In this morning market briefing, the host opens with a light‑hearted poll on the best Christmas movie before diving into a concise overview of global equity and currency markets. US indices closed lower (S&P and Dow down 0.9%, Nasdaq down 1.4%) and Asian markets continued a three‑day decline, pressured by Chinese property concerns (Shimao Group) and a regulatory fine on Weibo. The dollar remains strong, keeping EUR/USD near recent lows. Upcoming central‑bank events (Fed, BoE, ECB) are highlighted as key drivers of short‑term currency divergence, with expectations of a firmer dollar and a weaker euro. The briefing then shifts to the UK’s Omicron surge—accounting for ~20% of cases and an estimated 200,000 daily infections—alongside a political showdown over vaccine passports, where 78 Tory MPs plan to vote against the government, though the measures are likely to pass with Labour support. US fiscal policy is touched on, noting the White House’s push to salvage the Build‑Back‑Better bill and Senator Joe Manchin’s inflation‑focused reservations. A corporate update covers Elon Musk’s recent sale of ~900,000 Tesla shares to cover tax liabilities from exercised options. UK labour data (4.2% unemployment, 4.3% average earnings ex‑bonus) showed little market reaction. The day’s economic calendar is quiet, featuring eurozone industrial production and US PPI releases, with no major central‑bank speakers ahead of the Fed’s decision. The host closes by reiterating the Christmas‑movie poll.
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Alright, very good morning. Tuesday the 14th of December, and before we begin the briefing, I need your help to sort out a debate in the Chung household last night, which was what is the best Christmas movie? So in Twitter, you— I've done a poll last night, but you can only do 4 options, I'm afraid. So although there were good shouts for things like Scrooged and Elf and Love Actually and others, I've gone with Die Hard, Home Alone, The Miracle on 34th Street, or It's a Wonderful Life. And I need you to, to sort this out once and for all. What's the best Christmas movie out of those 4? Home Alone out as the clear runner, followed by Die Hard at the moment. So drop me a comment on the video. Let me know what your favorite is so we can resolve this matter and move on. But talking about markets this morning and what have we got going on? A little bit of dollar strength as we go into the European Open. However, things are pretty quiet. There's nothing really too major for me to mention of groundbreaking news that's developed in the overnight session. We had a slightly lower close on Wall Street. We finished down about 0.9% in the S&P and the Dow. The Nasdaq, a little bit of an underperformer, down 1.4%. The Asia-Pac indices kind of followed suit. They fell for a third straight session. Chinese property and technology stocks in a little bit of focus, and they generally weighed in overnight Asia-Pac sentiment, the first being sparked by a company called Shimao Group Holdings. And on the tech side, Weibo shares were down about 9% after receiving a regulatory fine as well. But as we go into the European open, that, that kind of Asia-Pac sentiment has just been brushed aside a little bit. Stock index futures just popping up a touch as we go into this morning. And with the dollar strength, worth keeping an eye on the likes of the EURUSD on some of the lower bound levels that we were trading in yesterday's session. This— the calendar for today is relatively quiet overall. The quiet news cycle as well is largely a byproduct of the fact that you've got the big central bank meetings happening. The Fed, of course, tomorrow, and then you've got the Bank of England, ECB on Thursday. And for one, wouldn't be too much of a surprise to see a kind of a renewed divergence play short term in the currency space, more favorable to the dynamics of a firmer dollar against a generally weaker euro. Although the ECB on Thursday will talk about ending their PEPP in March and then the transitional effect of any alterations they might do to the APP, the idea is that the Fed are ready to go in terms of speeding up tapering irrespective of the still yet to really emerge stateside Omicron virus, and that could well exert some further directional downside bias. And as you can see here in the euro, we generally have been trending lower really since the end of last week. Um, for the moment, would very much expect that to continue really. And if we break through yesterday's low, you've got the S1 on the downside at 1.1284 in the futures, and then the low from, um, kind of latter part of last week that was seen down towards the S2 level of 1.12 56. So likewise in cable, we did trend lower in cable overnight. There was obviously some news, further updates going on the UK Omicron front. So just get you up to speed of what's happening there. Obviously yesterday we had the UK Health Secretary