EUROPEAN MIDDAY BRIEFING - Stocks Fall on -2-

The supply risk is helping lift other base metals, while the Fed's meeting this week has also fueled risk appetite and with it, demand for metals, said TD Securities.

EMEA HEADLINES

German Producer Prices Rise at Fastest Annual Pace in 70 Years

The producer price index for industrial products in Germany rose 19.2% in November compared with the prior year, the German statistics office, Destatis, said Friday.

This was the highest on-year increase since November 1951, Destatis said.

German Business Sentiment Declines for the Sixth Consecutive Month

German business sentiment has worsened in the run up to Christmas, with supply bottlenecks and the deterioration of the health situation dimming the short-term outlook.

The Ifo business-climate index decreased to 94.7 points in December from 96.6 points in November, data from the Ifo Institute showed Friday. This is the sixth consecutive decrease of the indicator after it peaked at 101.8 in June.

EU Car Registrations Declined in November

Passenger-car registrations in the European Union fell in November, declining for the fifth consecutive month this year, the European Automobile Manufacturers Association said Friday.

New car registrations declined 20.5% year-on-year to 713,346 vehicles for the month, said the association, also known as ACEA.

U.K. Consumer Confidence Falls Slightly in December on High Inflation, Omicron Fears

British consumers turned slightly more pessimistic in December as high inflation and news about the coronavirus Omicron variant clouded the short-term outlook for both the economy and personal finances.

GfK's consumer-confidence barometer fell to minus 15 in December from minus 14 in November. The decline is less steep than the minus 18 consensus forecast from economists polled by The Wall Street Journal.

NatWest Enters into Legally Binding Agreement for Stake in Permanent TSB

NatWest Group PLC said Friday that with its subsidiary Ulster Bank Ltd, has entered into a legally binding agreement with Permanent TSB Group Holdings PLC as part of its phased withdrawal from Ireland.

The U.K. bank said the agreement is for the sale of performing non-tracker mortgages, performing micro-SME [small and medium-sized enterprise] loans, the subsidiary's asset-finance business and a subset of its branch locations.

HSBC Fined $85 Million for Lax Anti-Money-Laundering Controls

HSBC Holdings PLC was fined for inadequate anti-money-laundering controls that the London-based bank used to monitor hundreds of millions of dollars of transactions.

The U.K.'s Financial Conduct Authority fined HSBC GBP63.9 million, the equivalent of $85 million, for weak oversight at the bank between 2010 and 2018. HSBC didn't dispute the regulator's findings, which meant it got a 30% discount on the fine, the FCA said in a statement.

Aker Solutions, AF Gruppen End Talks Over Offshore Decommissioning Ops Merger

Aker Solutions ASA and AF Gruppen ASA said Friday that they have ended talks over a potential merger of their offshore decommissioning operations.

In July, the two companies signed a letter of intent to merge the operations into a 50/50-owned company to offer recycling of offshore assets.

Credit Agricole, Stellantis to Set Up Auto Leasing Joint Venture

Stellantis NV and Credit Agricole SA have joined forces on long-term car leasing, they said Friday.

The two companies intend to set up a joint venture, with the aim of managing a fleet of more than 1 million vehicles by 2026, making it one of the top five European companies in long-term leasing.

EU Leaders Warn Russia to Stay Out of Ukraine

BRUSSELS-European Union leaders warned Russia on Thursday that it would pay a "severe cost" if it carries out a fresh military intervention in Ukraine, but held back for now from detailing the actions they could take to deter the Kremlin.

EU leaders discussed the situation on Ukraine's border on Thursday afternoon after NATO Secretary-General Jens Stoltenberg earlier urged Russia to reverse a buildup of troops, artillery, tanks and drones close to Ukraine that "undermines security in Europe."

Airbus Wins Two Longtime Boeing Customers

Airbus SE won deals to sell Dutch carrier KLM and Australia's Qantas Airways Ltd. scores of single-aisle jets, prying away two of Boeing's most loyal customers.

Air France-KLM Group placed an order for up to 160 of Airbus's A320neo family of jets to replace aging Boeing jets at both KLM and its discount unit, Transavia. Qantas earlier Thursday said it had agreed to buy 40 single-aisle, or narrow-body, jets from Airbus with purchase rights for another 94 jets over the next 10 years as it phases out older Boeing jets.

