- UK PM May will insist that “nothing is agreed until everything is agreed” on the terms of Brexit after the Irish government claimed that last week’s preliminary deal is binding
- Asia equity markets began the week mostly positive after last Friday’s gains on Wall St
- Looking ahead, highlights include US 3yr and 10yr auctions
Asia equity markets began the week mostly positive after last Friday’s gains on Wall St and better than expected US NFP jobs data, although the upside in Asia-Pac bourses were contained ahead of this week’s central bank-heavy roster. ASX 200 (+0.1%) and Nikkei 225 (+0.4%) were higher with strength in commodity-related stocks in Australia just about keeping the index afloat, while focus was on AWE shares which rallied over 15% after Co. was subject to a take-over offer. Hang Seng (+0.6%) and Shanghai Comp. (+0.5%) were also in the green after the PBoC resumed liquidity operations, although a miss on inflation data over the weekend somewhat capped the advances. Finally, 10yr JGBs were lower amid the positive risk tone in the region and absence of the BoJ in the market under its massive bond buying program.
Chinese CPI (Nov) Y/Y 1.7% vs. Exp. 1.8% (Prev. 1.9%). (Newswires)
Chinese PPI (Nov) Y/Y 5.8% vs. Exp. 5.9% (Prev. 6.9%)
PBoC injected CNY 40bln via 7-day reverse repos and CNY 40bln via 28-day reverse repos. (Newswires)
PBoC set CNY mid-point at 6.6152 (Prev. 6.6218)
EU is reportedly planning to offer UK PM May a 2-year standstill Brexit transition deal this week. (The Times)
UK PM May will insist that “nothing is agreed until everything is agreed” on the terms of Brexit after the Irish government claimed that last week’s preliminary deal is binding. (Telegraph) This has led the Irish Government to hit back at a British government suggestion that a deal reached on the post-Brexit Border was a “statement of intent” rather than “a legally enforceable thing”. (Irish Times)
UK Brexit Secretary Davis suggested he wants a bespoke deal with the EU and is seeking an overarching agreement with no tariffs. (BBC) Further to this, The Times report that Britain could be forced to accept swathes of Brussels red tape if it is to secure the extensive trade deal that David Davis is championing, according to senior European sources. (Times)
UK Rightmove House Price Index (Dec) M/M -2.6% (Prev. -0.8%). (Newswires)
UK Rightmove House Price Index (Dec) Y/Y 1.2% (Prev. 1.8%)
German SPD leader Schulz said will announce next week whether they will form a coalition with German Chancellor Merkel’s CDU/CSU. (Newswires)
FX markets began mostly quiet on tentativeness ahead of the week’s risk events. Nonetheless, USD/JPY and JPY crosses extended on last week’s gains with the pair at a near 1-month high, while antipodeans were also firmer with NZD underpinned on the announcement of the next RBNZ Governor and as support at 0.7500 held for AUD/USD. Elsewhere, GBP/USD briefly reclaimed the 1.3400 handle to the upside as it nursed Friday’s post-Brexit-breakthrough slump which some had attributed to ‘buy the rumour sell the fact’, while focus was also on Bitcoin which gained 20% to hit limit up as futures trading of the cryptocurrency began on the CBOE today.
New Zealand named New Zealand Superannuation Fund CEO and former RRBNZ Deputy Governor (Head of Financial Stability) Adrian Orr as the next RBNZ Governor effective March 27th. (Newswires)
Commodities were rangebound in which WTI crude slightly pulled back after Friday’s gains and comments over the weekend from the Kuwait Oil Minister that suggested the possibility of an early exit from the output cut agreement. Elsewhere, copper was choppy and gold was flat as participants look ahead to the FOMC meeting where Fed Funds Futures were pricing in a 98.3% probability of a hike.
Baker Hughes Rig Count (Total) 931 (Prev. 929); drillers add oil rigs for 3rd consecutive week. (Newswires)
Kuwait Oil Minister stated that oil output reductions could stop in June if the market rebalances. (Newswires)
South Korea, Japan and US began joint missile tracking exercises today. (Newswires)
North Korea stated that UN envoy expressed a willingness to reduce tensions. However, there were also reports that North Korea warned the US on Sunday over the possible use of a naval blockade, which it said would be considered as a “declaration of war.”. (Yonhap)
Treasuries saw little lasting reaction following monthly nonfarm payroll data out of the US, which showed that while payroll growth remained healthy, concerns remain with regards to wage growth and whether inflation will move higher. 10-year t-note futures settled 5 ticks lower at 124.08+.
US Senator Collins reiterated she is unsure if she will support the final version of the tax bill and wants to see it first. (Newswires)