• European bourses are mixed whilst US futures are entirely in the red; Nike (-12.2%) shares slump in the pre-market
• Dollar remains sub-102, GBP firmer post Retail Sales and Antipodeans softer
• Fixed benchmarks are around unchanged and Gilts are muted as Retail Sales strength is offset by GDP revisions
• Crude and Spot Gold benefit from broader weakness in the Dollar whilst Base Metals are mixed
• Looking ahead, US Personal Income, Core PCE, US Durable Goods, UoM Inflation Expectations (Final), and Canadian GDP

EUROPEAN TRADE

EQUITIES

• European equities, Stoxx600 (+0.1%), remain afloat despite significant losses in Prosus (-17.2%), with Retail also subdued post Nike earnings.
• European sectors are mixed with a slight positive bias; Basic Resources and Energy benefit from broader commodity action, whilst Tech lags, hampered by Prosus.
• Chinese regulator issues drafts for online game management, according to Reuters; requires online games to set spending limits, ban daily login rewards. Requires online game approvals to be processed by regulators within 60 days. Pressuring gaming names in APAC trade and in the European session; Tencent (-12.5%), Ubisoft (-5.1%).
• US equity futures are softer across the board, NQ (-0.2%); Nike (NKE) is down 12.2% in pre-market after cutting guidance.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• Dollar is stuck sub-102 following yesterday's data induced/month-end selling; trade has been contained between a tight range of 101.89-61.
• EUR and JPY are slightly firmer having spent the majority of the session flat; price action may pick up ahead of the NY cut where there are large clips due to roll off.
• GBP outperforms post-UK Retail Sales, though with gains capped after lower GDP revisions.
• Antipodeans underperform, giving back some of the prior day's advances; AUD/NZD cross holds slightly above 1.08.
• PBoC set USD/CNY mid-point at 7.0953 vs exp. 7.1306 (prev. 7.1012)
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• USTs are marginally firmer but remain well within yesterday's ranges between 112.18+ and 113.04+; markets will await impetus from November's PCE.
• Gilts slightly higher, with strong Retail Sales offset by downward revisions to UK GDP.
• Bunds hold steady with trade ultimately unreactive to German Import Prices.
• US sells USD 20bln of 5yr TIPS (reopening) at 1.71%; High Yield: 1.71% (prev. 2.44%). Tail: 0bps (prev. 2bps, six-auction avg. -1.6bps). Bid-to-Cover: 2.55x (prev. 2.36x, six-auction avg. 2.61x). Dealers: 6.14% (prev. 9.2%, six-auction avg. 10.8%). Directs: 18.2% (prev. 17.6%, six-auction avg. 11.6%). Indirects: 75.66% (prev. 73.2%, six-auction avg. 77.6%)
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COMMODITIES

• Crude benchmarks, WTI (+0.9%) continue to climb as Red Sea tensions and the rerouting of ships continue.
• Spot Gold inches higher as the Dollar continues to slip whilst Base Metals are mixed with overall specifics light.
• Baker Hughes Rig Count: Oil -3 to 498, Nat Gas +1 to 120, total -3 to 620.
• China's MPI Research Institute said China's 2023 steel demand to fall 3.3% Y/Y and 2024 steel demand to fall 1.7% Y/Y.
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NOTABLE EUROPEAN HEADLINES

DATA RECAP

• UK GDP QQ (Q3) -0.1% vs Exp. 0.0% (prev. 0.0%); UK GDP is now estimated to shown no growth in Q2 2023 (prelim. 0.2%); click here for more details and analysis
• UK GDP YY (Q3) 0.3% vs. Exp. 0.6% (Prev. 0.6%)
• UK Retail Sales MM (Nov) 1.3% vs. Exp. 0.4% (Prev. -0.3%); UK Retail Sales YY (Nov) 0.1% vs. Exp. -1.3% (Prev. -2.7%, Rev. -2.5%); click here for more details and analysis
• UK Retail Sales Ex-Fuel MM (Nov) 1.3% vs. Exp. 0.4% (Prev. -0.1%, Rev. 0.2%); UK Retail Sales Ex-Fuel YY 0.3% vs. Exp. -1.5% (Prev. -2.4%, Rev. -2.1%)
• German Import Prices MM (Nov) -0.1% (Prev. 0.3%); German Import Prices YY -9.0% (Prev. -13.0%)
• UK Business invest YY (Q3) 2.3% (Prev. 2.8%, Rev. 8.0%); UK Business Invest QQ -3.2% (Prev. -4.2%, Rev. 1.4%)
• French Producer Prices MM (Nov) 2.4% (Rev. -0.1%); French Consumer Confidence (Dec) 89.0 vs. Exp. 88.0 (Prev. 87.0, Rev. 88)
• Spanish GDP Final QQ (Q3) 0.3% vs. Exp. 0.3% (Prev. 0.3%); Spanish GDP YY (Q3) 1.8% vs. Exp. 1.8% (Prev. 1.8%)
• Italian Consumer Confidence (Dec) 106.7 vs. Exp. 103.8 (Prev. 103.6); Italian Manufacturing Business Confidence (Dec) 95.4 (Prev. 96.6)

