Another overnight session, and – predictably – futures are higher in keeping with the most glaringly obvious market trend since 2016 of stocks surging during overnight US trading (while trading flat in regular trading hours)…
… alongside world stocks which rose to a fresh record high on Wednesday ahead of today’s Fed meeting – the last for 2020 – on optimism a fiscal deal is imminent after congressional leaders from both parties met for several hours yesterday and afterwards reported that they are making progress with Mitch McConnell said nobody is leaving Washington for a break until a deal is completed, which should happen “soon.” The dollar reached its lowest in more than two and a half years, on the prospect of effective coronavirus vaccines; the 10-year Treasury yield was at 0.9262% and gold gained.
Futures were higher across the board with trader confidence building on the back of stronger European PMI data, the vaccine rollout and the prospect for more U.S. stimulus. E-minis were up 10 points, or 0.3%, at 7am, briefly rising above 3,700 and just shy of all time highs. Dow E-minis were up 93 points, or 0.31%. Nasdaq 100 E-minis were up 31 points, or 0.23%.
The MSCI world stock index rose 0.4% to a new all time high of 636.64. The index has climbed 15% since the beginning of November, propelled by trillions of dollars worth of global stimulus.
Europe’s Stoxx 600 Index rose 1%, notching a third day of gains, and Germany’s DAX outperformed. Bulls got a boost after negotiations continued over a post-Brexit trade deal between the U.K. and the European Union with signs of cautious optimism from both sides that agreement can be reached. European stocks also got a boost after PMI economic data came in far better than expected and the European Central Bank decided on Tuesday to let euro zone banks start paying dividends again if they have enough capital. The December Composite PMI for the euro area came in at 49.8, just below the level that points to an expansion in the economy.
The reading, well ahead of economist expectations for 45.7, was boosted by German manufacturing and French services. The news was sufficient to push the euro above $1.22 for the first time since April 2018 while eurozone bond yields edged up.
Earlier in the session, the MSCI index of Asia Pacific shares ex-Japan followed Wall Street’s latest rise to end 0.9% higher. The region is also at record highs and up 3.8% so far in December putting it track for its best yearly performance since 2017. Equity markets in Taiwan, Indonesia and Vietnam climbed more than 1% as investors awaited the outcome of the Federal Reserve’s policy meeting. Materials and communication services were the top performers in Asia. Shares of Apple suppliers also gained on bets of robust demand for iPhone 12 models after Nikkei reported the firm is boosting production. Stocks in China underperformed the broader Asian gauge. MSCI became the third index provider to delete some Chinese stocks blacklisted by the Trump administration from its benchmarks. SMIC, the nation’s largest chipmaker, slid 5.5% to its lowest in more than two months after news emerged about the surprise resignation of a top executive. The Kospi also underperformed the MSCI Asia Pacific Index, which rose 0.8% following a two-day drop. South Korean authorities are reviewing the possibility of raising social distancing to level 3, the strongest measure.
Besides new covid relief, optimism over a $1.4 trillion U.S. spending package increased after House of Representatives Speaker Nancy Pelosi invited other congressional leaders to meet late on Tuesday to put together a deal to be enacted this week.
“The odds are that this deal is more than the $500 billion the Republicans proposed and likely less than the $900 billion of the joint Republican/Democrat committee proposal,” said Sebastien Galy, macro strategist at Nordea Asset Management. “It is rightfully welcomed by the markets, but the size of the fiscal package is the issue.”
Additionally, progress on rolling out vaccines continued after Moderna’s COVID-19 vaccine appeared set for regulatory authorization this week. The United States also expanded its rollout of the newly approved vaccine developed by Pfizer Inc. and BioNTech.
“Investors are starting to buy in to the vaccine rollout,” said Maarten Geerdink, head of European equities at NN Investment Partners. “With further approvals expected shortly and the European recovery fund being approved, investors are willing to look beyond the current spike of cases and heightened lock down and are focusing and positioning for next year.”
Euphoric markets will also look to the Fed at 2pm ET today to see whether it hints at an extension of its stimulus program and it thinks the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom, which will be viewed as positive news. The FOMC is expected to discuss the conditions under which it would alter the scope of its asset purchase program and possibly provide fresh guidance on its asset purchases, now $120 billion a month, tying how long the buying will continue to substantial progress in meeting its goals of full employment and 2% inflation.
