>>> Asian update

Asia Mid-Session Market Update: Oil prices spike 5% on non-OPEC production cut agreement; Property and insurance names lead China lower
Mon, 12 Dec 2016 1:31 AM EST

***Friday US markets on close: Dow +0.7%, S&P500 +0.6%, Nasdaq +0.5%***
- At the close: VIX 11.8 (-0.9pts); Treasuries: 2-yr 1.15% (+2bps), 10-yr 2.46% (+8bps), 30-yr 3.15% (+7bps)
- Best Sector in S&P500: Healthcare
- Worst Sector in S&P500: Materials

***Weekend US Corporate Headlines***
- BA: Boeing, Iran Air Announce Agreement for 80 Airplanes with estimated value of $16.6B

***Politics***
- (IT) Outgoing Foreign Min Gentiloni given a mandate to form a new Italy govt following resignation of PM Renzi - press
- (US) John Kennedy (R) wins Louisiana runoff elections for US Senate; Gives Republicans 52 seats
- (US) Reportedly Pres-elect Trump has picked Exxon CEO Tillerson as nominee for Secretary of State
- (HK) Hong Kong Financial Sec Tsang hands in resignation; hinting in a blog post that he will run for the position of Chief Executive - local media
- (NZ) New Zealand confirms Bill English as new PM, as expected

***Asia Session Notable Observations, Speakers and Press***
- WTI crude oil spikes up 5% in early electronic trade to test $54.50 after non-OPEC oil producers' meeting yielded an output cut; Saudi minister also optimistic about being able to cut production more than anticipated.
- Asian indices mixed - Nikkei225 leading advancers as JPY remains weak due to rising US treasury yields, while Shanghai Composite falls about 2%; Weakness in China attributed to China Insurance Regulatory Commission banning insurers from investing in stocks (amid allegations of short term trading) and property sector losses on China Vanke warning of significant price declines next year.
- Commodity currencies CAD and MXN benefit from higher oil prices; Safe-haven currencies JPY and CHF remain sold off, as latest CFTC data show their net short positions among speculators at 1-year high.
- Political uncertainty in Italy may recede as Foreign Min Gentiloni gathers parliament leaders in attempt to form a new govt; May meet with President again on Monday to inform about progress in talks
- Multiple press sources speculating BOJ may have to step back from its policy easing stance with either reduced asset purchase program for JGBs or higher 10-year yield target due to steadily rising Treasury rates in the US also raising rates Of JGBs.

Energy:
- 12 non-OPEC producers agree to production cuts totaling 612K bpd - press
- (SA) Saudi energy min: very optimistic about meeting with Non-OPEC producers tomorrow; expect 10 to 12 non-OPEC producers to participate in the final communique

China:
- (CN) China NDRC researchers see 2017 CPI at 1.8% and PPI at 1.0% - press
- (CN) China State Information Center calling for 2017 GDP target of ~6.5%; CPI to be capped at ~2.5% and creation of 10M jobs - CSJ
- (CN) Nomura targets 2017 GDP of 6.5% and 2018 GDP at 6.2% - press

Japan
- (JP) BOJ may soon have to consider tightening policy for the first time since 2007 due to rising US Treasury yields following election of Trump - press
- (JP) Financial press discusses the possibility of the BOJ tapering its bond buying to ¥70T v ¥80T target, due to the introduction of the yield curve control policy
- (JP) Japan's ruling LDP party proposes for Parliament's upper house to vote to casino and pension reform bills on Tuesday - Japan press
- (JP) Bank of Japan (BOJ) and Financial Services Agency (FSA) have increased oversight of bank lending for apartments due to concern such transactions could spur bad debt - press

Australia / New Zealand:
- (AU) RBC head of fixed income: RBA's policy statement may imply neutral bias, but inflation forecasts suggest remaining bias to cut; Confident will cut rates again in 2017 - Australian press
- (NZ) Moody's: New Zealand's Half-year Budget shows strong public finances and robust economic growth
- (NZ) New Zealand Institute of Economic Research (NZIR) releases Q3 report: Raises 2016/17-2018/19 GDP forecast

***Asian Equity Markets/Futures (00:30ET)***
- Nikkei225 +1.0%, S&P/ASX flat, Kospi +0.1%, Shanghai Composite -1.8%, Hang Seng -1.1%
- Equity Futures: S&P500 flat, Dax flat, FTSE100 +0.3%

