• Asia-Pac equities traded lower following a mixed lead from Wall Street; ASX 200 underperformed
• UK PM Johnson made a last ditch push for a Brexit deal with some movement on his position over fisheries; an EU official said "It's still a no from us."
• US House and Senate approved the COVID relief package tied together with the spending bill
• Apple (AAPL) is looking at electric vehicle production as early as 2024 that could have its own novel "monocell" battery tech
• In FX, DXY strengthened, Cable fell below 1.3400, antipodeans yielded and USD/JPY traded in a tight range
• Looking ahead, highlights include German GfK Consumer Confidence, US GDP (Final) & Existing Home Sales

CORONAVIRUS UPDATE

US COVID stats: Cases +197,616 (prev. + 201,490); deaths +1,584 (prev. +2,624). New York COVID stats: Hospitalisations 6,331 (prev. 6,185), cases +9,007 (prev. +9,957), positivity rate 5.75% (prev. 5.05%), deaths +109 (prev. +123). California Governor Newsom said it is likely that stay at home orders will be extended; no ICU beds available in vast swaths of the state. (Newswires)

Germany reports 19,528 (vs prev. +16,643) new COVID-19 cases and 731 new deaths (vs prev. 226), according to RKI. (Newswires)

Taiwan reported its first locally transmitted COVID-19 case since April. (Newswires)

UK may not have enough COVID-19 tests to meet surging demand in the coming weeks, according to an internal government document. (FT)

China’s Sinovac COVID-19 vaccine has shown to be effective in late-stage trials in Brazil; results put the vaccine above the 50% threshold that scientists deem necessary to protect people, according to WSJ sources. (WSJ) AstraZeneca (AZN) US late stage trial has enrolled over 26k out of 30k participants. (Newswires). BioNTech (BNTX) CEO said Germany could have an immunity rate of 60-70% by late summer, according to Bild TV. (Newswires) US Operation Warp Speed Chief Slaoui says there have been considerations on dose-sparing trials of Moderna's (MRNA) COVID-19 vaccine to see if the lower dose is effective. (Newswires)

ASIA

APAC equities saw a subdued session following a somewhat mixed Wall Street handover, after the S&P 500 and Nasdaq ended the session well off lows and the Dow eked mild gains. Meanwhile, Tesla shed 6.5% on its S&P debut, with some of the losses emanating from source reports that Apple is looking at electric vehicle production as early as 2024 which could also have its own novel "monocell" battery tech. US equity futures meanwhile drifted lower as markets awaited the State-side COVID relief and government funding package to make its way through Congress. Back to APAC, the overall sentiment was lacklustre, with losses in the ASX 200 (-1.1%) led by the basic resources and energy sectors, whilst upside for the Nikkei 225 (-0.6%) was hampered by recent JPY-dynamics. South Korea's KOSPI (-0.5%) held onto losses as the rising COVID case count in the country surfaced reports of tourist location closures in a bid to stem the spread. Elsewhere, Hang Seng (-0.3%) and Shanghai Comp. (-0.2%) conformed to the losses across the region and as tensions with Washington brew in the background, with the Trump admin poised to publish a list of 103 Chinese and Russian companies with alleged military ties, whilst Secretary of State Pompeo announced additional restrictions on visas for officials of the Chinese Communist Party linked to human rights violations. Finally, 10yr JGB futures are flat as it tracks similar price action in UST futures.

China and the EU are likely to wrap up their investment deal “soon”, according to Chinese Foreign Minister Wang Yi. (SCMP)

WTO said Australia has initiated a dispute complaint against the Chinese Barley duties. (Newswires)

PBoC sets USD/CNY mid-point at 6.5387 vs exp. 6.5397 (Prev. 6.5507)

PBoC injected CNY 10bln via 7-day reverse repos and CNY 120bln via 14-day reverse repos for a net daily injection of CNY 120bln. PBoC maintained 7- and 14-day reverse repo rates at 2.20% and 2.35% respectively. (Newswires)

UK/EU

UK PM Johnson reportedly made a last-ditch push for a Brexit deal with some movement on his position over fisheries. UK is said to be prepared to allow EU boats to retain two-thirds of their catch. Meanwhile, FT's Payne tweeted that "UK and EU are edging towards a deal on fishing rights as December 30th is eyed as the date to pass it into law, compromise may be a 35% cut in EU access over five-year period." EU sources were sceptical on Monday evening that the offer would be acceptable in full to member states but suggested that it could provide a basis for a deal if the French government found it acceptable. (Guardian) An EU official speaking about the UK's latest offer told The Telegraph: "It's still a no from us." (Telegraph)

UK ministers reportedly have drawn up plans for a potential Brexit legislation to clear both Houses of Parliament and gain Royal Assent in a single day next week. (Telegraph)

UK PM Johnson reiterated that WTO terms would be more than satisfactory for the UK, "not that we don't want a deal" but we can cope with a no deal. (Newswires)

UK PM Johnson and French President Macron have agreed on measures to restart freight, measures will be announced later and will come into effect Wednesday (BBC). UK PM Johnson is reportedly drawing up contingency plans to test all lorry drivers taking goods across the Channel in order to bring an end to the disruption at Britain's ports. (Telegraph)

