US-CHINA: NYT-'Trump Eyes Bigger, Better Trade Deal With China'

• The importance of UK labour market data may have fallen a little for the MPC, but it is still incredibly important for the market, despite growth concerns having picked up recently and activity and PMI data increasingly watched.
• The scope for further revisions make this month’s print even more unpredictable.
• Rounded to 1dp, the majority (6/8) of analyst forecasts we have seen for private sector regular AWE look for a 5.8%Y/Y print in the 3months to November, up from 5.37%Y/Y in the 3-months to the end of October. The other two forecasts we have seen look for 5.7%.
• In terms of the “headline” whole economy AWE numbers, ex-bonus forecasts are generally 5.5%Y/Y in the 3-months to November (from 5.19%Y/Y in the 3-months to October) while the total (including bonus) whole economy AWE forecasts are split between 5.6-5.7%Y/Y in the 3-months to November (with one analyst looking for 5.5%).

For the full preview including summaries of a dozen sellside views click here.

• There is, as always, a lot to unpack within the BOS and CSCE surveys but on inflation expectations, businesses in Q4 broadly gave back some of the downward progress seen in Q3 whereas consumers further converged towards more typical readings.
• Within the details, the BOS 2Y confirmed last quarter’s notable step lower to 2.5% but the separate monthly Business Leaders’ Pulse (BLP) readings all accelerated 20bps in December vs September readings across 1-5Y periods.
• Ranging from 2.6-2.8%, these BLP readings remain within the 1-3% target range although 2.6% for the 2Y is the highest end-quarter reading since Dec’23 whilst the 2.7% for the 5Y is the highest end-quarter reading since the BLP started in mid-2022 (but with a few joint highs at 2.7% in other months).
• Consumer inflation expectations meanwhile saw a sharp step lower for the 1Y to 3.05% (-80bps) whilst the 2Y and 5Y broadly consolidated Q3’s moderation with 3% readings. 

The United States House of Representatives has gaveled in for a pro-forma session to formally accept the resignation of Representative Michael Waltz (R-FL), tapped to serve as President-elect Donald Trump's National Security Advisor.

• Waltz's resignation is expected to be followed by the registration of Rep Elise Stefanik (R-NY), who will serve as Trump's ambassador to the United Nations.
• The two resignations, along with the exit of former GOP Rep Matt Gaetz (R-FL), will take the House balance of power to 217 Republicans, 215 Democrats, and 3 vacancies (Waltz, Gaetz, Stefanik).
• Special elections will be held to fill the two Florida seats on April 1st. A special election to fill Stefanik's seat will be called by New York Governor Kathy Hochul (D-NY), who may seek to delay the special election for as long as possible - feasibly until mid-May.  
• Until the vacant seats are filled, House Speaker Mike Johnson (R-LA) cannot drop a single Republican vote in any vote on the House floor, assuming all Democrats are present and voting.
• The fine margin is unlikely to affect Johnson's reconciliation agenda, which targets floor votes in May. However, the razor-thin margin may hand Democrats some additional leverage talks to avert a government shut and raise the debt limit in mid-March.