• European indices are modestly subdued, Euro Stoxx 50 -0.4%, in a relatively quiet session ahead of a number of looming risk events; stateside, performance is broadly similar ES -0.4%.
• FDA is today to release two separate detailed analyses on the Pfizer(PFE)/BioNTech(BNTX) COVID-19 vaccine candidate, ahead of Thursday's meeting, WSJ
• 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
• DXY has drifted lower throughout the morning but peers are mixed against the USD with GBP the laggard thus far as we await a firm time for the Johnson/von der Leyen meeting
• Looking ahead, highlights include Riksbank Governor Ingves & supply from the US

CORONAVIRUS UPDATE

US FDA is today to release two seperate detailed analyses on the Pfizer(PFE)/BioNTech(BNTX) COVID-19 vaccine candidate, ahead of Thursday's meeting; data is expected to show how the vaccine works with different age, ethnic and other demographic groups. (WSJ)

COVID-19 hospitalizations in the US south has surpassed the summer peak, according to reports in FT. (FT)

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)

SinoVac COVID-19 vaccine is said to have an efficacy of 97% in early trials, according to Bio Pharma. (Newswires)

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%)

US

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 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)

US government funding and COVID relief talks to go on behind the scenes today. Coalition of senators to release parts of bipartisan coronavirus bill today, according to Fox's Pergram. (Twitter)

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)

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)

UK PM Johnson says he is very hopeful on reaching a Brexit trade deal with the EU but the situation is tricky; UK and EU are still a long way apart on fisheries. (Newswires)

EU sources said there could be an earlier push for the no deal Brexit plans at today’s meeting of European ministers as legislations need sufficient time to be approved by EU govt and parliament. (Telegraph)

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)

German ZEW Economic Sentiment (Dec) 55.0 vs. Exp. 45.5 (Prev. 39.0); Current Conditions (Dec) -66.5 vs. Exp. -66.0 (Prev. -64.3)

• EU ZEW Survey Expectations (Dec) 54.4 (Prev. 32.8)

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

GEOPOLITICAL

Turkey wishes to improve EU ties on the basis of full membership. (Newswires)

EQUITIES

European equities trade with little in the way of firm direction (Eurostoxx 50 -0.4%) in what has been a relatively uninspiring session thus far. Stocks in the region initially resided in modest negative territory with a mildly anti-cyclical bias before heading towards the unchanged mark. Stateside, the initial growth/value divergence between the e-mini Nasdaq and Russell which favoured the former has since narrowed whilst the e-mini S&P trades near-enough flat. From a macro perspective, not a great deal has changed throughout the session with Brexit dominating the focus in Europe, whilst elevated COVID levels and budget/stimulus talks in the US take the fore. On the latter, 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. Sectors in Europe are currently mixed with travel & leisure names near the bottom of the pile with InterContinentalHotels (-3.0%) a laggard in the sector after being downgraded to underperform from hold at Jefferies. AstraZeneca (-1.5%) are marginally lower on the session with Health Care names faring marginally worse than peers with the UK vaccine task force acknowledging that only 4mln doses of the AstraZeneca/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 delay. To the upside, German-listed auto-supplier Hella (+6.4%) sit at the top of the Stoxx 600 after raising FY20/21 guidance, whilst ASM International (+4.5%) and Lanxess (+1.5%) are also firmer on the session after broker upgrades at JP Morgan Chase and UBS respectively.

FX

DXY - The broader Dollar and Index trade on a modestly softer footing but remain caged - with the latter meandering within a tight 90.750-989 intraday band thus far amidst a lack of fresh fundamental newsflow and catalysts. State-side, government funding and COVID-relief hold onto attention with the former anticipated to see a one-week stopgap resolution as per Senate Majority Leader McConnel, but COVID-19 relief is proving to be tricker with no concrete compromises seen thus far from either side, but with some mild optimism expressed by the Democrats. From a technical standpoint, yesterday’s 90.612 low could prove to be a support level ahead of 90.500 and Friday’s 90.471 low, whilst to the upside, Monday’s 91.241 peak could act as a point of resistance above the 91.00 psychological mark.

GBP, EUR - Sterling narrowly underperforms G10 peers as eyes remain on Brexit developments after the phone call between UK PM Johnson and EU’s von der Leyen failed to narrow the outstanding gaps in talks, with the two set to meet at some point this week. The timetable for this meeting remains in limbo but is touted to take place tomorrow, in-fitting with Brexit Negotiator Barnier’s Wednesday deadline ahead of the European Council summit on Thursday and Friday. Cable sees itself around 1.3350 having had waned off its current 1.3377 intraday peak, with the 21 DMA seen around 1.3308. Subsequently, the softer GBP has provided the EUR with some reprieve via the cross whereby EUR/GBP continues to inch closer to 0.9100 (vs. low 0.9050) having had notched a high of 0.9140 during yesterday’s session. As such, EUR/USD retains its 1.2100+ status after briefly dipping below the figure on account of early-morning Dollar inflows.