“We are not expecting a lot of fireworks from the Fed today – they have already engineered very easy monetary conditions and the tone of their messaging has been persistently dovish,” said Marija Vertimane, senior strategist at State Street Global Markets. “This is unlikely to change … in this meeting.”
DB economists wrote that they expect the FOMC to maintain the current pace and composition of asset purchases, but the most important innovation for this meeting is likely to be an enhancement to the QE guidance by adopting qualitative outcome-based language. This will be a tough balancing act given the desires from some to maintain the flexibility to adjust purchases as the outlook evolves, so they expect the Fed will be less explicit with its QE guidance than its policy rate guidance, and think the Fed will adopt language along the lines of increasing “its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace…until substantial progress has been made toward the Committee’s goal of maximum employment, and inflation is on track to reach 2% on a sustained basis.” Watch out for the latest Summary of Economic Projections too, there may be upgrades to the growth and unemployment forecasts. However, with a persistent shortfall in core inflation and uncertainty over the virus and the fiscal outlook, the median assessment of the federal funds rate should be unchanged through 2023.
In rates, Treasuries were lower led by long end amid a risk on mood ahead of November retail sales data and FOMC statement that may include new guidance on QE. With Brexit developments lifting pound to highest since 2018 vs dollar, rising gilt yields reinforce the move in Treasuries. Yields were cheaper by ~2bp at long end with 10-year higher by ~1bp at 0.92%. Bunds declined after the beat in French PMIs, despite Services remaining sub-50. German curve trades cheaper and steeper, with long end yields ~3.2bps higher. Gilts follow Germany’s bear steepening; treasuries are quieter ahead of today’s FOMC meeting. Peripheral spreads continue to tighten. 10y BTP/Bund narrows to 111bps, GGB/Bund near 113bps.
In FX, the dollar fell to its lowest since April 2018 against a basket of currencies and to a month-and-half low of 103.30 against the Japanese yen. Derek Halpenny, MUFG’s head of research, said that “underlines high expectations that the Fed will today deliver a message of continued loose monetary policy for a considerable period to come”. The euro rose above $1.22 for the first time since April 2018 and euro zone bond yields edged up, after data showed better-than-expected business activity in the bloc this month. The pound rose to 12-day highs against the dollar and a one-week high against the euro. It gained after European Commission President Ursula von der Leyen said there was progress on a Brexit trade deal and the next few days would be critical.
In commodities, gold prices rose as high as 0.4% to $1,860.20 an ounce. Gold has risen over 22% so far this year amid unprecedented government stimulus globally. Brent crude slipped 3 cents to $50.73 a barrel and U.S. crude fell 1 cent to $47.61. They were undercut by a surprise gain in crude oil inventories in the United States and persistent investor worries about demand for fuel being squeezed amid tighter lockdowns in Europe.
Looking at the day ahead now, and the aforementioned Federal Reserve meeting and Chair Powell’s subsequent press conference will likely be the highlight. Otherwise, data highlights include the remainder of the flash PMIs for December from around the world, and the US November retail sales and December NAHB housing market index. Over in Europe, central bank speakers include the ECB’s de Guindos, Schnabel and Hernandez de Cos.
