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Hot Reuters Morning Benchmark \ Dow Jones Morning Briefing

Discussion in 'World Economy' started by Tadhg Gaelach, Oct 17, 2016.

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    Tadhg Gaelach

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    FRIDAY, NOVEMBER 17, 2017


    TOP NEWS

    POLL-Confidence in euro zone expansion strong among economists
    The euro zone economy will mark its best year in a decade and maintain solid growth well into 2018, according to economists in a Reuters poll who said the risk was that their forecasts might not be optimistic enough. Inflation, last clocked at 1.4 percent, is expected to stay below the European Central Bank's target of just under 2 percent until at least the second half of 2019, according to the poll. Meanwhile, another poll forecasts British economic growth to remain tepid over the coming few years, lagging well behind its peers, and could even be worse than economists’ expectations. Median forecasts in the poll was for the British economy to expand just 0.3-0.4 percent per quarter through to June 2018, with growth of 1.5 percent this year and 1.3 percent the next.

    PREVIEW-Japan exports seen growing in Oct on robust external demand
    Japan's exports are expected to have risen for an eleventh straight month in October, led by robust demand for cars and electronics manufacturing equipment as the world's third-largest economy continues its recovery, a Reuters poll showed. Exports are forecast to have grown 15.8 percent in October from a year ago as overseas demand for cars and semiconductor manufacturing equipment grew. Imports likely rose 20.2 percent in October from a year ago, the fastest pace of growth since January 2014, as higher oil prices inflate import costs, the poll found. The trade balance likely stood at 330.0 billion yen in October, narrowing from a revised 667.7 billion yen in September.

    Tax overhaul drama moves to U.S. Senate as House approves its bill
    Congressional Republicans took important steps on Thursday toward the biggest U.S. tax-code overhaul since the 1980s, with the House of Representatives approving a broad package of tax cuts, and a Senate panel advancing its own version of the legislation sought by senior lawmakers and President Donald Trump. The House vote shifted the tax debate to the Senate, where a tax-writing panel finished debating and approved a bill late Thursday evening. The path forward for the tax plan in the Senate, where Republicans have a narrow majority, is fraught with obstacles about concerns over the deficit, healthcare and the distribution of tax benefits. Republicans can lose no more than two Senate votes if Democrats remain united in opposition.


    Fed's Kaplan: falling unemployment may trigger rate hikes
    Dallas Federal Reserve Bank President Robert Kaplan on Thursday repeated that he is "very open-minded and actively thinking about" a possible interest-rate hike at the U.S. central bank's next policy meeting. His comments on Thursday suggest a growing unease that the Fed could overheat the economy if it does not respond to falling unemployment with rate hikes. Inflation is expected to rise toward the Fed's goal, he said, and though structural pressures keeping it down are intensifying, "cyclical forces are building." Meanwhile, San Francisco Federal Reserve President John Williams reiterated his view on Thursday that the U.S. economy is growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5 percent.

    China overhauls $2.69 trln public-private projects as debt fears rise
    China's finance ministry has ordered an overhaul of its existing public-private partnership (PPP) projects and tightened approval rules for new ones, as Beijing has grown increasingly concerned about rising hidden debt risks from potential abuses of the programme. The value of China's 14,220 existing PPP projects totalled 17.8 trillion yuan by end-September, according to a national database managed by the finance ministry. the aggressive PPP boom has started to alarm authorities who say some local governments are using public-private partnerships, government investment funds and government procurement services as "disguised channels" for raising debt. All provincial finance bureaus should weed out "unqualified" PPP projects by March 2018, the finance ministry said.



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    BREAKINGVIEWS


    Sorry is the hardest word for central bankers
    Honesty is often touted as the best policy. It may be the hardest one for central bankers to adopt. Bank of England Chief Economist Andy Haldane this week told a conference of global rate-setters to speak simply and truthfully to the general public. His advice is laudable but difficult to follow in its entirety.



    EURO ZONE GROWTH
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    MORNING MEETING


    JGB SUTURES RALLY, USD HIT

    BONDS, EQUITIES, OTHER ASSET MARKETS
    • US Treasury 10s indicated 2.359%, JGB 10s 0.038%, Bund 10s 0.375%
    • US-Japan-Germany respective 2s indicated 1.711%, -0.197%, -0.747%
    • JGB yields largely unchanged, while only futures rally
    • Yields within 0.5bp either side of yessterday's close across the curve
    • JGB futures up 15 ticks at 150.95, CTD JB336 gains 1.5bp
    • BoJ trims size of 1-3yr JGB buying at regular op, but impact limited
    • Nikkei gaps up at TSE open after Wall St gains o/n, to 22,757 high early
    • Off later to 22,319 and, at 22,396, up only 45 pts or 0.2% on day
    • AXJ mostly in black - HSI 0.8%, KOSPI 0.15%, STI 0.9%, TWI 0.9%
    • ASX and NZX50 also up 0.3% each, Shanghai outlier, off 0.55%
    • Dalian iron ore up almost 3% on day at writing

