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Top 5 Things to Watch on Monday, Dec. 23

Investing.com -- China cuts import tariffs to make sure the coming phase-1 trade deal with the U.S. doesn't invite complaints from other trading partners. Russia and Ukraine ink a deal that takes off the table the risk of a big disruption to Europe's gas supplies in the new year, and Disney's latest Star Wars movie falls short of expectations on its opening weekend. Here's what you need to know in financial markets on Monday, 23rd December.

1. China cuts import tariffs - for everyone

China’s government approved reductions in tariffs on a broad range of imports worth nearly $400 billion a year, in what analysts saw as a preliminary step toward signing a phase-1 trade deal with the U.S. early in the new year.

The cuts address some of the most pressing issues in the Chinese economy such as high pork prices and access to medicines and parts for smartphones. They give no specific preference to U.S. goods but will pre-empt complaints by China’s other trade partners at the World Trade Organization by ensuring that they enjoy the same tariffs as the U.S. if and when the phase-1 deal is signed.

As such, the deal has a signalling effect that China remains wedded to an international rules-based order, something it hopes will improve its profile vis-à-vis the U.S. in the eyes of third parties.

2. Credit Suisse's new spying scandal

Credit Suisse (SIX:CSGN) is facing a growing public relations disaster after reports of a second instance of illegal surveillance of its executives.

The Swiss regulatory authority Finma has appointed an investigator to look into practises at the bank, after media reports disclosed that the bank had spied on its former HR director, only months after a similar episode involving wealth management head Iqbal Khan (who was on the verge of defecting to rival UBS at the time)

The bank in a statement said – again – that chief executive Tidjane Thiam had no knowledge of the surveillance, and said it had been lied to by a firm of detectives hired by former COO Pierre Olivier Bouee during its inquiry into the Iqbal Khan affair. Bouee, a long-time confidante of Thiam, had carried the can for that at the time.

3. U.S. stocks set to open higher; durable goods orders due

U.S. stock markets are set to edge up to new record highs after Friday’s record close and upbeat news on trade over the weekend.

In addition to the Chinese tariff cuts, President Donald Trump had said that a signing ceremony for the phase-1 deal is “being arranged” but provided no further detail.

By 6:30, Dow futures were up 78 points or 0.3%. S&P 500 Futures were up 0.5% while Nasdaq 100 futures were up 0.4%.

European markets were mostly flat, while Chinese markets had fallen slightly in the Asian session.

With no major earnings planned, the focus during the U.S. day will be on durable goods orders, which are due at 7:30 AM ET (1230 GMT) and new home sales data for November at 10 AM ET.

4. The 'Rise of Skywalker' falls flat

Walt Disney (NYSE:DIS) had a disappointing reception for its latest Star Wars movie, the Rise of Skywalker, taking in a "mere" $175 million at the box office across North America on its opening weekend.

That was well below the studio’s hopes of $200 million-plus, and suggested the trend of diminishing returns on the Star Wars franchise is unbroken.

According to The Wall Street Journal, receipts were 20% below those for “The Last Jedi” and 29% those for the 2015 release of “The Force Awakens”.

5. Europe breathes out as Russia, Ukraine sign gas deal

The threat of a major disruption to European gas supplies this winter was lifted after Russia and Ukraine signed a protocol that will allow for gas deliveries through Ukraine under a new contract next year.

The signing late on Friday came only days after the U.S. passed a bill sanctioning contractors on the Nord Stream 2 gas pipeline, a measure that is likely to delay that alternative route for Russian gas to Europe by some months.

The deal builds on tentative signs of progress in relations between the Ukraine and Russia, which have been in an undeclared state of war since 2014.

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