• European bourses are firmer this morning, continuing the positive tone from APAC hours
• Sterling lags and Gilts lead core debt peers after dismal UK retail sales
• White House officials confirmed they are planning election year stimulus which will focus on tax reductions
• Chinese GDP printed in-line with exp. with IP and retail sales topping estimates
• Looking ahead, highlights include US Building Permits, Housing Starts, Industrial Production, JOLTS, Uni. Of Michigan, Baker Hughes, Fed’s Harker,...

• Asian equity markets traded mostly positive after taking impetus from another record-setting session on Wall St.
• Chinese GDP printed in-line with expectations, whilst both Industrial Production and Retail Sales topped estimates
• China’s Global Times noted comments from an expert who suggested that China could demand that the US roll back all tariffs prior to phase two talks
• DXY was relatively flat and held near the prior day’s highs, while its major counterparts were indecisive
• Looking ahead,...

• European equities are little changed at present, as newsflow has slowed since the Phase One signing
• Chinese VP Liu He says it is unwise to rush into the Phase Two negotiations, stating Beijing has little interest in immediately doing so
• US Senate Majority Leader McConnell said the impeachment trial will begin on Tuesday and the Senate will complete USMCA trade deal today
• USD is slightly softer as antipodeans benefit on the trade deal, other G10 currencies little changed/mixed at...

• Asian equity markets traded mostly higher but with gains capped as the euphoria from the US-China Phase 1 trade deal signing dissipated
• The deal was caveated by China’s commitment to purchase agricultural goods “based on market conditions” and potential for China to exit the deal
• President Trump said he will visit China in the not too distant future to reciprocate for the Phase 1 signing. Work on Phase 2 will begin as soon as this one kicks...

• European bourses are mixed-flat in tentative trade ahead of the US-China Phase One Signing
• US Treasury Secretary Mnuchin stated that tariffs will stay in place until there is a Phase 2 agreement with China
• Soft UK CPI and comments from BoE’s Saunders have seen market pricing for a January cut increase to 60%
• Russian Energy Minister Novak states there are no plans to delay the March OPEC+ meeting
• FX complex is similarly tentative while gilts are driving upside in debt
• Looking ahead,...

• Asian equity markets followed suit to the cautious performance on Wall St amid trade-related headwinds
• Tariffs on China will remain until after the US election despite a Phase 1 deal, according to sources
• US Treasury Secretary Mnuchin stated that tariffs will stay in place until there is a Phase 2 agreement with China
• OPEC+ is mulling the delay of its March meeting to June and could extend output cuts until then if so, according to reports citing sources
• Looking ahead, highlights include...

• European bourses are relatively unchanged in choppy trade on quiet newsflow in European hours
• US Treasury removed China from the currency manipulator list, said China made enforceable commitments to refrain from competitive devaluation in the Phase 1 deal
• US-China Phase 1 deal will include pledge by China to buy USD 200bln of US goods over a 2-year period
• Chinese trade date showed a sizable increase in the trade balance, albeit this did miss (USD-denominated) expectations
• USD is firmer but...

• European equities are mixed, but overall little changed, this morning; aside from the FTSE 100 on currency effects
• US Treasury Secretary Mnuchin stated that China’s commitments in Phase 1 deal were not changed during the lengthy translation process
• BoE’s Vlieghe becomes the latest MPC member to come out in support of a potential rate cut if data does not improve; subsequently, UK GDP Estimate (Nov) printed below expectations
• As such, GBP is...

• Asian equity markets began the week somewhat mixed with the region indecisive ahead of the US-China Phase 1 deal signing
• US Treasury Secretary Mnuchin stated that China’s commitments in Phase 1 deal were not changed during the lengthy translation process
• BoE’s Vlieghe becomes the latest MPC member to come out in support of a potential rate cut if data does not improve
• Iran admitted that it accidentally shot down the Ukraine passenger jet in which it alleged that the airliner took the flying posture...

• European bourses are little changed, as newsflow slows with NFP ahead
• US President Trump said he thinks the US-China Phase One deal will be signed on January 15th or shortly after
• China Global Times tweeted that a Phase Two trade deal after November is too far away
• USD is firmer this morning, with GBP briefly dented by comments from BoE’s Tenreyro
• Looking ahead, highlights include US & Canadian Jobs Reports

GEOPOLITICS

Israeli Air Force jets...

10th January 2020

·       Rockets reportedly landed near the Balad military base north of Baghdad, which houses US troops, according to Iraqi police

·       US government officials are now confident the Ukrainian Boeing 737-800 was shot down by an Iranian missile, citing satellite data

·       US President Trump said he might want to wait till after the election to complete Phase...

• European bourses are firmer, as markets return to risk-on following the Middle-East de-escalation
• Senior Iranian Revolutionary Guard Commander states that Iran will take 'harsher revenge soon' following on from the missile attacks on US targets in Iraq., Tasnim
• China and the US will sign the Phase One deal, which will occur on January 15th at 16:30GMT., Chinese Press
• USD is outperforming G10 counterparts today, particularly GBP post-Carney
• Looking ahead, highlights include Jobless Claims,...

