Asian stocks grinding a touch higher, with KOSPI the star of the show, up 1.3%.
The OPEC+ deal had the desired effect, oil prices pushing higher overnight.
U.S. futures point to slight gains for the major indices.
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Stimulus hopes are back, with the bipartisan $908 billion relief bill drawing attention.
Biden backs it, but he's going to ask for more later.
The total spend is certainly closer to the amount Republicans said they would back pre-election.
Goldman Sachs expect a deal to be agreed this month.
The games continue.
Macron is playing to the home crowd.
Brexit talks heading for weekend showdown between Boris Johnson and Emmanuel Macron
- Downing Street sources unsure as to whether the French president might 'torpedo' a deal at the last minute over fishing rights in UK waters
He won't, but he needs to look like he's tried...
The two leaders are at odds over the right to fish in British waters with senior Downing Street sources unsure as to whether the French president might "torpedo" the proposed Brexit deal at the last possible moment.
They fear he may be tempted to scupper a compromise fishing deal ahead of the French presidential election in 2022.
There had been growing hopes that a deal was about to be agreed but the British delegation was taken aback after the EU made a series of “destabilising” last-minute new demands on fishing and other issues.
“Our hopes of any movement on Friday are pretty much gone now,” said one UK source, with Monday now set as the unofficial deadline for a deal by Downing Street.
Sources on the UK side branded the intervention “unacceptable”. They said Mr Macron’s officials had been “lobbying hard” among member state capitals to agree to fresh demands on fishing, state subsidies and non-regression clauses.
Government sources said they “genuinely did not know” if Mr Macron was serious or simply grandstanding to get the best possible deal for France in the Brexit endgame.
Mr Barnier was “millimetres away” from the EU’s red lines on fishing and the level playing field commitments, a senior EU diplomat said.
“Leaders always have the possibility to reject the outcome,” the diplomat said, ”that certainly is an option.”
Both sides believe that a deal will not happen without a meeting between Mr Johnson and Ms von der Leyen first.
If that is successful, Mr Johnson will move to secure Mr Macron’s support ahead of Thursday’s summit. If EU leaders give their blessing to the deal, it will pave the way for MEPs to ratify it before the end of the transition period.
Another key issue for next Thursday' council meeting is the Poland/Hungary standoff.
Brussels warns Poland and Hungary they cannot stop EU recovery fund
The EU budget commissioner has warned Poland and Hungary that Brussels is ready to cut them out of the recovery fund and proceed with the project without them if they continue to block Europe’s upcoming budget.
Johannes Hahn said Warsaw and Budapest “cannot stop us from helping our citizens” as he confirmed that the commission’s lawyers had identified possible ways of circumventing the two capitals’ objections to the EU’s spending plans.
OPEC, Allies Agree to Increase Output by 500,000 Barrels a Day in January
OPEC and a group of Russia-led oil producers agreed to increase their collective output by 500,000 barrels a day next month, signaling the world’s biggest producers are betting the worst of a pandemic-inspired shock to demand is behind them.
By agreeing to ramp up output again, members of the 13-strong Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and a group of 10 other big producing nations led by Russia, are effectively betting the price recovery will continue. The wider group calls itself OPEC-plus.
“They are looking at a post-vaccine world where demand grows,” said Kathleen Kelley, the head of New York advisory firm Queen Anne’s Gate Capital. The group has concluded the worst is over, she said.
Underscoring lingering uncertainty, though, the two sides agreed to a small increase—amounting to about a half percent of pre-pandemic global demand—during an online meeting Thursday. They also hedged their bet, agreeing to a monthly reassessment to decide whether to open the taps wider, stay put or rein in production once again. The group intends to gradually increase production by two million barrels a day at some stage, said Alexander Novak, Russia’s deputy prime minister, at a virtual press conference after the meeting.
While any boost to production would add more global supply—pressuring prices—an agreement was seen by oil market watchers as bullish for crude by showing cohesion among the producers group.
Oil has rallied since the deal was announced.
Nomura Quant Warns Trend Followers May Ditch All Treasury Longs
Quant investors who typically ride the momentum of markets around the world are ditching Treasuries, raising the risk of another spike in yields on the world’s benchmark bond.
After liquidating 65% of long Treasury bets since August, systematic players known as Commodity Trading Advisors will dump bullish exposures “en masse” if the 10-year yield climbs above 1.02%, according to Nomura Holdings.
“CTAs are looking increasingly likely to have to exit the entirety of their aggregate net long,” Masanari Takada, a quantitative strategist at the bank wrote in a note Thursday. “The 10yr UST yield could jump up to around 1.20% if CTAs were to sell their way down to a flat position.”