***FX ranges/Commodities/Futures/Fixed Income (00:30ET):***
- EUR 1.0505-1.0660; JPY 112.85-113.85; AUD 0.7410-0.7455; NZD 0.7070-0.7140
- Feb gold -0.3% at $1,159/oz, Jan crude oil +4.8% at $53.98/brl, Mar copper +0.6% at $2.67/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 3.2 tonnes to 857.5 tonnes; 17th straight decline; lowest since May 18th
- (KR) South Korea sells 10-yr bonds at 2.271%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.9086 V 6.8972 PRIOR; weakest Yuan setting since Nov 25th

***Key economic data:***
- (JP) JAPAN OCT MACHINERY ORDERS M/M: 4.1% V 1.1%E; Y/Y: -5.6% V -4.9%E
- (JP) JAPAN NOV PPI (CGPI) M/M: 0.4% V 0.3%E; Y/Y: -2.2% V -2.3%E
- (NZ) New Zealand Nov REINZ median home price y/y: +13.2% v +4.0% prior; Home sales y/y: -6.0% v -14.2% prior

***Asia movers***
- Iluka ILU.AU: Macquarie Raised ILU.AU to Neutral from Underperform; +5.0%
- Sirtex Medical SRX.AU: UBS maintains Buy; Lowers PT by 14% to A$33.50; +3.8%
- Hyundai Heavy 009540.KR: Awarded $700M order to build 10 ships for Iran Shipping Lines - press; +2.6%
- Domino's Pizza DMP.AU: UBS Raised DMP.AU to Buy from Neutral, price target: A$79.70; +2.0%
- Downder DOW.AU: JV, Keolis Downer, awarded ~A$450M contract in Newcastle; +1.8%
- Alpine Electronics 6816.JP: Raises FY16/17 guidance Net profit ¥2.1B from loss ¥2.5B; Affirms Op ¥2.3B; Rev ¥236.5B; +1.5%
- Qantas QAN.AU: Plans to launch direct Australia-Europe 17-hour flights with its new Dreamliner aircraft - press; Morgan Stanley negative note -3.2%
- Truly International Holdings 732.HK: Credit Suisse Cuts 732.HK to Neutral from Outperform; -4.8%
- China Vanke 2202.HK: President: China home sales may fall significantly over the next year - Chinese press; -5.4%
- Geely Auto 175.HK: Credit Suisse Cuts 175.HK to Neutral from Outperform; -6.2%
- Flight Center FLT.AU: Morgan Stanley Cuts FLT.AU to Underweight from Equal Weight; -7.7%
- China Green Holdings 904.HK: Issues H1 profit warning; -8.5%

>>> What to look at tody - 10th & 11th of December 2016

Weekly Performance
Dow +3.06% S&P +3.08% Nasdaq +3.59% Russell +5.62% BRazil+0.31% EuroStoxx +6.05% CAC +5.19% Dax +6,57% Ibex +6.54% Mib +7.06% FT +3.32% SMI +4.05% Nikkei +3.10% Hang Seng +0.87% CSI -1% Shanghai -0.34%
Stocks had a positive week in the US and globally, with many hitting new all-time highs and the S&P 500 posting consecutive record levels over the past three sessions. On the week, the S&P and DJIA each gained 3.1%, while the Nasdaq surged 3.6%. After the historic OPEC agreement and talks with non-OPEC producers this weekend expected to be fruitful, cuts set by the oil cartel last week seem to be real. And with a Fed rate decision also on the horizon, the markets have heavily discounted a likely hike in December. In the past, the dark shadow of higher rates pushed stock prices down, whereas now expected corporate tax cuts and deregulation have more than offset the higher cost of money.

Macro :
- Saudis Signal Deeper Cuts After Deal With Non-OPEC Countries
- Mexico’s Three Largest Oil-Export Ports Closed on Poor Weather
- Turkey’s AKP Proposes Amendment Extending Presidential Powers
- France Extends Electric Car Bonus to Taxis to Fight Pollution
- Snap Said Holding Meetings w/ Investors Ahead of IPO: WSJ
- Giuliani Said Ruled Out for Secretary of State: CNN
- Italian President Asks Gentiloni to Form New Government

