• European stocks see a mixed picture following a lacklustre open, with no risk profile to be derived from sectors
• EU is reportedly seeking a new alliance with US to bury the tensions and to meet the new challenges related to China
• UK could grant approval to Pfizer and BioNTech's vaccine within days; EMA is set to consider approval of Pfizer/BioNTech vaccine next month and will also consider Moderna’s vaccine
• European Commission is reportedly leaning on EU Chief Brexit Negotiator Barnier to get a deal, although Downing Street warned that a no-deal Brexit is underpriced
• OPEC+ talks on Sunday failed to reach an agreement on an output cut extension
• Looking ahead, highlights include national German CPI, US Chicago PMI, OPEC meeting (13:00GMT/08:00EST), BoE's Tenreyro, Fed’s Barkin

CORONAVIRUS UPDATE

US COVID-19 total cases rose to around 13.14mln from a previous of around 13.00mln and total death rose to around 265.2k from around 264.0k. (Newswires)

New York City Mayor De Blasio announced that the city’s public schools will begin to resume in-person classes from December 7th. (Newswires)

Canada extended its travel restriction for arrivals from US until at least December 21st, while it will extend mandatory isolation order and temporary travel restrictions from other countries aside from US to January 21st. (Newswires)

UK COVID-19 cases +12,155 (prev. +15,871) and deaths +215 (prev. +479), while Italy cases +20,648 (prev. +26,323) and deaths +541 (prev. +686). (Newswires)

UK PM Johnson said the tiered virus system would have a sunset of February 3rd in which he promised to give parliament another chance to vote on the system in early February to avoid a mass Tory rebellion. It was separately reported that UK PM Johnson appointed Junior Business Minister Nadhim Zahawi as the minister in charge of vaccine distribution. (Newswires/Telegraph/Sky News)

UK is set to become the first western country to approve a COVID-19 vaccine in which the regulator could grant approval to Pfizer and BioNTech's vaccine within days, while reports added that deliveries would start within hours of the approval and first injections could begin from December 7th. (FT) European Medicines Agency is set to consider approval of Pfizer/BioNTech vaccine next month and will also consider Moderna’s vaccine. (FT)

Moderna (MRNA) announced amendment of current supply agreement with the UK government for an additional 2mln doses of its COVID-19 vaccine in which the UK government has now secured 7mln doses of MRNA-1273. (Newswires)

German Economy Minister Altmaier stated that the partial shutdown could be extended until early spring 2021. There were separate reports that Italy was reported to loosen COVID restrictions in Lombardy, Piedmont, Calabria, Milan, Turin from Sunday, while Ireland PM Martin unveiled a plan to lift the lockdown and stated that they are encouraged by falling virus numbers. (Newswires)

ASIA

Asian equity markets began the week mixed amid tentativeness heading into month-end and this week’s key risk events, with the region also digesting a slew of data including better than expected Chinese Manufacturing and Non-Manufacturing PMI data. ASX 200 (-1.3%) underperformed as gold miners led the broad retreat seen across sectors after the recent slump in the precious metal and with Treasury Wine Estates hampered again by China’s anti-dumping measures on Australian wine, while Nikkei 225 (-0.8%) was initially kept afloat after Industrial Production data topped estimates but later succumbed to the headwinds from a firmer currency. Hang Seng (-2.1%) and Shanghai Comp. (-0.5%) initially diverged with the mainland bourse outperforming after Chinese official Manufacturing PMI printed its highest reading in more than 3 years and amid PBoC efforts in which it injected funds through Reverse Repo operations and the Medium-term Lending Facility. Conversely, the mood in Hong Kong was subdued with CNOOC and other blue-chip oil peers pressured after reports US President Trump is to add CNOOC and chipmaker SMIC to the defense blacklist, while Alibaba was also among the laggards amid suggestions the Ant Financial IPO faces narrow chances of going through next year. Finally, 10yr JGBs were lacklustre and attempted a breakdown of the psychological 152.00 level with price action failing to take impetus from the bull-flattening last Friday in USTs and the BoJ presence in the market today, while the central bank also recently announced its bond purchase intentions for December whereby it maintained the value amounts but reduced the frequency of buying in 1-3yr and 3-5yr maturities to 5 times from 6 times a month.