AUD, NZD, CAD, JPY, CHF - The non-US dollars all trade modestly firmer against the Buck but with gains relatively broad-based as opposed to idiosyncratic factors. AUD/USD makes headway above 0.7400 (vs. low 0.7405) but remains below yesterday’s 0.7453 high, whilst its Kiwi counterpart meanders around 0.7050 (vs. low 0.7027) as it closes in on Monday’s 0.7064 peak. The Loonie sees some gains in conjunction with a recovery in oil prices, but the currency is not an outlier an in terms of gains vs. its antipodean peers. USD/CAD remains sub-1.2800 as the pair failed to take out support around the 1.2772-74 region which held throughout the prior two sessions. The traditional safe havens meanwhile trade flat vs the Dollar – USD/JPY trades on either side of 104.00 and within recent ranges, whilst USD/CHF sees similar price action on either side of 0.8900.

• 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%)

FIXED

A slower start to the session when compared with yesterday’s pronounced Brexit fuelled upside for the complex, as Gilts have seemingly relinquished the driving seat today and are unable to dictate action for their German peer. Currently, Bunds are firmer by ~15 ticks and in proximity to highs above 178.00 with near-term resistance residing at 178.10 and 178.23, 30th November high and 3rd November low respectively, if the modest upside extends. Data wise, little impetus was derived from the ZEW figures given the week’s plethora of events and as the December PMIs are scheduled for next week. Returning to the UK, where Gilts are modestly softer but remain relatively mid-range at present with attention on the meeting between PM Johnson and Commission President von der Leyen this week, timing TBC. Elsewhere, little impetus was derived from the first outing of UK supply which was a touch softer than the previous issuance – the longer-dated line later in the session is expected to be well received. Stateside, USTs are little changed on the session with a modest negative bias at present amid quiet newsflow. Focus for the US is on any updates to the progression of fiscal stimulus/Gov’t funding alongside a 3yr note issuance of USD 56bln to commence a trio of auctions totalling USD 118bln this week.

COMMODITIES

WTI and Brent front month futures have trimmed overnight losses to trade around the unchanged mark at the time of writing despite a distinct lack of fresh news flow for the complex. Earlier modest losses in the complex came alongside some COVID-19 developments whereby Germany is poised to discuss tighter restriction this week, whilst AstraZeneca informed of some manufacturing delays in its COVID-19 vaccine following a similar announcement by Pfzier and BioNTech last week. On the flip side, early trial data from SinoVac's vaccine candidate pointed to an efficacy level of around 97%. WTI Jan resides around USD 45.50/bbl (vs. low 45.14/bbl) whilst Brent Feb sees itself under USD 48.75/bbl (vs. low 48.09/bbl). Looking ahead, ING holds a constructive view with regards to crude markets amid the OPEC+ output reductions coupled with a continued recovery in demand, with the Dutch bank forecasting ICE Brent to average USD 55/bbl over 2021 with prices around USD 60/bbl by the end of next year. The analysts also touch upon the Iranian sanction wind-down under a Biden administration, which sees around 1.5-2mln BPD of supply back in the market, but the timing of this is unknown. "If we were to see a fairly quick return of Iranian supply over 1H21, this could put some pressure on the market, with the market likely finding it difficult to absorb additional barrels. However, if we only see Iranian supply starting to come back in the latter part of next year, the market should be able to digest this oil more easily, given expectations of demand continuing to recover as we move through the year", the bank states. Elsewhere, spot gold and spot silver are relatively uneventful but hold onto a lion's share of yesterday's gains, with the former still north of USD 1850/oz (vs high 1872/oz) and the latter above USD 24.50/oz (vs. high 24.75/oz). In terms of base metals, iron ore prices in China continued to rally amid the ongoing constructive demand outlook. On the other hand, LME copper prices are softer as the red metal tracks the lacklustre risk sentiment in markets.

Kremlin says Russian President Putin will hold a government meeting tomorrow and could discuss the OPEC+ deal. (Newswires)

UAE's Adnoc is to cut January term crude supplies of Murban by 20%; Upper Zakum & Das to be cut by 15%, according to sources. (Newswires)