Keep an eye on :
- ABI BB : AB InBev Considers Review of Global Ad-Buying Business: WSJ
- ACS SM : Spain’s ACS Reduces Stake in Canadian Toll Road: Reuters
- ACA FP : Agricole, UniCredit to Agree on Pioneer Sale Today: Messaggero
- AIR FP : Iran Air to Buy 80 Boeing Aircraft Including 737, 777: IRNA
- AMUN FP: UniCredit’s Pioneer Says Two Senior Executives Have Resigned
- AMUN FP : Amundi May Fund Pioneer Deal With Capital Increase, Loan: Sole
- ATL IM : Bids for Atlantia ASPI Stake to Be Submitted by Dec. 15: Sole
- BKIA SM : Bankia and Banco Mare Nostrum's privatisation urged by European authorities; merger subject to conditions
- BPE IM : BPER Banca Targets Higher Revenue From Fees: Sole
- BMPS IM : Monte Paschi Says It Hasn’t Received Info From ECB on Request
- BPOST BB : Belgian government open to selling shares in Bpost (translated) - http://bit.ly/2gmwVLq tidj.be
- BLT LN : BHP CEO Says Rally in Iron Ore, Coal Won’t Last: Australian
- CCC PW : CCC to Fund New Stores From EU150m Convertible-Bond Proceeds
- CBK GY : Commerzbank’s Mandel Aims to Double Customer Growth: EaS
- DAI GY : Daimler Abandons Individual Bonus Payments: Stuttgarter Zeitung
- DBK GY : Weidmann Could Accept State Shielding Some Bank Investors: FAS
- DBK GY : Deutsche Asset Management to Expand in U.S., Asia: Moreau in WaS
- DB1 GY : London backs Deutsche Börse and LSE to resist Frankfurt base, Downing Street sees no reason why the planned exchange merger should be reviewed - FT - http://on.ft.com/2hAMY9j
- ENI IM : ENI exploring interest in selling ENI Gas & Power NV - http://bit.ly/2hah9ak
- FCC SM : FCC Set for Possible Partisan Stalemate After Nomination Fails
- GLEN LN : Glencore, Qatar Buy Stake in Rosneft With Loans From Intesa
- IGG LN : IG CEO Says FCA Rules Could Push Traders Out of U.K.: Telegraph
- LAD LN : GVC rumoured to have prepared reverse takeover for Ladbrokes
- LMI LN : Lonmin Threatened by South Africa Over Slow Response to Massacre
- MEO GY : Kaufhof Head Wants German Stores to Open 10 Sundays a Year: FAZ
- NOVN VX : Novartis Said to Eye Takeover of Stada, SonntagsZeitung Reports
- RBI AV : Raiffeisen May Reduce Stake in Event of Avaloq IPO, CEO to NZZ
- RKET GY : Rocket Internet Swaps Foodpanda Stake for Delivery Hero Shares
- RYA LN : Ryanair CEO to Slash 2017 Prices in Germany Price War: Funke
- SAB LN : Asahi Lead Bidder for SAB Eastern Europe Assets: Sunday Times
- SAN FP : Sanofi to Fire About 20% of U.S. Diabetes, Cardiovascular Staff
- SKY LN : Sky Board Faces Investor Dissent on Accepting Fox Bid: Telegraph
- FP FP : Total CEO Says Oil Market Will Remain Volatile: JDD
- UCG IM : UniCredit Pekao Unit CEO May Quit as PZU Completes Deal: Parkiet
- UCG IM : UniCredit’s Pioneer Says Two Senior Executives Have Resigned
- VIV FP : Vivendi Says It’s Not Part of Potential Orange-Canal Plus Talks
- VOD LN : For Vodafone, Being No. 2 Could Be Best - http://on.wsj.com/2gmyqsT
- VOW3 GY : VW Meeting With DoJ Last Week Didn’t Bring Progress, BamS Says
- ZIL2 GY : ElringKlinger Sees 30% of Sales From E-Car Parts: Automobilwoche

Reuters - Major Sky shareholder to vote against Fox bid

Major Sky shareholder to vote against Fox bid

A major shareholder in British pay-TV company Sky (SKYB.L) will vote against Twenty-First Century Fox's (FOXA.O) $14 billion takeover bid, the investor told Reuters on Sunday, while another said it is unhappy about the offer.

Rupert Murdoch's Fox offered 10.75 pounds ($13.52) a share in cash on Friday in its second attempt to buy the 61 percent of the business that it does not own, with Sky's independent directors backing the latest bid.

The shareholder, which declined to be named but said it was one of Sky's top 50 stakeholders, described the bid as "far too low".

"We are voting against the deal if it comes out in its current form and we have told the company as such," the investor said.

"The independent directors have absolutely failed minority shareholders."