“Whatever the underlying mechanisms, it does look as though some risk-hungry U.S. individual investors and trend-following CTAs (among others) are increasingly engaging in what looks like a reflation trade,” Takada said.
Would the Fed would allow rates to move that far so early in the recovery?
Lots going on with China.
Cnooc Among Four China Firms Cited by U.S. for Military Ties
The Pentagon added four more Chinese companies to a list of firms it says are owned or controlled by China’s military, exposing them to increased scrutiny and potential sanctions by the U.S.
The four companies added to the list posted online by the Pentagon Thursday are China National Offshore Oil Corp., Semiconductor Manufacturing International Corp., China Construction Technology Co. and China International Engineering Consulting Corp.
The move comes amid a continuing erosion of U.S.-China ties during the U.S. presidential transition, as President Donald Trump ratchets up actions targeting Beijing over issues from its tightening control over Hong Kong and treatment of Muslim minorities to exports of 5G technology.
Cnooc is China’s third-biggest oil company and the nation’s main deepwater explorer. It also owns U.S. oil and gas fields, partners with companies like Exxon Mobil Corp. on international projects, and uses American technology and equipment. Shares of its Hong Kong-listed unit slipped as much as 2.5%, taking their losses for the week to roughly 20%.
SMIC, China’s largest chipmaker, fell 2.3% in Hong Kong before the shares were suspended from trading pending an announcement of inside information. The firm is evaluating the impact from its inclusion into the U.S. list, it said earlier in a statement to the Shanghai Stock Exchange. Its stock sank as much as 4.5% on the mainland.
U.S. in Talks With Huawei Finance Chief Meng Wanzhou About Resolving Criminal Charges
The U.S. Justice Department is discussing a deal with Huawei Technologies Co. finance chief Meng Wanzhou that would allow her to return home to China from Canada, in exchange for admitting wrongdoing in a criminal case that has strained Beijing’s relations with the U.S. and Canada, people familiar with the matter said.
Lawyers for Ms. Meng, who faces wire and bank fraud charges related to alleged violations of U.S. sanctions on Iran on Huawei’s behalf, have spoken to Justice Department officials in recent weeks about the possibility of reaching a “deferred prosecution agreement,” the people said.
Under such an agreement, which prosecutors usually use with companies but rarely grant to individuals, Ms. Meng would be required to admit to some of the allegations against her but prosecutors would agree to potentially defer and later drop the charges if she cooperated, the people said.
An agreement wouldn’t only allow her to return to China, it would also remove an issue that has caused Beijing’s relations with Ottawa to plummet and has added to a downward spiral in ties with Washington. A deal could also pave the way for China to return two Canadian men who were detained there soon after Ms. Meng’s arrest, a factor that is in part motivating the discussions, the people said.
Germany blocks Chinese takeover of satellite tech company: report
Chancellor Angela Merkel's government has blocked a Chinese defence company from buying up a German company specialising in satellite and radio technologies including 5G over national security risks, local media reported Thursday.
Based in North Rhine-Westphalia state, the company called IMST is an acquisition target of Addsino, a subsidiary of state-owned defence group China Aerospace Science and Industry Corporation which manufactures military communication systems, German news agency DPA reported, citing a government document.
The Economy Ministry confirmed that Dr Merkel's cabinet agreed on Wednesday to block an acquisition by an foreign player, but would not name the companies involved.
"The criterion for examination is always the threat posed by a concrete acquisition to the public order or security of Germany," the ministry told AFP in a statement.
China Is National Security Threat No. 1
By John Ratcliffe, U.S. Director of National Intelligence.
The People’s Republic of China poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since World War II.
The intelligence is clear: Beijing intends to dominate the U.S. and the rest of the planet economically, militarily and technologically. Many of China’s major public initiatives and prominent companies offer only a layer of camouflage to the activities of the Chinese Communist Party.
I call its approach of economic espionage “rob, replicate and replace.” China robs U.S. companies of their intellectual property, replicates the technology, and then replaces the U.S. firms in the global marketplace.
Beijing is preparing for an open-ended period of confrontation with the U.S. Washington should also be prepared. Leaders must work across partisan divides to understand the threat, speak about it openly, and take action to address it.
This is our once-in-a-generation challenge. Americans have always risen to the moment, from defeating the scourge of fascism to bringing down the Iron Curtain. This generation will be judged by its response to China’s effort to reshape the world in its own image and replace America as the dominant superpower. The intelligence is clear. Our response must be as well.
Looking ahead, today is all about employment.
NFP's are expected to show that ~469k jobs were added back into the workforce in November, and the unemployment rate to fall 0.1% to 6.8%.
This would be the slowest employment gain in months amid concerns that the labour market recovery is stalling.
Will markets care?
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