European equity markets closed sharply higher, while US and APAC
markets were mixed. US government bonds sold off sharply on the
Democrat's dual victories in the US Senate run-off elections, with
European bonds also lower on the day. European iTraxx indices
closed tighter across IG/high yield and CDX-NA closed almost flat
after being tighter most of the day. Oil and copper were higher,
while gold and silver closed lower. Today's ADP US private
employment report came in much weaker than expected, so all eyes
will now be on tomorrow morning's US weekly jobless claims report
and Friday's US non-farm payrolls report.
- US equity markets closed mixed, with the Russell 2000 +4.0%
reporting its best daily performance since late-April; DJIA +1.4%,
S&P 500 +0.6%, and Nasdaq -0.6%.
- The U.S. Capitol was declared secure on Wednesday evening,
about four hours after a mob of President Donald Trump's supporters
stormed the building and forced debate on Joe Biden's victory in
the Electoral College to be suspended. The Secretary of the Army
said 1,100 National Guard troops had been deploying to the Capitol
to bolster local police and other forces, some of which were seen
massing on street corners near the main congressional building.
Washington Mayor Muriel Bowser ordered a 6 p.m. curfew after a day
of chaos and violence. (Bloomberg)
- US govt bonds sold off sharply on the morning announcements
confirming that Democrat Raphael Warnock won his US Senate contest
and polls indicated that fellow Democrat Jon Ossoff was also highly
likely to win.
- 10yr US govt bonds closed +8bps/1.04% yield, which is the first
close above 1.00% since 19 March.
- 30yr govt bonds closed +11bps/1.82% yield, which is the highest
close since 26 February.
- CDX-NAIG closed flat/52bps and CDX-NAHY -1bps/302bps, with the
latter being as tight as -9bps at 11:23am EST.
- DXY US dollar index closed +0.1%/89.53.
- Gold closed -2.3%/$1,909 per ounce, silver -2.2%/$27.04 per
ounce, and copper +0.3%/$3.65 per pound.
- Crude oil closed at +1.4%/$50.63 per barrel, which is the
highest close since 24 February.
- Minutes from the meeting of the Federal Open Market Committee
(FOMC) held on 15 and 16 December 2020 were released this afternoon
(6 January). The most substantive discussions centered on evolving
risks to the economic outlook over the short- and medium-runs; the
form of outcome-based guidance for asset purchases and future
considerations related to that guidance; and prospects for
inflation moderately overshooting the 2% longer-run objective. (IHS
Markit Economists Ken Matheny and Chris Varvares)
- The most consequential decision taken at the December meeting
was to provide qualitative, outcome-based guidance for large-scale
asset purchases. There was unanimous agreement to "enhance" the
FOMC's communication about asset purchases by issuing qualitative,
outcome-based guidance that such purchases would continue "until
substantial further progress has been made toward reaching the
Committee's maximum employment and price stability goals."
- All FOMC participants felt it was appropriate to continue the
Treasury and MBS purchases, with a couple open to weighting
purchases of Treasury securities toward longer maturities. With
relatively few participants in favor of such a change, it is
unlikely that average maturity of purchases will be increased
barring a deterioration in the outlook.
- The seasonally adjusted final IHS Markit US Services PMI
Business Activity Index registered 54.8 in December, down notably
from 58.4 in November and also lower than the earlier released
'flash' estimate of 55.3. Although the rate of expansion was
slightly stronger than the series average, it marked a
significantly slower upturn in output, as a rise in virus cases
dampened client demand. The latest increase in total new business
was the slowest for four months. The loss of growth momentum
reportedly stemmed from difficulties among consumer-facing firms
following another surge in virus cases and additional social
distancing restrictions. (IHS Markit Economist Chris
- US manufacturers' orders rose 1.0% in November, while
manufacturers' shipments rose 0.7%. The former was close to the
consensus expectation. (IHS Markit Economist Ben Herzon and
- Manufacturers' inventories, meanwhile, rose 0.7% in November
and, factoring in a small upward revision to October, were in line
with our expectations through November.
- Orders and shipments of nondefense capital goods excluding
aircraft (core capital goods) were little revised through November.
