DAILY ASIA-PAC OPENING NEWS
CORONAVIRUS UPDATE
US COVID cases +186,215 (prev. +174,387) and deaths +1,532 (prev. +1,118). (Newswires)
US President Trump said he expects news very shortly on other vaccines and that he would use the defense production act if needed for vaccine distribution to Americans, while hopes the FDA will authorize Pfizer (PFE) vaccine within days. (Newswires)
Pfizer (PFE) CEO said he expects a very intense meeting with the FDA Advisory Committee and thinks they will vote yes given the strength of the data, while the Co. is working on a new formulation to avoid having to store its COVID vaccine at -70 degrees celsius and has confidence in the UK regulator after its decision to approve the vaccine. (Newswires)
Johnson & Johnson (JNJ) CEO is hoping for COVID-19 vaccine results by end-Jan but said that it could be sooner than expected, while it was separately reported that US Operation Warp Speed Chief Slaoui said Johnson & Johnson (JNJ) has recruited more than 35k people for its Phase 3 trial. (Newswires)
Oxford-AstraZeneca vaccine candidate showed average efficacy of 70.4% (in line) in pooled analysis of interim data with 62% for those given two doses and 90% efficacy for those who take half a dose then a full dose. (Newswires)
SinoVac COVID-19 vaccine is said to have an efficacy of 97% in early trials, according to Bio Pharma. (Newswires)
Swiss Government said the COVID situation is worsening and has prepared additional coordinated measures to restrict the spread of the virus. (Newswires)
ASIA-PAC
China'sForeign Ministry said they will take necessary countermeasures according to the situations regarding new US arms sales to Taiwan. (Newswires)
China Vice Foreign Minister summoned the US embassy representative over US sanctions on Chinese officials following the Hong Kong crackdown and stated that China will take reciprocal countermeasures. (Newswires)
US President-elect Biden's incoming NSA Sullivan said he is deeply concerned about the arrests and imprisonment of pro-democracy activists in Hong Kong. (Newswires)
Sources noted that the recent sanctioning by the US of 14 members of the Chinese National People’s Congress officials is unlikely to force Beijing into easing crackdown on opponents, while reports noted that in the hours after the move, Hong Kong police arrested 8 activists including opposition legislators and protest organisers. (WSJ)
Brazil is looking for legal options to ban China's Huawei from 5G, according to sources. (Newswires)
UK/EU
UK, Norway, and Iceland signed a trade continuity agreement, according to a UK statement which covers trade in goods and ensures 95% of goods trade with Norway and over 90% with Iceland will remain tariff-free. (Newswires)
UK PM Johnson said he is very hopeful on reaching a Brexit trade deal with the EU but the situation is tricky, while he added UK and EU are still a long way apart on fisheries. (Newswires)
UK Cabinet Minister Gove said he is delighted to announce an agreement in principle on all issues in the UK-EU Withdrawal Agreement Joint Committee, while an EU spokesperson also said UK and EU have reached an agreement in principle on Protocol on Ireland/Northern Ireland in which the UK will remove clauses 44, 45 and 47 of the Internal Market Bill and will not introduce any similar provisions in the Taxation Bill. (Newswires/Twitter)
UK government source said if we can make progress at a political level, it could allow UK Chief Brexit Negotiator Frost and his team to continue negotiations over the coming days, while the government source added that we must be realistic that an agreement may not be possible as we will not compromise on reclaiming UK sovereignty. (Newswires)
EU CommissionPresident von Der Leyen confirmed that a meeting will take place with UK PM Johnson Wednesday evening where they will continue discussions on the Partnership Agreement. (Newswires)
A growing list of EU states are concerned that EU Commission President von der Leyen is willing to give away more on the level playing field than they are prepared to swallow at this late stage, sources told Express' Barnes. (Twitter)
EU Barnier told 27 EU affairs ministers on Tuesday no-deal was now more likely than sealing a new trade pact with the UK before year end, according to sources. (Newswires)
German European Minister Roth said of the current state of play, there is no substantial progress and that the only new thing in discussions is the meeting between UK PM Johnson and EU Commission President von der Leyen. (Newswires)
More member states are reportedly calling for No Deal contingency measures to be brought forward and there is some suggestion, but not confirmed, that these measures could go before the College of Commissioners on Wednesday morning. (RTE)
German Parliament suspended debt limits in the constitution again to permit borrowing of up to EUR 180bln next year. (Newswires)
Polish PM said position on EU budget has not changed and talks are ongoing with Germany, while he added there could be another summit and many more months of talks on the budget. However, there were later comments from Hungary PM Orban that there is a good chance of an EU budget deal this week. (Newswires)
