EU: Ambassadors Back Mercosur Trade Deal By Qualified Majority
EU ambassadors have voted by a qualified majority to provisionally support the EU-Mercosur trade deal that has been 20 years in the making. Tony Connelly at RTE reports that, as expected, France, Poland, Austria, Ireland, and Hungary voted against, while Belgium abstained. The remaining member states approved the deal, ensuring that the qualified majority threshold (55% of member states representing 65% of the EU population) was reached.
- Reuters reports that EU countries have until 1700CET (1100ET, 1600GMT) to give their approval to the deal as part of a written procedure. This would allow for a ratification ceremony as soon as Monday, 12 Jan in Paraguay.
- France has been the most vocal opponent of the deal, and parties on the far-left and far-right are set to launch votes of no confidence against the gov't of PM Sebastien Lecornu over the deal. The claim that, despite France's vote against today, the administration of President Emmanuel Macron has not done enough over its time in power to stop the EU-Mercosur deal passing. Far-right Rassembelement National leader Jordan Bardella also confirmed that his party would launch a no-confidence motion against Commission President Ursula von der Leyen in the European Parliament (MEPs will also need to vote in favour of the deal in order for it to come into effect). Neither of these no-confidence motions is likely to pass.
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ECB: Lagarde Suggests Growth Projections Will Be Upgraded In Dec
ECB President Lagarde is speaking to Martin Wolf of the FT. The topic of the discussion is "What are the futures of the euro and the dollar as global currencies, and what are the opportunities for the digital euro?"
Initial headlines give an early insight into the December macroeconomic projections, set to be released next Thursday:
- "*LAGARDE: GROWTH PROJECTIONS ARE LIKELY TO BE REVISED HIGHER" Bloomberg
- "ECB'S LAGARDE: WE REMAIN IN A GOOD PLACE" - Reuters
Asked about French President Macron's suggestion for the ECB to add growth and employment considerations into its mandate (alongside suggestions that policy can be "significantly adjusted today"), she suggests focus should remain on enhancing the single market.
You can stream the event here
UK FISCAL: Reeves: "I reserve the right to be able to take action at any point"
Reeves asked if headroom was lower by e.g. GBP5bln or GBP10bln in the Spring, would that be enough to mean more fiscal measures need to be taken in the Spring?
She avoids the question and then when pushed to ask says "I reserve the right to be able to take action at any point. But I believe the headroom that we have and the changes that we've made means that I won't need to do that in the spring. But of course, I reserve the right at any time to take action."
EQUITIES: Modest Weakness In ES1 Doesn't Look Headline Driven
A quick 0.3% pullback in US equity futures is noted, but Emini is already moving away from those session lows. There wasn't an obvious headline trigger for the move, and weak volumes behind the selloff supports the view that it wasn't news-related (see chart).
Our technical analyst notes that initial support in Eminis is 6807.02, the 20-day EMA. A bull cycle remains intact.
FIgure 1: ESA Index Price and Volume (Source Bloomberg Finance L.P)
Separately, the WSJ reports that "U.S. manufacturers are pulling back harder on orders of parts and raw materials because of rising uncertainty around the future of the Trump administration's signature tariffs, a new survey shows".
