"Historical experience indicates a marked supply slump is to be expected for the final month of the year," said Elmar Voelker, senior fixed-income analyst at LBBW. "The typically quiet Christmas period extends into a significant portion of December, having a particularly pronounced effect in the second half of the month."
LBBW forecasts gross government bond issuance of EUR36 billion in December, slightly up from EUR28 billion in December 2020, with the issuance concentrating at the beginning of the month.
Commodities:
Oil futures gained more than 5% in Europe, clawing back significant proportions of their sharp losses on Friday that came as major economies imposed travel restrictions on countries where the Omicron variant of the coronavirus has spread. Low trading volumes--with the U.S. celebrating Thanksgiving--added to the volatility.
"Given the lack of information on the latest variant, one could probably question the scale of Friday's selloff and whether it is really justified," said ING's Warren Patterson, adding that "the market seems to be coming to that realization in early morning trading today, with a relief rally underway." The market's attention will soon turn to OPEC+, which meets later this week.
Jefferies said Omicron jeopardizes what was an increasingly positive near-term outlook for mining stocks.
"Regardless of whether this new variant is a real issue, the sector is likely to be under short-term pressure as there is a renewed risk of lockdowns, which would negatively impact demand and push investors away from such a highly cyclical sector."
Still, Jefferies--which said the mining sector is otherwise "underowned" and poised to benefit from higher metals prices--reckons investors should buy mining stocks in bouts of short-term weakness because the medium- to long-term fundamental outlook is unchanged and still very positive.
DOW JONES NEWSPLUS
EMEA HEADLINES
Omicron Variant Is Reported in More Countries as Officials Grapple With How to Respond
Countries around the world reported their first cases of the Omicron variant over the weekend and some imposed new travel restrictions, racing to protect themselves against the potentially more contagious strain even as scientists cautioned they don't yet know how severe it will prove to be.
Canada, Australia, the Netherlands and Austria on Sunday joined a group of countries that have detected a strain first documented in South Africa that authorities said could pose a greater risk of people falling ill with Covid-19 a second time and could be more transmissible than other variants.
Eurozone Economic Sentiment Declines in November
Confidence among businesses and households in the eurozone fell in November amid rising inflation, supply-chain constraints and a surge of coronavirus cases.
The European Commission said Monday that its economic sentiment indicator, an aggregate measure of business and consumer confidence, fell to 117.5 in November from 118.6 in October. The result was in line with the forecast from economists polled by The Wall Street Journal.
Eurozone Inflation Likely Hit Record High in November
Consumer-price inflation in the eurozone likely hit a record high in November, but many economists think that might mark a peak for now, and therefore don't expect the European Central Bank to raise its key interest rate next year.
As in the U.S., consumer prices in the eurozone have risen faster over recent months than most economists and policy makers had expected. The data have raised questions for investors, businesses and households about the credibility of central bank assertions that this period of high inflation is likely to prove transitory.
Telecom Italia CEO Resigns as Board Reviews KKR Offer
Telecom Italia SpA said late Friday that Chief Executive Officer Luigi Gubitosi resigned from his position and the telecommunications company would start to examine a takeover offer by private-equity company KKR & Co. Inc.
The company said that Mr. Gubitosi also resigned as general manager of the group but he will remain a member of the board of directors.
Impala Platinum Makes Firm Intention to Acquire Royal Bafokeng Platinum
Impala Platinum Holdings Ltd. said Monday that it firmly intends to make an offer to acquire peer mining company Royal Bafokeng Platinum Ltd., after acquiring a 24.52% stake in the company for 10.6 billion South African rand ($650.3 million) last week.
Implats, a South African precious-metals company, said it will offer RBPlat shareholders 150 South African rand ($9.20) a share, consisting of a cash amount of ZAR90 per offer share and 0.3 ordinary shares in Implats, valued at ZAR60. The offer price represents a 24% premium to its closing price Friday.
BP Plans Major Green Hydrogen Project in England
BP PLC said Monday that it is planning a major green hydrogen project in Teesside, in the northeast of England.
