• Both the House and Senate passed the stop-gap measure which would avert a shutdown and keep the government funded tspanough to January 19^th
• Unionist Citizens (anti-independence) party won the most seats in the Catalan Parliamentary Elections, although separatists groups collectively still retained a majority in Parliament and took 70 out of the 135-seat Parliament
• Looking ahead, highlights include UK GDP, US Durables, PCE, Personal Income, Uni. Of Michigan (F)

ASIA

Asia equity markets traded with a positive tone after the Cspanistmas cheer returned on Wall St. where most majors finished with gains amid outperformance across energy and financials. Furthermore, Congress also added to the glee after-hours as both the House and Senate passed the stop-gap measure which would avert a shutdown and keep the government funded tspanough to January 19th. ASX 200 (+0.2%) was higher as energy stocks tracked the outperformance seen in their US counterparts, while Nikkei 225 (+0.1%) was tepid as flows into the JPY restricted upside for equities. Elsewhere, Hang Seng (+0.4%) was positive and Shanghai Comp. (+0.1%) traded somewhat indecisive after the PBoC refrained from open market operations, which still resulted to a net liquidity injection of CNY 200bln for the week. Finally, 10yr JGBs were sideways amid a lack of drivers and an indecisive risk tone in Japan, while an uneventful enhanced liquidity auction for 10yr-30yr JGBs also kept price action tame.

PBoC refrained from open markets operations today, for a weekly net injection of CNY 200bln vs. last week's CNY 80bln net injection. (Newswires)

PBoC set CNY mid-point at 6.5821 (Prev. 6.5795)

UK/EU

UK Lloyds Business Barometer (Dec) 28 (Prev. 24). (Newswires)

UK PM May is said to be preparing a cabinet reshuffle following Damian Green’s departure. (Newswires)

German Foreign Affairs Minister Gabriel is said to warn of a minority government. (Newswires)

Unionist Citizens (anti-independence) party won the most seats in the Catalan Parliamentary Elections, although separatists groups collectively still retained a majority in Parliament and took 70 out of the 135-seat Parliament. (Newswires)

FX

EUR/USD underperformed as the currency took a two-fold blow from the Catalan elections, where the unionist Citizens party won the most seats but separatists groups still retained a majority in Parliament, as well as comments from German Foreign Affairs Minister Gabriel who warned of a minority government in Germany. Elsewhere, commodity linked currencies were firmer after CAD remained supported by yesterday’s stronger than expected Retail Sales and CPI, while AUD/USD also extended on its reclaim of the 0.7700 handle to the upside.

COMMODITIES

Commodities were quiet overnight in which WTI crude slightly pared some of the prior day’s gains but still held above the USD 58/bbl level. Elsewhere, gold was also traded sideways and inline with a flat greenback, while copper continued its recent pullback from near 2-month highs.

Russia energy minister Novak said supply and demand balance in oil markets will likely be reached in 2018 and that detailed talks on oil cut deal will take place as soon as signs emerge of a market rebalancing. However, he also commented that there is an option for extending supply cut deal beyond 2018 if markets require further rebalancing. (Newswires)

GEOPOLITICAL

South Korean Minister announced an openness to discussions with North Korea without preconditions. (Newswires)

US

The Treasury curve was mixed on Thursday. However, 2s30s narrowed by c. 6bps (wiping out yesterday’s steepening), 2s10s were flatter by c. 4bps, 5s30s were c. 5bps flatter. Yields were little changed after the batch of US economic data; the final GDP data for Q3 saw small downward revisions to most of the components, though analysts were still confident that this would keep the Fed on track to continue hiking rates next year. Elsewhere on the data docket, FHFA house prices rose on both the M/M and Y/Y measures. The US Treasury sold $14bln of 5-year TIPS, stopping tspanough the screens by over 3bps, with demand firming versus the previous auction. US 10-Year T-Note Future settled 2 ticks higher at 123-16+.

US House voted 231 vs.188 and Senate voted 66 vs. 32 to pass the stop-gap funding bill to keep government funded tspanough to January 19^th. (Newswires)

US Federal Judge dismissed lawsuit against President Trump regarding foreign payments to Trump-owned businesses. (Newswires)

US President Trump's Deputy Chief of Staff Rick Dearborn and White House Economic Advisor Katz are said to resign, according to reports. (Newswires/Washington Post)

Larry Lindsey is being considered for role of Fed Vice Chair and he is also said to be interested in exploring the job, according to CNBC source reports. (Newswires)