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More Misery for May - EMEA Brief 14 Dec

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MichaelaIG

  • European Commission President Jean-Claude Juncker stumped Theresa May's effort to renegotiate on a key Brexit withdrawal point, namely the Irish Backstop.
  • China's reported industrial output and retail sales growth missed expectations. Industrial output growing by only 5.4% in November the slowest rate of increase in almost three years. 
  • Asian Stocks fell as China's economy shows weakening. Shares in Hong Kong and Japan led declines, Japan Topix index sliding 1.5% and Shanghai Composite falling 1.5%
  • Apple to push software updates in attempt to resolve potential court ban of some iPhone models in China resulting from alleged Qualcomm patent infringements. 
  • COP24 UN Climate talks in Poland come to an end today but Former Maldives President Mohamed Nasheed warns there may be "hell to pay" if counties fail in taking significant steps in key climate issue agreements. 
  • Bitcoin continues to decline as it approaches September 2017 level of $3,000. 
  • Europe Car sales fell by 8.1% last month the third monthly decline in a row.   

Asian overnight: Asian markets have failed to sustain the recent uptrend, with sharp losses overnight coming amid slowing Chinese data and a return of fears over Theresa May’s Brexit programme. Data-wise, the Japanese and Chinese economies have been in focus. The Japanese Tankan non-manufacturing index was the big outperformer, rising back to 24 after last month’s fall to 21. Chinese industrial production and retail sales both underperformed, although the blow was softened by a fall in the unemployment rate.

UK, US and Europe: Looking ahead, a host of eurozone PMI surveys will keep the European session interesting as they are released throughout the morning. Also keep an eye out for the US retail sales figures before we return to the PMI focus for the US manufacturing and services PMI readings to close out the day.

After rebuffing Theresa May's attempts to renegotiate or outline the Irish Backstop EU Leaders step up No-Deal Brexit plans. It appears once again that the EU is taking a hard stance in these divorce talks. This week has seen May experience highs and lows as Prime Minister. On Monday May was forced to cancel the parliamentary vote on the draft Brexit deal amid fears the Irish Backstop controversy would result in a no vote. Wednesday saw May survive a vote of no confidence but is this a small victory in the face of today's news? 

Economic calendar - key events and forecast (times in GMT)

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8.15am – 9am – French, German, eurozone PMIs (December, flash): German mfg PMI to rise to 52.3 from 51.8. Markets to watch: eurozone indices, EUR crosses

1.30pm – US retail sales (November): forecast to rise 0.2% MoM from 0.8%. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Balfour Beatty expects performance to be above expectations after the sale of its infrastructure investments unit. The year-end order book is expected to be £12 billion, above last year’s £11.4 billion. 
  • Reach said that performance for 2018 would be marginally ahead of forecasts, after Q4 revenue rose 23% following the acquisition of Express & Star. 
  • Costco reported disappointing quarterly earnings and revenue resulting in shares fall of 3%.  
  • Starbucks saw a 3% fall after hours, following the announcement of delivery service partnership with Uber Eats.

Lundbeck upgraded to overweight at Barclays
Meggitt upgraded to buy at Citi

Equinor Downgraded to Sell at Goldman

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