EU GDP Revised (Q3) Q/Q 12.5% vs. Exp. 12.6% (Prev. 12.6%). (Newswires)EU GDP Revised (Q3) Y/Y -4.3% vs. Exp. -4.4% (Prev. -4.4%)EU Employment (Q3 F) Q/Q 1.0% vs. Exp. 0.9% (Prev. 0.9%)EU Employment (Q3 F) Y/Y -2.3% vs. Exp. -2.0% (Prev. -2.0%)German ZEW Economic Sentiment (Dec) 55.0 vs. Exp. 45.5 (Prev. 39.0)German ZEW Current Conditions (Dec) -66.5 vs. Exp. -66.0 (Prev. -64.3)
COMMODITIES
US Private Inventory Data (bbls): Crude +1.1mln (exp. -1.4mln). (Newswires)
EIA STEO cut 2020 world oil demand growth by 240k BPD to -8.85mln BPD Y/Y and cut 2021 world oil demand growth by 110k BPD to +5.78mln BPD Y/Y, while it sees 2020 US crude output to fall 910k BPD to 11.34mln BPD (prev. -860kbpd) and 2021 US crude output to fall 240k BPD to 11.1mln BPD (prev. -290kbpd). (Newswires)
GEOPOLITICAL
US is to impose terrorism-related sanctions on one Iranian individual and one Iranian entity, according to a US official. (Newswires)
Iranian official said some of those involved in the assassination of the Iranian nuclear scientist have been arrested, according to ISNA news agency. (Newswires)
US issued North Korea related sanctions which target trading and shipping companies. (Newswires)
North Korean Leader’s sister Kim Yo-jong said South Korean Foreign Minister Kang will pay dearly for her reckless remarks. (Yonhap)
US
US President-elect Biden reiterated the bipartisan COVID relief package is only a start, while he added that urgent action is needed to put resources in place for COVID vaccine distribution and more action will be needed next year to fund the rest of the distribution effort. (Newswires)
US Treasury Secretary Mnuchin, White House Chief of Staff Meadows, House Minority Leader McCarthy and Senate Majority Leader McConnell are set to discuss stimulus bill today. There were also prior reports that Senate Majority Leader McConnell's opposition to direct payments is softening, according to sources cited by Politico. (Newswires/Politico)
US Senate Majority Leader McConnell said we should set aside liability and set aside state and local and pass the things we agree on, knowing we will be back at this after the first of the year. It was also separately reported that Senate Minority Leader Schumer criticised McConnell's proposal to drop state and local aid provisions from COVID aid relief. (Newswires)
US GOP Senator Lindsey Graham hopes to have agreement on liability protections today and been working with Senator Angus King on this text of the bipartisan COVID relief bill, according to FBN's Lawrence. (Twitter)
US Senator Manchin said the bipartisan coalition will release section-by-section for their aid bill on Tuesday afternoon, but won't release sections on liability and state and local aid. (NBC)
White House officials are pushing Republican senators to include USD 600 stimulus cheques in the COVID relief bill and it was also reported that White House is still negotiating with GOP's regarding USD 600 stimulus cheques but President Trump favours USD 600 or much higher, while there were separate comments from Democrat Senator Durbin that he has received some signals from the White House that President Trump wants USD 1,200 stimulus cheques. (Washington Post/CNN)
US House Majority Leader Hoyer said he is not sure if he has enough votes to override the Trump veto, regarding Section 230/NDAA defense bill. (CNN)
MARKET RECAP
Stocks recovered after a subdued Europe performance in what was otherwise a very light on newsflow session, seeing the SPX cross above 3,700 for the first time ever. The strength in stocks was tilted towards cyclicals, with the R2K rising above 1,900 for the first time. Part of that cyclical bias was likely somewhat on stimulus expectations, where participants were encouraged to hear McConnell looking to set aside both liability protections and state and local aid in an urge to get something out before Christmas; Schumer didn't take to the suggestions so well, however. Note that market strength in stocks was already underway before these latest developments, with the market continuing to extend its bull run without too much regard for headlines. Tesla (TSLA) announced a USD 5bln stock offering through an at the market offering programme on a from time-to-time basis. Apple (AAPL) announced the launch of its AirPods Max, new overhead earphones, and the launch of its Fitness Plus on December 14th at USD 9.99/mth. Boeing (BA) 737 MAX is to be flown commercially for the first time by Gol Linhas (GOL), while it delivered 7 new jets in November, but saw customers cancel 88 orders, but secured 27 new orders. Raytheon Technologies (RTX) authorised a USD 5bln share repurchase programme. Pfizer (PFE) and BioNTech (BNTX) had its vaccine candidate data confirmed by the US FDA at 95% efficacy and that the vaccine was highly effective in preventing symptomatic COVID-19 which may begin preventing some cases even after the first dose, although there is not enough data to conclude this. SPX +0.28% at 3,702, NDX +0.31% at 12,636, DJI +0.35% at 30,174.