GLOBAL NEWS

Inflation Is Near a 40-Year High. Here's What It Looks Like.

U.S. inflation climbed to a 39-year high in November, as strong consumer demand collided with supply constraints. Overall, the level of consumer prices leapt 6.8% last month from a year earlier, the Labor Department said.

But prices didn't change at the same rate for all goods and services. A surge in prices for gasoline and other energy sources, along with prices for cars, have been the primary drivers of this year's inflation burst. Meanwhile, prices for services like education and medical care rose just slightly.

Global Coal Power Expected to Hit Record Despite Climate Fight

Despite global efforts to slash carbon emissions, global coal-fired power generation is expected to rise 9% and hit a record by the end of 2021 as electricity demand from the economic recovery outstrips a shift to cleaner energy sources, the International Energy Agency said Friday.

The main drivers of the growth are China and India, which together account for roughly two thirds of the world's coal use. Coal power is expected to notch increases of 9% in China and 12% in India to reach all-time highs in both countries by the end of the year, as electricity demand among the world's two largest populations continues to grow.

Biden Says $2 Trillion Bill Needs More Time

WASHINGTON-President Biden acknowledged work on Democrats' $2 trillion education, healthcare and climate plan was nowhere near complete, as a series of parliamentary challenges and the concerns of Sen. Joe Manchin (D., W.Va.) stalled progress on a bill the party had hoped to wrap up this year.

"We will advance this work together over the days and weeks ahead," he said, adding that talks with Mr. Manchin would continue.

Japan's Central Bank Shuns Tightening Trend, Citing Lack of Inflation

TOKYO-Japan's central bank kept its monetary policy ultraloose and expressed minimal concern about inflation, joining continental Europe in showing that recent tightening in the U.S. doesn't necessarily represent a global phenomenon.

The Bank of Japan on Friday maintained its target for short-term interest rates at minus 0.1% and said it would continue guiding the yield on 10-year Japanese government bonds to around zero, well below the U.S. where equivalent government bonds are yielding more than 1.4%.

BOJ to Scale Back Some Covid-19 Emergency Stimulus Measures

TOKYO-The Bank of Japan said Friday it would scale back its purchases of commercial paper and corporate bonds, joining other central banks in winding down emergency stimulus related to the Covid-19 pandemic.

The central bank said that starting in April, it would reduce its holdings of commercial paper and corporate bonds to a total of about 5 trillion yen ($43.97 billion) from the previous limit for Y20 trillion. The decision returns the level of the credit-asset holdings to where they were at the beginning of the pandemic in 2020.

Guam, America's Forgotten Territory, Is New Front Line Against China

Alongside a road that cuts through dense jungle, the first new U.S. Marine base in almost 70 years is emerging. Construction cranes are helping build training areas for urban warfare and live-weapons firing behind a perimeter topped with razor wire.

Marine Corps Base Camp Blaz, to be formally opened in a ceremony early next year, is the latest sign that Guam, a remote U.S. outpost in the Pacific Ocean, is becoming more crucial for military planners as they sharpen their focus on Asia, and tensions with China rise.

Senate Parliamentarian Rejects Democrats' Immigration Proposal in $2 Trillion Bill

The arbiter of Senate rules found that Democrats' plan to provide temporary protections for immigrants living in the U.S. illegally can't be passed as a component of party lawmakers' roughly $2 trillion education, healthcare and climate package.

The guidance provided by Senate parliamentarian Elizabeth MacDonough is set to force Democrats to remove the protections from the bill, the third time the party's immigration proposals have been found to run afoul of the chamber's rules. The current provisions would have shielded immigrants from deportation for five years and would have provided a five-year renewable work authorization, available to any immigrant who arrived in the country before 2011.

Senate Passes Bill Banning Imports From Chinese Region Over Treatment of Uyghurs

WASHINGTON-The Senate passed legislation Thursday to ban imports from China's Xinjiang region over concerns about the use of forced labor, sending the bill to President Biden, who is expected to sign it.

The passage, by unanimous consent, comes as Washington cracks down on China for its treatment of the Uyghurs, which lawmakers have said amounts to genocide. The Biden administration also announced sanctions on Thursday that will target Chinese biotech and surveillance companies for their actions in Xinjiang.

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12-17-21 0637ET