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17/12/21 Briefing

The S&P 500 futures trade 21 points, or 0.5%, below fair value at the end of a volatile week in which the S&P 500 is down 0.9%. The Nasdaq 100 futures trade 0.9% below fair value with the corresponding index down 2.8% for the week amid profit taking in the mega-caps.

Interest rates can't be blamed for the underperformance of the mega-caps/growth stocks since the 10-yr yield is currently down three basis point to 1.39%, leaving it down ten basis points since last Friday. Moreover, the 2-yr yield is currently down one basis point to 1.60%, and is down six basis points since last Friday, despite the Fed signaling three rate hikes in 2022.

The latter suggests the market is respecting the economic uncertainty of the Omicron variant and its potential influence on the Fed to tread more cautiously with policy. Speaking of central banks, the Bank of Japan made no changes to its policy stance but reduced the amount of emergency asset purchases.

In corporate news, FedEx (FDX 252.40, +13.88, +5.8%) is up 6% in pre-market action on pleasing earnings news while Cerner (CERN 94.00, +14.51, +18.3%) is up 18% after The Wall Street Journal reported Oracle (ORCL 98.88, -4.34, -4.2%) is in talks to acquire the company for potentially $30 billion.

The U.S. Dollar Index is little changed at 96.05. WTI crude futures are down 2.2%, or $1.59, to $70.79/bbl amid lingering demand concerns.

In U.S. Corporate news:

  • FedEx (FDX 252.40, +13.88): +5.8% after beating top and bottom-line estimates, guiding FY22 EPS above consensus, and authorizing a new $5 billion share repurchase program.

  • Oracle (ORCL 98.88, -4.34): -4.2% after The Wall Street Journal reported that the company is in discussions to acquire Cerner (CERN 94.00, +14.51, +18.3%) for potentially $30 billion.

  • Rivian (RIVN 100.50, -8.37): -7.7% after missing EPS estimates.

  • U.S. Steel (X 22.28, -1.17): -5.0% after guiding Q4 adjusted EBITDA below consensus, citing a seasonal year-end slowdown in order entry activity.

  • Johnson & Johnson (JNJ 170.00, -3.01): -1.7% after the CDC confirmed it expressed a clinical preference for individuals to receive an mRNA COVID-19 vaccine over J&N's vaccine due to rare blood clot issues.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: -1.8% (+0.4% for the week) Hong Kong's Hang Seng: -1.2% (-3.4% for the week) China's Shanghai Composite: -1.2% (-0.9% for the week) India's Sensex: -1.5% (-3.0% for the week) South Korea's Kospi: +0.4% (+0.3% for the week) Australia's ASX All Ordinaries: +0.1% (+0.2% for the week).

  • In economic data:

  • China's November FDI 15.9% yr/yr (expected 16.0%; last 17.8%)

  • Singapore's November trade surplus SGD6.245 bln (last surplus of SGD5.909 bln). November non-oil exports 1.1% m/m (expected 0.2%; last 4.1%); 24.2% yr/yr (expected 17.3%; last 17.8%)

  • New Zealand's December NBNZ Own Activity 11.8% (last 15.0%) and December ANZ Business Confidence -23.2 (last -16.4)


  • In news:

  • Reports from Japan indicate that bond issuance planned for FY22 will be down sharply from issuance of JPY43.6 trln in FY21.

  • Australia and the U.K. signed a $13.3 bln free trade deal.

  • The Bank of Japan made no changes to its policy stance but reduced the amount of emergency purchases.

  • Bank of Japan Governor Kuroda said that commercial paper and corporate bond purchases will return to a pre-pandemic level.



  • Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.3%) outperforms. STOXX Europe 600: -0.7% (-0.5% week-to-date) Germany's DAX: -0.8% (-0.7% week-to-date) U.K.'s FTSE 100: +0.3% (-0.2% week-to-date) France's CAC 40: -1.0% (-1.0% week-to-date) Italy's FTSE MIB: -1.2% (-1.0% week-to-date) Spain's IBEX 35: -0.7% (-0.5% week-to-date).