Treasuries extended their bull-flattener from Monday, although impending duration supply and a turn-around in stocks brought yields off the lows. By settlement, 2s +0.8bps at 15.1bps, 10s -1.3bps at 91.5bps, and 30s -2.7bps at 166.1bps; real yields were down by just under 5bps in 5s and 10s, and 2.5bps in 30s; T-Note futures volumes were lacklustre. The upside in bonds catalysed as US participants came into the fray, there wasn't anything too incremental for participants to dig into, rather just a continuation of the pull away from the post-COVID high yields seen last Friday, with the overarching concerns of a lack of stimulus/rising virus cases/Brexit supporting the move. Yields found their lows shortly after the US cash equity open before paring some of their strength into latter trade amid a turn around in stocks (particularly cyclicals), in addition to looming Treasury supply; one desk noted "small algo sell programs" were triggered after the unconvincing break beneath the 90bps level in 10s, dealers were also on the offer. The 3-year note auction today was lacklustre, although Tuesday's 10s and Wednesday's 30s are expected to lure in more demand amid the juicy, FX-hedged yield pick up foreign bond buyers can attain. T-note (H1) futures settled 3 ticks higher at 137-26.
(Newswires)
CORONAVIRUS UPDATE
US COVID cases +186,215 (prev. +174,387) and deaths +1,532 (prev. +1,118). (Newswires)
US President Trump said he expects news very shortly on other vaccines and that he would use the defense production act if needed for vaccine distribution to Americans, while hopes the FDA will authorize Pfizer (PFE) vaccine within days. (Newswires)
Pfizer (PFE) CEO said he expects a very intense meeting with the FDA Advisory Committee and thinks they will vote yes given the strength of the data, while the Co. is working on a new formulation to avoid having to store its COVID vaccine at -70 degrees celsius and has confidence in the UK regulator after its decision to approve the vaccine. (Newswires)
Johnson & Johnson (JNJ) CEO is hoping for COVID-19 vaccine results by end-Jan but said that it could be sooner than expected, while it was separately reported that US Operation Warp Speed Chief Slaoui said Johnson & Johnson (JNJ) has recruited more than 35k people for its Phase 3 trial. (Newswires)
Oxford-AstraZeneca vaccine candidate showed average efficacy of 70.4% (in line) in pooled analysis of interim data with 62% for those given two doses and 90% efficacy for those who take half a dose then a full dose. (Newswires)
SinoVac COVID-19 vaccine is said to have an efficacy of 97% in early trials, according to Bio Pharma. (Newswires)
Swiss Government said the COVID situation is worsening and has prepared additional coordinated measures to restrict the spread of the virus. (Newswires)
ASIA-PAC
China'sForeign Ministry said they will take necessary countermeasures according to the situations regarding new US arms sales to Taiwan. (Newswires)
China Vice Foreign Minister summoned the US embassy representative over US sanctions on Chinese officials following the Hong Kong crackdown and stated that China will take reciprocal countermeasures. (Newswires)
US President-elect Biden's incoming NSA Sullivan said he is deeply concerned about the arrests and imprisonment of pro-democracy activists in Hong Kong. (Newswires)
Sources noted that the recent sanctioning by the US of 14 members of the Chinese National People’s Congress officials is unlikely to force Beijing into easing crackdown on opponents, while reports noted that in the hours after the move, Hong Kong police arrested 8 activists including opposition legislators and protest organisers. (WSJ)
Brazil is looking for legal options to ban China's Huawei from 5G, according to sources. (Newswires)
UK/EU
UK, Norway, and Iceland signed a trade continuity agreement, according to a UK statement which covers trade in goods and ensures 95% of goods trade with Norway and over 90% with Iceland will remain tariff-free. (Newswires)
UK PM Johnson said he is very hopeful on reaching a Brexit trade deal with the EU but the situation is tricky, while he added UK and EU are still a long way apart on fisheries. (Newswires)