A Sky spokeswoman declined to comment.

The deal would give Fox control of a pay-TV network spanning 22 million households in Britain, Ireland, Austria, Germany and Italy.

A second shareholder told Britain's Sunday Telegraph newspaper that Sky's directors should push for more.

It "ought to be the start of the process, not the conclusion", Alastair Gunn, a fund manager at Jupiter Asset Management, was quoted as saying.

A representative of the firm was not immediately available for comment when contacted by Reuters on Sunday.

Analysts at Citi characterized the offer as a "low-ball bid", citing 13.50 pounds per share as a fair valuation.

Sources familiar with the matter have told Reuters that Fox had pounced after Britain's vote to leave the European Union in June sent the pound down about 14 percent against the U.S. dollar and Sky's share price tumbling.

WSJ : Why Goldman Sachs Could Again Rule Wall Street

Why Goldman Sachs Could Again Rule Wall Street
The surge in volatility since the election has reawakened hedge funds, which are Goldman’s core clientele

Wall Street’s “flow monsters” are suddenly looking less formidable.

So far, the post-Trump trading world seems to be rewarding everyone on Wall Street. J.P. Morgan Chase & Co., Citigroup Inc. and others are projecting double-digit increases in trading revenue for the fourth quarter, executives said at an industry conference last week.

But a postelection shakeout could loom, one that is more likely to benefit firms like Goldman Sachs Group Inc. Indeed, Goldman’s postelection share-price gains have outpaced those notched by J.P. Morgan and Citigroup by more than 10 percentage points. Goldman’s shares are up nearly a third since Election Day and are within striking distance of their all-time closing high of $247.92 reached Oct. 31, 2007.

One reason: the low-margin, high-volume “flow monster” model based on a steady flow of business from global corporations that has boosted Citigroup and J.P. Morgan “could be under pressure" in a new, more volatile trading world, said Mitchel Penn, a managing director in equity research at Janney Montgomery Scott. That has the potential to create new winners and losers, he added.

ENLARGE
Those likely to gain are firms more focused on hedge funds and active traders. Until the election, Goldman Sachs’s core clientele of hedge funds was less active amid low stock-market volatility and interest rates stuck near zero.

The surge in volatility since Nov. 8 has reawakened hedge funds, while protectionist views espoused by President-elect Donald Trump could dampen international trade. That would lessen corporations’ need for currency hedges and other products.

Opportunities in trading are shifting from a “stocked pond” where it’s easy to catch small fish to a new environment “all about trying to reel in the big ones," said Brennan Hawken, a UBS Group AG analyst. “That’s Goldman’s sport.”

That would bring things full circle on Wall Street. Hedge funds once powered big-bank trading desks. They paid high fees for tailored products that let them place big bets on, say, Japanese government bonds or Texas oil.


But the postcrisis period of calm made it harder to find an edge. Returns suffered and some funds curtailed their trading, which disproportionately hurt Goldman.

Among the five biggest U.S. trading firms, Goldman’s share of fixed-income trading fees fell to 14% so far this year from 21% in 2010, according to data compiled by UBS. Morgan Stanley, which also skews toward hedge funds, lost two percentage points, while J.P. Morgan picked up eight and Citigroup gained two.

Much of that growth has come from corporate treasurers. A spike in global trade and cross-border merger activity has sent companies in search of financial products to help manage risks.

These transactions generally carry low fees, sometimes just a few thousand dollars. But big global companies can do thousands each year.

Often, they turn to global banks like Citigroup and J.P. Morgan. These behemoths are already plugged in with corporate back-office officials and treasurers who shop for less-glamorous financial services—meeting payroll and zapping cash around the world.

Earlier this year, J.P. Morgan’s investment banking chief, Daniel Pinto, said the bank’s corporate clients were expanding to more countries and handling more real-time payments, increasing their needs for trading products like currency hedges.

Citigroup’s network operates in nearly 100 countries, collecting cash from retail stores in Indonesia and making sure British pounds can be withdrawn as Brazilian reals. Corporate clients generate more than 40% of Citigroup’s trading revenue in certain products, according to bank executives.

“While people often cite the declining industry revenue pool in [fixed-income trading], for us you really need to dig a little deeper,” said James Forese, who runs Citigroup’s institutional business.

But that environment could change. Mr. Trump’s election created pockets of uncertainty that have been fertile hunting ground for hedge funds. An expected rise in interest rates is also likely to open new opportunities for these clients to be more active.

