Chaos in Europe, Will it be resolved at the EU Summit? ～Key points and schedule for December 14～

At yesterday's ECB Governing Council meeting, the decision was to hold steady as expected. In the staff projections, there were dovish elements such as downward revisions to Europe’s GDP outlook. The press conference also featured expected dovish remarks. However, because all of these were within expectations, the euro’s decline was limited. It may also be that the fact the EU summit was taking place contributed to the limited euro decline.

◎ Today's Highlights

1)EU Summit

In Europe, there are many problems, including the Brexit plan for the United Kingdom. Regarding Brexit, it is stated that no fixes will be accepted. Attention is on statements and actions from Europe and the UK.

Apart from the UK, attention is likely on Italy’s budget and France’s finances. Italy announced a revision of its budget deficit from 2.4% of GDP to 2.04%. Market reaction from Europe will be interesting. Also, France’s fiscal deficit is of interest. France had been considering tax reform to reduce the budget deficit, but protests led to the postponement of tax reform. It will be important to see what response France receives.

Also, not exactly a summit issue, but domestic France concerns make President Macron’s approval rating noteworthy. There is attention on whether a no-confidence motion might be proposed.

2)U.S.-China Relations

Concessions on auto tariffs suggested an improvement in U.S.-China relations, but the Huawei issue has resurfaced. China has detained two Canadian nationals. Will U.S.-China relations move toward improvement or worsen? It is worth watching.

3)Weekend Factors

Today is the practical end of the week’s fifth trading day. Major SQ (special quotes) in the stock market. As the year-end approaches, market participants are thinning out. In such times, movements that are unusual can occur. Please stay cautious.

◎ Today’s Events Schedule

Friday the 14th

European Union (EU) Summit (Brussels, until the 14th)

11:00　CNY　China industrial production
17:00　EUR　Spain HICP (consumer price index)
17:15　EUR　Degoldos ECB Vice President remarks
17:15　EUR　France services & manufacturing PMI
17:30　EUR　Germany services & manufacturing PMI
18:00　EUR　Eurozone services & manufacturing PMI
18:00　EUR　Novotny Austrian Central Bank President remarks
18:30　EURLautenschlager ECB Executive Board member remarks
19:00　EUR　Italy HICP (consumer price index)
20:30　EUR　De Cos Spain Central Bank Governor remarks
20:30　EUR　Visco Italy Central Bank Governor remarks
22:30　USDU.S. Retail Sales
23:45　USD　U.S. services, manufacturing, and composite PMI

Saturday the 15th

03:00　USD　Baker Hughes rig count