The HyGreen Teesside project could deliver up to 500 megawatts of electrical input of hydrogen production by 2030, the oil-and-gas company said. The facility is to be developed in multiple stages, and BP is aiming to start production by 2025 with an initial phase of around 60 megawatts.
Eni Sells Stake in Algeria-Italy Gas Pipelines to Snam
ENI SpA agreed to sell a 49.9% stake in subsidiaries operating gas pipelines between Algeria and Italy to energy infrastructure company Snam SpA for a consideration of 385 million euros ($435.7 million).
The deal includes the onshore gas pipelines running from the Algeria and Tunisia borders to the coast of Tunisia, and the offshore gas pipelines connecting the Tunisian coast to Italy, Eni said Saturday.
Standard Bank Says Revenue Has Continued to Recover
Standard Bank Group Ltd. said Monday that revenue has continued to recover over the past ten months and backed its guidance for the year.
The South African bank said card spend in South Africa recovered to 2019 levels, while merchant acquiring turnover was well above. In Africa regions, transaction volumes also reflected good growth, it said.
Iran's Nuclear Advances Weigh on Renewed Talks
As negotiators gather in Vienna for talks aimed at reviving an international nuclear agreement with Iran, one big question looms: Has Tehran advanced its nuclear work so much in the past two years that the 2015 deal can no longer be rescued?
Restoring the pact, which placed limits on Iran's nuclear activities in exchange for relief from economic sanctions, is a top foreign-policy goal of the Biden administration. Iran's new president, however, has delayed restarting talks while pressing ahead with nuclear work.
U.K. Looks to Compete on Financial Regulation
London wants to regain the mantle of the world's busiest financial center from New York by overhauling how banks and other financial firms are regulated after Brexit.
The U.K. government said this month its top financial regulators will be required to help boost growth and international competitiveness in the financial sector, as secondary mandates to existing tasks such as maintaining financial stability and consumer protection.
GLOBAL NEWS
Labor Talks to Start in 2022 at Congested West Coast Ports
U.S. shippers struggling with supply-chain gridlock on the West Coast face new concerns in the coming year as dockworkers and marine terminals gird for talks on a new labor contract.
Australian Regulator Finalizes New Bank Capital Framework
SYDNEY-Australia's regulator of financial institutions won't require the country's banks to raise extra capital as part of its finalized new system to strengthen financial system resilience.
The Australian Prudential Regulation Authority on Monday released its well-flagged new bank capital framework. It said it had the goal of embedding "unquestionably strong" levels of capital and aligning Australian standards with internationally Basel III requirements, which are due to come into force around the world from 2023. Australian banks must implement APRA's capital framework by Jan. 1, 2023.
Buyout Boom Gains Steam in Record Year for Private Equity
Big leveraged buyouts are back, and this year's crop might just be a taste of things to come.
Private-equity firms have announced a record $944.4 billion worth of buyouts in the U.S. so far this year, 2.5 times the volume in the same period last year and more than double that of the previous peak in 2007, according to Dealogic. So far this year, there have been five $10 billion-plus deals in the U.S., equaling the total in all of 2007, though still below the high-water mark of nine in 2006.
Omicron Variant Not Detected Yet, but Likely Already in U.S., Health Officials Say
Top U.S. health officials said Sunday that the newly discovered Omicron variant of the coronavirus is likely already in the U.S. even though it hasn't been detected yet and urged Americans to take precautions while scientists study its potential impact.
"If and when, and it's gonna be when, it comes here, hopefully we will be ready for it," said Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, in an interview on ABC on Sunday. He said that includes getting more people vaccinated and boosted and making sure people follow mask-wearing guidelines.
Japan to Bar Entry of Foreigners in Response to Omicron Variant
TOKYO-Japan will bar newly entering foreigners such as business travelers from entering the country starting Tuesday, in response to the Omicron coronavirus variant.
Japanese citizens and foreign residents of Japan who are returning from trips abroad will still be allowed to enter the country, the government said Monday.
Australia Seeks to Make Social-Media Firms Liable for Users' Defamatory Comments
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11-29-21 0556ET
