deemed it necessary to keep monetary policy settings tight; and was prepared to adjust policy as necessary. Inflation expectations were broadly anchored but balance of risks for inflation remained tilted to the upside. Medium-term growth prospects remained firm.
– Taiwan Central Bank Policy Statement noted that the decision to keep policy steady was unanimous. Reiterated view that would adjust monetary policy in a timely way. Domestic consumption would grow mildly next year but cautioned that the China’s economic growth slowdown might affect global economy recovery momentum. Domestic inflation to drop to ~2% next year.
– Taiwan Central Bank (CBC) Gov Chin-Long post rate decision press conference noted that the tightening cycle might be near the end if CPI was certain to be below the 2% target.
– Fitch affirmed Australia sovereign rating at ‘AAA’; Outlook stable.
– IEA Monthly Oil Report (OMR) cut the 2023 global oil demand growth from 2.4M to 2.3M bpd while raising the 2024 global oil demand growth from 930K to 1.1M bpd. On supply. IEA raised its 2023 global oil supply growth from 1.7M to 1.8M bpd while cutting the 2024 global oil supply growth from 1.6M bto 1.2M bpd.
Currencies/fixed income
– USD was softer in the aftermath of the Fed decision. Market sentiment was one of “risk on” following what is being labeled as the great monetary pivot. Fed appeared to be shifting into rate cuts in 2024 as inflation eases. However, Fed was not alone as more dovish international central bank commentary was witnessed during the session.
– USD/CHF was steady following SNB decision. Swiss reiterated stance that prepared to remain active in foreign exchange markets but did drop the language of possible more rate hikes.
– EUR/NOK cross was lower following the surprise rate hike by Norges. Removed rate hike guidance but noted rates likely to stay at current level for some time.
– Analysts recalibrated their rate cut outlook for the major G3 central bank. Market pricing in 125bps of BoE rate cuts in 2024 (five 25bps moves) compared to 95bps before Fed. Markets pricing in 155bps of ECB rate cuts in 2024 following dovish Fed decision (135bps before Fed). Fed futures currently pricing 88% (v 44% pre-FOMC) chance for 1st rate cut by Mar 2024; 20% (v 4% pre-FOMC) for first rate cut at Jan 31st’s meeting (**Note: Price 5-6 full rate cuts by end-2024 v 3 expected by Fed’s median dot-plot projections.
– Bond yields globally continued to fall post Fed. Both Core and periphery European yield lower by approx 15bps by mid-session.
Economic data
– (SE) Sweden Nov PES Unemployment Rate: 3.2% v 3.2% prior.
– (FI) Finland Nov CPI M/M: -0.3% v +0.3% prior; Y/Y: 3.3% v 4.9% prior.
– (IN) India Nov Wholesale Prices (WPI) Y/Y: 0.3% v 0.0%e.
– (SE) Sweden Nov CPI M/M: 0.3% v 0.6%e; Y/Y: 5.8% v 6.0%e.
– (SE) Sweden Nov CPIF M/M: 0.1% v 0.5%e; Y/Y: 3.6% v 3.9%e.
– (SE) Sweden Nov CPIF (ex-energy) M/M: -0.5% v -0.1%e; Y/Y: 5.4% v 5.9%e; CPI Level: 410.35 v 411.65e.
– (PH) Philippines Central Bank (BSP) left the Overnight Borrowing Rate unchanged at 6.50% (as expected).
– (CH) Swiss Nov Producer & Import Prices M/M: -0.9% v +0.2% prior; Y/Y: -1.3% v -0.9% prior.
– (ES) Spain Nov Final CPI M/M: -0.3% v -0.4% prelim; Y/Y: 3.2% v 3.2% prelim.
– (ES) Spain Nov Final CPI EU Harmonized M/M: -0.5% v -0.6% prelim; Y/Y: 3.3% v 3.2% prelim.
– (ES) Spain Nov CPI Core M/M: % v 0.4% prior; Y/Y (final): 4.5% v 4.5% prelim.
– (TW) Taiwan Central Bank (CBC) left the Benchmark Interest Rate unchanged at 1.875% (as expected) for its 3rd straight pause in the current tightening cycle.
– (CH) Swiss National Bank (SNB) left its Policy Rate unchanged at 1.75% (as expected). Removed language on possible more rate hikes. Reiterated stance that prepared to remain active in foreign exchange markets. Reiterated stance of being prepared to remain active in foreign exchange markets.
– 03:30 (HK) Hong Kong Q3 PPI Y/Y:+3.0 % v -0.2% prior.
– (HK) Hong Kong Q3 Industrial Production Y/Y: 4.4% v 2.7% prior.
– (NO) Norway Central Bank (Norges) raised the Deposit Rate by 25bps to 4.50% (not expected).
– (CZ) Czech Oct Current Account Balance (CZK): 19.8B v 7.5Be.
– (IS) Iceland Nov International Reserves (ISK): 793B v 773B prior.
– (ZA) South Africa Q3 Non-Farm Payrolls Q/Q: 0.3% v 1.1% prior; Y/Y: 2.6% v 1.7% prior.
– (ZA) South Africa Nov PPI M/M: -0.6% v -0.1%e; Y/Y: 4.6% v 5.1%e.
– (GR) Greece Q3 Unemployment Rate: 10.8% v 11.2% prior.
Fixed income issuance
– (SE) Sweden sold total SEK500M vs. SEK500M indicated in 2032 and 2039 I/L Bonds.
Looking ahead
– (EU) European Council to begin 2-day meeting.
– European Union on 2024 issuance.
– 05:25 (EU) Daily ECB Liquidity Stats.
