ASIA:

Debt problems at a major Chinese property developer have now spilled over into a vital artery of the nation’s industrial engine – the steel sector – and started to ripple through to other critical parts of the world’s second-largest economy. The spreading balance-sheet crisis at real estate firms is a warning for policymakers as a swing in the fortunes of the steel industry would have significant repercussions for China’s economy, with cement, glass, and household appliances all vulnerable to demand drops. Already, steel prices are down from their record highs seen earlier this year due to easing demand from construction activities, which account for over half of the metal’s consumption, while steelmakers’ share prices have also been hurt. Cement production, another construction material, was down around 16% for September-November year-on-year, and was lower versus the same period between 2017 and 2019. Demand for earth excavators has also dropped off in recent months.

India’s antitrust agency suspended Amazon.com’s 2019 deal with Future Group on Friday, potentially denting the U.S. e-commerce giant’s attempts to block the sale of Future’s retail assets to an Indian market leader. The regulator ruled that the U.S. company had suppressed information while seeking regulatory approval on an investment into Indian retailer Future Group two years ago. The CCI’s order said Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 607.87 points or -2.13% to 27,937.81

• Shanghai decreased 38.76 or -1.07% to 3,593.60

• Hang Seng decreased 447.77 points or -1.93% to 22,744.86

• ASX 200 decreased 11.80 points or -0.16 to 7,292.20

• Kospi decreased 54.73 points or -1.81% to 2,963.00

• SENSEX decreased 1,189.73 points or -2.09% to 55,822.01

• Nifty50 decreased 371.00 points or -2.18% to 16,614.20

The major Asian currency markets had a negative day today:

• AUDUSD decreased 0.00068 -0.10 to 0.71161

• NZDUSD decreased 0.00218 -0.32 to 0.67152

• USDJPY decreased 0.2 or -0.17 to 113.51

• USDCNY deceased 0.00573 or -0.09% to 6.38227

Precious Metals:

• Gold decreased 3.83 USD/t oz. or -0.21% to 1,793.85

• Silver decreased 0.038 USD/t. oz or -0.17% to 22.309

Some economic news from last night:

New Zealand:

Trade Balance (MoM) (Nov) increased from -1,302M to -864M

Trade Balance (YoY) (Nov) decreased from -4,900M to -6,040M

EUROPE/EMEA:

The Bank of England is carefully assessing the risks posed by the omicron Covid-19 variant in light of its surprise decision to raise interest rates, its Chief Economist Huw Pill told CNBC on Friday. Pill — who also serves as the Bank’s executive director for monetary analysis and research — said the Bank now needs to proceed cautiously and assess whether omicron is going to lead to some reversal of the dynamics in the British economy over the past six months and beyond, particularly the tightening of the labor market. The U.K.’s central bank raised its main interest rate to 0.25% from its historic low of 0.1% in the face of persistent inflation pressures and a tightening labor market, defying market expectations for it to wait until the new year before kickstarting its hiking cycle.

UK consumer price inflation surged to 5.1% in November, its highest level in more than a decade, according to the Office for National Statistics. Prices are outstripping wage hikes and presenting a dramatic challenge to the Bank of England as it grapples with a stalling economy and a new surge of coronavirus infections. November’s CPI reading was much stronger than the 4.7% economists had expected and the highest since September 2011. Record gasoline prices were a major contributor to the sharp rise in inflation. But retail prices of a broad range of goods also surged, including clothing, food, used cars, alcohol and tobacco, as well as books, games and toys. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that inflation should remain near November’s rate over the next four months, before soaring to 6% in April and then falling sharply.

The major European stock markets had a negative day:

• CAC 40 decreased 56.53 points or -0.82% to 6,870.10

• FTSE 100 decreased 71.89 points or -0.99% to 7,198.03

• DAX 30 decreased 292.02 points or -1.88% to 15,239.67

The major European currency markets had a mixed day today:

• EURUSD increased 0.00547 or 0.49% to 1.12908

• GBPUSD decreased 0.00124 or -0.09% to 1.32216

• USDCHF decreased 0.00363 or -0.39% to 0.92040

US/AMERICAS:

Joe Manchin has come out against the Build Back Better funding bill. “I have always said, ‘If I can’t go back home and explain it, I can’t vote for it.’ Despite my best efforts, I cannot explain the sweeping Build Back Better Act in West Virginia and I cannot vote to move forward on this mammoth piece of legislation,” Manchin stated. Manchin broke with the Democratic Party after claiming the Build Back Better agenda will cost “more than double what the bill’s ardent supports have claimed.” The bill is already slated to cost upward of $4.5 trillion.

Super Saturday shopping, which marks the last Saturday to shop before Christmas, declined 26.3% this year compared to 2019. However, YoY retail shopping increased 19.4%, showing some improvement to pre-pandemic levels. The National Retail Federation had predicted an 11.5% YoY increase, contributing to US GDP.

Quebec announced plans to lockdown once again this Monday. Gyms, bars, schools, and other establishments will close at until at least January 10, but Quebec Health Minister Christian Dube said the lockdown may be extended. The “lockdown” will be slightly less restrictive than the last one, with restaurants and salons operating at 50% capacity during limited hours.

US Market Closings:

• Dow declined 433.28 points or -1.23% to 34,932.16
• S&P 500 declined 52.62 points or 1.14% to 4,568.02
• Nasdaq declined 188.74 points or -1.24% to 14,980.94
• Russell 2000 declined 34.06 points or -1.57% to 2,139.87

Canada Market Closings:

• TSX Composite declined 200.97 points or -0.97% to 20,538.22
• TSX 60 declined 11.05 points or -0.88% to 1,248.34

Brazil Market Closing:

• Bovespa declined 2,180.78 points or -2.03% to 105,019.78

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 3.64 USD/BBL or -5.14% to 67.2200

• Brent decreased 3.24 USD/BBL or -4.41% to 70.2800

• Natural gas increased 0.098 USD/MMBtu or 2.66% to 3.7880

• Gasoline decreased 0.0641 USD/GAL or -3.02% to 2.0576

• Heating oil decreased 0.0784 USD/GAL or -3.53% to 2.1415

The above data was collected around 12:30 EST on Monday

• Top commodity gainers: Natural Gas (2.66%) and Lithium (1.29%), Orange Juice (1.90%), Rice (1.17%)

• Top commodity losers: Lumber (-4.13%), Oat (-5.27%), Brent (-4.41%), and Crude Oil (-5.14%)

The above data was collected around 12:45 EST on Monday.

BONDS:

Japan 0.045%(+0.1bp), US 2’s 0.6216% (-0.02%), US 10’s 1.4021%(-0.51bps); US 30’s 1.8348% (+0.03%), Bunds -0.361% (+1.4bp), France -0.01% (+1.4bp), Italy 0.946% (+3.8bp), Turkey 21.85% (+18bp), Greece 1.244% (+3.2bp), Portugal 0.278% (+1.5bp); Spain 0.372% (+2.39bp) and UK Gilts 0.782% (+1.8bp).