    Currency Summaries
    JPY
    • USD/JPY down from early 113.14 to 112.40 on WSJ Mueller subpoena report
    • US Treasury yields off too from early highs, 10s off 1-2 bps, @2.359%
    • Weak longs seen bailing en masse again, especially ahead of weekend
    • Talk some bids from @112.50 absorbed, more trail down
    • Nearby option expiries today mostly to upside, total USD1.2 bln 113.25-70
    • Nikkei rally earlier to 22,757 should have been supportive but not
    • EUR/JPY moves in line with USD/JPY, off from 133.16 early to 132.86
    • View cross in near-term downtrend reinforced, 132.43 55-DMA initial target
    • GBP/JPY 149.30 to 148.77 but essentially in holding pattern, 55-DMA 148.67
    • AUD/JPY 85.84 to fresh trend low of 85.31, tracks away from 86.01 200-DMA
    • NZD/JPY 77.50 to fresh trend low of 77.04, lowest since end-May

    EUR
    • EUR/USD up a leg in Asia on broad US weakness, 1.1766 to 1.1821
    • WSJ report Mueller to subpoena Trump campaign documents, US yields ease
    • EUR powers through initial line of offers @1.1800, some option-related
    • E949 mln expiries 1.1790-1.1800, more above help limit EUR strength
    • Total E1.5 bln or in expiries between 1.1820-50 strikes
    • EUR/USD soars through 1.1792 55-HMA, descending 55-DMA at 1.1792 also
    • View cross in near-term downtrend reinforced, 132.43 55-DMA initial target?
    • EUR/GBP sideways, Asia 0.8913-26, between 0.8907 55-DMA, 0.8951 100-DMA
    • EUR/CHF bid with SNB vowing to remain ultra-easy, concerns over strong CHF
    • Asia 1.1704-15, quiet but holding at fresh trend highs, highest since Jan ‘15

    GBP
    • Cable rushes up from 1.3190 early Asia to 1.3245 on broad USD weakness
    • Report of Mueller subpoenas for Trump campaign documents hit USD hard
    • Some jobber sales from high, ascending 55-DMA also 1.3240, heavy above
    • Some nearby option expiries - GBP639 mln up at 1.3300 strike

    CHF
    • USD/CHF down from early Asia 0.9942 to 0.9904 alongside USD/JPY
    • Move down clear rejection ahead of descending 200-HMA up at 0.9950
    • Some support still @0.9900 but Fibo 38.2% of 0.9421-1.0039 at 0.9802
    • USD/CHF may be in process of reversing July 9-October 27 rally

    Market Briefs
    • Special Counsel Mueller issued subpoena for Trump campaign documents -WSJ
    • Tax overhaul drama moves to U.S. Senate as House approves its bill
    • Fed's Kaplan: falling unemployment may trigger rate hikes
    • Fed's Williams says December rate hike 'perfectly reasonable'
    • ECB Nowotny - Corporate bonds could be bigger share of stimulus
    • Confidence in euro zone expansion strong among economists- Rtrs poll
    • Britain wants trade deal with EU "much closer than Canada"- Davis
    • BoE's Carney says two more rate hikes likely in coming years - report
    • RBNZ plans new standard for mortgage bonds to spur debt market activity
    • NZ Oct Producer Price - Inputs, 1.0% vs 1.4%
    • NZ Oct PPI Output, 1.0% vs 1.3%
    • Moody's gives Modi a boost by raising India's sovereign bond rating
    • BoJ trims amount of 1-3 JGBs buys to Y250 bln from Y280 bln at reg ops.
    • Fitch - Japan regional banks face weak outlook and consolidation
    • U.S. junk bond funds post 4th-biggest week of outflows ever -Lipper
    • Foreign CB US debt holdings +$4.239 bln to $3.369 trln Nov 15 week
    • Treasuries +$5.186 bln to $3.040 trln, agencies +$396 mln to +$262.26 bln

    Looking Ahead - Economic Data (GMT)
    • 09:00 EZ Sept Current Account NSA, Eur, last 29.6B
    • 09:00 EZ Sept Current Account SA, Eur, last 33.3B

    Looking Ahead - Events, Auctions, Other Releases (GMT)
    • 08:30 ECB President Mario Draghi to speak at the European Banking Congress - Frankfurt
    • 08:30 Bundesbank President Jens Weidmann to address the European Banking Congress - Frankfurt
    • 08:30 Deutsche Bank CEO John Cryan to speak at the European Banking Congress- Frankfurt
    • 13:00 Bank of Norway Governor Oystein Olsen gives a speech at KPMG's Executive Conference - Oslo
    See North American Open for a detailed listing of US/NorAm releases, events.

    FX options flows hint USD could still breakout
    Yesterday's Deutsche Bank weekly option flow report noted the USD was the only major currency that benefitted from inflows, Swiss was the most sold, mainly USD/CHF calls however volumes dropped approximately 25%. That's surprising because IMM CHF shorts jumped 20% - implying the options market is less convinced the topside's going to break. Deutsche Bank's SVACHF report (Skew Volume At-the money) indicates greater buying of USD/CHF calls over puts at roughly 2.3% of net. The BIS puts Swiss options volume at about USD 5bn a day so it's not a huge number vs spot turnover. NZD puts over calls 2.2% of net, turnover USD8bn (BIS), so USD900mn for the week. CAD puts over calls around 1.7%, CAD options turnover 14bn a day (BIS) USD 1.2bn for the week. JPY as of Tuesday night was still being net sold, but puts over call sales dipped below 1% of net, with daily option turnover 74bn (BIS) that's stil 3.3bn for the week. The options market seems to be saying the buck could still breakout.