  • In economic data:

  • Eurozone's November CPI 0.4% m/m (expected 0.5%; last 0.8%); 4.9% yr/yr, as expected (last 4.9%). November Core CPI 0.0% m/m (expected 0.1%; last 0.1%); 2.6% yr/yr, as expected (last 2.6%). October Construction Output 1.56% m/m (last 1.02%)

  • Germany's December ifo Business Climate Index 94.7 (expected 95.3; last 96.6). December Current Assessment 96.9 (expected 97.5; last 99.0) and December Business Expectations 92.6 (expected 93.5; last 94.2). November PPI 0.8% m/m (expected 1.4%; last 3.8%); 19.2% yr/yr (expected 19.9%; last 18.4%)

  • U.K.'s November Retail Sales 1.4% m/m (expected 0.8%; last 1.1%); 4.7% yr/yr (expected 4.2%; last -1.5%). November Core Retail Sales 1.1% m/m (expected 0.8%; last 2.0%); 2.7% yr/yr (expected 2.4%; last -2.1%)

  • Spain's October trade deficit EUR3.40 bln (last deficit of EUR2.40 bln


  • In news:

  • Bank of France Governor Villeroy de Galhau said that he thinks the eurozone economy is approaching an inflationary peak.

  • Bundesbank expects that German inflation will reach 3.6% in 2022, slowing to 2.2% in 2023.

  • Bank of England Chief Economist Pill said that more rate hikes are expected from the BoE.

  • The Central Bank of Russia increased its key rate by 100 bps to 8.50%, as expected.




U.S. equity futures:

  • S&P 500 Futures: -32 @ 4,637

  • DJIA Futures: -162 @ 35,736

  • Nasdaq 100 Futures: -173 @ 15,691

Overseas:

  • Europe: DAX -0.8%, FTSE +0.3%, CAC -1.0%

  • Asia: Nikkei -1.8%, Hang Seng -1.2%, Shanghai Composite -1.2%

Commodities:

  • Crude Oil -1.63 @ 70.75

  • Nat Gas -0.095 @ 3.671

  • Gold +14.95 @ 1813.15

  • Silver +0.178 @ 22.663

  • Copper -0.0070 @ 4.2975

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

  • Darden Restaurants (DRI) beats by $0.04, beats on revs; guides FY22 EPS below consensus, revs above consensus

  • Expensify (EXFY) reports SepQ earnings; revs jumped 72.6% yr/yr as SMBs continue to bounce back from the pandemic; guides Q4 revs above consensus

  • FedEx (FDX) beats by $0.54, beats on revs; guides FY22 EPS above consensus; authorizes new $5 bln share repurchase program

  • Freshpet (FRPT) lowers FY21 guidance

  • Mosaic (MOS) releases November 2021 sales and volumes by business unit; consolidated sales jumped 71% yr/yr

  • Quanex (NX) beats by $0.09, beats on revs; co is not providing formal guidance at this time due to supply chain disruptions

  • Ring Energy (REI) increases Q4 sales guidance and provides an outlook on its 2022 drilling program

  • Rivian Automotive (RIVN) misses by $0.84, reports 71K net preorders of R1 in U.S. and Canada

  • Scholastic Corp (SCHL) reports NovQ earnings; revs grew 29% yr/yr

  • Steelcase (SCS) misses by $0.01, misses on revs; guides FebQ revs below consensus

  • U.S. Steel (X) guides Q4 adjusted EBITDA below consensus; reflects temporary slowdown in order entry activity, which co believes is related to typical seasonal year-end buying activity

  • Winnebago (WGO) beats by $1.17, beats on revs


  • General News:

  • South Africa's hospitalization rate with Omicron is 1.7% versus 19% with Delta, according to Bloomberg

  • President Biden acknowledged that Build Back Better Act will not get passed by the end of the year, but negotiations will continue. Senators are expected to leave Washington today for a holiday recess, according to Politico

  • Senate parliamentarian Elizabeth MacDonough will not allow immigration reform to be included in Build Back Better Act because it violates Senate reconciliation rules, according to The Hill

  • UK and Australia agree to trade deal, according to Reuters

  • AMC Entertainment announced that SPIDER-MAN: NO WAY HOME has broken AMC box office records

  • Ashford Hospitality Trust (AHT) reported preliminary portfolio occupancy of 61.6% for November with an average daily rate of ~$155 resulting in RevPAR of ~$95

  • Biogen (BIIB): EMA has recommended the refusal of the marketing authorisation for Aduhelm, a medicine intended for the treatment of Alzheimer's disease

  • BioMarin Pharm (BMRN) and Skyline Therapeutics sign multi-year strategic collaboration for gene therapies to treat genetic cardiovascular diseases

