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Wednesday, December 19

19th Dec - Fed makes a dovish hike, market tumbles




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EUROPE
EU and Italy strike budget agreement to avoid fines – FT
Italian bonds rally after Rome agrees to delay spending measures to narrow deficit

Italy: No request (yet) for Excessive Deficit Procedure from the EU Commission – ING
The agreement between the Italian government and the EU Commission was made possible by more realistic growth forecasts from the Italian side and a sharp cut in the planned structural balance increase from 0.8% of GDP to zero

EU plans to soften no-deal Brexit — but not by much – FT
Commission seeks to avoid worst cliff edges but proposals fall short of Brexiter hopes

Core euro sovereign bonds 2019 outlook – Pictet

EU investigates huge hack of its diplomatic cables – FT
Chinese group alleged to be behind years-long cyber attack

Hacked European Cables Reveal a World of Anxiety About Trump, Russia and Iran – NYT


UNITED STATES
  FEDERAL RESERVE
Editorial: The Fed Should Ignore Trump and Raise Rates
– BB
Not to snub the president, but because the economy requires it.

How the December Statement Changed From November – WSJ

Powell Follows the Data, Not the Market – WSJ

'Not Dovish Enough' Rate-Hike: Cuts Outlook And Future Hikes By One – ZH

Wall Street Reacts: "I Think People Are Scared" – ZH

Sharp stock market sell-off on Fed rate rise – FT
US equity investors deliver worst response since 1994 as central bank makes fourth move for the year

Fed Watch: Fewer hikes ahead – Nordea
The Fed hiked rates by 25bp today and projects two more rate hikes in 2019 and one more rate hike in 2020. The Fed funds rate is now at the lower end of a broad range of neutral and Chair Powell underscored the Fed’s data dependence going forward.

‘Most Important Thing Is the Dots’: Wall Street Reacts to Rate Hikes – BB

FOMC review – Danske Bank
Fed to markets: "Just a couple of more hikes"

The Fed hikes, but a slowdown is coming – ING
A fourth 25bp hike for 2018, but with growth headwinds intensifying and market tensions rising the Federal Reserve will tread a more cautious path in 2019


OTHER
2019 US-China trade outlook: major challenges remain – Pictet
Following the Trump-Xi dinner on 1 December, there are signs of goodwill on both sides, leaving the impression that a ‘mini deal’ is possible before the 1 March 2019 deadline set by the US.

Easing trade tensions will send metal prices higher – ABN AMRO
In this publication: 2018 was a turbulent year for industrial metals markets. Prices will remain heavily influenced by US economic policies in the short term. Base metals prices will rise as soon as trade tensions ease significantly. We expect lower steel prices due to weak demand and sufficient supply. Sufficient supply steel making raw materials puts pressure on prices.


REGULARS
EU Open Rundown – RANsquawk

Brussels Edition Daily – BB

Brussels Briefing – FT
Italy and the EU say that a deal is in the offing, and are emphasising the collegiate atmosphere of recent talks

Eco Day Europe – BB
BOE's Empty Desks, Mnuchin Interview, RBA's Sydney Woes * U.S. and China plan trade war talks for January, Mnuchin says * Fear of fear itself has now become a growing economic risk

FirstFT Daily Briefing – FT

WSJ Daily Economics – WSJ

Danske Daily – Danske Bank

Daily Market Comment – Marc Chandler
The Fed's Paws may Still Unsettle Investors

Brussels Playbook – Politico
New EU Cablegate — Peeking over the Brexit cliff edge — Trump’s ambassador strikes back

Five Things You Need to Know to Start Your Day – BB

US Open – ZH
Futures Rise Ahead Of Fed; Europe Jumps On Italy Budget Deal

US Open Rundown – RANsquawk

Aamukatsaus – Nordea
Tänään katseet kiinnittyvät Fedin kokoukseen, markkinoilla seurataan tarkasti keskuspankin koronnostosuunnitelmia | Saksan talouselämän luottamus jatkoi laskuaan, Japanin viennin kasvu hiipui | Öljyn hinta laski eilen reippaasti