- S&P 500 futures up 0.2% to 3,703.25
- STOXX Europe 600 up 0.9% to 396.24
- German 10Y yield rose 2.7 bps to -0.584%
- Euro up 0.4% to $1.2200
- Italian 10Y yield fell 2.1 bps to 0.409%
- Spanish 10Y yield rose 1.4 bps to -0.003%
- MXAP up 0.8% to 195.72
- MXAPJ up 0.9% to 646.35
- Nikkei up 0.3% to 26,757.40
- Topix up 0.3% to 1,786.83
- Hang Seng Index up 1% to 26,460.29
- Shanghai Composite down 0.01% to 3,366.98
- Sensex up 0.9% to 46,684.08
- Australia S&P/ASX 200 up 0.7% to 6,679.23
- Kospi up 0.5% to 2,771.79
- Brent futures up 0.4% to $50.96/bbl
- Gold spot up 0.6% to $1,863.83
- U.S. Dollar Index down 0.3% to 90.19
Top Overnight News from Bloomberg
- Euro-area services came close to stabilizing in the first half of December — a trend likely to be short-lived after most German stores were ordered to close for the rest of the year
- German manufacturing powered ahead in December, with global demand helping factories post a better-than-forecast performance. IHS Markit’s monthly index unexpectedly jumped to 58.6, the highest level in almost three years, from 57.8
- Germany recorded the biggest increase in Covid-19 deaths since the pandemic began as Chancellor Angela Merkel hinted that a hard shutdown that takes effect Wednesday will remain in force beyond January
- House Speaker Nancy Pelosi’s two rounds of meetings with bipartisan congressional leaders made progress towards a deal on Covid-19 relief and funding the government into 2021, according to Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy
A quick look at global markets courtesy of Newsquawk:
Asian equity markets traded higher as the region received a tailwind from Wall Street where all major indices were lifted amid stimulus hopes after House Speaker Pelosi invited fellow congressional leaders for a meeting to discuss government funding and COVID-19 relief, while Senate Majority Leader McConnell suggested that they would not leave Washington without a package no matter how long it takes. ASX 200 (+0.7%) outperformed for most of the session led by tech, mining names and financials which helped push the ongoing tensions with China to the backseat for now, although dozens of ships carrying Australian coal remain blocked from unloading at Chinese ports and Trade Minister Birmingham is to request formal consultations with China at the WTO regarding Australian barley. Nikkei 225 (+0.3%) was also positive but pared the majority of its initial gains amid recent currency inflows, as well as disappointing data in which trade figures underwhelmed including a surprise contraction in exports for its 24th consecutive month of declines and PMI data also remained in contraction territory. Hang Seng (+1.0%) and Shanghai Comp. (U/C) were somewhat varied with the mainland the laggard as ongoing US-China tensions continued to take its toll with MSCI announcing to delete the securities of 7 Chinese companies due to the US blacklisting and which follows similar action by FTSE Russell, S&P Dow Jones Indices and Nasdaq. Finally, 10yr JGBs were lacklustre with demand contained by gains across stocks and with the BoJ to begin its 2-day policy meeting tomorrow, although downside was also stemmed by the BoJ’s presence in the market today for nearly JPY 1.5tln of JGBs with up to 10yr maturities and the central bank also announced to purchase USD 6bln directly from the MoF for the first time ever for smoother execution of its operations.
Top Asian News
- Cathay Still Mired in Covid Trouble With Traffic Down 99%
- Steak Dinner Party Could Worsen Woes for Japan’s Suga
- Australia to Challenge China at the WTO as Tensions Escalate
- Thai Restaurants Gain New Michelin Stars Amid Slump in Travel
European majors kicked off the mid-week session by taking their cue from the modest gains seen in APAC, but thereafter sentiment was lifted following a string of Flash PMI beats across the Eurozone, in turn providing stocks with tailwinds (Euro Stoxx 50 +1.0%), but that being said, some of the PMI metrics could prove to be stale given the re-imposition of lockdown measures – namely in Germany which take effect today through to Jan 10th. Further adding to the risk-on narrative, the positive noise out of the US regarding stimulus has also underpinned broader sentiment, whilst State-side futures also eke mild gains: ES +0.2%, NQ +0.3% and RTY +0.5%. Back to Europe, sectors are all in positive territory but do not portray a specific risk bias amid some idiosyncratic factors. Banks are among the laggards despite the high-yield environment following the ECB’s decision for banks to refrain from or limit dividends until September 2021 with dividends to remain below 15% of cumulated 2019-20 profits and not higher than 20bps of CET1 ratio. Analysts at Goldman Sachs suggest “the ECB delivered beyond our expectations – an introduction of a hard deadline, set for 30 September, will trigger a near automatic ‘repeal’ of current measures, and a return to a ‘normal supervisory cycle'”. Elsewhere, the Auto sector is leading the gains, with Volkswagen (+4.0%) the driving force for the sector as its CEO is looking to upgrade their Wolfsburg HQ with the latest electric vehicle technology to compete with Tesla’s Berlin facility and aiming to reduce the production time per car to 10-hours vs the current projected 20+ hours, according to sources. Meanwhile, Continental (+4.7%) resides at the top of the DAX (+1.6%) as it targets an adj. EBIT margin of 8-11% in the medium term and organic annual growth of 5-8% and intends to undertake planned spin-off of Vitesco tech as scheduled in 2021. Finally, the Travel & Leisure sectors also remains supported by vaccine hopes as testing is underway in the UK and US, whilst EU could have its first vaccinations before year-end.