  • Boeing (BA) awarded $398 mln contract for the Royal Saudi Air Force for AWACS modernization program

  • Bright Horizons (BFAM) authorized a new share repurchase program under which up to $400 million of the Company's outstanding common stock may be repurchased

  • Bristow Group (VTOL) and Overair form strategic partnership to introduce Butterfly

  • City Office REIT (CIO) raises quarterly dividend by 33% to $0.20 per share

  • Darden Restaurants (DRI) announces that Eugene Lee Chairman and Chief Executive Officer, will retire as CEO effective May 29, 2022

  • Dyadic International (DYAI) has entered into a Research, License and Collaboration Agreement with Janssen Biotech, one of the Janssen Pharmaceutical Companies of Johnson & Johnson (JNJ)

  • EVO Payments (EVOP) enters into strategic marketing alliance with the National Bank of Greece

  • Exxon (XOM) aiming to bid for Brazil oil blocks, according to Reuters

  • Fox Corporation (FOXA) and Nexstar Media Group (NXST) launch NEXTGEN TV broadcasting in Los Angeles

  • Futu Holdings (FUTU) responds to media report; "Futu has been abiding by the same rules and regulations and adopting the similar industry practices"

  • General Motors (GM): Cruise CEO Dan Ammann to leave the company; further details not disclosed

  • Gilead Sciences' (GILD) Kite and Daiichi Sankyo to expand YESCARTA collaboration in Japan

  • Granite Point Mortgage (GPMT) authorizes repurchase up to an additional 2 mln shares

  • HCI Group (HCI) agrees with United Insurance Holdings (UIHC) to transition its personal lines insurance business in GA, NC, and SC, to HCI

  • KE Holdings (BEKE) refutes the Muddy Waters' Report

  • Johnson & Johnson (JNJ): CDC confirms it expressed a clinical preference for individuals to receive an mRNA COVID-19 vaccine (PFE, BNTX, MRNA) over JNJ's COVID-19 vaccine

  • Kellogg (K) confirms new tentative agreement for a five-year labor contract with the union

  • Lockheed Martin (LMT) awarded a $286 mln modification to previously awarded contract with the Kingdom of Saudi Arabia

  • Luxfer (LXFR) taking multiple actions related to U.S. and U.K pension plans; expected to reduce pension deficit by ~$12.7 mln

  • Lyell Immunopharma's (LYEL) Investigational New Drug application to initiate Phase 1 trial for LYL797 cleared by the FDA

  • Merck (MRK): New England Journal of Medicine publishes positive results from its Phase 3 MOVe-OUT trial evaluating molnupiravir, its COVID-19 treatment

  • Merck (MRK) receives positive EU CHMP opinion for KEYTRUDA as adjuvant therapy for certain patients with renal cell carcinoma following surgery

  • Merck KGaA (MKKGY) unit EMD Serono's TEPMETKO (tepotinib) receives Positive CHMP Opinion for patients with advanced NSCLC with METex14 skipping alterations

  • Meta Platforms (FB) takes action against the surveillance-for-hire industry; says "We alerted around 50,000 people who we believe were targeted by these malicious activities worldwide, using the system we launched in 2015"

  • Meta Platforms (FB): FTC aiming to expand antitrust investigation into virtual reality, according to The Information

  • ObsEva (OBSV) announced that the CHMP of the EMA adopted a positive opinion recommending approval of linzagolix, an oral GnRH antagonist for the management of moderate to severe symptoms of uterine fibroids (UF) in adult women of reproductive age

  • Passage BIO (PASG) announces positive interim safety and biomarker data and advances Phase 1/2 Trial of PBGM01 in GM1 Gangliosidosis

  • Peloton (PTON) removes ad amid sexual misconduct allegations, according to the Wall Street Journal

  • QuantumScape Battery (QS) recently signed an agreement with an established global luxury automotive original equipment manufacturer

  • Roche Hldg (RHHBY) receives CE mark for its cobas SARS-CoV-2 Qualitative test

  • Seagen (SGEN) and Astellas (ALPMY) receive Positive CHMP Opinion for PADCEV (enfortumab vedotin) in locally advanced or metastatic urothelial cancer

  • Shift4 Payments (FOUR) authorizes repurchase program for up to $100 mln of company's common stock

  • Taysha Gene Therapies (TSHA) initiates clinical development of TSHA-118 for treatment of CLN1 disease

