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(Wallace Refiners) – It was a clear risk-on session overnight as the major bourses closed higher and gold fell around half a percent. The yellow metal heads into the EU session trading at $1860 per ounce while silver dropped 1% to trade at $24.30. After a positive handover from the US the Nikkei 225 (1.33%) and ASX (0.61%) traded well but the Shanghai Composite moved 1.12% into the red.
One of the big bits of news overnight came from China. The November consumer price index (CPI) printed at -0.5% y/y vs the analyst consensus of 0.0%. This is the first negative reading in 11 years but some analysts pointed out the decline is less meaningful because of a surge late last year in pork prices. If adjusted to not include food an energy the reading would have been 0.05%.
In the US, it has been said that Treasury Secretary Mnuchin is set to present a $916B stimulus proposal to House Speaker Pelosi today. This will be welcome news but still short of some of the higher proposals the Democrats wanted in the early days of negotiations. There has been more talk of stimulus checks and the United States Senator McConnell told White House he would support $600 stimulus checks. It looks like this all might not be enough for Pelosi and co. as there were some press reports saying that Pelosi was unimpressed with the proposal.
On the Brexit front things are still up in the air. UK PM Johnson is heading to Brussels today to continue talks with EU Commission President von der Layen. There is some hope that these face to face talks can get a deal over the line but the same issues still remain.
Elsewhere in Europe, keep an eye on things in Italy as Italian Prime Minister Giuseppe Conte faces a vote on European Union financial assistance amid opposition from part of his governing coalition. Italy has had its budget stretched like all nations due to the COVID-19 pandemic but before there was lots of scrutiny on the nation receiving aid due to the government spending policies.
Looking ahead to the rest of the session highlights include US Jolts openings, Canadian rate decision, DoE inventories and US wholesale inventory data.
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