Goldman, which gets about one-quarter of its trading business from hedge funds, could benefit. The firm had been urging its investment bankers to use their relationships with CEOs to refer trading business, and had shifted sales coverage to win more business from asset managers, according to people familiar with the matter.

The recent bounce in hedge-fund trading, however, has some executives rethinking the urgency of that shift, the people said.

FT : Diesel faces global crash as electric cars shine

Diesel faces global crash as electric cars shine
Falling costs of electric and hybrid vehicles steals diesel’s competitive advantage

Diesel will “almost disappear” from the global car market within 10 years as it faces a “perfect storm” of competition from cheaper electric cars and tougher stances by regulators, a report by UBS has forecast.

The falling costs of electric and hybrid vehicles will strip the fuel of its once-competitive price advantage, while tighter emissions regulation and soured public sentiment towards the fuel in the wake of the Volkswagen scandal will see its global share of car sales fall from 13.5 per cent to just 4 per cent by 2025, the bank predicts.

In Europe, diesel’s traditional heartland, sales will fall from 50 per cent to just 10 per cent, it forecasts.


Sales in Europe have been falling slowly since 2012, but have accelerated in the past 12 months in the wake of the VW diesel scandal.

The decline forecast by UBS is sharper than many in the industry predict, and comes as major manufacturers grapple with the question of whether diesel cars will be viable in the future.

All carmakers are pursuing some form of electrification in order to meet tightening CO2 targets.

Diesel, which emits around a fifth less CO2 than petrol equivalents, is no longer the easy option it once was due to tightening rules over Nitrogen Oxide emissions, which are emitted by diesel engines.

As a result, almost all manufacturers plan to launch fully electric cars within five years.

Diesel cars are likely to be replaced by 48V mild-hybrid technology, which combines a small petrol engine with a large battery and offers similar fuel economy and performance to diesel while eliminating NOx emissions, the report predicts.

UBS expects sales of 48V cars to overtake diesel sales globally in 2021, and to account for a quarter of all cars sold by 2025.

In Europe, where diesel sales peaked in 2012, the fuel is taxed around €15 less per litre than petrol, adding to its popularity.

But states including France and Belgium have pledged to close this gap, while cities such as London, Madrid, Paris and Athens all have plans to ban the vehicles from their central areas.

“In the aftermath of the Volkswagen diesel issue, politicians and regulators have become highly sensitive and increasingly populist about diesel emissions,” said the report.

“Even if some plans appear overly ambitious, the direction of travel is obvious and likely irreversible.”

It added that diesel would remain dominant in trucks and large SUVs.

FT : London backs Deutsche Börse and LSE to resist Frankfurt base

London backs Deutsche Börse and LSE to resist Frankfurt base - http://on.ft.com/2hAMY9j
Downing Street sees no reason why the planned exchange merger should be reviewed

London is backing Deutsche Börse and the London Stock Exchange Group in resisting German pressure to reopen the exchanges’ planned merger and force the combined company to be based in Frankfurt.

The deal to create a €28bn European heavyweight has been given high level blessing by both the German and UK governments in the past and Downing Street insiders said they saw “no reason” why the deal agreed by shareholders should be reviewed.

Any suggestion that the headquarters be switched from London to Frankfurt because of Brexit would be politically problematic for Theresa May, the UK prime minister, who is attempting to play down the risk to the City of London of life outside the EU.


The regional government of Hessen, which regulates Deutsche Börse, is adamant that it should host the headquarters.

Michael Boddenberg, head of the ruling Christian Democrats in the Hessen regional assembly said it was “sensible” to apply certain conditions. “The central conditions are as follows: the seat of the joint exchange holding company after a possible merger of Deutsche Börse, and the London Stock Exchange must be Frankfurt and the financial base in Frankfurt and the development of Deutsche Börse in international competition must be strengthened through the merger . . . . After the vote of the UK to leave the EU it is in our view ruled out that London can be considered as the [combined company’s] seat.”

This reflects an overall toughening in Germany's view of Brexit in response to signs of Mrs May's government adopting increasingly hard tones. It also ratchets up the tension around the all-share deal to create Europe’s largest exchange group. It also faces tough scrutiny from antitrust officials in Brussels, who this week are expected to formally lay out their principal objections to the merger.

Conceived a year ago, the LSE and Deutsche Börse’s plans to combine to compete with rivals in the US and Asia has been thrown into uncertainty by the UK’s decision to leave the EU.