Taken together, the details of this report that feed into our GDP
tracking left our estimate of fourth-quarter GDP growth unrevised
at 3.0% and our forecast of first-quarter GDP unrevised at
- Nominal shipments of petroleum refineries have recovered just
over one-half of a sharp two-month decline last spring. This mainly
reflects reduced oil prices; from February through November,
nominal shipments of petroleum refineries declined 23%, while
domestic oil prices declined 19%.
- Outside of petroleum refineries, nominal shipments have fully
recovered and, as of November, were 1.4% above the February
- This highlights the relative strength of the goods sector
(relative to services). By our estimates, US GDP of goods has fully
reversed the pandemic-induced decline, while GDP of services is
- In addition to a relatively healthy goods sector generally,
today's report highlights the relative strength of equipment
spending. Orders and shipments of core capital goods have surged
past their pre-pandemic trends, indicating robust near-term growth
of equipment spending.
- The number of employees at U.S. businesses unexpectedly
declined in December for the first time since April, underscoring
the immediate economic impact of mounting coronavirus cases across
the country. Company payrolls decreased by 123,000 during the
month, concentrated in leisure and hospitality and retail,
according to ADP Research Institute data released Wednesday. The
prior month was revised down slightly to a 304,000 gain. The median
projection in a Bloomberg survey of economists called for an
increase of 75,000 in December. Private payrolls remain almost 10
million short of pre-pandemic levels. (Bloomberg)
- PPG Industries says it has raised its offer for Tikkurila to
€1.24 billion ($1.52 billion), or €27.75/share, in response to
Tikkurila's receipt of an undisclosed rival bid. PPG announced the
acquisition of Tikkurila for an original price of €1.1 billion, or
€25/share, on 18 December. The revised offer represents an 84.5%
premium on Tikkurila's closing price as of 17 December, the last
trading day before the deal was announced. Tikkurila is a major
producer of decorative paints and coatings, with operations in 11
countries, principally in northern Europe. The company reported
€564 million in revenue in 2019. "We will be able to extend the
reach of the strong Tikkurila products, and immediately utilize
Tikkurila's well-established distribution network across the Nordic
region for a wide variety of PPG products," says PPG chairman and
CEO Michael McGarry. "From a cost standpoint, the Tikkurila
management team has implemented a broad margin-improvement program
over the last couple of years, and we will continue that momentum
with supply-chain and other traditional acquisition-related
synergies." The tender offer for all outstanding shares in
Tikkurila will commence on or about 15 January, and the deal is
expected to close in the second quarter of this year. PPG has
announced multiple significant acquisitions in recent weeks.
Earlier today, it announced the acquisition of VersaFlex, a maker
of specialty coatings for industrial and infrastructure end
markets, and in November the company said it would acquire
transportation coatings maker Ennis-Flint. (IHS Markit Chemical
- General Motors (GM) is reported to be planning to build an
electric utility vehicle for the Honda brand at a Mexico facility
and an electric vehicle (EV) for the Acura brand at a US plants,
according to media reports. Automotive News reports that the Acura
project will be produced at GM's Spring Hill (Tennessee, US) plant,
while the Honda product would be produced at Ramos Arizpe (Mexico).
The report indicates the Honda could go into production in 2023 and
the Acura product in 2024. Automotive News notes that GM declined
to comment on future product, and quotes a Honda spokesperson as
saying the company "looks forward to sharing new information on our
North American electrification strategy later this year." In 2020,
GM and Honda announced plans first for GM to jointly develop EVs
for Honda on GM's Utium battery platform as well as later
announcing plans to form a North American product alliance.