     
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    Tadhg Gaelach

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    Dow Jones Newswires, 20 Nov 2017 03:40 EST
    Global Forex and Fixed Income Roundup: Market Talk


    0840 GMT - DBS remains bullish on Indonesia's economic outlook, saying the country has one of strongest fundamentals in ASEAN with low debt, moderate inflation, stable governance, and marginal political risk. Still, afflicted by the hangover from the 2014-5 commodity crash and a still-challenging investment environment, the economy seems to be stuck in a 5% growth trajectory. That's "well below its potential," the investment bank says while projecting almost-5.5% GDP growth in both 2018 and 2019 as investment continue to recover. (chester.yung@wsj.com; @chester_yung)

    0840 GMT [Dow Jones] Currently trading at JPY 147.93, the British pound is bearish, capped by its declining 50-period moving average at JPY 148.10 on a 30-min chart. Moreover, the intraday RSI stands within its selling area between 50 and 30 and confirms the bearish bias. As a consequence, a first target to the downside is set at Nov 20 bottom at JPY 147.65. A break below this threshold would open the way towards Oct. 12 bottom at JPY 147.30 and towards the strong horizontal support and JPY 147.00 in extension. Only a rebound above the horizontal resistance and overlap at JPY 148.50 would turn the outlook to bullish with a first alternative target set at the horizontal resistance at JPY 148.80 and a second one set at JPY 149.25 in extension. [This piece contains the opinions of Trading Central and does not constitute personalized investment advice or form part of any invitation or inducement to buy or sell any security. The author has been prohibited by Trading Central from purchasing or otherwise directly or indirectly acquiring any direct or indirect beneficial ownership of any instruments or markets for which Trading Central or its affiliates issues recommendations. To read more, visit bit.ly/1MehCU9.] (analysts-europe@tradingcentral.com)

    0837 GMT - Thailand's economic growth this year isn't "merely just humming along," OCBC says. That as exports' recovery is spilling over into the domestic economy. "Should these trends persist into 2018, growth could likely accelerate beyond how 2017 could herald," the bank adds while boosting this year's GDP forecast to 3.9% from 3.5% amid today's stout 3Q report. It adds that a tax break on year-end shopping could further spur both domestic and tourist spending next month. Then there's the prospect of a big infrastructure plan supporting growth next year. (saurabh.chaturvedi@wsj.com; @journosaurabh)

    0834 GMT - The collapse of the German coalition talks last night, when the liberal FDP left the negotiations, means for Europe that "the European Summit in December can almost be cancelled, at least when it comes to the discussion on the future of the eurozone," says Carsten Brzeski, chief economist for Germany and Austria at ING. Europe has lost another illusion as Germany is no longer the role model of political stability, he says. The economist sees three options ahead: a minority government, a continuation of the current grand coalition or new elections, adding that the likelihood of new elections has increased. (emese.bartha@wsj.com; @EmeseBartha)

    0832 GMT - ING advises a long GBP/USD position as its trade on the week, expecting a rise to 1.34 "on a well-received" U.K. Autumn Budget on Wednesday. "It's clear that the global investment community are in dire need of some Churchillian-like words of inspiration over the future of Britain," ING says. Sterling rises Monday on reports that Prime Minister Theresa May will increase the Brexit bill offer, potentially opening the door to trade negotiations. GBP/USD last up 0.2% at 1.3241. EUR/GBP falls 0.3% to 0.8895 after German coalition talks break down.(olga.cotaga@wsj.com; @OlgaCotaga)

    0826 GMT - Nigeria is set to hit the market with a dual-tranche dollar bond sale. The proposed offering, rated B by S&P and Fitch, may be split into 10- and 30-year tranches; no African country besides South Africa has sold a 30. Nigeria finished 3 days of roadshows on Friday with fixed-income investors and deal size hasn't been finalized. But the country had announced plans to raise $3 billion from the bond market this year and another $2.5 billion from multilaterals. The offering, led by Citi and Standard Chartered, may get launched today, subject to market conditions. (manju.dalal@wsj.com)

    0823 GMT - Economists keep getting thrown by the strength of exports in Asia, says Eugenia Victorino, herself an economist at ANZ Research, following data showing yet-another Southeast Asian economy outperforming expectations. Thailand today reported the biggest year-over-year GDP increase in 4 years. "So far, 2017 growth numbers have been overshadowed by the outperformance of external demand," Victorino says. But she sees that likely changing in 2018 as growth drivers shift to domestic-demand factors and as favorable base effects diminish. (paul.jackson@wsj.com)

    0811 GMT - EUR/USD falls 0.3% against the dollar to 1.1755 on news that German Chancellor Angela Merkel has failed to form a coalition. Although this adds "a slight downside tilt" to EUR/USD, ING expects it to hold above support at 1.1720 and 1.1700. The euro has recovered some of its overnight losses, having earlier dropped to its lowest in nearly a week at 1.1723. ING says this week will "all be about" European Central Bank communications for the euro. Minutes from the last meeting will be published on Thursday, and ECB speakers include President Mario Draghi on Monday at 1400 GMT. The bank expects EUR/USD to consoliate in a 1.15-1.20 range.(olga.cotaga@wsj.com; @OlgaCotaga)

    0754 GMT - With the German coalition talks failing, it is "completely" open how the formation of a government could proceed, says LBBW. Fellow bank Nordea adds a weak German government is seen making European-wide reforms more difficult to achieve and risks slower decisions occurring in a time of crisis. The euro's selloff after the talk headlines first hit have persisted; the common currency is down 0.3% at around $1.1750. (emese.bartha@wsj.com; @EmeseBartha)

    0750 GMT - The FTSE 100 index is expected to open down five points at 7375, according to London Capital Group, following falls in Asia as concerns about the breakdown of German Chancellor Angela Merkel's coalition talks dents investors' risk appetite. Gains in the pound on reports that the U.K. government may be prepared to increase its divorce bill to the EU may also pressure U.K. stocks. Shares in Mediclinic International PLC are likely to be in focus after the private hospital company said it has been unable to reach an agreement to buy Spire Healthcare Group PLC. There is no major U.K. data Monday, with the U.K. budget on Wednesday set to be this week's focus. (jessica.fleetham@wsj.com)

    0745 GMT - Danske recommends investors to buy Finland's September 2027-dated government bond at Tuesday's auction and benefit from the pick-up the bond offers versus German bunds. "Finland still trades with a small pick-up to Germany and the 10-year segment is an attractive point on the Finnish asset swap curve," say Danske's fixed income analysts. Finland will complete its annual bond issuance program with the upcoming up to EUR1 billion bond auction. The auction will bring Finland's full-year euro-denominated government bond issuance to EUR12 billion. (emese.bartha@wsj.com; @EmeseBartha)

    0741 GMT - Finland's economic recovery bodes well for an expected return to triple-A credit rating by one of the major rating firms next year, say Danske Bank's fixed income analysts. "Finland is in our view a clear candidate to regain one or more AAA-ratings in 2018," they say. Finland is rated one notch below triple-A by the three major rating firms. (emese.bartha@wsj.com; @EmeseBartha)

    (END) Dow Jones Newswires
     
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    Tadhg Gaelach

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    MONDAY, NOVEMBER 20, 2017


    TOP NEWS

    Japan's export growth signals economic recovery to continue in Q4
    Japan's export growth held steady in October, suggesting that brisk global demand for Japanese cars and electronics will likely carry its economic recovery into the current quarter. Ministry of Finance data showed that exports rose 14.0 percent year-on-year in October, led by shipments of cars to Australia and liquid-crystal device production equipment and raw materials for plastics to China. Japan's imports rose 18.9 percent in the year to October. The resulting trade balance was a surplus of 285.4 billion yen in October versus the median estimate for a positive balance of 330.0 billion yen, a fifth straight surplus month.

    UK households feel the pinch as budget nears, Christmas sales seen down
    British households felt more of a squeeze on their finances this month, a survey by data firm IHS Markit showed, and credit card firm Visa predicted spending over the Christmas holidays would fall in real terms for the first time since 2012. The IHS Markit Household Finance Index for November fell to 43.4, reversing some of October's improvement to 43.8. Separately, Visa said its research predicted a 0.1 percent fall in spending after adjusting for inflation during the Christmas holidays, the first annual fall since 2012.

    Goldman Sachs sees Fed raising rates four times in 2018
    Goldman Sachs said it expects a tight U.S. labor market and more normal inflation picture will lead the Federal Reserve to hike interest rates four times next year. "The U.S. economy heads into 2018 with strong growth momentum and an unemployment rate already below levels that Fed officials view as sustainable," Goldman's economists wrote in note dated Friday. "The strength is becoming 'too much of a good thing' and containing further overheating will become a more urgent priority in 2018 and beyond," the Goldman note said.


    China's home price growth picks up in October
    China's new home prices rose at a slightly faster pace in October after gains had held steady the previous month, as prices remained resilient in the face of falling sales and a tighter liquidity environment. Average new home prices rose 0.3 percent month-on-month in October, compared with a 0.2 percent gain in September, according to Reuters calculations from National Bureau of Statistics (NBS) data out on Saturday. Property prices in tier-3 cities rose 0.3 percent from a 0.2 percent increase in September, the NBS said in the note.

    Canada, Mexico to question U.S. auto content demands at NAFTA talks
    Canada and Mexico will not make counterproposals to U.S. demands for tougher NAFTA automotive content rules but instead will offer rebuttals and pepper American negotiators with technical questions on Monday, people familiar with the talks said. The Canadian negotiating team's presentation will "provide information about how the U.S. rules of origin proposal for autos would damage the continental industry in general and the United States in particular," the Canadian source said. Another source close to the negotiations said Mexico and Canada consider the U.S. proposal "unviable" and disagree with the concept.


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    UK INFLATION, UNEMPLOYMENT, WAGES & BANK RATE
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    MORNING MEETING


    JGBS MOVE LITTLE, EUR HIT

    BONDS, EQUITIES, OTHER ASSET MARKETS
    • US Treasury 10s indicated 2.327%, JGB 10s 0.036%, Bund 10s 0.354%
    • US-Japan-Germany respective 2s indicated 1.711%, -0.195%, -0.756%
    • JGBs move little with no BoJ ops, no JGB auctions
    • JGB futures up 0.01 at 150.96, range 150.03/150.90
    • Nikkei off on Wall St weakness Friday, stronger JPY, 22,410 to 22,215
    • At 22,261, index off 135 points or 0.6% on day
    • AXJ mostly down too - SSEC 0.8%, HSI 0.2%, KOSPI and STI 0.1%, TWI 0.3%
    • ASX off 0.1% but NZX50 +0.3%, outlier
    • Dalian iron ore -1.2%

