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RANsquawk EU Open Rundown 08.12.17

  • UK PM May plans go to Brussels early today to meet EU's Juncker and Tusk to finalize Irish border deal
  • Asia equity markets took the impetus from a positive tone in US where all indices finished higher and tech continued its rebound
  • Looking ahead, highlights include UK production numbers and the US jobs report

ASIA

Asia equity markets took the impetus from a positive tone in US where all indices finished higher and tech continued its rebound, while Congress also voted to pass the stop-gap spending bill to fund the government till December 22nd and avert a shutdown. ASX 200 (+0.3%) and Nikkei 225 (+1.4%) were higher in which the latter outperformed as exporters benefitted from a weaker currency and after a stellar upward revision to Q3 GDP figures. Hang Seng (+1.0%) and Shanghai Comp. (+0.4%)were also in the green amid better than expected Chinese trade data, although gains were capped in the mainland after the PBoC refrained from open market operations for a total net weekly drain of CNY 510bln. Finally, 10yr JGBs eked mild gains despite the broad positive risk tone, as prices eyed the 151.00 level and amid the BoJ’s presence in the market for JPY 840bln of government bonds.

PBoC skipped open market operations for a net weekly drain of CNY 510bln vs. last week's CNY 40bln net drain. (Newswires)

PBoC set CNY mid-point at 6.6218 (Prev. 6.6195)

Chinese Trade Balance (USD)(Nov) 40.2B vs. Exp. 35.0B (Prev. 38.2B)

Chinese Exports (USD)(Nov) Y/Y 12.3% vs. Exp. 5.3% (Prev. 6.9%)

Chinese Imports (USD)(Nov) Y/Y 17,7% vs. Exp. 13.0% (Prev. 17.2%)

Japanese GDP (Q3 F) Q/Q 0.6% vs. Exp. 0.4% (Prev. 0.3%). (Newswires)

Japanese GDP Annualised (Q3) 2.5% vs. Exp. 1.5% (Prev. 1.4%)

UK

UK PM May plans go to Brussels early today to meet EU's Juncker and Tusk to finalize Irish border deal. (BBC) Furthermore, reports later stated UK PM May and Brexit Secretary Davis is to meet with EU's Juncker and Barnier in Brussels at 0600GMT and that a press conference is possible at 0630GMT, while EU’s Tusk is also to make a Brexit statement today at 0650 GMT. (Newswires)

DUP leader Foster says substantive changes were made to Brexit border draft text, which PM May is taking to Brussels and that agreement means no red line on Irish Sea (Newswires)

UK Officials confirmed they have agreed Divorce Bill terms which is estimated at around EUR 50bln, and that they have settled the rights of EU citizens. (Newswires)

Ireland and Britain were said to be very close to a Brexit border deal according to an Irish Official, while there were also reports that the UK was said to be optimistic on an Irish border deal by the morning and that EU officials told negotiators they were hopeful to achieve a Brexit breaktspanough today. (Newswires)

EU

Germany SPD party and Chancellor Merkel's CDU are to hold coalition discussions on Wednesday. This was after the German SPD party congress voted against motion to block party from participating in grand coalition with Chancellor Merkel's Conservatives. (Newswires)

FX

USD/JPY and JPY-crosses were firmer with the pair above the 113.00 level as the heightened risk appetite spurred outflows from safe-haven JPY, and with the greenback underpinned after the US Congress voted to avert a government shutdown. Elsewhere, GBP/USD continued to benefit from Brexit optimism to reclaim the 1.3500 handle as PM May headed to Brussels today for discussions and amid reports DUP leader Foster and PM May had negotiated on the border issue tspanough the early hours.

COMMODITIES

Commodities were uneventful with WTI crude futures relatively unchanged tspanoughout the session, while gold prices languished near the prior day’s lows as participants await today’s key US NFP jobs data. Elsewhere, copper somewhat outperformed with mild support seen amid the increased risk appetite in the region and better than expected trade data from its largest consumer China.

CME lowered Comex 100 gold futures margins by 9.2% to USD 4450 per contract and lowered Comex 5000 silver futures margins by 11.9% to USD 5200 per contract. (Newswires)

GEOPOLITICAL

Russian Foreign Minister Lavrov said North Korea would like a discussion with US regarding security guarantees. (Newswires)

US

US House voted 235-193 and Senate voted 81-14 to pass the stopgap spending measure which will avoid a government shutdown and fund government tspanough to Dec. 22nd. (Newswires)

White House said Congressional leaders from both parties agreed to resume negotiations on a 2-year budget cap deal on Friday. (newswires)

Washington Post reported that emails show Russian social media executive sought to aid President Trump’s campaign last year. (Newswires)
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Well, this week has had us all bamboozled! Team RAN tapping out for the weekend to reload, ECB quite possibly abo… https://t.co/n0fsbPLwFp