MARKET WRAPS
Watch For:
Germany ZEW indicator of economic sentiment, WPI; UK monthly
unemployment figures, Mortgage Lenders and Administrators Return
statistics, Scottish Retail Sales Monitor; trading update from
Siemens Healthineers
Opening Call:
European stock futures were higher as attention turns to data
releases scheduled for today. In Asia, stock benchmarks advanced;
the dollar edged lower; Treasury yields steadied; while oil and
gold futures rose.
Equities:
Stock futures rose early Tuesday ahead of a number of economic
data releases, including U.K. unemployment, Germany ZEW economic
sentiment and U.S. CPI data.
Market strategists generally expect today's U.S. inflation data,
if it comes in as expected, not to be strong enough to
substantially change the message from Jerome Powell at Wednesday's
FOMC meeting.
Matthew Weller, global head of research at StoneX, said that
"regardless of what this week's U.S. inflation report shows, Jerome
Powell and company will want to see at least a few more months of
job and inflation data before tweaking the current monetary policy
settings."
Whether the Fed cuts rates in the spring or later in the year,
"we think the trajectory is by far what's most important," said
Yung-Yu Ma, chief investment officer at BMO Wealth Management.
Forex:
The dollar fell slightly early Tuesday amid mild risk appetite
spurred by Wall Street's overnight gains.
Positive risk sentiment continues to predominate, said RBC
Capital Markets. Market participants are awaiting U.S. November CPI
data due out later today, though inflation trends there have been
well-behaved recently, RBC noted.
Bonds:
S&P Global Ratings said its ratings outlook on covered bonds
remains stable, "despite geopolitical tensions, market turbulence,
the economic slowdown, and deteriorating asset performance." In
2023, benchmark European covered bond issuance hit a 10-year high,
according to S&P.
"The trends supporting covered bond issuance may be slightly
weaker in 2024, but issuance will likely remain close to recent
highs, at about EUR160 billion," said S&P Global Ratings credit
analyst Antonio Farina.
Energy:
Oil futures rose slightly early Tuesday on possible position
adjustments. Brent crude oil futures may find support in the $70s
per barrel area, with price risks tilted toward the upside,
Commonwealth Bank of Australia said.
These upside risks are driven by OPEC+ delivering its pledged
supply cuts and stronger-than-expected oil demand growth, CBA
added.
-
Renewable projects in the EMEA region could face delays and
challenges including higher costs of new projects, higher interest
rates and lengthy and complex permitting processes, Fitch Ratings
said. Meanwhile, "operational projects are largely insulated from
fluctuations in market prices through long-term, fixed-price
contracts or regulated tariffs," Fitch said.
Metals:
Gold edged higher in Asia after the front-month Comex gold
contract fell for the third straight session overnight. However,
the precious metal's price gains may be capped.
Market participants appear to be cautious ahead of key global
economic data and meetings of major central banks this week, ANZ
said.
-
Iron ore futures strengthened but overall sentiment remained
negative as concerns over China's economic recovery linger.
China's National Development and Reform Commission recently held
a meeting to promote the development of mine resources, but
investors are concerned about the domestic economy, Nanhua Futures
said.
-
Chinese lithium futures may remain volatile in the near term,
according to Macquarie, who reckons the GFEX's use of physical
delivery instead of cash settlement will exacerbate jolts.
Lithium carbonate futures prices have become increasingly wild,
with two down limits and two up limits recorded for the GFEX
January contract over the past week, the bank said.
TODAY'S TOP HEADLINES
What to Watch in CPI Report: Firm Underlying Inflation Could
Complicate Prospect for Interest-Rate Cuts
Lower prices for gasoline, cars and furniture likely cooled
inflation last month, but underlying price pressures have remained
more stubborn, analysts estimate.
U.S. Companies Are Finding It Hard to Avoid China
HONG KONG-American companies, under heavy pressure to reduce
their exposure to China, are increasingly turning to factories in
places such as Vietnam, Indonesia and Mexico.
Many are finding it hard to avoid China, however.
When Bond Yields Dropped, the Everything Rally Kicked Off
Investors spent most of 2023 fretting about inflation and
interest rates. Now they are snapping up everything from stocks and
bonds to crypto and even gold.
The simultaneous surge across assets has sparked debate about
whether the "everything rally" marks the arrival of a lasting bull
market-or just a fleeting sugar high at the end of the Federal
Reserve's tightening cycle.
Commodities Carriers Star Bulk and Eagle Bulk Shipping Agree to
$2.1 Billion Merger
Star Bulk Carriers and Eagle Bulk Shipping said they agreed to
merge in an all-stock deal that would create the world's
fourth-biggest commodities carrier and make it more attractive to
large investors.
Star Bulk, which is based in Athens, Greece, and Eagle Bulk
shareholders will own 71% and 29% of the combined entity,
respectively, the companies said Monday. The deal, which values the
merged company at roughly $2.1 billion, is slated to close next
year.
BP Asks U.S. Regulator to Intervene in Escalating Natural-Gas
Feud
British oil giant BP asked U.S. energy regulators to intervene
in an escalating dispute with a startup U.S. natural-gas exporter
whose feud with customers has become one of the industry's nastiest
battles in years.
BP in a Monday filing with the U.S. Federal Energy Regulatory
Commission accused Venture Global LNG of skirting FERC disclosure
rules while maintaining "a veil of secrecy around its operations"
to the detriment of long-term customers.
Putin Critic Alexei Navalny Missing From Prison
Alexei Navalny, Russia's leading opposition figure, is missing
from the penal colony where he has been imprisoned and his
whereabouts are unknown, his spokeswoman and other allies said,
prompting concern in Washington about his condition.
Navalny, a fierce critic of President Vladimir Putin, hasn't
been heard from for nearly a week, his team said on X. In recent
weeks he had become ill and was put on an IV by prison staff. The
team said that when his lawyers asked on Monday about his
whereabouts in two penal colonies in the Vladimir region, east of
Moscow, where he had been recently held, they were told he wasn't
at either one.
Google Loses Antitrust Case Brought by Epic Games
Google lost an antitrust case over the market power of its app
store on Monday, a blow to the search giant as it faces other legal
challenges to its search dominance and ad tech business.
Videogame maker Epic sued the search giant in 2020, alleging it
used its dominant position to squeeze excess profits from app
developers. The San Francisco jury reached a unanimous verdict
after deliberating for less than four hours.
Write to singaporeeditors@dowjones.com
Expected Major Events for Tuesday
00:01/UK: 1Q Manpower UK Employment Outlook Survey
05:30/NED: Nov CPI
05:30/NED: Oct International trade
07:00/NOR: Oct Monthly GDP
07:00/UK: Nov UK monthly unemployment figures
07:00/GER: Nov WPI
08:00/SVK: Oct Construction production
09:00/BUL: Sep Trade with EU Member States - preliminary
data
09:00/BUL: Oct Trade with third countries - preliminary data
09:30/UK: 3Q Mortgage Lenders and Administrators Return (MLAR)
statistics
10:00/GER: Dec ZEW Indicator of Economic Sentiment
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(END) Dow Jones Newswires
December 12, 2023 00:16 ET (05:16 GMT)
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