    Currency Summaries
    JPY
    • EUR/JPY sells off hard early Asia on failure of Germany "Jamaica" talks
    • Cross already under pressure from sagging USD/JPY, today 132.19 to 131.16
    • Cross well into 130.98-132.36 daily Ichi cloud, ascending 100-DMA 131.23
    • Decisive break below cloud projects test of 130.64 September 15 low
    • USD/JPY down in sympathy from early 112.22 to 111.89 before steadying
    • Soft US Tsy yields and large USD2.35 bln option expiries at 112.30 weigh
    • Total USD1.2 bln more in expiries between 111.90-112.00 tether market down
    • Japanese importer bargain-hunting, Gotobi demand, short-covering supportive
    • GBP/JPY 148.28 to 147.57, downside limited on EUR/GBP sales
    • Cross however back in 146.06-148.26 daily Ichi cloud, deeper dip ahead?
    • AUD/JPY down more after 85.84 to 84.65 plunge Friday, today 84.87 to 84.50
    • NZD/JPY too after 77.50 to 76.21 plunge Friday, 76.39 to 76.10, then bounce
    • Oct crude oil import volume +7.8% y/y, LNG -2.3%, thermal coal -0.8%

    EUR
    • News German Chanc Merkel failed in "Jamaica" coalition govt talks hits EUR
    • EUR/USD down from early 1.1810 high to 1.1722 before steadying
    • News likely to have disproportional affect EUR going forward
    • Underlying support at 1.1700-10, ascending 200-HMA at 1.1708
    • Nearby option expiries - 1.1660-80 E1.25 bln, 1.1750 342 mln, 1.1800-05 624
    • Cross well into 130.98-132.36 daily Ichi cloud, ascending 100-DMA 131.23
    • Decisive break below cloud projects test of 130.64 September 15 low
    • EUR/GBP from 0.8918 to 0.8879, gradually rising 200-HMA 0.8888
    • EUR/CHF from 1.1652 to 1.1592, key support at rising 55-DMA at 1.1538

    GBP
    • Cable off small, 1.3222 to 1.3189 in sympathy with EUR/USD
    • EUR/GBP buys supportive, helps GBP/USD bounce from low
    • Low of session just above 1.3188 then base of hourly Ichi cloud
    • Gradually ascending 55-HMA 1.3202, top of hourly Ichi cloud now 1.3204
    • Daily Ichi cloud 1.3217-63, ascending 55-DMA 1.3244 above

    CHF
    • USD/CHF off small in Asia, in sympathy with USD/JPY? 0.9902 to 0.9880
    • Downside limited on lack of interest, focus
    • 0.9878 low Friday, 0.9847 low last Wednesday, stops eyed sub-0.9845
    • Market heavy 0.9900+ on broad USD heaviness too

    Market Briefs
    • Merkel fourth term in doubt as German coalition talks fail
    • UK's Hammond seeks answer to voter unrest in new house building push
    • Cabinet ready to back May's inreased Brexit bill offer - FT
    • Hammond - Hopeful main elements of EU-UK deal agreed before Brexit - ITV
    • GB Nov IHS Market household finance index off to 43.4, Oct up to 43.8
    • UK households feel pinch as budget nears, Christmas sales down?
    • Trump open to dropping healthcare provision in Senate tax bill -aide
    • Goldman Sachs sees Fed raising rates four times in 2018
    • China's home price growth picks up in October
    • Japan PM Abe: Govt and BOJ to work together to beat deflation
    • JP Oct trade surplus Y285.4 bln, Y330 bln eyed, exports +14%, imports +18.9%
    • JP Exports to US +7.1% y/y, China +26%, largest ever in value, Asia +18.9%
    • Japan to offer USD-denominated loans to developing nations - Nikkei
    • Saudi state budget deficit shrinks nearly 10 pct in third quarter
    • Speculators cut negative dollar positions to lowest since July - CFTC

    Looking Ahead - Economic Data (GMT)
    • 07:00 DE Oct Producer Prices m/m, y/y, f' cast 0.3%, 2.7%, 0.3%, 3.1% last

    Looking Ahead - Events, Auctions, Other Releases (GMT)
    • N/A EU General Affairs Council meeting
    • N/A Central and E. European cen bankers at an economic conference - Vienna
    • 08:00 Riksbank executive board meeting - Stockholm
    • 12:15 ECB's Lautenschlager speaks at a forum - Frankfurt
    • 14:00 ECB's Draghi speaks at ECON committee - Brussels
    • 14:15 ECB's Constancio chairs a panel discussion - Frankfurt
    • 18:30 BoE's Ramsden speaks at King's College - London
    See North American Open for a detailed listing of US/NorAm releases, events

    Week Ahead-Fed, RBA, ECB minutes; Yellen, Draghi speak
    This week's events calendar is fairly light and with the US Senate in recess all week for the Thanksgiving holiday on Thursday, there won't be any debate on the tax reform bill until Nov 28. On Monday ECB President Draghi speaks to the European parliament in Brussels and BOE Deputy Governor Marsden speaks at a monetary policy conference. On Tuesday the RBA releases the minutes from its Nov 7 policy meeting and Governor Lowe speaks at the Australian Business Economists' annual dinner. Later that day Fed Chair Yellen participates in a panel discussion at Stern Business School. On Wednesday UK Chancellor Hammond delivers the Autumn Statement and the FOMC releases the minutes from their October policy meeting. On Thursday, the ECB releases their Oct monetary policy meeting account and SNB Chairman Jordan gives a speech on Switzerland's high current account surplus and its effect on monetary policy.

