While negotiations are ongoing regarding China's return of the undersea US drone that was confiscated by China last week, China has pushed back against U.S. President-elect Donald Trump’s claim that its military stole an American naval drone last week, even as the Philippines called the seizure off its coast, and which took place outside of the contested nine-dash line, “very troubling.”
Submitted by Jennifer Thomson via Gavekal Capital blog,
After a brief respite, the bloodbath in Chinese bonds is back, with futures plunging back to lows overnight amid liquidity fears (short-term lending rates are inverted) and growing anxiety over China's almost unprecedented debtload.
The key economic releases this week are durable goods and GDP on Thursday. Chair Yellen’s speech on the labor market on Monday afternoon is also likely to garner considerable attention. While the calendar gets quieter in the weeks ahead over the holiday season, there are a few notable macro events to keep traders occupied.
This week, the Bank of Japan and Riksbank deliver their latest policy verdicts, and we also get the RBA Minutes, while in the first week of the new year attention turns to FOMC Minutes and NFP, as well as Eurozone inflation.
Global markets begin the last full week of trading of the year in subdued fashion, with U.S. equity futures rising 0.1%, to 2,258.5, European shares decline halting two straight weeks of gains, and Asian shares hitting a four-week low. The Dollar extends losses, yen and gold rise amid geopolitical concerns as the fallout from China's seizure of a U.S. continues to reverberate. Volumes are thinning before the December holiday season and end of the year, with trading in German bund futures about half the average for the past five days.