Huawei CFO Arrest Shock Impact? ~ December 7 Highlights and Schedule ~

Headline just before yesterday's Tokyo market open! It is reported that Huawei's Chief Financial Officer has been arrested.

Huawei and ZTE are believed to have been arrested as part of U.S. spy-related investigations.

The arrest was made in Canada; the United States has requested extradition. The charges this time relate to illegal exports to Iran under sanctions.

This matter seems to have significant implications, potentially more as a spark for deterioration in U.S.-China relations rather than a simple individual arrest.

◎ Today’s Focus

1)U.S.-China relations and risk-off

With the headlines of Huawei's CEO arrest, global risk-off is underway. U.S.-China relations have banned transactions of two tech companies on espionage grounds. Since the United States is involving its allies, the impact is broad.

In Europe, there are many risks as well: Italy’s budget proposal, French fuel tax protests, and Germany’s ruling party leadership election.

In the UK, Brexit negotiation discussions continue. A TV debate is scheduled for the weekend.

Additionally, there are many risk-propagating factors; how long the risk-off may last is a key point of attention.

Risk-off in progress! Could Huawei director’s arrest worsen U.S.-China relations!?

2)Brexit negotiations

Brexit negotiations continue, with various details, progress, and forecasts circulating. A TV debate is planned for the weekend. Polls are also emerging, causing the pound to swing. Today is a weekend, so be mindful at market closes and FIX times, and if carrying positions, ensure proper funding and risk management.

The pound's path this week could be a turning point! A special urgent video is available.

3)Italy budget

While Brexit and Huawei dominate, Italy’s budget is not finished. Negotiations between Europe and Italy continue. In recent days, budget amendments have been proposed, and reports on the Italian finance minister’s tenure have appeared. Attention should be paid to the budget’s direction.

4)German ruling party leadership election

Germany’s ruling party leadership election is underway as Chancellor Merkel’s term ends. This year’s election saw Merkel suffer a heavy defeat; perhaps due to that, she is not running in this leadership contest. This has drawn attention to who will win the new party leader—someone supportive of Merkel or someone critical of Merkel?

Voting takes place today; this is worth watching.

However, this is a leadership election, not a chancellorship election.

In Japan, party leader equals prime minister, but in Germany, the party leader’s term and the chancellor’s term are separate. Therefore, even if a new party leader is elected, Merkel may continue as chancellor. This is an important distinction.

◎ Today’s Event Schedule

December 07 (Friday)

German CDU Leadership Election

08:30 USD Williams, President of the Federal Reserve Bank of New York speaks
08:45 USD Powell, Fed Chair speaks
17:30 GBP Halifax House Price Index
17:30 EUR Lagarde ECB Council member speaks
19:00 EUR Eurozone GDP
22:30 USD NFP Employment Report・ Unemployment rate・ Average hourly earnings
22:30 CAD Employment change・ Unemployment rate

December 08 (Saturday)

02:00 USD BOC Fed Governor Brainard speaks
03:00 USD Baker Hughes Rig Count
11:00 CNY China Trade Balance

December 09 (Sunday)

UK and Brexit TV Debate