UK Cabinet Minister Gove said he is delighted to announce an agreement in principle on all issues in the UK-EU Withdrawal Agreement Joint Committee, while an EU spokesperson also said UK and EU have reached an agreement in principle on Protocol on Ireland/Northern Ireland in which the UK will remove clauses 44, 45 and 47 of the Internal Market Bill and will not introduce any similar provisions in the Taxation Bill. (Newswires/Twitter)
UK government source said if we can make progress at a political level, it could allow UK Chief Brexit Negotiator Frost and his team to continue negotiations over the coming days, while the government source added that we must be realistic that an agreement may not be possible as we will not compromise on reclaiming UK sovereignty. (Newswires)
EU CommissionPresident von Der Leyen confirmed that a meeting will take place with UK PM Johnson Wednesday evening where they will continue discussions on the Partnership Agreement. (Newswires)
A growing list of EU states are concerned that EU Commission President von der Leyen is willing to give away more on the level playing field than they are prepared to swallow at this late stage, sources told Express' Barnes. (Twitter)
EU Barnier told 27 EU affairs ministers on Tuesday no-deal was now more likely than sealing a new trade pact with the UK before year end, according to sources. (Newswires)
German European Minister Roth said of the current state of play, there is no substantial progress and that the only new thing in discussions is the meeting between UK PM Johnson and EU Commission President von der Leyen. (Newswires)
More member states are reportedly calling for No Deal contingency measures to be brought forward and there is some suggestion, but not confirmed, that these measures could go before the College of Commissioners on Wednesday morning. (RTE)
German Parliament suspended debt limits in the constitution again to permit borrowing of up to EUR 180bln next year. (Newswires)
Polish PM said position on EU budget has not changed and talks are ongoing with Germany, while he added there could be another summit and many more months of talks on the budget. However, there were later comments from Hungary PM Orban that there is a good chance of an EU budget deal this week. (Newswires)
EU GDP Revised (Q3) Q/Q 12.5% vs. Exp. 12.6% (Prev. 12.6%). (Newswires)EU GDP Revised (Q3) Y/Y -4.3% vs. Exp. -4.4% (Prev. -4.4%)EU Employment (Q3 F) Q/Q 1.0% vs. Exp. 0.9% (Prev. 0.9%)EU Employment (Q3 F) Y/Y -2.3% vs. Exp. -2.0% (Prev. -2.0%)German ZEW Economic Sentiment (Dec) 55.0 vs. Exp. 45.5 (Prev. 39.0)German ZEW Current Conditions (Dec) -66.5 vs. Exp. -66.0 (Prev. -64.3)
COMMODITIES
US Private Inventory Data (bbls): Crude +1.1mln (exp. -1.4mln). (Newswires)
EIA STEO cut 2020 world oil demand growth by 240k BPD to -8.85mln BPD Y/Y and cut 2021 world oil demand growth by 110k BPD to +5.78mln BPD Y/Y, while it sees 2020 US crude output to fall 910k BPD to 11.34mln BPD (prev. -860kbpd) and 2021 US crude output to fall 240k BPD to 11.1mln BPD (prev. -290kbpd). (Newswires)
GEOPOLITICAL
US is to impose terrorism-related sanctions on one Iranian individual and one Iranian entity, according to a US official. (Newswires)
Iranian official said some of those involved in the assassination of the Iranian nuclear scientist have been arrested, according to ISNA news agency. (Newswires)
US issued North Korea related sanctions which target trading and shipping companies. (Newswires)
North Korean Leader’s sister Kim Yo-jong said South Korean Foreign Minister Kang will pay dearly for her reckless remarks. (Yonhap)
US
US President-elect Biden reiterated the bipartisan COVID relief package is only a start, while he added that urgent action is needed to put resources in place for COVID vaccine distribution and more action will be needed next year to fund the rest of the distribution effort. (Newswires)
US Treasury Secretary Mnuchin, White House Chief of Staff Meadows, House Minority Leader McCarthy and Senate Majority Leader McConnell are set to discuss stimulus bill today. There were also prior reports that Senate Majority Leader McConnell's opposition to direct payments is softening, according to sources cited by Politico. (Newswires/Politico)
