10 Things You Need To Know This Morning

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Good morning. Here’s what you need to know.

  • The Shanghai Composite soared 4.3 per cent in overnight trading while the Nikkei was down slightly, losing less than 0.1 per cent. European markets are trading higher, led by Germany and Italy, both up 0.3 per cent. In the United States, futures point to a positive open.
  • Markit’s flash China PMI rose to a 14-month high reading of 50.9, topping expectations of a rise to 50.8. Any reading above 50 indicates expansion. While new orders growth accelerated, new export orders declined, suggesting persistent weak external demand for Chinese goods.
  • The Japan Tankan Large Manufacturers Index fell to -12 from a previous reading of -3, worse than expectations of a drop to -10. The tumble in the index marks a near three-year low in Japanese business confidence as the country sinks into recession.
  • The first December reading of French manufacturing PMI saw the index tick up slightly to 44.6, missing expectations of a rise to 44.9. German manufacturing PMI unexpectedly fell to 46.3, missing expectations of a rise to 47.3. However, services PMI numbers got a nice boost, bringing the composite indices for both countries to multi-month highs.
  • Eurozone CPI inflation came right in line with expectations, rising 2.2 per cent year-over-year in November. The core measure of inflation registered a 1.4 per cent rise year-over-year, slightly below expectations of 1.5 per cent.
  • The Federal Reserve is currently stress testing U.S. banks on liquidity measures in a move that gives regulators more oversight of bank funding markets. Previous stress tests were only focused on capital and the results were made public. The results of these tests, however, will not be revealed, and some senior bank executives were unaware they were even underway.
  • Cancer specialists told the Wall Street Journal that Venezuelan President Hugo Chavez’s cancer is likely terminal, despite news yesterday that he was making a good recovery from his latest surgery undertaken on Monday. Investors are snapping up Venezuelan bonds in anticipation that the fall of Chavez will mean the end of socialism in Venezuela.
  • U.S. CPI inflation fell 0.3 per cent in November from the previous month, a bit further than the expected 0.2 per cent decline. Ex food and energy, the index rose 0.1 per cent, also slightly below expectations.
  • The preliminary Markit reading for December US PMI surged to an index level of 54.2 from last month’s reading of 52.4, well exceeding expectations of a decline to 51.8. The release marks an 8-month high on the index.
  • U.S. industrial production rose 1.1 per cent in November, exceeding expectations of a 0.3 per cent expansion. The report said the robust figures largely reflect a rebound from the effects of Hurricane Sandy in October.
  • BONUS: Taylor Swift debuted an edgy music video on her birthday yesterday.

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