Although neither GM nor Honda have confirmed or denied the recently
revealed production plans, producing the Honda variant in Mexico
would suggest it would share more with planned Chevrolet EV
products, expected to be produced at Ramos Arizpe, while the Acura
could be more closely aligned with Cadillac products planned to be
produced at Spring Hill. (IHS Markit AutoIntelligence's Stephanie
- Lactalis Brazil, the largest milk processor in the country, has
said that it is aiming to make Brazil a hub for exporting its
products to South and Central America countries. In 2020, the
company's shipments from Brazil rose by almost 170% y/y, to 3,400
tons with foreign sales favored by a good exchange rate. Most of
the trading took place between Lactalis' business units, with
products manufactured in Brazil under international brands, such as
Parmalat and Président, sold in Uruguay, Chile, Paraguay,
Argentina, Colombia, and Peru. The Dominican Republic is set to
join the recipient list soon, said Guilherme Portella,
communication director at Lactalis Brazil. The company also
extended its portfolio of exports from four product-types in 2019
(UHT milk in bottles, flavored milk, condensed milk and sour
cream), to ten types in 2020, which now also includes butter,
cheese, curd and canned condensed milk, in cans. (IHS Markit Food
and Agricultural Commodities' Ana Andrade)
- Bolivia's banking regulator, the Financial System Supervision
Authority (Autoridad de Supervisión del Sistema Financiero: ASFI),
released an order on 28 December stating that banks must withhold
all of their 2020 profits and reserve them as capital, therefore
banning dividend payments through 2021. (IHS Markit Banking Risk's
- This regulation is stricter by national standards. Since 2015,
the ASFI has been forcing banks to retain at least 50% of their
profits. IHS Markit interprets this doubling of the percentage as
an indication that the regulator considers the sector's capital
buffers to be in need of strengthening, taking into account the
likely concretization of asset-quality deterioration in 2021.
- As of September 2020, Bolivian banks had a capital adequacy
ratio (CAR) of 13.1%, parallel to a low shareholders'
equity-to-total assets ratio of 6.8%. According to news sources,
the sector's profits between January and November 2020 stood at
BOB1.15 billion (USD170 million), equivalent to 0.5% of total
assets in the sector. This means that the leverage ratio will have
a maximum jump to 7.7% of total assets.
- Despite this moderate improvement in capitalization, we
consider the sector to have inadequate levels of capital. This is
risk negative for banks given that the economic deterioration
caused by the COVID-19-virus pandemic has not yet translated into a
rise in impairment. IHS Markit estimates that real GDP will end
2020 with an 8.8% contraction.
- As with the broader region, we expect non-performing loans
(NPLs) to rise in Bolivia through 2021. Furthermore, despite a low
NPL ratio at 1.7% as of September 2020, provisions are insufficient
to cover it, as demonstrated by the coverage ratio at 88.4% over
the same period, revealing that some proportion of the sector's
capital will be threatened as the year unfolds.
- European equity markets closed sharply higher; UK +3.5%, Spain
+3.2%, Italy +2.4%, Germany +1.8%, and France +1.2%.
- 10yr European govt bonds closed lower across the region;
UK/France +3bps, Spain/Germany +2bps, and Italy +1bp.
- iTraxx-Europe closed -1bp/48bps and iTraxx-Xover
- Brent crude closed +1.3%/$54.30 per barrel, which is the
highest close since 24 February.
- With most of the UK facing a lockdown in early 2021, the UK
economy is heading for a deeper double-dip recession. (IHS Markit
Economist Raj Badiani)
- The second national lockdown in England during November,
followed by tough regional restrictions across most of the UK,
probably triggered fresh GDP losses during the final quarter of
2020, with the economy likely to have contracted by between 2.0%
quarter on quarter (q/q) and 3.5% q/q.
- This is less damaging than when real GDP fell by 18.8% q/q in
the second quarter of 2020 during the first shutdown. Manufacturing
and construction firms, alongside schools, remained open during the
final quarter of 2020.
- On the flipside, there is some evidence that the economy
received a boost from Brexit-related stockpiling before the
transition period expired on 31 December 2020.
- With the UK now enduring a third lockdown, which includes the
closure of schools, the UK is set to endure further GDP losses in
the first quarter of 2021. Again, the service sector will be the
most exposed, largely reflecting tighter restrictions on
consumer-facing services. Again, manufacturing and construction
firms will continue to operate, helping to soften the impact on
overall economic activity.
- Effective vaccination rollout plan required to spark strong
growth from Q2
- The key to halting the current loop of easing restrictions
triggering rising infections is a rapid and effective COVID-19
- This will allow a sustained easing of restrictions and lay the
foundations for a strong economic rebound from the second half of
2021 and in 2022.
- A key driver will be a sharp rebound in consumer spending,
aided by accumulating household savings during the pandemic.
Indeed, the household savings rate stood at historical highs of
27.4% and 16.9% of disposable income in the second and third
quarters of 2020, respectively.
