Data, Japan On The Agenda
Markets were generally buoyant overnight, led by a surge in Chinese bourses as risk is set to continue a bid tone heading into Sunday’s elections in Japan. Nonetheless, weak Tankan numbers still underscored the economic challenges for Tokyo as the large manufacturers’ diffusion index came in at -12 (cons. – 10). Ahead today, advance December manufacturing PMIs are out in Europe, while inflation numbers are due in the Eurozone and US. Elsewhere, sterling is stabile after S&P’s outlook downgrade. Looking ahead to Sunday, our economists note that the vote in the Lower House will close at 20:00 (11:00 GMT) on Sunday and initial results will be out almost expected immediately. The official result will be due four hours later. Anything less than a strong majority for the LDP/New-Komeito coalition could damage USDJPY longs banking on their aggressive platform for a weaker yen. Overnight EURUSD traded 1.3067-1.3114 and USDJPY 83.61-83.96.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank