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Livesquawk - Closing Wrap - Thursday 25.11
Closing Wrap - Thursday 25.11
Headlines
  • ECB: Must Keep Options Open Beyond Dec Amid Uncertainty
  • ECB Is Said To Consider Firm Limits On Riskiest Leveraged Loans
  • EU Moves To Place Covid Booster Jabs At Heart Of Travel Rules
  • French Fishermen To Block Ports, Eurotunnel Over License Spat
  • Spain's Draft Budget Clears Another Hurdle In Parliament
  • Merkel Raises Prospect Of EU Sanctions As Russia Tensions Build
  • China Warns Olaf Scholz’s Incoming German Coalition Over Taiwan
  • Tesla Begins Model Y Performance Deliveries In China
  • Daimler Expects Chinese Demand To Remain Strong In 2022
  • Nissan To Make 50% Of Global Car Sales Electric And Hybrid By 2030
Commentary
US Trading Hours For Thanksgiving And Black Friday

U.S. financial markets are closed Thursday for Thanksgiving, and will close early on Black Friday.

 

Black Friday, Nov. 26, is the official start to the holiday shopping season, with many retailers — including Macy’s and Walmart — offering bargains for those looking for holiday gifts.

 

The Intercontinental Exchange -owned New York Stock Exchange and the Nasdaq will close at 1 p.m. Eastern on Friday, while the Securities Industry and Financial Markets Association recommends a 2 p.m. Eastern close for Treasury markets. (MarketWatch – Continue Reading)

German Business Confidence Shows Fifth Consecutive Decline As Fourth Wave Hits Hard

German managers expressed less optimism again in November after Europe’s most populous country continued to set records for new coronavirus cases, according to the results of the monthly poll conducted by Germany’s Ifo Institute.

 

The headline business climate index from the economic thinktank fell for the fifth straight month with a decline to 96.5 points in November versus the market estimate of 96.6 and the 97.7 reading announced last month.

 

The forward-looking business expectations component of the index dropped to 94.2, which was lower than both economists’ forecast of 94.6 and last month’s 95.4 result. The current assessment component slid to 99.0, matching the estimate but below October’s upwardly adjusted reading of 100.1.

 

Ifo said, “Supply bottlenecks and the fourth wave of the coronavirus are challenging German companies.” (LiveSquawk – Continue Reading)

TLTRO’s Future: No More Discounts?

The ECB is currently preparing and discussing options for the December policy meeting, but it seems unlikely that another extension of the TLTRO discount will be part of the policy mix. This will undoubtedly trigger early repayments, particularly to the extent that banks have borrowed the cheap money with the purpose of buying higher-yielding assets. We don’t expect this to significantly impact bank issuance in 2022, but it could have some implications for money market rates and sovereign spreads.

 

As part of its strategy review, the ECB did conclude that longer-term operations will remain part of the toolkit, and we do not think that the December allotment will be the last TLTRO operation conducted by the ECB. However, we believe that the role of any future (T)LTROs will likely shift back to that of funding backstop. The worst economic impact of the pandemic seems to be behind us and upside risks to the inflation outlook have increased. Unless the fourth Covid wave significantly changes this picture, we don’t expect that the Governing Council will deem it necessary to add another discount period to the current TLTRO-III loans – certainly not at the rates that are being currently offered. (Rabobank – Continue Reading)

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