PBoC injected CNY 150bln via 7-day reverse repos at a rate of 2.20% for a net daily injection of CNY 110bln and announced a CNY 200bln 1-year MLF operation at a rate of 2.95%, while it will also conduct an MLF operation on December 15th with the amount to be determined. (Newswires)PBoC set USD/CNY mid-point at 6.5782 vs. Exp. 6.5787 (Prev. 6.5755)

• Chinese NBS Manufacturing PMI (Nov) 52.1 vs. Exp. 51.5 (Prev. 51.4); highest since September 2017
• Chinese Non-Manufacturing PMI (Nov) 56.4 vs. Exp. 56.0 (Prev. 56.2)
• Chinese Composite PMI (Nov) 55.7 (Prev. 55.3)

US President Trump is to add SMIC (81 HK) and CNOOC (883 HK) to the defense blacklist according to sources, while there were reports that US House is to vote on bill on Wednesday which could threaten future of Chinese firms on US stock exchange. (Newswires/SCMP) Chinese Foreign Ministry has announced sanctions on four Americans as countermeasures against earlier US sanctions on Chinese officials over Hong Kong. (Newswires)

China’s Global Times tweeted that China urges the US to respect existing international rules and multilateral trading system, as well as stop its anti-subsidy investigation into the alleged undervaluation of the Chinese currency. There was also a separate tweet from Global Times Editor Hu Xijin that the Trump administration has repeatedly showed hostility and ambitions to contain China, while he added that Chinese people generally hold little hope that Sino-US relations will substantially improve under Biden and that surely any improvement is welcome, but people are mentally prepared for continuous tension. (Twitter)

US

US President-elect Biden is to nominate Neera Tanden as OMB Director and will nominate Pete Rouse to head council of economic advisers, while he will nominate Adewale Adeyemo as Deputy Treasury Secretary. However, US Senator Cornyn's Communications Director later tweeted that Neera Tanden has zero chance of being confirmed citing a stream of disparaging comments about GOP Senators whose votes she will need. (Newswires)

President-elect Biden reportedly twisted his ankle while playing with a dog and will be examined by an orthopaedist out of an abundance of caution, according to his office. (WSJ/Newswires)

US President Trump tweeted that there are some big things happening in various litigations on the election hoax and suggested that everyone knows it was rigged. Furthermore, President Trump added that Biden didn’t get more votes from the Black community than Obama and certainly didn’t get 80mln votes, while he later added "NO WAY WE LOST THIS ELECTION!". (Twitter)

UK/EU

UK PM Johnson and European Commission President Von der Leyen were reportedly expected to speak within 48 hours (as of Saturday) and the European Commission was said to lean on EU Chief Brexit Negotiator Barnier to get a deal, although other reports noted there was no call scheduled citing a UK source. (Newswires/Times)

UK’s Downing Street warned that a no-deal Brexit is underpriced and that the UK could be just 7 days away from leaving without an agreement (Telegraph)

EU’s Chief Brexit Negotiator Barnier told MEPs that he would work during the weekend and then “maybe one or two more days” in a last-ditch effort to bridge the large gaps, while EU sources said there was an increasing feeling that a lack of breakthrough and need to prepare businesses for a no-deal made it unwise for negotiations to continue beyond then. (Guardian) EU Chief Brexit Negotiator Barnier commented that talks were to continue even on Sunday and discussions are in their last week, while he added talks are an ongoing process and called for the sides to do the work. (Newswires)

EU and UK officials were said to express confidence that an overarching agreement on the outstanding issues of the Northern Ireland Protocol can be agreed in the coming weeks and EU Member states will have to approve a series of formal legal decisions, mandated under the Protocol, so that the system will have a proper legal base under EU law on January 1st. Reports added it is understood that the UK is being appraised of these legal texts and a meeting of the Joint Committee was scheduled last Friday but was postponed and is now expected to take place in the week ahead with a final JC meeting happening by mid-December. Furthermore, it is thought that at that point the overall package could be formally signed off by both the EU and UK, although sources said there is still some way to go before all the details are finalised. (Newswires)