  • TETRA Tech (TTI) and Eos Energy sign term sheet regarding supply and collaboration agreement

  • TFI International (TFII) increases quarterly dividend to $0.27 from $0.23/share

  • Univar Solutions (UNVR) expands partnership with Novozymes in Brazil, Mexico, Paraguay, Uruguay and Bolivia

  • Vera Therapeutics (VERA) has acquired MAU868 and has entered into a credit facility with Oxford Finance to provide borrowing capacity up to $50 mln

  • Vroom (VRM) appoints Thomas Shortt as COO


  • M&A:

  • Agilysys (AGYS) to acquire ResortSuite for approx. $25 mln in cash

  • Armada Acquisition Corp. I (AACI) acquires Rezolve Mobile Engagement Platform in $2 bln deal

  • Bottomline Tech (EPAY) has entered into a definitive agreement to be acquired by Thoma Bravo in an all-cash transaction that values Bottomline at ~$2.6 bln

  • Cenovus Energy (CVE) reaches agreement to sell Tucker thermal asset for $800 mln

  • Coca-Cola FEMSA (KOF) reaches an agreement to acquire CVI Refrigerantes in Brazil

  • Dover (DOV) completes acqusition of Acme Cryogenics for $295 mln and agrees to acquire Engineered Controls International for $631 mln in cash

  • Global Cord Blood's (CO) Board rejects non-binding proposal from Alternate Ocean Investment Company

  • North Atlantic Acquisition Corp (NAAC) announces business combination with TeleSign

  • Oracle (ORCL) in discussions to purchase Cerner (CERN) for potentially $30 bln, according to the Wall Street Journal


  • Syndicate:

  • EOG Resources (EOG) files mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

  • UIHC +6.7%, REI +5.7%, FDX +5.7%, LYEL +4.5%, DNMR +2.7%, CO +1.8%, CVE +1.8%, UPS +1.6%, EFC+1.6%, NAAC +1.5%, EOSE +1.4%, GPMT +0.7%, MRK+0.6%


  • Gapping down:

  • RIVN -9.6%, X -5.3%, EXFY -4.4%, GM -3.2%, BEKE-3.1%, SCS -2.8%, ZME -1.7%, TSHA -1.6%, DOV-1.5%, TFII -1.1%, MOS -1%, JNJ -0.9%, K -0.5%, ALVR -0.5%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Advanced Energy (AEIS) upgraded to Buy from Hold at Needham; tgt $120

  • DCP Midstream (DCP) upgraded to Buy from Neutral at Citigroup; tgt raised to $34

  • DCP Midstream (DCP) upgraded to Buy from Neutral at Mizuho; tgt raised to $34

  • Edwards Lifesciences (EW) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $140

  • F45 Training Holdings (FXLV) upgraded to Overweight from Neutral at JP Morgan; tgt $15

  • Federated Hermes (FHI) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $45

  • Integra (IART) upgraded to Neutral from Underweight at JP Morgan; tgt $75

  • Invesco (IVZ) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt $33

  • iRhythm (IRTC) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $116

  • Martin Marietta (MLM) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $485

  • Moelis (MC) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt $77

  • Northern Oil & Gas (NOG) upgraded to Buy from Neutral at BofA Securities; tgt $28

  • Six Flags (SIX) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $53

  • T. Rowe Price (TROW) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt lowered to $246


  • Downgrades:

  • CMS Energy (CMS) downgraded to Neutral from Buy at BofA Securities; tgt raised to $67

  • Franklin Resources (BEN) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt $38

  • Medtronic (MDT) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $105

  • Starbucks (SBUX) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $116

  • Williams Cos (WMB) downgraded to Neutral from Buy at Citigroup; tgt lowered to $27


  • Others:

  • 3M (MMM) initiated with a Neutral at Mizuho; tgt $180

  • Allegion (ALLE) initiated with a Buy at Mizuho; tgt $170

  • Ametek (AME) initiated with a Buy at Mizuho; tgt $159

  • Bicycle Therapeutics (BCYC) initiated with an Outperform at SVB Leerink; tgt $70

  • Biomea Fusion (BMEA) initiated with an Outperform at Oppenheimer; tgt $22

  • BlueLinx (BXC) initiated with a Buy at DA Davidson; tgt $102

  • BrightSpire Capital (BRSP) initiated with a Mkt Outperform at JMP Securities; tgt $11