– 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds.
– 06:00 (IE) Ireland Nov CPI M/M: No est v 0.3% prior; Y/Y: No est v 5.1% prior.
– 06:00 (IE) Ireland Nov CPI EU Harmonized M/M: No est v 0.2% prior; Y/Y (final): No est v 2.3% prelim.
– 06:00 (PT) Portugal Nov Final CPI M/M: No est v -0.3% prelim; Y/Y: No est v 1.6% prelim.
– 06:00 (PT) Portugal Nov Final CPI EU Harmonized M/M: No est v -1.0% prelim; Y/Y: No est v 2.3% prelim.
– 06:00 (IL) Israel Q3 Current Account Balance: No est v $4.2B prior.
– 06:00 (UK) BOE short-term repo allotment.
– 06:30 (CL) Chile Central Bank Traders Survey.
– 07:00 (UK) Bank of England (BoE) Interest Rate Decision: Expected to leave Bank Rate unchanged at 5.25%.
– 07:00 (UR) Ukraine Central Bank (NBU) Interest Rate Decision: Expected to cut Key Rate by 100bps to 15.00%.
– 07:00 (BR) Brazil Oct Retail Sales M/M: 0.4%e v 0.6% prior; Y/Y: 1.7%e v 3.3% prior.
– 07:00 (BR) Brazil Oct Broad Retail Sales M/M: 0.3%e v 0.2% prior; Y/Y: 3.4%e v 2.9% prior.
– 08:00 (PL) Poland Oct Current Account Balance: €1.8Be v €0.4B prior; Trade Balance: €0.8Be v €0.8B prior; Exports: €28.6Be v €27.5B prior; Imports: €28.2Be v €26.7B prior.
– 08:00 (RU) Russia Gold and Forex Reserve w/e Dec 8th: No est v $592.9B prior.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 08:15 (EU) ECB Interest Rate Decision: Expected to leave Key Rates unchanged.
– 08:30 (US) Nov Advance Retail Sales M/M: -0.1%e v -0.1% prior; Retail Sales (Ex-Auto) M/M: -0.1%e v +0.1% prior; Retail Sales (ex-auto/gas): 0.2%e v 0.1% prior; Retail Sales (control group): 0.2%e v 0.2% prior.
– 08:30 (US) Nov Import Price Index M/M: -0.8%e v 0.6% prior; Y/Y: -2.1%e v -2.0% prior; Import Price Index (ex-petroleum) M/M: -0.2%e v -0.2% prior.
– 08:30 (US) Nov Export Price Index M/M: -1.0%e v -1.1% prior; Y/Y: -5.2%e v -4.9% prior.
– 08:30 (US) Initial Jobless Claims: 220Ke v 220K prior; Continuing Claims: 1.88Me v 1.861M prior.
– 08:30 (CA) Canada Oct Manufacturing Sales M/M: -2.7%e v +0.4% prior.
– 08:30 (US) Weekly USDA Net Export Sales.
– 08:45 (EU) ECB chief Lagarde post rate decision press conference.
– 10:00 (US) Oct Business Inventories: -0.1%e v +0.4% prior.
– 10:00 (DK) Denmark Central Bank (Nationalbanken) Interest Rate Decision.
– 10:30 (US) Weekly EIA Natural Gas Inventories
– 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.
– 12:00 (CA) Canada to sell 30 Year Bonds.
– 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to leave Overnight Rate unchanged at 11.25%.
– 16:30 (NZ) New Zealand Nov Manufacturing PMI: No est v 42.5 prior.
– 17:00 (AU) Australia Dec Preliminary PMI Manufacturing: No est v 47.7 prior; PMI Services: No est v 46.0 prior; PMI Composite: No est v 46.2 prior.
– 18:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to cut Reference Rate by 25bps to 6.75%.
– 19:01 (UK) Dec GfK Consumer Confidence: -22e v -24 prior.
– 19:30 (JP) Japan Dec PMI Manufacturing: No est v 48.3 prior; PMI Services: No est v 50.8 prior; PMI Composite: No est v 49.6 prior.
– 20:20 (CN) China PBoC 1-year Medium-Term Lending Facility (MLF) Rate: Expected to be left unchanged at 2.5%; Volume (CNY): 975.0B v 1.45T prior.
– 20:30 (CN) China Nov New Home Prices M/M: No est v -0.4% prior.
– 21:00 (CN) China Nov Industrial Production Y/Y: 5.7%e v 4.6% prior; Industrial Production YTD Y/Y: 4.2%e v 4.1% prior.
– 21:00 (CN) China Nov Retail Sales Y/Y: 12.5%e v 7.6% prior; Retail Sales YTD Y/Y: 7.4%e v 6.9% prior.
– 21:00 (CN) China Nov YTD Fixed Urban Assets Y/Y: 3.0%e v 2.9% prior.
– 21:00 (CN) China Nov YTD Property Investment Y/Y: -9.5%e v -9.3% prior; Residential Property Sales Y/Y: No est v -3.7% prior.
– 21:00 (CN) China Nov Surveyed Jobless Rate: 5.0%e v 5.0% prior.
– 21:00 (ID) Indonesia Nov Trade Balance: $3.1Be v $3.5B prior; Exports Y/Y: -9.4%e v -10.4% prior; Imports Y/Y: -0.4%e v -2.4% prior.
– 21:35 (CN) China to sell 50Y Upsized Bond.
– 21:35 (CN) China to sell 3-month Bills.
– 23:30 (JP) Japan Oct Tertiary Industry Index M/M: +0.1%e v -1.0% prior.
– 22:30 (JP) Japan to sell 3-Month Bills.
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