UK Foreign Minister Raab stated we’re in a reasonable position and there is a deal to be done, while he feels there is progress on the level playing field but significant issues remain on fishing. Raab also commented that this is a very significant week and we’re in the last week or so on substantive negotiations, while he also suggested the EU shifts goalposts on when the deadline for a deal is and that we’re down to the last two basic issues. (Newswires) UK Environment Secretary Eustice on Brexit, says there has been great progress, we are nearly there, we think there is a prospect of a deal. (Newswires)

BoE Chief Economist Haldane commented that inflation could increase more than expected citing COVID-19 vaccine progress and the large amount of stimulus seen this year. Haldane also stated that the extraordinary expansion in central banks’ balance sheets over the past decade poses a challenge to the independence of monetary policy. (Newswires)

UK Treasury is hoping that a speedy economic recovery in the middle of 2021 could result to consideration of significant tax increases being delayed until 2022. (Telegraph)

UK government said telecoms providers must stop installing Huawei equipment in the UK's 5G mobile network from September. (BBC)

ECB’s De Guindos stated that ECB sees lower inflation to persist this year and then rebound slower than anticipated next year, while he added that negative Q/Q growth is the most realistic scenario for the end of the year but added that medium-term outlook is more brighter amid vaccine hopes. (Newswires)

EU is reportedly seeking a new alliance with US to bury the tensions experienced during the Trump administration and to meet the new challenges related to China. (FT)

Brussels is reportedly planning a slate of proposals to make it easier for EU banks to offload soured loans as it anticipates risk of a pandemic-related wave of corporate distress. Furthermore, a paper due to be published next month will discuss ideas such as boosting secondary markets for buying and selling NPLs, as well as the creation of a network of bad banks across the bloc. (FT)

Spain is poised to approve a budget which will translate to an increase in tax take, high social services spending and use of the EU recovery fund, according to Spain's Finance Minister. (FT)

Brussels will next week publish proposals to allow regulators to target fast growing companies before they are able to achieve the market dominance seen by Google (GOOG) and Facebook (FB). The EU has yet to reveal how it plans to measure company growth, according to Competitions Commissioner Vestager. (FT)

Switzerland voted to reject a proposal that would have banned the Swiss National Bank from investing in defense firms and also voted against the Responsible Business Initiative that would’ve held multinational corporations accountable for human rights and environmental lapses abroad. (Newswires)

German regional CPI's have largely been in-line with expectations for the nationwide figure, with MM expected to cool whilst YY is seen ticking higher.

EQUITIES

Major European bourses see a mixed performance (Euro Stoxx 50 Unch) after the region trimmed the modest losses seen at the cash open despite a lack of fresh fundamental catalysts, and with some suggesting month-end rotation for the earlier losses ahead of a number of key risk events for the week - including Brexit, OPEC and the US Labour Market reports. State-side futures also sees tepid trade in early European hours ahead of the US entrance from the long Thanksgiving weekend. Back to Europe, sectors kicked the week of with a defensive bias as Healthcare, Utilities and Staples initially performed better than the cyclicals, albeit thereafter, sectors re-calibrated to show more of a mixed picture, with no clear risk tone to be derived as things stand. Energy remains the straddler amid price action in the complex ahead of the OPEC confab, whilst Banks also retain their spot near the bottom amidst a lower yield environment, and as Brexit continues hang over UK financials heading into the crunch week. Further for the banking sector, HSBC (-2%) trades lower following reports the group is looking to exit retail banking in the US as part of a cost reduction plan, whilst ABN AMRO (-6.2%) sees more pronounced losses following its investor update whereby it sees some 15% workforce reduction by 2024. Elsewhere, on the M&A front - AA (-0.5%) trades modestly lower as its largest shareholder is set to oppose the takeover from Warburg Pincus and TowerBrook Capital Partners, with his stake just under the 25% needed to block the deal. Meanwhile, JD Sports (+6.3%) tops the FTSE 100 amid source reports that the group is less likely to make an offer for the Debenhams as its chairman is reportedly concerned that COVID restrictions have had a larger impact. Meanwhile, Siltronic (+9.1%) holds onto gains amid reports the Co. is said to be in talks to be bought by Taiwan's GlobalWafers for EUR 3.75bln. Finally, state-side S&P Global Inc confirmed it is in advanced talks to acquire IHS Markit for a deal worth around USD 44bln.