- Plant-based food company Livekindly Collective has further
expanded its portfolio with the acquisition of No Meat, an
alternative protein line owned by UK frozen foods retailer Iceland
Foods. No Meat's plant-based products include the No Bull burger,
No Bull mince and 'meat' balls, No Porkies sausages and burgers and
No Chick fillets and strips. The products are currently available
in stores owned by Iceland, Asda and Ocado in the UK. US-based
Livekindly said the acquisition underlines its ambition to
"spearhead the global shift to environmentally friendly meat
alternatives". "This acquisition is very complementary to our
current portfolio further strengthening our position in the frozen
sector of the fast-growing plant-based meat category", says
Domenico Speciale, General Manager for Livekindly Collective in the
UK. "This acquisition is a big step in delivering our mission of
making plant-based food the new norm." Andrew Staniland, Trading
Director - Frozen at Iceland Foods said partnering with Livekindly
Collective would help bring the No Meat brand to new consumers
globally while also expanding Iceland Foods' plant-based product
offering in the UK. The new partnership will launch in January 2021
when Iceland will provide new and exclusive No Meat products as
part of a "Veganuary Sale". (IHS Markit Food and Agricultural
Commodities' Max Green)
- Autonomous vehicle (AV) software startup Oxbotica has raised
USD47 million in a Series B funding round, reports VentureBeat. The
financing round was led by the venture arm of oil giant BP in
participation with BGF, Halma, HostPlus, IP Group, Tencent, Venture
Science, and funds advised by Doxa Partners. The company plans to
use the capital to accelerate commercial deployment of its software
platform across key industries and markets. Oxbotica was founded in
2014 as an AV software company, headquartered in Oxfordshire. The
company specialises in building artificial intelligence software
for controlling AVs and cloud-based software that optimises the
route of the vehicle on the road. Oxbotica's software is deployed
for use in AV trials as part of Project Endeavour and Project
DRIVEN. (IHS Markit Automotive Mobility's Surabhi Rajpal)
- Volkswagen (VW) CEO Herbert Diess has said that he is concerned
about the difficulties 'old auto' is having in proving to the
markets that they will not be left behind in a technology race with
disruptors like Tesla and Apple. In a Bloomberg interview, Diess
said that getting the message across that VW would not be left
behind in the race for new automotive technology was central to his
recently announced program of reforms for the company (see Germany:
15 December 2020: VW Group CEO wins supervisory board backing for
reforms but no contract extension). He said, "Despite all efforts,
we are currently in a rather more difficult situation than in 2018,
when I took office. What really has changed -- and what I had not
expected to this extent -- is the view of capital markets on our
industry." Commenting on the difference in valuations between tech
and traditional auto companies and how this has affected their
respective access to capital, Diess added, "We haven't sufficiently
proved yet that we can hold our ground in the new competitive
environment -- our valuation is still located in 'old auto'… This
leads to a grave disadvantage for us in terms of access to required
resources." While traditional automotive companies have performed
averagely to poorly in recent years on the markets, the tech
companies' market capitalization has risen exponentially, as has
their ability to raise fresh capital cheaply. Tesla is seen by the
markets as a tech company, rather than a traditional company, and
despite a valuation that even its own CEO has previously described
as unrealistic, its share price has continued to rise. (IHS Markit
AutoIntelligence's Tim Urquhart)
- Germany's Federal Statistical Office (FSO) has reported, based
on data from various regional states, that the country's national
consumer price index (CPI) increased by 0.5% month on month (m/m)
in December 2020, about 0.1 percentage point firmer than the
average monthly change in December in recent years. The annual
inflation rate remained at -0.3%. The EU-harmonized CPI measure
posted a reading of 0.6% m/m, its year-on-year (y/y) rate thus
staying at -0.7%. (IHS Markit Economist Timo Klein)
- The detailed breakdown of the German national data will only be
published with the final numbers on 19 January, but components are
available, for instance, from the largest and most populous state
of North Rhine-Westphalia (NRW). CPI inflation in this state stood
at 0.5% m/m, leaving its y/y rate at -0.4%.
- Energy prices in NRW rebounded by 1.4% m/m, pushing up their
y/y rate from -6.8% to -5.5%. The main other categories showing
rising prices during December were recreation and entertainment
(4.5% m/m; mostly but not entirely seasonal, linked to package tour
prices surging 22.2%), furniture/household goods (0.6%), and
"miscellaneous goods and services" (0.4%). These forces were
broadly offset by cheaper clothing/shoes (-5.3% m/m), food (-0.8%),
and alcohol/tobacco (-0.8%).
