• Asian equity markets were mixed after an uninspiring handover from the US where stocks pulled back from record levels
• UK MPs voted against the House of Lords' amendments to the Internal Market Bill and reinstated the ‘international law-breaking’ clauses to the controversial bill (as expected)
• UK PM Johnson is to visit Brussels for an in-person meeting with EU Commission President von der Leyen to push for a trade deal
• In FX, the DXY traded rangebound beneath 91.00, EUR/USD retained 1.21 status and GBP/USD trades sub-1.34
• In the US, the House will conduct a vote on a 1-week continuing resolution on Wednesday to provide lawmakers more time to work on government spending and virus relief
• Looking ahead, highlights include German ZEW, EZ GDP (final), US NFIB, Riksbank Governor Ingves, supply from the UK and US

CORONAVIRUS UPDATE

US COVID cases +174,387 (prev. +206,992) and deaths +1,118 (prev. +2,310), while a major newswire tally stated US cases rose by at least 203,474 to a total of 14.93mln and deaths rose by at least 1,582 to a total of 283.8k. Elsewhere, New York cases +7,302 (prev. +9,702); positivity rate 4.79% (prev. 4.71%); hospitalisations +4,602 (prev. +4,442); deaths +80 (prev. +56) and reports noted that COVID-19 hospitalizations in the US south surpassed the summer peak. (Newswires/FT)

US President Trump will sign an executive order on Tuesday to ensure priority access for Americans to get COVID vaccines, according to a senior administration official. (Newswires)

Pfizer (PFE) and Moderna (MRNA) have reportedly declined invitations from the Trump Administration to attend the White House Vaccine Summit. In other news, the White House reportedly passed on Pfizer's offer in summer to sell the government more doses of its COVID-19 vaccine, while the Co. may not be able to provide more doses to the US until June due to commitments with other countries. (STAT/NYT)

The UK vaccine task force has acknowledged that only 4mln doses of the AstraZeneca (AZN LN)/Oxford University COVID-19 vaccine will be delivered this year vs. the projected production of 30mln by year-end in the UK due to manufacturing delays. (FT)

German Chancellor Merkel is reportedly aiming to close retail shops from December 27th until January 3rd and is aiming for talks about stricter measures this week. (Bild)

Hong Kong Chief Executive Carrie Lam announced to ban dining in restaurants after 1800 local time and will ask the financial secretary to study new relief measures for industries impacted by latest round of tightening. (Newswires)

South Korea said it has signed agreements with AstraZeneca (AZN LN), Pfizer (PFE) Johnson & Johnson (JNJ) and Moderna (MRNA) to purchase COVID-19 vaccines for 44mln people. There were also comments from South Korea Health Minister that they plan to begin inoculating people after monitoring other countries for 2-3 months and that they not considering buying Russian vaccines. (Newswires)

ASIA

Asian equity markets were mixed after an uninspiring handover from the US where stocks pulled back from record levels amid infection and lockdown concerns with underperformance in cyclicals front-running the declines, although the Nasdaq outperformed and extended on record levels as growth stocks were favoured and with Tesla in the driving seat heading into its S&P 500 inclusion later this month. ASX 200 (+0.2%) was kept afloat by strength in gold miners after recent upside in the precious metal and as tech was inspired by the resilience of the sector stateside, with an improvement in business survey data adding to the tailwinds, while the Nikkei 225 (-0.1%) was subdued by ongoing currency strength although the announcement of a widely flagged JPY 73.6tln stimulus package and better than expected Final Q3 GDP, which grew at the fastest pace since comparable data was available in 1994 at 5.3% Q/Q and 22.9% annualized growth, has cushioned the losses for the index. Hang Seng (-0.4%) and Shanghai Comp. (Unch.) lagged for most the session after the US confirmed new Hong Kong related sanctions on 14 members of the National People's Congress despite warnings of strong countermeasures by China’s Foreign Ministry, with Hong Kong also pressured by increased restrictions and as JD Health’s debut stole the limelight with gains of more than 50% from its IPO price. Finally, 10yr JGBs were higher after breaking back above the 152.00 level amid the subdued mood for Tokyo stocks and recent bull flattening in USTs, with further upside seen following stronger metrics at the 5yr JGB auction.