IHS Markit (INFO) - Co. is to merge with S&P Global in a deal which values IHS at USD 44bln; both the companies expect to maintain current dividend policies until the close of transaction expected in H2 2021

FX

USD - The Dollar remains downbeat irrespective of any safe haven demand that might ordinarily be warranted as stocks waver on the last trading day of the month, with bank models flagging a relatively strong sell strong signal against G10 currencies, bar the Yen. Hence, the DXY is depressed below 92.000 and just off a new 2020 low within 91.762-630 parameters and technically weak unless it can regain momentum and reclaim losses through a Fib retracement level at 91.729. Ahead, Chicago PMI before pending home sales and Dallas Fed manufacturing and a speech from Barkin.

NZD/CHF/EUR/GBP - More independent traction for the Kiwi as it targets 0.7050 vs its US counterpart in wake of improvements in the NBNZ business outlook and own activity readings for November, while the Franc has taken on board a pick up in Swiss retail sales and KOF’s leading indicator slowing less than expected this month rather than mixed weekly sight deposits to maintain gains above 0.9050. Elsewhere, the Euro is making steady measured progress towards 1.2000 after eclipsing resistance at 1.1975, albeit with some assistance from reported Eur/Gbp RHS interest for month end as the cross tests 0.9000 and Cable continues to trade heavy on the 1.3300 handle amidst ongoing Brexit uncertainty and conflicting UK data (BoE consumer credit weak, mortgage lending sub-consensus, but approvals considerably higher than forecast).

CAD/AUD - The Loonie is holding up pretty well between 1.3000-1.2970 parameters given another downturn in oil prices and Aussie also close to 0.7400 following contrasting business inventory and company profits, with similarly divergent external impulses via strength in Chinese PMIs to temper some of the pain inflicted by Beijing’s steep anti-dumping tax on wine and a fresh diplomatic twitter spat.

JPY - A major laggard on the aforementioned lack of demand for portfolio purposes vs the Greenback, as the Yen pivots 104.00 and comfortably inside recent extremes after a raft of inconclusive Japanese data overnight.

SCANDI/EM - The Nok is also displaying a degree of resilience against the backdrop of weaker crude and Sek is consolidating off post-Riksbank lows, while the Cnh has firmed from PBoC midpoint fix levels for the Cny with more reverse repo and MLF liquidity to compound the robust official PMIs and the Try has drawn encouragement from a more pronounced than anticipated GDP rebound in Q3, narrower trade deficit and cheaper oil.

FIXED INCOME

Core bonds appear to be biding time for the return of US participants from the long Thanksgiving holiday weekend and final run in to month end, but UK debt has overcome early Liffe lethargy to overtake peers and sit some 10 ticks under a moderately higher 134.70 intraday peak (+36 ticks on the day) vs Bunds just above par (vs +22 ticks at best) and the 10 year T-note vice-versa (within a tight 138-08-138-04 overnight band). Note, Gilts and Treasuries have rolled from Dec20 to Mar21 in terms of trading volumes. Still to come, preliminary German CPI, Eurogroup meeting, BoE’s Tenreyro, Chicago PMI, ECB APP/PEPP tallies, pending home sales and Fed’s Barkin plus any more updates on Brexit trade negotiations.