    Week Ahead-US durable goods, EZ flash PMIs, German Ifo
    This week's data calendar begins quietly, with only Japanese trade data for October released on Monday. UK public finances and US existing home sales for Oct are out Tues. The pace picks up Weds, when euro zone Nov consumer confidence, US Oct durable goods (f/c 0.5%, last 2.0%), weekly jobless claims and final University of Michigan Nov sentiment are all due. Thursday kicks off with New Zealand's Q3 retail sales, followed by Q3 GDP in Germany (f/c 0.8% q/q, last 0.6%) & the UK, flash Nov EZ PMIs (mfg PMI f/c 58.4, last 58.5) and Canada's retail sales for Sept. The week ends with NZ Oct trade, Japan's Nikkei flash mfg PMI, the Nov Ifo business survey in Germany and US Markit Nov flash PMIs.
     
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    Tadhg Gaelach

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    Good to see the unemployment rates falling, good news wouldnt you say?
     
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    TUESDAY, NOVEMBER 21, 2017

    TOP NEWS

    Weak pay suggests UK can grow without pushing up inflation-BoE's Ramsden
    Brexit uncertainty may have made British workers more cautious about their pay demands, which suggests that the economy has more room to grow without pushing up inflation, Deputy Governor Dave Ramsden said. While the Monetary Policy Committee overall judged that slack in Britain's economy was now disappearing, Ramsden said there were signs - such as persistently weak wage growth - that there may be more left to use up. Ramsden said the biggest risk to the outlook for Britain's economy was uncertainty about its trading relationships after Brexit, as well as the path followed to reach them.

    No EU deposit insurance if bad loans not cut: ECB's Draghi
    There cannot be a common European insurance scheme for bank deposits if the level of unpaid loans is not reduced, Mario Draghi said. Draghi's comments mark a rare alignment with Germany's position on a key issue and also his first attempt at a fightback against Italian criticism of the ECB's decision to force banks to set aside more money against loans that sour. Draghi said a full-fledged deposit insurance scheme had to remain the ultimate goal and that any postponement should be limited in time.

    NAFTA nations lock horns on U.S. auto demands as fifth round ends
    Negotiators from the United States, Mexico and Canada square off for the last time in a fifth round of talks to rework the North American Free Trade Agreement, with stalemate brewing on a contentious proposal to ramp up regional content for autos.Officials and lobbyists say Mexico and Canada will firmly push back against the U.S. demand to raise the minimum threshold for NAFTA autos to 85 percent from 62.5 percent, as well as insist that fully half the content is from the United States. Mexican and Canadian officials say they want the United States to explain how the auto plan could prosper in view of the skepticism, and have repeatedly indicated they have no intention of responding to the scheme with a counterproposal.


    Greece to overshoot budget surplus targets in 2017, 2018 - government official
    Greece expects to overshoot its budget surplus targets for a third consecutive year in 2018, a senior government official said, an outcome that could help ease the austerity burden imposed on a recession-weary population. In a final budget draft due to be submitted to parliament on Tuesday, Greek authorities will outline projections of a primary surplus - the fiscal surplus excluding debt repayments - of between 2.4 and 2.5 percent this year, and of more than 3.7 percent next year. A strong fiscal surplus could allow the government - facing public fatigue with pension cuts and tax hikes - to redirect funds to vulnerable sections of the population hit hardest.

    Yellen to leave Fed board once successor Powell sworn in
    Federal Reserve Chair Janet Yellen said she will resign her seat on the Fed's Board of Governors once Jerome Powell is confirmed and sworn in to replace her as head of the U.S. central bank. It is expected that Powell will be in place when Yellen's four-year term as Fed chief ends in February. Her departure from the Fed board will give Trump, who lauded the economy's performance under Yellen but said he wanted to name his own Fed chief, that much more room to reshape the central bank by opening up another spot to fill.


    BREAKINGVIEWS

    Powell’s mystery Fed board poses continuity risk
    Jerome Powell’s mystery Federal Reserve board poses a continuity risk. As expected, Janet Yellen will leave the U.S. central bank when her successor takes over. Powell will inherit a skeleton board in need of four more Donald Trump appointees.


    COLUMNS
    Euro political risk creeps back on markets' radar as German talks fail: McGeever
    In an ironic twist for world markets, the collapse of German government coalition talks has suddenly revived the spectre of European political risk that appeared to have been laid to rest with the election of France's Emmanuel Macron in May.

    Britain’s gravest economic challenge isn’t Brexit
    Few British budgets have mattered as much as the one that Philip Hammond will deliver to the House of Commons on Nov. 22. The chancellor of the exchequer must shore up Theresa May’s perilously shaky government ahead of a vital Brexit summit of European leaders in mid-December.


    [​IMG]



    YIELD CURVES AMONG MAJOR ECONOMIES
    [​IMG]



    MORNING MEETING


    JGBS STEADY, REOFFER AUCTION GOOD

    BONDS, EQUITIES, OTHER ASSET MARKETS
    • US Treasury 10s indicated 2.366%, JGB 10s 0.031%, Bund 10s 0.360%
    • US-Japan-Germany respective 2s indicated 1.753%, -0.202%, -0.751%
    • JGBs move little in morning session, 15yr sector better bid
    • 5y-15.5yr reoffer auction good, helping market to move higher
    • Lack of major JGB supply, more BoJ ops cited as supporting factors
    • JGB futures end at 151.02, up 6 ticks on day; range 151.05/150.95
    • Nikkei up on good market reaction to news of Toshiba offering
    • Index 22,426 to 22,563 and, at 22,416, up 154 points or 0.7% on day
    • AXJ up too to varying degrees in keeping with Wall St, DAX rise
    • SSEC 0.4%, HSI 1.2%, KOSPI 0.1%, STI 1%, TWI 0.9%, ASX 0.4%
    • NZX50 outlier, just below par on day
    • Dalian iron ore +1.3%