PBoC injected CNY 60bln via 7-day reverse repos at a rate of 2.20% for a net daily injection of CNY 40bln. (Newswires) PBoC set USD/CNY mid-point at 6.5320 vs. Exp. 6.5308 (Prev. 6.5362)

Chinese Foreign Minister Wang underscored commitment to a Phase 1 trade deal during a videoconference with US executives, while US executives pressed on the need for equal treatment of US firms in China, according to the head of the US-China Business Council who also hopes the sides will begin Phase 2 trade discussions under the Biden administration. (Newswires)

Australia passed the law that allows a cancellation of China Belt & Road agreements, as expected. In relevant news, China's Global Times tweeted that China has suspended imports from Australian beef supplier Meramist Pty Ltd, which is the sixth supplier to face such action in Australia this year amid deteriorating trade ties. (Newswires/Twitter)

UK and EU will refrain from imposing sanctions on Chinese officials for actions in Xinjiang and Hong Kong for now, with UK currently examining the situation and EU avoiding providing a direct answer. (SCMP)

China's cyber regulator removed the TripAdvisor (TRIP) app due to illegal content. (Newswires)

• Japanese GDP (Q3 F) Q/Q 5.3% vs. Exp. 5.0% (Prev. 5.0%)
• Japanese Annualized GDP (Q3 F) 22.9% vs. Exp. 21.5% (Prev. 21.4%)
• Japanese Household Spending (Oct) M/M 2.1% vs. Exp. 1.0% (Prev. 3.8%)
• Japanese Household Spending (Oct) Y/Y 1.9% vs. Exp. 2.5% (Prev. -10.2%)

UK/EU

UK MPs voted against the House of Lords' amendments to the Internal Market Bill and reinstated the ‘international law-breaking’ clauses to the controversial bill as expected, with Lords Amendment 1 to the Internal Market Bill reversed by 359 votes to 265 (majority of 94) and they rejected Amendment 47 by 357 vs. 268 votes (majority of 89). (Newswires)

UK PM Johnson is to visit Brussels for an in-person meeting with EU Commission President von der Leyen to push for a trade deal, while no date has been announced but will likely be on Wednesday, although an EU source suggested the meeting will probably be on the margins of the EU Council Summit and that von der Leyen will only want to meet if they can deliver a deal in which the contours of such will need to be defined prior to the meeting. (Daily Mail/Sky)

UK said Brexit talks are in the same position now as they were on Friday and have made no tangible progress, while they do not consider this process to be closed but noted that things are looking very tricky and there is every chance we are not going to get there, according to a source. (Newswires)

EU Commission President von Der Leyen said that the conditions for an agreement are not there due to remaining differences on critical issues which are level playing field, governance and fisheries, while she added that negotiators are to prepare overview of differences to be discussed in person in coming days. (Newswires)

Irish Foreign Minister Coveney said there has been no progress at all in the last two days and the EU mood is starting to shift towards no-deal planning, while he added that on fisheries, if anything, new problems are landing on the table rather than solutions. There were also comments from Dutch Foreign Minister Blok we must not allow ourselves to be rushed into hasty compromises on Brexit talks and that we actually still have a long time, while he suggested to not let an EU summit rush us. (Newswires)

UK negotiators proposed stripping the pelagic fishing industry out of Brexit negotiations and instead have those stocks dealt with through an informal forum, with countries such as Russia, Norway, the Faroes, Iceland and Greenland. (RTE)

UK Barclaycard stated November consumer spending fell 1.9% Y/Y, while spending at department stores fell 18% Y/Y and online grocery shopping rose 97.4% Y/Y. (Newswires)

UK BRC Retail Sales (Nov) Y/Y 7.7% (Prev. 5.2%). (Newswires)

FX

In FX markets, the DXY traded rangebound beneath the 91.00 level after yesterday’s mixed performance amid the indecisive risk appetite and with participants awaiting developments from Congress to avert a shutdown when the existing funding measure expires on Friday, although reports noted the House will conduct a vote on a 1-week continuing resolution on Wednesday to provide lawmakers more time to work on government spending and virus relief. EUR/USD was flat and retained the 1.2100 status against the backdrop of Thursday’s ECB meeting, while GBP/USD pulled back from resistance at 1.3400 and remained at the whim of Brexit-related uncertainty with the UK noting that Brexit talks were in the same position as they were on Friday with no tangible progress made, although PM Johnson is said to be planning to visit Brussels for an in-person meeting with EU Commission President von der Leyen to push for a trade deal. USD/JPY was lacklustre around 104.00 amid the cautious risk tone and after stronger than expected GDP and mixed Household Spending data, while antipodeans were rangebound due to their high-beta characteristics and following a relatively stable PBoC reference rate setting.