·       US President Trump confirmed no Americans or Iraqi lives were lost by the Iranian strike and added that Iran appears to be standing down

·       Two rockets reportedly hit Baghdad’s Green Zone near the US Embassy in Iraq with no casualties reported, according to Iraq military

·       Asia-Pac bourses traded with firm gains across the board after a positive handover from Wall...

• European bourses are softer, but not significantly so, in tentative trade ahead of US President Trumps update
• WTI and Brent spiked overnight, with spot gold surpassing the USD 1600/oz mark
• Iran has launched over a dozen ballistic missiles at two Iraqi air bases – Al-Asad and Erbil - which houses US and coalition troops; no US casualties at present
• US President Trump tweeted "all is well", he acknowledged the missiles launched by Iran at two military bases in Iraq, "Assessment of casualties &...

8th January 2020

·       Iran has launched over a dozen ballistic missiles at two Iraqi air bases, no US casualties have officially been reported thus far

·       Iranian Revolutionary Guard Corp claimed the attacks, Iran threatened "more crushing attacks" should the US retaliate

·       US President Trump tweeted "all is well…Assessment of casualties & damages taking place...

• European bourses are firmer as risk-sentiment strengthens on signs of a possible tempering of tensions in the Middle-East
• USD remains firm ahead of ISM, while the AUD is weighed on post-data and with the ongoing environmental crisis
• Iran is reportedly assessing 13 scenarios for retaliation against the US and is prepared to "come back to full compliance in the Nuclear deal"
• US Defense Secretary Esper said the US does not have plans to pull out of Iraq
• China-US Phase One trade deal is on track...

·       US Defense Secretary Esper said the US does not have plans to pull out of Iraq, whilst a Pentagon spokeswoman said there is no change in US policy on its troops' presence in the country

·       Trump administration has begun drafting sanctions against Iraq, according to sources - but plan to wait on the decision to impose penalties

·       China-US Phase One trade...

• Markets remain risk-off as Middle-East newsflow dominates, spot gold set 6-year highs at USD 1587/oz overnight
• USD is subdued to the aid of G10 counterparts, particularly GBP and EUR with PMIs providing assitance
• Iran has finalised a new retreat from the Nuclear Deal in which it will not comply with any restrictions on the amount of uranium enrichment, enrichment rate and number of centrifuges
• Iraqi parliament has voted for the government to work on plans to end US troop presence in...

• US President Trump stated that there will be a “major retaliation”, perhaps in a disproportionate manner, should Iran retaliate
• Iran has finalised a new retreat from the Nuclear Deal in which it will not comply with any restrictions on the amount of uranium enrichment, enrichment rate and number of centrifuges
• US President Trump threatened sanctions against Baghdad after the Iraqi parliament voted to work on plans to end US troop presence in Iraq
• Chinese trade delegation, led by Vice Premier Liu He,...

• European bourses are subdued on the overnight middle-east tensions which sparked a broad flight-to-quality
• USD is firmer this morning, and weighs on most G10 peers excluding the safe-havens
• Senior Iranian Revolutionary Guard Corp Commander Soleimani and Iraqi Militia Commander Muhandis have been assassinated in an air strike
• Iranian Government spokesperson says the response to the assassination of Soleimani is not far away, and the response will be strong
• North Korea's official newspaper...

3rd January 2020

·       Asian equities failed to track the Wall Street rally as sentiment took a hit from geopolitical developments

·       Oil prices surged as US air strikes killed Senior Iranian Revolutionary Guard Corp Commander Soleimani; IRGC official vowed revenge against the US

·       North Korea's official newspaper warned of "immediate and powerful" strikes against...

• European bourses are firmer this morning in relatively quiet newsflow for the European session
• USD is firmer this morning, but the DXY remains well off pre-holiday levels after tumbling at year end
• PBOC has cut the RRR for domestic banks by 50bps, the level for big banks now stands at 12.5%
• US President Trump says the US-China trade deal will be signed on January 15th at the White House with high level Chinese Representatives
• North Korean Leader Kim Jong Un has stated that North Korea is no...

PBOC has cut the RRR for domestic banks by 50bps, the level for big banks now stands at 12.5%; this was the 8th cut since early 2018. (Newswires) 

US President Trump says the US-China trade deal will be signed on January 15th at the White House with high level Chinese Representatives, additionally President Trump will at a later date visit Beijing for the Phase Two talks. Note, China is yet to confirm the signing will take place on January 15th at the White House and today’s Mofcom press conference has been...

• European bourses are little changed with a number of market closures already underway
• China Global Times tweeted that hopefully US can move faster towards lowering tariffs after China recently announced new tariff-cut plans on imports
• FX markets are tentative/little changed with the debt complex painting a similar picture
• Looking ahead, highlights include Richmond Fed, APIs, US 5yr. Note, there are several early market closures, all of which...

• Asian equity markets were mixed with price action range-bound amid the ongoing holiday lull
• China Global Times tweeted that “hopefully the US can move faster towards lowering tariffs” after China recently announced new tariff-cut plans on imports
• In FX markets, price action was contained with the DXY languishing below its 200DMA at 97.71
• Looking ahead, highlights include Richmond Fed, APIs, US 5yr. Note, there are several early market closures, all of which are detailed on our...