Top European News
- Nokia to Sacrifice Network Margins to Improve 5G Technology
- Merkel Hints at Lockdown Extension as Deaths Surge to Record
- England Keeps Looser Holiday Covid Rules Even as Cases Surge
- Altice Raises Take-Private Bid to Appease Hedge Fund Rebels
In FX, the Dollar may yet get a fillip from US data, Markit’s flash PMIs and/or the Fed, but for now there is little or no let-up in the negative forces bearing down on the Greenback, both internal and external. On the one hand, risk sentiment is being buoyed by more apparent determination in Washington to deliver fiscal stimulus, while the Brexit saga is showing signs of reaching a positive conclusion assuming the still contentious fishing rights issue can be resolved, and preliminary Eurozone PMIs have lifted some of gloom surrounding the ongoing spread of COVID-19. On top of all that, the Buck could be prone to selling for portfolio rebalancing and perhaps more pronounced given recent record peaks in benchmark equity indices, not to mention the fact that December 31 aligns with the end of Q4 and 2020 as well. Looking at the index, 90.000 is just about holding for now as the DXY hovers within a 90.126-544 band awaiting the busy pm agenda that culminates in the FOMC and chair Powell’s final post-meeting presser of the year – for a full preview of the event check out the Newsquawk Research Suite.
- EUR/GBP/NZD – As noted from the outset, all probing round numbers and significant or psychological marks against their US counterpart, with the Euro extending its y-t-d high through 1.2200 in the process on the back of flash French, German and pan PMIs that beat consensus across the board. Meanwhile, the Pound has inched closer to its current 1.3539 best for the year following latest UK-EU reports on trade negotiations suggesting that 2 out of the 3 most contentious issues may now have been resolved, leaving London and Brussels (or perhaps Paris to be precise) still searching for a compromise on fisheries. Note, relatively weak UK inflation data and somewhat disappointing PMIs (outside of manufacturing) have been largely ignored. Elsewhere, the Kiwi has reclaimed 0.7100+ status ahead of NZ Q3 GDP with assistance from a decent half year Economic and Fiscal update overnight, an upward revision to ASB’s milk price forecast and marginally better than expected current account metrics.
- JPY/CHF/AUD – All benefiting at the US Dollar’s expense more than specifics or independent impulses as the Yen eyes support protecting 103.00 from early November having breached 103.50 with a bit more resolve, while is above 0.8850 and still beyond 1.0800 against the Euro pre-SNB and Aussie comfortably over 0.7550, though unable to keep pace with its Antipodean peer as Aud/Nzd pulls back below 1.0650.
- CAD/NOK/SEK – Downbeat/dovish comments from BoC Governor Macklem clearly weighing on the Loonie as it retreats from a fleeting foray through 1.2700 towards 1.2750 in advance of Canadian CPI in contrast to the Norwegian Krona that is deriving enough support from firm oil prices to match the Euro and even the Swedish Crown in face of similar remarks from Riksbank’s Jansson – see 10.15GMT and 9.49GMT posts on the Headline Feed for details. Indeed, Eur/Nok and Eur/Sek are sub-10.6000 and 10.2000 respectively.
- EM – Broad gains vs the Usd, but the Try is actually outperforming through 7.8000 in wake of CBRT commentary underlining a tightening bias until inflation returns to target, efforts to gradually strengthen reserves and maintaining swap operations to support the Turkish banking system. Conversely, the Rub is lagging further behind after failing to build momentum alongside Brent and meeting solid resistance at 73.0000.
In commodities, WTI and Brent front-month futures eke mild gains in early European hours following a side-ways APAC session, with the complex deriving mild impetus from the overall sentiment bolstered via constructive (albeit stale) EZ PMI metrics. Prices last night were little reactive to the surprise build in private inventories (+1.97mln bbls vs exp. -1.90mln), with eyes on the DoE’s later today following last week’s substantial and surprise build of some 15.189mln bbls (vs. exp -1.424mln). WTI Jan 21 resides north of USD 47.75/;bbl (vs low 47.38/bbl) with Brent Feb 21 probing USD 51/bbl to the upside (vs low 50.48/bbl) having had seen a fleeting move above the level to a high of 51.19/bbl. Elsewhere, spot gold and silver remain elevated on the reflationary prospect emanating from positive noise regarding State-side stimulus, with the softer Buck also providing metals with a boost ahead of the FOMC decision. Spot gold extends gains above USD 1850/oz after finding support at the level overnight, whilst spot silver breached 25/oz to the upside (vs low 24.44/oz). LME copper meanwhile sees a firm session thus far on the back of overall sentiment and Greenback softness.