US Senate Majority Leader McConnell said we should set aside liability and set aside state and local and pass the things we agree on, knowing we will be back at this after the first of the year. It was also separately reported that Senate Minority Leader Schumer criticised McConnell's proposal to drop state and local aid provisions from COVID aid relief. (Newswires)
US GOP Senator Lindsey Graham hopes to have agreement on liability protections today and been working with Senator Angus King on this text of the bipartisan COVID relief bill, according to FBN's Lawrence. (Twitter)
US Senator Manchin said the bipartisan coalition will release section-by-section for their aid bill on Tuesday afternoon, but won't release sections on liability and state and local aid. (NBC)
White House officials are pushing Republican senators to include USD 600 stimulus cheques in the COVID relief bill and it was also reported that White House is still negotiating with GOP's regarding USD 600 stimulus cheques but President Trump favours USD 600 or much higher, while there were separate comments from Democrat Senator Durbin that he has received some signals from the White House that President Trump wants USD 1,200 stimulus cheques. (Washington Post/CNN)
US House Majority Leader Hoyer said he is not sure if he has enough votes to override the Trump veto, regarding Section 230/NDAA defense bill. (CNN)
MARKET RECAP
Stocks recovered after a subdued Europe performance in what was otherwise a very light on newsflow session, seeing the SPX cross above 3,700 for the first time ever. The strength in stocks was tilted towards cyclicals, with the R2K rising above 1,900 for the first time. Part of that cyclical bias was likely somewhat on stimulus expectations, where participants were encouraged to hear McConnell looking to set aside both liability protections and state and local aid in an urge to get something out before Christmas; Schumer didn't take to the suggestions so well, however. Note that market strength in stocks was already underway before these latest developments, with the market continuing to extend its bull run without too much regard for headlines. Tesla (TSLA) announced a USD 5bln stock offering through an at the market offering programme on a from time-to-time basis. Apple (AAPL) announced the launch of its AirPods Max, new overhead earphones, and the launch of its Fitness Plus on December 14th at USD 9.99/mth. Boeing (BA) 737 MAX is to be flown commercially for the first time by Gol Linhas (GOL), while it delivered 7 new jets in November, but saw customers cancel 88 orders, but secured 27 new orders. Raytheon Technologies (RTX) authorised a USD 5bln share repurchase programme. Pfizer (PFE) and BioNTech (BNTX) had its vaccine candidate data confirmed by the US FDA at 95% efficacy and that the vaccine was highly effective in preventing symptomatic COVID-19 which may begin preventing some cases even after the first dose, although there is not enough data to conclude this. SPX +0.28% at 3,702, NDX +0.31% at 12,636, DJI +0.35% at 30,174.
Treasuries extended their bull-flattener from Monday, although impending duration supply and a turn-around in stocks brought yields off the lows. By settlement, 2s +0.8bps at 15.1bps, 10s -1.3bps at 91.5bps, and 30s -2.7bps at 166.1bps; real yields were down by just under 5bps in 5s and 10s, and 2.5bps in 30s; T-Note futures volumes were lacklustre. The upside in bonds catalysed as US participants came into the fray, there wasn't anything too incremental for participants to dig into, rather just a continuation of the pull away from the post-COVID high yields seen last Friday, with the overarching concerns of a lack of stimulus/rising virus cases/Brexit supporting the move. Yields found their lows shortly after the US cash equity open before paring some of their strength into latter trade amid a turn around in stocks (particularly cyclicals), in addition to looming Treasury supply; one desk noted "small algo sell programs" were triggered after the unconvincing break beneath the 90bps level in 10s, dealers were also on the offer. The 3-year note auction today was lacklustre, although Tuesday's 10s and Wednesday's 30s are expected to lure in more demand amid the juicy, FX-hedged yield pick up foreign bond buyers can attain. T-note (H1) futures settled 3 ticks higher at 137-26.
(Newswires)