- With respect to changes in y/y rates, inflation was boosted the
most - taking weights into account - by transport (from -3.2% to
-2.5%), housing/utilities (from 0.1% to 0.3%), recreation and
entertainment (from 0.6% to 1.0%), and "miscellaneous goods and
services" (from 0.7% to 1.1%). These were offset by sharp declines
for food (from 1.0% to -0.1% y/y) and especially clothing/shoes
(from -2.2% to -6.3%).
- NRW's core rate of inflation without food and energy remained
steady at 0.3% y/y in December. Apparently, increases in the
recreation and entertainment and furniture/household goods
categories were offset roughly by the price plunge for
- Service-sector inflation in NRW was stable at 0.9% y/y, while
goods inflation edged down slightly further from -1.7% to -1.8%
- German inflation broadly corresponded to expectations in
December and remained in moderately negative territory.
Importantly, however, the re-imposition in January of the higher
VAT rates that had prevailed until June 2020 will push inflation
back up to around 0.3% at first in early 2021, followed by around
1% in mid-2021 and nearly 2% in late 2021, the latter owing to
VAT-related base effects in combination with the projected economic
recovery as the COVID-19 virus pandemic is slowly overcome.
- Audi has taken another step towards making its production
facilities fully carbon neutral with a new technology aimed at more
efficient plastic recycling. According to an Autocar report, Audi
will switch from the mechanical reconstitution of waste plastic
materials, such as fuel tanks, wheel trim parts, and radiator
grilles, towards a form of chemical recycling. Audi and the
Karlsruhe Institute of Technology will seek to convert such
materials into pyrolysis oil, which can be used to make new plastic
for cars, thus saving energy and cost. Audi's head of Procurement
Strategy, Marco Philippi, said, "We want to make efficient use of
resources, and chemical recycling has great potential for this."
Audi has presumably conducted a study on the overall environmental
benefit of shifting to this plastic recycling technique since there
is an obvious possible environmental downside in using chemicals
for recycling plastics as any chemical waste will have to be
disposed of responsibly. However, there appears to be a benefit in
terms of reduced energy consumption in not using large industrial
equipment for such tasks. (IHS Markit AutoIntelligence's Tim
- France's consumer confidence index increased from 89 in
November, which was a near two-year low, to 95 in December. The
confidence index had collapsed from 104 in March to 95 in April,
and has since ranged between 89 and 96. (IHS Markit Economist Diego
- The November index demonstrated a large deterioration of the
forward-looking elements of the survey resulting from the
introduction of the new national lockdown in late October.
Following the partial relaxation of some of the measures in late
November, these sub-indices rebounded in December (see chart). The
survey was conducted between 25 November and 15 December.
- In particular, the index measuring households' views on the
economic outlook has improved to its highest level since March
2020. Households' views on their financial outlooks also improved,
matching the level in September.
- The index measuring unemployment expectations, which had
reached its highest level since mid-2013 in November, declined to
its lowest level since April. Similarly, the index measuring major
purchase intentions over the coming year has more than recovered
from its November collapse, rising to its highest level since
- This was accompanied by a decline in the index measuring
households' saving intentions, which fell to a four-month low.
- Although the December figures are encouraging, the number of
COVID-19 cases has continued to increase since the survey was
conducted, prompting the authorities to delay some of the planned
relaxation in restrictions. It remains to be seen whether this,
combined with an underwhelming start of the vaccination program in
France, will damage sentiment in January.
- Households' incomes have been protected by strong fiscal
support, driving a large increase in savings. Improving confidence,
if sustained, may lead to some of this pent-up demand being
unleashed as and when restrictions are gradually eased.
- Angelini Pharma (Italy) has entered a definitive merger
agreement to acquire Arvelle Therapeutics (Switzerland). The terms
of the deal require Angelini to pay an initial sum of USD610
million. A further USD350 million will be due, provided that
Arvelle's epilepsy candidate cenobamate generates undisclosed
revenue targets, subject to regulatory approval in Europe. The
all-cash transaction is therefore valued at up to USD960 million.