    Currency Summaries
    JPY
    • USD/JPY and JPY complex quiet in Asia, trading light, flows few
    • USD/JPY range 112.51-70, after push up to 112.71 late NY, slow ease
    • Pair looks to be moving down gradually with 100-HMA, currently 112.62
    • USD/JPY back in hourly Ichi cloud, well above also descending 112.33 55-HMA
    • Higher US yields and option expiries at 112.20-25, 112.00 supportive
    • Total USD692 mln at 112.20-25, 1 bln at 112.00, tom 112.00 1.3 bln also
    • Good tech support from ascending 55-DMA at 112.43
    • EUR/JPY quiet too, 132.04-27 range, push down rejected with bounce to 132.47
    • Rejection from ascending 100-DMA, at 131.28 today, 132.55 Ichi cloud base
    • GBP/JPY buoyant, Asia 148.94-149.21, Brexit-BoE event risks shrugged off
    • Support from ascending 55-DMA at 148.92, Ichi daily cloud top 148.56
    • AUD/JPY off from early 85.11 to 84.78 on bearish MorganStanley forecast
    • MS sees AUD/USD at 0.65 in '19, longer-term investors more cautious
    • NZD/JPY heavy too, Asia 76.47-80, Antipodeans less popular in Tokyo

    EUR
    • EUR/USD did absolutely nothing in Asia after a tumultuous session yesterday
    • Pair from 1.1795 early Asia to 1.1722, to 1.1808 in London then 1.1728 in NY
    • Asia range today 1.1730-44, little interest and few flows
    • Market on hold above 1.1727 ascending 200-HMA, decent support eyed to 1.1700
    • Also ascending 100-DMA above at 1.1751, descending 55-DMA 1.1786 above
    • Germany's political fortunes in back seat pending fresh initiatives
    • Higher US yields weigh as much as ECB dovishness
    • Rejection from ascending 100-DMA, at 131.28 today, 132.55 Ichi cloud base
    • EUR/GBP does nothing, Asia 0.8561-67 and soggy on GBP buoyancy
    • EUR/CHF quiet, Asia 1.1650-61, well above 1.1592 spike low yesterday

    GBP
    • Cable quiet in Asia, range 1.3236-49, relatively buoyant despite risk events
    • Market showing little concern over Brexit talks, BoE to remain hawkish?
    • Pair seemingly tracking 55-DMA up, at 1.3249 today
    • 55-HMA below at 1.3227 along with 100-HMA at 1.3203, 200-HMA at 1.3169

    CHF
    • USD/CHF buoyant on higher US yields, Asia 0.9928-35
    • Pivoting around descending 200-HMA at 0.9930
    • Few flows in region, little interest

    Market Briefs
    • Merkel signals readiness for new election after coalition talks collapse
    • Yellen to leave Fed board once successor Powell sworn in
    • Trump declares N.Korea state sponsor of terrorism, triggers sanctions
    • S.Korea, Japan say listing N.Korea as terror sponsor will pressure Pyongyang to denuclearise
    • Australia's c.bank uncertain on wages recovery as it holds rates at record lows
    • UK's May meets senior ministers to discuss Brexit divorce bill offer
    • EU's Barnier presses UK on Irish border Brexit problem
    • Profits rise but smaller UK manufacturers lukewarm on investment - survey
    • Activist funds flock to Toshiba's massive Y600 bln share offering - Nikkei

    Looking Ahead - Economic Data (GMT)
    • 11:00 GB Nov CBI Trends Order f' cast 3, -2 last

    Looking Ahead - Events, Auctions, Other Releases (GMT)
    • N/A Central and E.European cen bankers participate in a conference - Vienna
    • N/A France's Le Maire, EU antitrust chief speak at innovation conference - Paris
    • 10:00 BoE's Cunliffe and others participate in a committee meeting - London
    • 14:05 Riksbank Jochnick participates in a panel discussion - Copenhagen
    • 15:00 ECB's Coeure chairs a ECB Conference - Frankfurt
    • 23:00 Fed's Yellen participates in moderated discussion - New York
     
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    Tadhg Gaelach

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    Dow Jones Newswires, 21 Nov 2017 02:22 ES
    Global Forex and Fixed Income Roundup: Market Talk



    0722 GMT - The Turkish lira hits a fresh low against the dollar as lira-settled forward foreign-exchange sale auctions failed to ease the currency's selloff. "The market is likely to expect more" central-bank policy action before stabilizing, says TEB, a unit of BNP Paribas. It sees the next step being tighter liquidity conditions through lowering the TRY11 billion overnigh repo funding and signals an interest-rate hike will come at next month's meeting. But TEB adds the central bank is liable to wait before doing anything, in the interim seeing whether FX auctions have a meaningful impact on the lira in coming days. The dollar is up 0.5% at TRY3.9505 and earlier got as high as TRY3.9730. (yeliz.candemir@wsj.com; @dowjones_yeliz)

    0717 GMT - The weaker Swiss franc helped Switzerland's trade balance last month. The surplus was CHF2.4 billion, boosted by a 2.3% rise in inflation-adjusted exports from a year earlier. Improved trade should help 2H GDP growth after the economy showed signs of sluggishness in the early part of 2017. The euro is little changed from yesterday at CHF1.1658. (brian.blackstone@wsj.com)
    0628 GMT - Singapore's CPI likely edged higher to 0.5% in October, pushed by higher private-road transport costs, according to the median of 7 estimates in a WSJ poll of economists. The metric rose 0.4% in September. Meanwhile, core CPI--which excludes private road transport and accommodation costs--is seen remaining at 1.5%. The data come Thursday. (gaurav.raghuvanshi@wsj.com)