NOTABLE US HEADLINES

• Apple (AAPL) reportedly pulled watches from online stores to meet the US-ordered ban, according to Bloomberg. Apple Watch Series 9 and Ultra 2 are unavailable to buy on the website. A ban on Apple watches has been ordered in a patent technology fight.
• Nike Inc (NKE) Q2 2024 (USD): EPS 1.03 (exp. 0.85), Revenue 13.39bln (exp. 13.43bln). Guides Q3 revenue slightly negative Y/Y; cuts FY24 revenue growth estimate to +1% (prev. mid-single digit growth), confirms gross margin increase of 140-160bps, via conference call; sees 400bps headwinds from supply chain disruptions. Nike Executive said "We are seeing indications of more cautious consumer behavior around the world in an uneven macro environment." Shares fell 11.7% after-market.
• Click here for the US Early Morning Note.

GEOPOLITICS

• US Commerce Secretary Raimondo said she doesn't see any change in tone from China regarding Taiwan, via CNBC interview.
• China's top military officer, on Taiwan, said Chinese armed forces will resolutely defend state sovereignty and territorial integrity, according to the Defence Ministry.
• The Chinese Central Military Commission's top military officer had a video call with his US counterpart; China said the US should respect China's sovereignty in the South China Sea, according to Reuters.

CRYPTO

• Bitcoin (-0.4%) back beneath USD 44k whilst Ethereum (+2.6%) continues to climb.

APAC TRADE

• APAC stocks initially traded with a modest positive bias following the gains on Wall Street but with gains capped ahead of the US PCE and the Christmas break, whilst losses in Hong Kong tilted sentiment into the red after China announced online gaming restrictions.
• ASX 200 was flat in tight ranges above 7,500, whilst the breadth of the sectors was also narrow. Energy and IT were the relative outperformers.
• Nikkei 225 saw support from its Banking Sector, but Autos and Retail once again underperformed.
• Hang Seng and Shanghai Comp were choppy and initially held a mild positive bias, whilst Hang Seng was later hit hard after Chinese regulators issued drafts for online game management, with shares of Tencent and NetEase slumping on the announcement and extending losses on return from the lunch break, with Tencent -16% and NetEase -28% at one point.

NOTABLE HEADLINES

• Bank of Communications (601328 CH), Construction Bank (601939 CH), China's Agricultural Bank (601288 CH), Bank of China (601988 CH), and China's ICBC (601398 CH) cuts interest rates on some deposits from Dec 22.
• PBoC injected CNY 40bln through 7-day reverse repos at 1.80% and CNY 291bln via 14-day reverse repos at 1.95%; both rates maintained.
• Samsung Electronics (005930 KS) and other smartphone manufacturers are planning to increase production in 2024, according to Nikkei, "In a sign the industry is finally pulling out of its yearlong slump".
• China regulator issues drafts for online game management, according to Reuters; requires online games to set spending limits, and ban daily login rewards.
• BoJ Oct meeting minutes (two meetings ago): Members agreed on the need to patiently maintain the current easy policy; Several members said must sustain YCC to continue supporting wage growth.
• Tencent (0700 HK) VP says the new draft regulation does not bring about any fundamental changes regarding the business model and operational speed

DATA RECAP

• Japanese CPI, Core Nationwide YY (Nov) 2.5% vs. Exp. 2.5% (Prev. 2.9%); Overall Nationwide 2.8% (Prev. 3.3%)
• Australian Private Sector Credit (Nov) 0.4% (Prev. 0.3%)
• Australian Housing Credit (Nov) 0.4% (Prev. 0.4%)

LATAM

• Brazil Congressional Budget Committee approves main part of 2024 budget, according to Reuters.