The takeover will enable Angelini to gain exclusive licensing
rights to the drug-resistant, partial (focal)-onset seizure drug
cenobamate in adults in the European Union, European Economic Area,
Switzerland, and the United Kingdom. Arvelle secured licensing
rights to cenobamate in Europe from SK Biopharmaceuticals (South
Korea) in a USD530-million deal in 2019 (see Switzerland - South
Korea: 19 February 2019: SK Biopharmaceuticals signs USD350-mil.
licensing agreement with Arvelle for cenobamate in Europe). SK
Biopharmaceuticals is entitled to further milestone payments of up
to USD430 million, pending regulatory and commercial milestones.
The South Korean firm has sold a 12% stake that it held in Arvelle
to Angelini. A decision on whether to recommend cenobamate for
approval by the European Medicines Agency (EMA) is expected in
2021. The UK Medicines and Healthcare Products Regulatory Agency
(MHRA) granted cenobamate a promising innovative medicine (PIM)
designation in August 2020. As such, cenobamate is expected to be a
candidate for the early access to medicines scheme (EAMS) in the
UK, which is tailored towards expedited patient access of therapies
nearing the end of the development program in areas of unmet
medical need. Cenobamate is approved by the US FDA under the brand
name Xcopri for the treatment of partial (focal) seizures in
adults. The acquisition of Arvelle should drive Angelini's
ambitions to carve out a larger market share in the central nervous
system (CNS) therapeutic area in the European market. (IHS Markit
Life Sciences' Eóin Ryan)
- Russian Federal State Statistical Service (RosStat) revised its
"flash" estimate of a 3.6% year-on-year (y/y) contraction for the
third quarter of 2020 to 3.4% y/y. This compares to a y/y fall of
8.0% in the second quarter, when the brunt of the containment
measures against the coronavirus disease COVID-19 virus pandemic
sent all sectors of the economy into deep contraction, with the
exception of exports and public consumption. (IHS Markit Economist
- The latter continued to expand in the third quarter as well.
However, government consumption was small to offset the drag from
underperformance of all other expenditure components.
- More specifically, private consumption fell by 8.4% y/y during
July-September, compared to a sharp fall of 22.1% in the previous
quarter. This reflects the easing of the restrictive anti-pandemic
measures through the third quarter and the realisation of some of
the pent-up demand.
- Weak domestic demand drove sharp declines in imports, which
fell by 20.1% y/y in the third quarter, only somewhat easing from
22.5% y/y fall during April-June. This implies that the recovery in
private consumption was mainly in the domestic services.
- Export data paint a contradictory picture. Although the sector
bucked the trend and even posted small growth in the second
quarter, Russian exports significantly declined in the third
quarter. Two main factors explain this.
- Firstly, the low statistical base effect had a positive impact
on the third-quarter results. In the second quarter of 2019,
Russian exports shrunk by 5.3% y/y when its oil exports were halted
due to the contamination of crude oil shipped through a key
EU-bound Druzhba (Friendship) pipeline.
- Secondly, Russian exports, including of crude oil, maintained
their levels well into May due to an initial impasse within the
OPEC+ over the crude oil production cuts. External demand slumped
significantly in the third quarter, leading to an 8.5% y/y fall in
- Net exports remained in positive territory in the third quarter
but they dropped to USD0.7 billion, from USD1.6 billion in the
- Under our current assumptions, Russian real GDP will contract
by 4.3% in 2020, followed by only modest gains of 1.9% in 2021.
Available sentiment and hard data for the remainder of 2020
suggests a decline in economic activity due to the second wave of
- Russian authorities have now admitted that they have
significantly underestimated the deaths caused by the virus,
potentially revising the figure from 57,000 to 186,000 in 2020,
putting Russia in third place in terms of deaths after the US and
- Ford will begin conducting autonomous vehicle (AV) trials in
the coming weeks in Israel, after receiving approval from the
Transportation Ministry, reports Haaretz. It will deploy the Ford
Fusion, which is equipped with cameras, radar, and LiDAR, and will
be operated by its research and development (R&D) center in
Israel. The aim of these trials is to enable the "R&D team to
personally see the algorithms they have developed operating in
real-road conditions". Udi Danino, CEO and founder of SAIPS, which
is responsible for the development of Ford's AV, said, "After four
years of working by remote, we realized that we need to move to the
next stage. Until now, we've been developing software, sending it
to the United States, getting feedback and so on. We want to
shorten the process". Ford has delayed plans to launch an AV until
2022, largely on the COVID-19 virus pandemic and technology
development, but its work has not abated. Ford has been testing
goods-delivery services in Miami, Austin (Texas), and Washington
DC, with the company believing that, in future, goods deliveries
will be a key AV service. Ford plans to launch a robotaxi service
in several US cities by the end of 2022. The taxis will be equipped
with Level 4 autonomous technology, allowing the vehicle to drive
without human intervention, but its applications are limited to
specific conditions. (IHS Markit Automotive Mobility's Surabhi
- APAC equity markets closed mixed; Australia -1.1%, South Korea
-0.8%, India -0.5%, Japan -0.3%, Hong Kong +0.2%, and Mainland
- Chinese imports of US almonds totaled 99 million pounds in the
2019-20 season (August-July), 23% less year-on-year and 42% less
than in the 2017-18 season, according to data from the Almond Board
of California (ABC) provided during the virtual 2020 Almond
Conference (December 2020). (IHS Markit Food and Agricultural
Commodities' Jose Gutierrez)
- The trade war between China and the US has badly hit the
Californian almond industry and Chinese importers are keeping an
eye on the Australian industry to diversify supply.