US Event Calendar
- 8:30am: Retail Sales Advance MoM, est. -0.3%, prior 0.3%;
- 8:30am: Retail Sales Ex Auto MoM, est. 0.1%, prior 0.2%
- 8:30am: Retail Sales Control Group, est. 0.15%, prior 0.1%
- 9:45am: Markit US Manufacturing PMI, est. 55.8, prior 56.7; Markit US Services PMI, est. 55.9, prior 58.4; Markit US Composite PMI, prior 58.6
- 10am: Business Inventories, est. 0.6%, prior 0.7%
- 10am: NAHB Housing Market Index, est. 88, prior 90
- 2pm: FOMC Rate Decision
DB’s Jim Reid concludes the overnight wrap
xYesterday saw risk assets recover from their Monday losses on the back of mounting hopes of deals in both the US stimulus negotiations as well as the EU-UK trade negotiations. By the close, the S&P 500 was up +1.29%, snapping a run of 4 successive losses, whilst the rotation out of safer assets saw the dollar index weaken a further -0.26% to hit a fresh 2-year low. The moves were part of a broad-based advance for equities, with more than 80% of the S&P 500 moving higher for the first time in over a month, and nearly every sector rising on the day, with cyclicals such as Energy (+1.92%), Materials (+1.88%) and Banks (+1.82%) among the main winners. It was a similar story in Europe, though they didn’t rebound by as much having missed out on the selloff after the previous day’s close, and the STOXX 600 ended the session up +0.25%.
Before we discuss the stimulus talks however, today’s focus will be on the final Fed meeting of 2020, along with Chair Powell’s subsequent press conference. In their preview (link here), our US economists write that they expect the FOMC to maintain the current pace and composition of asset purchases, but the most important innovation for this meeting is likely to be an enhancement to the QE guidance by adopting qualitative outcome-based language. This will be a tough balancing act given the desires from some to maintain the flexibility to adjust purchases as the outlook evolves, so they expect the Fed will be less explicit with its QE guidance than its policy rate guidance, and think the Fed will adopt language along the lines of increasing “its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace…until substantial progress has been made toward the Committee’s goal of maximum employment, and inflation is on track to reach 2% on a sustained basis.” Watch out for the latest Summary of Economic Projections too, where our economists expect there to be upgrades to the growth and unemployment forecasts. However, with a persistent shortfall in core inflation and uncertainty over the virus and the fiscal outlook, the median assessment of the federal funds rate should be unchanged through 2023.
On that fiscal policy uncertainty, the stimulus talks progressed further yesterday following a meeting between Congressional leaders from both parties and Treasury Secretary Mnuchin after the New York close. House Speaker Pelosi, House Minority Leader McCarthy, Senate Majority Leader McConnell and Minority Leader Schumer were all relatively optimistic following the discussions, and McConnell indicated that he believes Congress would not go on recess for the holidays without a deal, saying he thinks there is “an agreement that we’re not going to leave here without the omni(bus bill) and a Covid package.” That came as another important political milestone was reached yesterday, since for the first time Senate Majority Leader Mitch McConnell acknowledged Joe Biden as President-elect following his formal victory in the Electoral College on Monday.
Against this backdrop, Treasury yields rose and the curve steepened further, with 10yr yields up +1.5bps to 0.908%, as the 2s10s steepened +1.3bps. The reflation trade also gathered steam, with 10yr US breakevens closing at 1.92%, their highest level since April 2019. Other core sovereign bonds similarly saw a rise in yields, with those on 10yr bunds up +0.9bps, but the bigger story in Europe was the relentless march lower of southern European yields, with those on 10yr Italian debt falling -2.2bps to an all-time low of 0.52%, as those on Spanish 10yr debt similarly fell -2.1bps to their own all-time low of -0.02%. That sent the Italian spread over bunds to its tightest level in over 4 years, at 1.13%, while the Spanish spread over bunds closed at 0.60%, which was its lowest closing level in over a decade.