FX

In FX, the DXY traded with intraday gains but resided closer to the 90.000 mark after waning from yesterday's 91.022 high in what was a quiet overnight session heading into the holiday period, and with Congress powering on through the night to pass the COVID-relief package and spending bill. As such, EUR/USD inched lower in lockstep with the Dollar, although the pair remained above 1.2200 but still under last week's 1.2273 peak - with the pair also eyeing hefty option expiries including ~EUR 2.3bln at 1.2200. Cable drifted lower below 1.3450 and through 1.3400 after reaching a high of 1.3496 in the prior session on reports that UK PM Johnson is said to make a last-ditch push in Brexit talks with some movement on fisheries - with the proposal seeing EU's rights to UK waters being cut by 35% over a five-year transition period - although an EU official, on the UK's latest offer, suggested "it's still a no from us". Elsewhere Antipodeans held onto losses as AUD/USD traded just below 0.7600 after testing the level to the upside during the US session - and with little following-through seen from a MM increase in prelim Aussie retail sales, whilst its Kiwi counterpart trundled lower overnight and with losses narrowly more pronounced as the AUD/NZD cross topped 1.0700. USD/JPY was relatively flat and within a tight parameter under 103.50 amid a lack of fresh fundamental news flow, with yesterday's 103.23 base the first immediate point of support and with some USD 1.2bln in OpEx at 103.00.

Australian Retail Sales Prelim (Nov) MM +7% (Prev. +1.4%). (Newswires)

South Africa’s Eskom CEO says they will need to increase electricity prices in order to reduce debts and prevent bankruptcies; in-spite of the frequent blackouts. (FT)

COMMODITIES

WTI and Brent front-month futures saw losses throughout the session after seeing a lower settlement, albeit off worst levels. Brent Mar'21 failed to sustain a footing above USD 51/bbl whilst WTI briefly reclaimed USD 48/bbl-status. News flow for the complex overnight remained light and prices largely tracked sentiment, albeit a leg lower in prices coincided with reports of Taiwan reporting its first locally transmitted case since April 12th. Elsewhere, spot gold and silver initially crept higher throughout the session, before erasing gains ahead of the EU open. In terms of base metals, Dalian iron ore futures saw another positive session, but with gains relatively modest, whilst Shanghai copper was subdued amid the lacklustre mood around the markets coupled with the USD trimming recent losses.

Iran's Oil Minister Zanganeh said Iran sees Russia as a strategic partner; says two countries have close views within OPEC+, according to Shana. (Newswires)

GEOPOLITICAL

US Commerce Department officials says the Trump admin it to publish a list of 103 Chinese and Russian companies with alleged military ties. (Newswires)

Suspected Russian hackers compromised dozens of Treasury Department email accounts and breached the office that houses its top officials, a senior senator said Monday. The Treasury Department still doesn’t know all of the activity the hackers engaged in or precisely what information was stolen. (WSJ)

US

Treasuries settled flat after supply and a risk recovery reversed a pronounced bull-flattener seen overnight. By settlement, 2s +0.2bps at 12.5bps, 10s -0.3bps at 94.5bps, 30s -1.2bps at 168.8bps; real yields were flat; futures volumes were average compared to recent averages but decent given the expected thinner holiday liquidity conditions. Sovereigns saw inflows, seeing the 10s and 30s US cash yields hit lows of 88.2bps and 162.0bps, respectively. But, as US participants returned from the weekend those risk-off moves began to fade. The approaching USD 24bln 20-year bond auction was most likely an added pressure on USTs, not to mention the new US COVID aid package, as dealers made way for a potentially weak, holiday-type auction. The auction was not all too bad given the circumstances: stop thru by 0.8bps, covered 2.39x (avg. 2.40x), while Indirects took less than average. There wasn't much movement seen in duration after the auction, the last bond offering of the year ahead of some notes to sell next week. Duration now sits little changed to start the week, coming ahead of the Fed stepping into 20- to 30-year sector on Tuesday. T-NOTE (H1) FUTURES SETTLED HALF A TICK HIGHER AT 137-24+

US House (359-53) and Senate (92-6) approved the COVID relief package tied together with the spending bill to keep the government open through September 2021. (Newswires/Twitter)

US House and Senate approved the week-long stopgap to avert a government shutdown. (Newswires/Twitter)

US President-elect Biden welcomes the COVID relief package but adds "but our work is far from over. Starting in the new year, Congress will need to immediately get to work on support for our COVID-19 plan."(Twitter) US House Speaker Pelosi wrote to her colleagues that more needs to be done regarding stimulus. (Twitter)

Some of Trump’s Hill allies met with Trump and discussed challenging the election results when Congress certifies them on Jan. 6, according to sources cited by Politico's Zanona (Twitter)

Apple (AAPL) is looking at electric vehicle production as early as 2024 that could have its own novel "monocell" battery tech; examining Lithium Iron Phosphate (LFP) battery chemistry, according to sources. Co. is expected to partner with lidar companies for sensors and a manufacturing partner to build vehicles. (Newswires)

Australia's ACCC has rejected Google's (GOOG) undertakings for Fitbit (FIT) acquisition, will continue investigation and set a new date of 25th March 2021. (Newswires)

Facebook (FB) and Google (GOOG) have agreed to team up against potential antitrust action, according to WSJ. (WSJ)