  • Bristol-Myers (BMY) initiated with a Buy at Goldman; tgt $72

  • Butterfly Network (BFLY) initiated with a Neutral at UBS; tgt $7

  • Carrier Global (CARR) initiated with a Neutral at Mizuho; tgt $57

  • CF Industries (CF) initiated with an Overweight at Piper Sandler; tgt $78

  • Chefs' Warehouse (CHEF) initiated with a Buy at The Benchmark Company; tgt $41

  • Deere (DE) initiated with a Buy at DA Davidson; tgt $400

  • Dover (DOV) initiated with a Buy at Mizuho; tgt $195

  • Dyadic International (DYAI) initiated with a Buy at H.C. Wainwright; tgt $7

  • Eaton (ETN) initiated with a Buy at Mizuho; tgt $200

  • Eli Lilly (LLY) initiated with a Neutral at Goldman; tgt $236

  • Eloxx Pharmaceuticals (ELOX) initiated with an Outperform at Oppenheimer; tgt $4

  • Emerson (EMR) initiated with a Neutral at Mizuho; tgt $100

  • Enovix (ENVX) initiated with an Overweight at Piper Sandler; tgt $39

  • Flowserve (FLS) initiated with a Neutral at Mizuho; tgt $34

  • Fortive (FTV) initiated with a Neutral at Mizuho; tgt $82

  • FREYR Battery (FREY) initiated with a Neutral at Piper Sandler; tgt $11

  • Honeywell (HON) initiated with a Buy at Mizuho; tgt $245

  • Hubbell (HUBB) initiated with a Buy at Mizuho; tgt $240

  • IDEX Corp (IEX) initiated with a Neutral at Mizuho; tgt $233

  • Independence Realty Trust (IRT) resumed with an Outperform at BMO Capital Markets; tgt $28

  • Innovid Corp. (CTV) initiated with an Outperform at Evercore ISI; tgt $10

  • InnovAge (INNV) initiated with a Neutral at JP Morgan; tgt $10

  • Intl Game Tech. PLC (IGT) initiated with a Buy at Stifel; tgt $43

  • Johnson Controls (JCI) initiated with a Buy at Mizuho; tgt $93

  • Johnson & Johnson (JNJ) initiated with a Neutral at Goldman; tgt $161

  • KORE Group (KORE) initiated with an Equal-Weight at Morgan Stanley; tgt $7.50

  • Lennox Int'l (LII) initiated with an Underperform at Mizuho; tgt $295

  • Life Storage (LSI) initiated with an Outperform at Wolfe Research; tgt $186

  • Lument Finance Trust (LFT) initiated with an Overweight at Piper Sandler; tgt $4.50

  • Merck (MRK) initiated with a Buy at Goldman and added to Conviction Buy List; tgt $93

  • Microvast (MVST) initiated with a Neutral at Piper Sandler; tgt $8

  • ModivCare (MODV) initiated with a Buy at Deutsche Bank; tgt $180

  • Mosaic (MOS) initiated with an Overweight at Piper Sandler; tgt $44

  • Nutrien (NTR) initiated with a Neutral at Piper Sandler; tgt $80

  • Oshkosh (OSK) initiated with a Neutral at DA Davidson; tgt $118

  • Parker-Hannifin (PH) initiated with a Neutral at Mizuho; tgt $345

  • Pentair (PNR) initiated with an Underperform at Mizuho; tgt $65

  • Playtika (PLTK) initiated with a Buy at DA Davidson; tgt $25

  • Roblox (RBLX) initiated with a Buy at Needham; tgt $136

  • Rockwell Automation (ROK) initiated with a Neutral at Mizuho; tgt $345

  • Roper (ROP) initiated with a Buy at Mizuho; tgt $550

  • Spruce Biosciences (SPRB) initiated with an Outperform at Oppenheimer; tgt $15

  • Stanley Black & Decker (SWK) initiated with a Buy at Mizuho; tgt $222

  • Trane (TT) initiated with a Neutral at Mizuho; tgt $205

  • Vertiv (VRT) initiated with a Neutral at Mizuho; tgt $27

  • Vor Biopharma (VOR) initiated with a Buy at H.C. Wainwright; tgt $26

  • Wabash Natl (WNC) initiated with a Buy at DA Davidson; tgt $25

  • Xylem (XYL) initiated with a Neutral at Mizuho; tgt $115

  • Zurn Water Solutions (ZWS) initiated with a Buy at Mizuho


Upcoming Events:

  • Econ Data:

  • No economic data of note.


