CHINA-EU: Xi Holds Call w/EUCO Pres But Med Dev Procurement Rpt Risks Ructions
(MNI) London - Chinese state media reporting on a call between President Xi Jinping and European Council President Antonio Costa. On the call, Xi told Costa "China and Europe are partners [and] have no fundamental conflicts of interest or geopolitical disputes." Xi: "China has confidence in the EU, [and] hopes the EU can become a partner that China can trust."
- Xi: "As long as China and Europe respect each other, treat each other as equals and engage in sincere dialogue, they can advance cooperation and achieve great things."
- Xi: "China and Europe should strengthen strategic cooperation [and] enhance strategic mutual trust as the international situation becomes more severe and complex."
- Earlier the EU published a report relating to a probe into whether the Chinese gov't is discriminating against EU firms in its medical devices procurement tender process.
- As Bloomberg notes, the report "confirmed the bloc’s concerns that the Asian country discriminates against foreign firms, opening the door to potential measures that could curb Beijing’s access to public tenders in future. [...] The move risks further raising tensions between the EU and China..."
- Trade Commissioner Maroš Šefčovič: “[EU] openness needs to be reciprocal: government contracts in the EU are open to non-EU countries, and we expect other countries to treat our companies with similar fairness. We have found that China is discriminating against EU medical devices producers in bids for public contracts, and while we continue to prioritise dialogue as a first step to finding solutions, we stand ready to take decisive action to defend the level playing field, ....”
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