- China will remain a key market for Californian almonds and the
ABC expressed its optimism in the long-term due to positive data,
- Nuts are considered as the main snack for Chinese consumers,
whose concerns about food combining health and nice flavor have
been gradually rising.
- Lockdown due to Covid-19 has led to booming e-sales of
- Generation Z consumers (between 20-30 years old) are pushing up
sales of products linked with Vitamin E, essential for skin care.
And almond is a nut with a high proportion of this vitamin.
- As a result, the ABC has been launching promotion programs
focused on highlighting e-sales of almonds as a vitamin E source.
Participants obtained discounts in almond e-purchases.
- NavInfo has partnered with Inceptio Technology to provide its
high-definition (HD) map for the development of autonomous trucks,
which will go into volume production at the end of 2021. Under this
partnership, NavInfo will supply its one-stop mapping service,
OneMap, to Inceptio for the latter to build a fleet of autonomous
trucks deployed for logistics business, reports Gasgoo. NavInfo is
a navigation map service provider to global automakers including
SAIC, BMW, Volkswagen Group, General Motors, Volvo, Toyota, and
Nissan. In 2019, Beijing's municipal authority has issued a
temporary license plate for the testing of autonomous vehicles to
NavInfo. Inceptio focuses on developing Level 3 and Level 4
autonomous truck technologies and has partnerships with truck
makers such as Dongfeng Automobile, Sinotruk Hong Kong, and Foton.
Recently, the company has secured a USD120-million investment in a
funding round led by Chinese electric vehicle battery maker CATL.
(IHS Markit Automotive Mobility's Surabhi Rajpal)
- New vehicle sales in Australia posted a 13.7% year-on-year
(y/y) decline in 2020 to 916,968 units, according to data from the
Federal Chamber of Automotive Industries (FCAI). A total of 454,701
sport utility vehicles (SUVs) were sold during 2020, down 5.9% y/y.
The SUV segment, however, continued to gain market share during the
year with a share of 49.6%, up from 45.5% in 2019. Passenger car
sales totaled 222,103 units, a fall of 29.7% y/y, with a market
share of 24.2%. Light commercial vehicles (LCVs) took a 22.4%
market share, contracting 8.9% y/y to 205,597 units during 2020.
Toyota remains the leading automaker with a 22.3% market share,
followed by Mazda with a 9.3% market share and Hyundai with a 7.1%
market share. Ford and Mitsubishi trailed the top three with market
shares of 6.5% and 6.4% respectively. The top five highest selling
vehicles for the year were the Toyota Hilux with 45,176 sales, Ford
Ranger with 40,973 sales, Toyota RAV4 with 38,537 sales, Toyota
Corolla with 25,882 sales, and Toyota Land Cruiser with 25,142
sales. New vehicle sales in Australia recorded a double-digit
decline during the COVID-19 virus pandemic. Sales in the fourth
quarter of 2020 have begun to improve, leading the market to a
recovery path heading into 2021. IHS Markit forecasts that
Australian light-vehicle sales, which include light passenger
vehicles and LCVs, will bounce back in 2021, with an increase of
around 8% y/y to 974,000 units. This total will still be lower than
in 2019 when around 1.05 million light vehicles were sold in the
market. (IHS Markit AutoIntelligence's Abby Chun Tu)
S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.