  • Earnings:

  • Wednesday (Dec 15)

  • Morning: ABM REVG TTC

  • Afternoon: HEI LEN NDSN TCOM


  • Thursday (Dec 16)

  • Morning: ACN ADBE JBL WOR

  • Afternoon: FDX NX SCS


  • Friday (Dec 17)

  • Morning: DRI WGO




Asia & Europe detail:

Asia: Nikkei -1.8%, Hang Seng -1.2%, Shanghai Composite -1.2%

Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Reports from Japan indicate that bond issuance planned for FY22 will be down sharply from issuance of JPY43.6 trln in FY21. Australia and the U.K. signed a $13.3 bln free trade deal. The Bank of Japan made no changes to its policy stance but reduced the amount of emergency purchases. Bank of Japan Governor Kuroda said that commercial paper and corporate bond purchases will return to a pre-pandemic level.

  • In economic data:

  • China's November FDI 15.9% yr/yr (expected 16.0%; last 17.8%)

  • Singapore's November trade surplus SGD6.245 bln (last surplus of SGD5.909 bln). November non-oil exports 1.1% m/m (expected 0.2%; last 4.1%); 24.2% yr/yr (expected 17.3%; last 17.8%)

  • New Zealand's December NBNZ Own Activity 11.8% (last 15.0%) and December ANZ Business Confidence -23.2 (last -16.4)


---Equity Markets---

  • Japan's Nikkei: -1.8% (+0.4% for the week)

  • Hong Kong's Hang Seng: -1.2% (-3.4% for the week)

  • China's Shanghai Composite: -1.2% (-0.9% for the week)

  • India's Sensex: -1.5% (-3.0% for the week)

  • South Korea's Kospi: +0.4% (+0.3% for the week)

  • Australia's ASX All Ordinaries: +0.1% (+0.2% for the week)

---FX---

  • USD/JPY: -0.2% to 113.45

  • USD/CNH: +0.2% to 6.3896

  • USD/INR: -0.3% to 75.99

Europe: DAX -0.8%, FTSE +0.3%, CAC -1.0%

Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.3%) outperforms. Bank of France Governor Villeroy de Galhau said that he thinks the eurozone economy is approaching an inflationary peak. Bundesbank expects that German inflation will reach 3.6% in 2022, slowing to 2.2% in 2023. Bank of England Chief Economist Pill said that more rate hikes are expected from the BoE. The Central Bank of Russia increased its key rate by 100 bps to 8.50%, as expected.

  • In economic data:

  • Eurozone's November CPI 0.4% m/m (expected 0.5%; last 0.8%); 4.9% yr/yr, as expected (last 4.9%). November Core CPI 0.0% m/m (expected 0.1%; last 0.1%); 2.6% yr/yr, as expected (last 2.6%). October Construction Output 1.56% m/m (last 1.02%)

  • Germany's December ifo Business Climate Index 94.7 (expected 95.3; last 96.6). December Current Assessment 96.9 (expected 97.5; last 99.0) and December Business Expectations 92.6 (expected 93.5; last 94.2). November PPI 0.8% m/m (expected 1.4%; last 3.8%); 19.2% yr/yr (expected 19.9%; last 18.4%)

  • U.K.'s November Retail Sales 1.4% m/m (expected 0.8%; last 1.1%); 4.7% yr/yr (expected 4.2%; last -1.5%). November Core Retail Sales 1.1% m/m (expected 0.8%; last 2.0%); 2.7% yr/yr (expected 2.4%; last -2.1%)

  • Spain's October trade deficit EUR3.40 bln (last deficit of EUR2.40 bln)


---Equity Markets---

  • STOXX Europe 600: -0.7% (-0.5% week-to-date)

  • Germany's DAX: -0.8% (-0.7% week-to-date)

  • U.K.'s FTSE 100: +0.3% (-0.2% week-to-date)

  • France's CAC 40: -1.0% (-1.0% week-to-date)

  • Italy's FTSE MIB: -1.2% (-1.0% week-to-date)

  • Spain's IBEX 35: -0.7% (-0.5% week-to-date)

---FX---

  • EUR/USD: -0.1% to 1.1316

  • GBP/USD: -0.2% to 1.3291

  • USD/CHF: +0.1% to 0.9196


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