Sajid Javid told Parliament that new coronavirus strain now accounts for around 20% of all confirmed COVID-19 cases in England, while the estimated number of daily infections is said to be around 200,000 according to an estimate from the UK Health security agency, and that would be by far and above the highest that we've ever seen. The other side that you're likely to hear today is that according to The Spectator magazine, so very on the pulse political magazine, said that 78 Tory MPs have said they'll vote against the government on the use of so-called vaccine passports. This was reported last night. That's just shy of the working majority that Boris has of around 80 in the House of Commons. And still though, the measures are almost certain to pass, and the reason for that is the opposition Labour Party has said they'll still vote for them. The question is whether more will be needed, especially if the booster program falls short of target, because if they're already bulking at the use of the vaccine passport at the moment, if we start to see more intensified restrictions, it's going to become increasingly problematic for Boris to, to manage And of course, comes in the context of all the other political kind of issues he's facing at the moment— sleaze scandals, inappropriate Christmas celebrations, so on and so forth. So in the currency market, again, cable's found a bit of a floor and bounced around the low that we had on Friday, which was also around the S1 in the futures market. However, we'll be keeping an eye on that at the moment, particularly in the context if we continue to see a firmer dollar. And some of the more negative developments in Omicron start to emerge in terms of how quickly, um, this is picking up. And the idea being here is that the faster that it does, then the more likely it is we start to adopt Plan C type measures and, and a more progressive nature of restrictions. And that's going to have more economic impact and thus then drive a divergence between the dollar dynamic of strength against a potentially reevaluation of pushing out rate hikes of the Bank of England and the economic impacts and effects of what tighter restrictions would result in for the UK. Otherwise, quick look elsewhere, just coming back to the news. We have the White House— the latest here on the Build Back Better bill is that the White House is rushing to try and save it. The Democratic senator from West Virginia and Biden's kind of main person he needs to get on board is Joe Manchin. And he told reporters on Monday that he had a good conversation with the president and remained engaged in negotiations. And a lot of this has come as for months he's raised concerns about the size and scope of the legislation and has recently tied his objections to rising inflation. That's very much what the Republicans' view is at the moment. Why would you want to do such magnitude stimulus when inflation is already tracking at a near 40-year high, of course, around 6.8% year on year, as we saw last week. The other thing then is just ongoing. Elon Musk accelerated his disposal of Tesla shares as per that Twitter poll a few weeks ago. So he's offloaded another just over 900,000 shares for around $900 million to cover taxes on the exercise of 2.1 million options. So he's got a few more million to go before he's exercised the full amount and the 10% has been fulfilled. One thing I did see was that Musk exercised options to buy 2.134 million shares of Tesla. The strike price was $624 a share. Wouldn't you love to have a couple of those, given in mind that Tesla shares obviously are trading around $1,000 at the moment? So he was given that obviously back in 2012 when that was a fair price for the shares back then in 2012. So yeah, credit, credit to him in that, in in that sense. Otherwise, as far as the calendar is concerned, it is pretty quiet overall. And we've had some UK data come out this morning. So let me just get you up to speed and get the latest numbers for those. Just bear with me one, one second. So the UK ILO unemployment rate, 4.2%, was in line with expectations. The average earnings ex-bonus, 4.3%. It's a touch firmer than expected 4%, but reaction in in sterling-dollar has been insignificant. So moving further on towards the rest of the, the session, what do we have? Very quiet really. You've got the eurozone industrial production figures coming out at 10:00. You've got US PPI numbers coming out at 1:30, and that is pretty much it. There's no major central bank speakers of course because they're all in the kind of blackout period— well, that is for the Fed at least— going into tomorrow night's decision. Uh, and that's pretty much it. So don't want to spend any more longer than necessary to talk. Um, again, drop me a comment. Let's put this argument to bed. Best Christmas film in your opinion? Let me know. All right, with that, take care guys, have a good day, and I'll catch you tomorrow.