They plan to base the holding company of the combined group in London, paying UK taxes. Each exchange would maintain local headquarters in Frankfurt and London to oversee regulation of their markets.

The British Treasury said: “We’re not going to comment on this as it’s a commercial issue.” Spokesmen for both the LSE and Deutsche Börse said: “We refer back to our previous statements on this matter — those still stand. The terms of our deal — which are binding — remain unchanged.”

Brussels is conducting an in-depth investigation into the deal and has cited fears that it could reduce competition in derivatives clearing and the repo market, which provides a crucial source of short-term funding for banks. The two exchanges have offered to sell the LSE’s French clearing arm to fend off the concerns.

>>> Weekly Update

Weekly Market Update: ECB Extends QE and Reflation Rally Continues

Stocks had a positive week in the US and globally, with many hitting new all-time highs and the S&P 500 posting consecutive record levels over the past three sessions. On the week, the S&P and DJIA each gained 3.1%, while the Nasdaq surged 3.6%. After the historic OPEC agreement and talks with non-OPEC producers this weekend expected to be fruitful, cuts set by the oil cartel last week seem to be real. And with a Fed rate decision also on the horizon, the markets have heavily discounted a likely hike in December. In the past, the dark shadow of higher rates pushed stock prices down, whereas now expected corporate tax cuts and deregulation have more than offset the higher cost of money.

The market rally was also given extra fuel by the hoped-for extension of the ECB asset buying program. The market reacted positively after Thursday's meeting, which saw the ECB extend purchases, but at a reduced amount. ECB President Draghi said purchases will continue through Dec 2017, an extension of 9 months, while the size of purchases will be reduced to $60B from $80B as of April 2017. Under the current macro narrative, bonds are the target, with the inevitability of higher interest rates and a larger federal budget pushing prices lower. Over the week, 10-year Treasuries gained 7bps in yield going from 2.39% to 2.46%, while 30-year bonds were hit harder, gaining 9bps, from 3.06% to 3.15%.

In corporate news, President-elect Trump gained some market attention by targeting both the pharmaceutical industry and Boeing in some pointed comments. On Tuesday, Trump told Boeing through Twitter that the price of its next delivery for Air Force One was too high and would have to be renegotiated, and on Wednesday, the president-elect stated in an interview that drug prices would have to come down, which sent pharmaceutical sector plunging and the NASDAQ Biotechnology Index down 3% on the day. The financial sector was one of the big gainers this week, rising 4.4%, helped by interest rate normalization and a high probability of easier capital requirements. The Italian financial sector was an exception, with banks selling off after Italian voters said "no" to constitutional reforms that would have smoothed capital raising by Monte Paschi and other banks. Energy deals were busy this week: Glencore is said to be in the final stage of a deal to buy 19.5% of Russian Rosneft at €10.2B, while a Macquarie-led consortium plans to buy a 61% stake in the UK National Gas grid for $7B, with the Qatari Government involved in both deals. Also Sky disclosed it received a takeover approach from 21st Century Fox, which already hold a 39% stake.


SUNDAY 12/4
(CN) CHINA OCT CAIXIN CHINA SERVICES PMI: 53.1 V 52.4 PRIOR (16-month high)
*(HK) HONG KONG NOV COMPOSITE PMI: 49.5 V 48.2 PRIOR; highest since Mar 2015; 21st consecutive month of contraction
(IT) Italy PM Renzi: My govt ends here (resigns as promised); Turnout was higher than anyone expected; Italian people have spoke
(IT) Italy referendum early exit polls shows "no" vote ahead on PM Renzi's proposed Constitutional reforms
(AT) Austria Presidential election: Center-left candidate Alexander Van der Bellen defeats far-right Norbert Hofer by 53.3% to 46.7% margin

MONDAY 12/5
*(EU) EURO ZONE DEC SENTIX INVESTOR CONFIDENCE: 10.0 V 14.3E
*(US) NOV FINAL MARKIT SERVICES PMI: 54.6 V 54.9E (lowest since Sep 2016)
*(US) NOV ISM NON-MANUFACTURING COMPOSITE: 57.2 V 55.5E
(US) Nov Labor Market Conditions Index Change: 1.5 v 0.2e
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET (OCR) UNCHANGED AT 1.50%; AS EXPECTED