• Australian NAB Business Confidence (Nov) 12 (Prev. 5). (Newswires)
• Australian NAB Business Conditions (Nov) 9 (Prev. 1)
• Australian Home Price Index (Q3) Q/Q 0.8% (Prev. -1.8%)
• Australian Home Price Index (Q3) Y/Y 4.5% (Prev. 6.2%)

COMMODITIES

WTI crude futures languished around yesterday's lows amid a lack of pertinent news the drive price action. The ongoing COVID-19 concerns did little to help prices which retreated beneath USD 45.50/bbl, although focus for the energy complex now turns to the latest stockpiles reports beginning with the private sector inventories due later where expectations are for a 1.5mln draw to headline crude. Gold marginally extended to the upside after the precious metal found favour from the lacklustre greenback and amid some stimulus hopes, while copper was pressured by the somewhat cautious global risk tone.

US

Treasuries bull-flattened on Monday amid the subdued risk tone and a rejection of key support levels tested last Friday. By settlement, 2s -0.1bps at 14.3bps, 10s -4.3bps at 92.6bps, 30s -4.7bps at 168.4bps; US real yields were lower by between 4-2bps; T-Note futures volumes were average. The sovereign rally made headway out of Europe, finding tailwinds from both the spillover from the UK Gilt market amid Brexit woes, in addition to a more cautious US stimulus outlook. It was essentially one-way traffic lower for yields, paring back nearly all the steepening move made on Friday after the stimulus chants grew louder on the back of the disappointing NFP print. After some caution cast on the differences between Dems and the GOP over the weekend in the press, market participants also cooled their expectations returning on Monday. The strength in rates comes ahead of this week's Treasury auctions, with the 3s, 10s and 30s auctions on Tuesday, Wednesday, and Thursday, respectively, although supply concession is seemingly not a driving factor for the otherwise occupied market right now. Furthermore, with US yields continuing to widen from their lower, international counterparts, there are likely growing expectations of a pick-up in foreign demand at this week's auctions. JPYUSD cross-currency basis swaps have already shown some signs of dollar demand, although part of that is likely a result of year-end funding pressures. Nonetheless, yield-hungry investors looking to participate in US auctions will likely drive those dollar pressures further. T-note (H1) futures settled 11 ticks higher at 137-23.

US President-elect Biden will announce more members of his cabinet before Christmas including Secretary of Defense pick and will announce members of economic and domestic cabinet this week, while reports later noted that Biden has chosen retired General Lloyd Austin for Defense Secretary. (Newswires/Politico)

US Senate Majority Leader McConnell said he anticipates passing a 1-week continuing resolution to give lawmakers more time on government funding bill and coronavirus relief, while McConnell said he sees no reason to believe disagreements with Democrats on COVID-19 relief will evaporate soon, despite signs of engagement. (Newswires)

US Senate Minority Leader Schumer said McConnell has refused to compromise on COVID relief and that we heard the "same old song" from McConnell although he added that there are some encouraging signs and bipartisan group continues to make progress. There were also separate comments from House Speaker Pelosi who stated in a letter to Democrats that negotiations on government spending bill are making progress. (Newswires)

NEC Director Kudlow suggested things are moving in the right direction on coronavirus stimulus talks, while he added they are getting closer and are all talking to each other right now. Kudlow added that odds are improving for a stimulus bill and that the problem solvers' relief bill is far more reasonable than earlier larger proposals from Democrats. (Newswires)

A Democratic aide said the house will vote on a stopgap bill on Wednesday and House Majority Leader Hoyer confirmed the House will vote on a one-week continuing resolution on Wednesday. There were separate comments from a GOP aide that Democrats’ continued refusal to negotiate in good faith risks blowing up any progress made elsewhere on a COVID relief bill. (Newswires/NBC)

FBN’s Gasparino initially tweeted that Senate GOP is preparing to unveil fiscal bill of USD 900bln today and it was unclear if it contains liability protections, although he then later tweeted that Senate Majority Leader McConnell will not unveil a bill but instead will speak on COVID-19 relief. There was also a separate report in CNN which noted significant sticking points remain on a bipartisan group effort to unveil USD 908bln stimulus bill text today. (Twitter/Fox/CNN)