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ECB members reiterate stance of watching Euro closely for market impact

Asos [ASC.UK] +2% (trading update), Just Eat Takeaway [JET.UK] -5% |(trading update) - - Speakers - ECB chief Lagarde stated that 2021 had begun on a more positive basis but reiterated that both fiscal and monetary policy support was still needed. Stressed that the EU fiscal aid must be rolled out quickly. ECB Dec Staff Projections remain plausible. Reiterated view that monitoring exchange rates very carefully - ECB s Villeroy (France) reiterated Council stance that closely watching impact of exchange rates. Reiterated view that ECB to keep monetary policy loose for as long as necessary - Germany Health Min Spahn stated that needed to do everything possible to curb the spread of coronavirus; would not be able to ease all curbs on Feb 1st ( Reminder: On Jan 12th speculation circulated that German Chancellor Merkel would seek the current lockdown measures to last until early April)

Quiet session; debt issuance continues to be heavy

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month bills; Avg Yield: 0.09% v 0.05% prior; Bid-to-cover: 2.85x v 1.72x prior Looking Ahead - 06:00 (IL) Israel to sell bonds - 06:25 (BR) Brazil Central Bank Weekly Economists Survey - 06:45 (US) Daily Libor Fixing - 07:00 (MX) Mexico Nov Industrial Production M/M: 0.8%e v 2.0% prior; Y/Y: -4.2%e v -3.3% prior; Manufacturing Production Y/Y: -2.4%e v -1.3% prior - 08:00 (UK) Daily Baltic Dry Bulk Index - (MX) Mexico Dec Nominal Wages: No est v 5.2% prior - 08:00 (IN) India announces details of upcoming bond sale (held on Fridays) - 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance

Cable strengthens on continuation of Brexit talks

Recipharm [RECI.B.SE] +23% (offer), Speakers - EU chief negotiator Barnier said to have told 27 EU envoys that UK was backtracking on fisheries; two sides remained split on state aid issue - EU chief negotiator Barnier tweet reiterated belief that coming days were important if deal is in place on Jan 1st, 2021. Reiterated that had responsibility to give the talks every chance of success. Reiterated that key issues of Level Playing Field (LPF) and Fisheries remained - ECB s Villeroy (France) stated that any positive economic effect from coronavirus vaccine would not be felt until the end of 2021 - ECB s Panetta (Italy) reiterated Council view that inflation to remain subdued for a protracted period; prepared to adjust all tools as necessary. Reiterated Council view that an appreciation of the Euro currency could significantly affect the region’s inflation. Says 2021 likely to be a pandemic year

Awaiting the ECB decision and type of stimulus it will use to combat the pandemic impact

- Hungary PM Chief Cabinet official stated that there was a chance of a budget deal at today’s EU Leader Summit as proposal for agreement contained all the guarantees that was important to us. There would not be any rule of law procedures before 2023. To find out if any of the frugal member States block the draft agreement on EU budget and Recovery Fund - Bank of Italy (BOI) Monthly Report `Money and Banks : Oct Gross Non-Performing Loans (NPLs) at €64.8B v €65.1B m/m - China Foreign Ministry spokesperson Hua Chunying announced reciprocal sanctions to target members of US Congress and revoking visa exemption treatment for US diplomatic passport holders visiting Hong Kong, Macau

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