TUESDAY 12/6
*(DE) GERMANY OCT FACTORY ORDERS M/M: 4.9% V 0.6%E; Y/Y: 6.3% V 1.6%E
*(EU) EURO ZONE Q3 FINAL GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.7% V 1.6%E
*(US) Q3 FINAL NONFARM PRODUCTIVITY: 3.1% V 3.3%E; LABOR COSTS: 0.7% V 0.3%E
(US) OCT FINAL DURABLE GOODS ORDERS: 4.6% V 3.4%E; DURABLES EX TRANSPORTATION: 0.8% V 0.5%E
LNKD: EU approves Microsoft-LinkedIn merger with conditions, as expected - press
(US) Atlanta Fed GDPNow: cuts Q4 GDP forecast to 2.6% from 2.9% on Dec 1st
VA: Justice Department approves Virgin-Alaska merger, as expected
9984.JP: President-elect Trump tweets: "Masa (SoftBank) of Japan has agreed to invest $50 billion in the U.S. toward businesses and 50,000 new jobs"
*(AU) AUSTRALIA Q3 GDP Q/Q: -0.5% (first contraction in 5 years) V -0.1%E; Y/Y: 1.8% V 2.2%E (lowest annual pace since 2008)

WEDNESDAY 12/7
*(CN) CHINA NOV FOREIGN RESERVES: $3.052T V $3.061TE (5th straight month of decline and largest monthly amount since January; Lowest level since Mar 2011)
*(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.25%; NOT EXPECTED
*(UK) OCT INDUSTRIAL PRODUCTION M/M: -1.3% V 0.2%E; Y/Y: -1.1% V 0.5%E (largest decline since 2012)
*(UK) OCT MANUFACTURING PRODUCTION M/M: -0.9% V +0.2%E; Y/Y: -0.4% V +0.7%E
*(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(US) President-elect Trump: will bring down drug prices - Time Magazine
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.50%; AS EXPECTED
ALR: Abbott seeks to terminate $56/shr cash Alere acquisition; files complaint seeking termination in the Delaware Court of Chancery
(US) Association of American Railroads weekly rail traffic report for week ending Dec 3rd: 553.1K carloads and intermodal units, +2% y/y (third straight week of gains)
COST: Reports Q1 $1.17 (ex $0.07 benefit from legal settlement) v $1.19e, R$28.1B (including member fees) v $28.4Be
*(JP) JAPAN Q3 FINAL GDP Q/Q: 0.3% V 0.5%E; ANNUALIZED GDP: 1.3% V 2.3%E (3rd straight expansion both quarterly and annualized)
*(CN) CHINA NOV TRADE BALANCE $44.6B V $46.9BE

THURSDAY 12/8
(CN) China Passenger Car Association (PCA): China Nov retail auto sales at 2.42M, +19.8% y/y
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE SEEN UNCHANGED AT 0.00%, AS EXPECTED
*(EU) ECB POLICY STATEMENT: EXTENDS ASSET PURCHASE TARGET UNTIL DEC 2017 (9-month extension); SCALES BACK PURCHASES TO €60B AFTER APRIL
*(US) INITIAL JOBLESS CLAIMS: 258K V 257KE; CONTINUING CLAIMS: 2.01M V 2.05ME
(EU) ECB chief Draghi: To buy €60B in QE from Apr until Dec; reiterates that program can be amended if needed - prepared remarks
*(EU) ECB chief Draghi: discussed option of continuing QE at full €80B for 6 months, decided instead to reduce QE to €60B in April - Q&A
(US) Fed reports Q3 Financial Accounts: Household Change in Net Worth: $1.59T v $0.84T prior
*(CN) CHINA NOV CPI M/M: 0.1% V 0.7% PRIOR; Y/Y: 2.3% (7-month high) V 2.2%E
*(CN) CHINA NOV PPI Y/Y: 3.3% V 2.3%E (3rd straight y/y positive print; 5-year high)

FRIDAY 12/9
*(FR) FRANCE OCT INDUSTRIAL PRODUCTION M/M: -0.2% V +0.6%E; Y/Y: -1.8% V -0.6%E
*(FR) FRANCE OCT MANUFACTURING PRODUCTION M/M: -0.6% V +0.7%E; Y/Y: -1.5% V +0.1%E
LLY: Provides detailed study from failed Alzheimer's drug Solanezumab trial
*(US) DEC PRELIMINARY MICHIGAN CONFIDENCE: 98.0 V 94.5E
SKY.UK: Discloses possible offer for Sky plc by 21st Century Fox at £10.75/shr in cash; forms independent committee to consider proposal terms
(US) Atlanta Fed maintains Q4 GDP forecast at 2.6%, no change from Dec 6th
(US) Weekly Baker Hughes US Rig Count: 624 v 597 w/w (+4.5%) (4th straight weekly increase)