As well as the Fed, today’s other main highlight will be the flash PMIs for December, which will offer one of the initial indications of how the global economy has fared into the end of the year. Overnight, we’ve already had the numbers out from Japan and Australia which gave mixed messages as in Australia, both the manufacturing (56.0 vs. 55.8 last month) and services (57.4 vs. 55.1) readings accelerated, whereas Japan saw a slight deceleration in its services PMI to 47.2 (vs. 47.8 last month). All eyes will be on the European numbers out later this morning, though the consensus for the Euro Area’s composite PMI is only pointing to a slight uptick to 45.7 (vs. 45.3 last month).
Elsewhere in Asia markets have followed Wall Street’s lead overnight with the Nikkei (+0.17%), Hang Seng (+0.82%), Shanghai Comp (+0.18%) and Kospi (+0.44%) all moving higher. In the US, S&P 500 futures (-0.05%) are trading broadly flat however. In other overnight news, Australia has decided to challenge China at the WTO over China’s imposition of tariffs on its barley exports. The move follows a recent deterioration in relations between the two countries, with various trade restrictions coming into place this year.
Onto the coronavirus, and there was more positive news on vaccine authorisations yesterday, with the US FDA reporting that the Moderna vaccine was safe and effective. That comes ahead of a meeting tomorrow in which they’ll discuss whether to give it an Emergency Use Authorization, as they’ve already done for the Pfizer/BioNtech vaccine. There was some other good news out of the US, as the FDA cleared the first over-the-counter test for Covid-19 that can be taken at home and acquired without a prescription. While initially limited, this sort of test can help open up parts of the economy while the vaccine is being distributed. Over in Europe as well, regulators brought forward their meeting in which they’ll review the Pfizer/BioNTech vaccine to Monday, rather than waiting until December 29 as originally planned. That follows criticism that Europe has lagged the approvals seen elsewhere such as in the US and the UK.
However, widespread vaccinations are still some time away and there was further talk of more stringent measures across a number of countries to deal with rising cases in the meantime. In New York City, Mayor de Blasio said that some kind of shutdown would be needed in the weeks ahead, though the decision would be up to Governor Cuomo. In the UK, pressure has been increasing to rethink the 5-day Christmas easing of restrictions, with the BBC reporting that further talks would take place between the four nations today, though they also said that the easing was still likely to go ahead. Over in Denmark, it was announced that their local lockdowns would be extended to the rest of the country, while in Sweden, which continues to be one of the most heavily scrutinized countries on their handling of the pandemic, reports said they were considering postponing all non-essential healthcare services until the end of January. This comes after Swedish Radio reported that regional hospitals nearly throughout the country are struggling with staff shortages. Overnight, a health ministry official in South Korea said they were also considering raising social distancing to the highest level 3.
Onto Brexit, and yesterday sterling was the top-performing G10 currency for the second day running as optimism continued to rise that a deal might be reached in the coming days. We didn’t get any concrete news out from the negotiations, but sentiment was supported by a tweet from the political editor of BBC Newsnight who said “Big buzz in the last hour among Tory MPs that the UK is heading towards a Brexit deal with the EU. Eurosceptics being reassured they will be happy.” Sterling strengthened further in response, and ended the session up +1.02% against the dollar, and gilts underperformed once again thanks to lower expectations that the Bank of England would need to ease monetary policy.
Wrapping up with yesterday’s data, US industrial production rose by +0.4% in November (vs. +0.3% expected), while capacity utilisation rose to 73.3% (vs. 73.0% expected). Meanwhile the Empire State manufacturing survey fell to 4.9 (vs. 6.3 expected). Over in the UK, the unemployment rate rose to 4.9% (vs. 5.1% expected) in the 3 months to October, while the number of redundancies over the same period rose to 370k, which was above its GFC peak of 311k.
To the day ahead now, and the aforementioned Federal Reserve meeting and Chair Powell’s subsequent press conference will likely be the highlight. Otherwise, data highlights include the remainder of the flash PMIs for December from around the world, the UK CPI reading for November, and the US November retail sales and December NAHB housing market index. Over in Europe, central bank speakers include the ECB’s de Guindos, Schnabel and Hernandez de Cos.