COMMODITIES

WTI and Brent futures trade on the backfoot in the run-up to the decision-making OPEC/OPEC+ meetings over the next two days, for which a full Newsquawk preview can be found here, whilst the Newsquawk OPEC Twitter Dashboard can be accessed here. In terms of where we stand, Sunday's impromptu meeting offered little in the way of a breakthrough, with the panel of OPEC+ ministers unable to reach an agreement on the extension of current cuts, but most participants are reportedly supporting a delay of hikes through Q1 2021. Market expectations are still leaning towards the second tranche (7.7mln BPD cuts) being extended through in the first three months of 2021, albeit with some sources suggesting an extension by 2-3 months, whilst the most recent sources suggested 3-4 months. Meanwhile, Russia is said to be advocating gradual monthly increases in output from January, according to sources. Nonetheless, futures contracts remain subdued awaiting concrete clarity, with the OPEC meeting set to commence at 13:00GMT/08:00EST and a drip-feed of to-and-fro sources likely. WTI Jan resides under USD 45/bbl (vs. high 45.42/bbl) whilst Brent Feb continues to lose ground sub-48.00/bbl (vs. high 48.04/bbl). Elsewhere, spot gold and silver trade lacklustre despite a lack of fundamental catalysts, but with month-end rotation to keep in mind - with the former struggling to gain ground after yielding the 1800/oz mark. Turning to base metals. Dalian iron ore and Shanghai copper futures extended on recent gains with traders pointing to upbeat economic data from China. LME copper meanwhile is catching tailwinds from the copper performance overnight coupled by somewhat of a recovery in stocks.

OPEC+ panel of ministers failed to reach an agreement on delaying output hike ahead of the meeting although most participants in an informal discussion on Sunday supported extension of the current output levels into Q1 but UAE and Kazakhstan opposed the idea, while it was separately reported that OPEC delegates stated there are no talks of deeper cuts. (Newswires/energyintel) *OPEC+ members are said to be discussing oil cuts rollover for 3-4 months and a gradual increase in output as the main scenario; Russia insists on gradual monthly increases in output from January, sources state. (Newswires) *

Russia and Saudi Arabia reportedly generally adhere to a consolidated stance regarding an extension of the current level of oil production curbs for the first months of 2021, according to two sources. (TASS)Russia's Kremlin says Russian President Putin has no plans to talk to Saudi before the OPEC+ meeting, but added there are not such strong differences between Russia and OPEC as was the case in early 2020. (Newswires)

Iraq's Oil Minister said that they will not seek an exemption from the output cut agreement. There were also separate reports that Iraq halted operations at a small refinery (30k bpd) after a fuel storage tank was hit by a rocket attack which the Islamic State claimed responsibility for. (Newswires)

Citi Research sees spot gold markets supported at mid-USD 1700/oz level and anticipates the sell-off to taper in December, while it added a renewed push to above USD 2000/oz in the next 3-6 months is likely but may then trade lower. (Newswires)

Goldman Sachs sees additional upside to its USD 65/bbl forecast in Brent crude through 2021 as the oil market rebalances and stated that in the short-term, oil market faces increasing coronavirus-led lockdowns and a winter wave of the virus will likely generate a 3mln bpd hit to global demand which it expects to delay the rebalancing of the oil market but not derail it. (Newswires)

GEOPOLITICAL

Iranian President Rouhani accused Israel of an act of terrorism for the killing of Iran’s top nuclear scientist and vowed to respond at the right time. Furthermore, Iran's Supreme Leader’s adviser Hossein Dehghan pointed the blame on Israel which he claimed seek to intensify and increase pressure on Iran to wage a full-blown war in the last days of their gambling ally's political life, which was seen as a reference to US President Trump, while he threatened that Iran will descend like lightning on the killers of this oppressed martyr and make them regret their actions. Furthermore, a spokesman said that Iran lawmakers will pass a bill which targets boosting nuclear activity following the recent killing of their physicist. (Newswires/Sky News)

White House senior adviser Kushner and his team is headed towards Saudi Arabia and Qatar this week for discussions amid tensions in the region following the killing of the Iranian nuclear scientist. (Newswires)