WSJ : Anheuser-Busch InBev to Consider Ad Buying Review for 2017

Anheuser-Busch InBev to Consider Ad Buying Review for 2017


Anheuser-Busch InBev NV is considering a review of its massive global ad buying business following its recent $100 billion-plus takeover of beer giant SABMiller.
"As a leading CPG company, it is part of our best practices to regularly review our approach to our media operating model," said a spokeswoman in a statement. "Following the combination with SABMiller, we are currently assessing our media planning and buying model and whether a global media agency review would be required."
The world's largest brewer is seeking to hire a consulting firm to help it review its existing ad buying practices and potentially conduct a review, according to people familiar with the matter.

AB InBev and SABMiller collectively spent $1.08 billion on U.S. measured media in 2015, according to estimates from ad-tracking firm Kantar Media.
AB InBev, which houses brands like Budweiser, Corona and Stella Artois, currently works with a long list of ad buying firms, including companies owned by ad giants WPP PLC, Publicis Groupe SA, Dentsu Inc. and Interpublic Group of Cos.
A review could begin in the second quarter of 2017, and cover a number of markets, including North America, Europe, Asia Pacific, Latin America and Africa, among others, according to the people familiar with the matter.
While the brewer's motives aren't immediately clear, a megadeal typically prompts a move to consolidate agency relationships in an effort to cut costs. combining media budgets could also provide the brewer, and its agencies, with even more sway over media companies, leading to additional cost savings.
AB InBev has already said it is seeking $1.4 billion in annual cost savings from the SABMiller deal. Marketing is typically a place that companies seek to find cost savings following mergers.
AB InBev has a reputation for slashing costs and has in the past pressured ad firms over the fees its pays for services.
Still, the consolidated beer business would be a prize for any agency. That is, if they make it through the potential review process.
AB InBev in September got the final stamp of shareholder approval for its SABMiller deal, and in October the company dropped the SABMiller name and began trading as a combined company.

WSJ : Italy’s President Set to Ask Paolo Gentiloni to Form New Government

Italy’s President Set to Ask Paolo Gentiloni to Form New Government
Matteo Renzi resigned as prime minister last week after ‘no vote’ in referendum on constitutional reform

ROME—Italy’s President Sergio Mattarella has summoned outgoing Foreign Minister Paolo Gentiloni to the presidential palace later Sunday, suggesting that Mr. Gentiloni is in line to become Italy’s new prime minister.

Later Sunday morning, the president is expected to give Mr. Gentiloni the mandate to try to form a new caretaker government. If Mr. Gentiloni accepts, he will then start consultations with the other political parties to form his team of ministers.

The development could signal a rapid resolution to a government crisis sparked by the resignation this week of Prime Minister Matteo Renzi, who stepped down after a stinging defeat in last Sunday’s referendum on a constitutional reform he heavily backed.


In choosing Mr. Gentiloni, Mr. Mattarella is reaching for a seasoned politician who enjoys cross-party esteem in Italy, something that can help him navigate the political tensions that have exploded since Mr. Renzi’s resignation.

Italian parties are now pushing hard for elections to be brought forward from their current timetable of spring 2018.

However, the country needs a new electoral law before Mr. Mattaralla can dissolve parliament because of a court challenge to the current law. Moreover, there are two different electoral rules for each of Italy’s parliamentary houses, a situation that would likely produce a hung legislature.

Mr. Gentiloni enjoys wide support within the center-left Democratic Party, the largest party in parliament. He also has a good relationship with former Prime Minister Silvio Berlusconi as a result of Mr. Gentiloni’s stint as communications minister in the mid-2000s. Those relationships could help him with the complicated task of rewriting voting rules just as an election looms.

Mr. Gentiloni is also highly regarded on the international front. Having joined the Renzi government as foreign minister in October 2014 after Federica Mogherini stepped down to become Europe’s foreign policy chief, he has spearheaded Italy’s efforts to gather international support for a solution to the Libyan crisis.

After holding consultations with the other parties, Mr. Gentiloni will choose his ministers and then the new government will be sworn in. The premier and his new cabinet will then be required to win confidence votes in each of Italy’s two parliamentary chambers to take power. That will likely happen before this Thursday, allowing Mr. Gentiloni to represent Italy at a European Union summit that day.