    0623 GMT - Japanese stocks posted a nice rebound Tuesday as the yen's recent strength eased. The Nikkei climbed 0.7% to 22416.48 after pulling back a bit in afternoon action. Of 33 Topix subindexes, 28 sectors rose; energy and chemicals led the gains. That as dollar-yen, after rebounding overnight, edged lower by the close of Tokyo stock trading to Y112.45 from Y112.62 late Monday in New York. Among other notables, Toshiba bounced 5.5% after yesterday's 5.8% slide caused by the company's planned stock sale. In JGBs, the 10-year yield finished flat at 0.03%. (kosaku.narioka@wsj.com)

    0534 GMT - China's long-awaited asset management guidance is a vital financial deleveraging step that could be a long-term positive for the country as it raises transparency and caps the growth in shadow banking, says Deutsche Bank. Still, while the near-term impact may only be limited, its degree will vary. Deutsche says the policy favors big banks while adding pressure to smaller ones that tend to have elevated shadow banking exposure and a lower degree of compliance. Both China Construction Bank and Industrial & Commercial Bank of China are up more than 2% compared with the Hang Seng's 1.5% gain. (john.wu@wsj.com)

    0532 GMT - Indian consumer firms are set to benefit from the recent tax cuts, says Jefferies. GST rates for most consumer goods were lowered to 18% from 28% and some supermarkets have started giving GST-led discounts in reduced-rate categories like detergents, chocolates and skin care. The investment bank says channel checks show improved demand this month and prospects of further improvement. (debiprasad.nayak@wsj.com)

    (END) Dow Jones Newswires
     
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    Tadhg Gaelach

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    [​IMG]


    MONDAY, NOVEMBER 20, 2017


    [​IMG]


    TOP NEWS


    [font=arial]• [/font]Yellen to leave Fed board once successor Powell sworn in

    Federal Reserve Chair Janet Yellen said she will resign her seat on the Fed's Board of Governors once Jerome Powell is confirmed and sworn in to replace her as head of the U.S. central bank. In a letter to President Donald Trump, which was released by the Fed, Yellen, 71, also vowed to "do my utmost to ensure a smooth transition" to Powell, who was nominated to succeed her by Trump earlier this month. Yellen, credited with putting the economy on a firmer footing and steering monetary policy away from the firefighting mode that followed the 2007-2009 recession and financial crisis, could have stayed on as a Fed governor until 2024.

    [font=arial]• [/font]No EU deposit insurance if bad loans not cut: ECB's Draghi
    There cannot be a common European insurance scheme for bank deposits if the level of unpaid loans is not reduced, the president of the ECB said. "The non-performing loans (NPL) issue and the European deposit insurance scheme (EDIS) are interlinked," Draghi told the European Parliament's economic committee. "Risk reduction and risk sharing should go in parallel ... and NPLs are part of this," he added. Separately, ECB policymaker Francois Villeroy de Galhau said the euro area can ill afford to wait and see if France's reforms bear fruit before deepening the bloc's economic integration.

    EXCLUSIVE-Greece to overshoot budget surplus targets in 2017, 2018
    Greece expects to overshoot its budget surplus targets for a third consecutive year in 2018, a senior government official said, an outcome that could help ease the austerity burden imposed on a recession-weary population. In a final budget draft due to be submitted to parliament on Tuesday, Greek authorities will outline projections of a primary surplus - the fiscal surplus excluding debt repayments - of between 2.4 and 2.5 percent this year, and of more than 3.7 percent next year, the official told Reuters. The figures mark an upward revision.

    U.S. credit access, financial fragility improve -Fed survey
    Americans' access to credit improved while their perceived vulnerability to a financial shock declined, according to a Federal Reserve Bank of New York survey that painted a slightly more optimistic picture of U.S. households. The so-called survey of consumer expectations found that respondents who were too discouraged to apply for credit over the past 12 months declined to 4.9 percent in October, continuing a downward trend and reaching its lowest level since the survey began in 2013. The survey also found a rise in those applying for and accessing credit, and a drop in rejections.

    • [URL='[URL="http://content.emails.thomsonreuters.biz/emessageIRS/servlet/IRSL?v=5&a=10111&r=200939&m=1417&l=10&e=2&x=2458169.0"]Japan's export growth signals economic recovery to continue in fourth quarter[/URL]'][color=#006699][b]Japan's export growth signals economic recovery to continue in Q4[/b][/color][/URL]
    Japan's export growth held steady in October, suggesting that brisk global demand for Japanese cars and electronics will likely carry its economic recovery into the current quarter. Ministry of Finance data showed that exports rose 14.0 percent year-on-year in October. That compares with a 15.8 percent annual gain expected by economists following a 14.1 percent increase in September. In volume terms, Japan's exports rose 3.8 percent in October from a year ago, after a 4.8 percent annual gain in September.



    COLUMN


    Euro political risk creeps back on markets' radar as German talks fail
    In an ironic twist for world markets, the collapse of German government coalition talks has suddenly revived the spectre of European political risk that appeared to have been laid to rest with the election of France's Emmanuel Macron in May.

    Britain’s gravest economic challenge isn’t Brexit
    Few British budgets have mattered as much as the one that Philip Hammond will deliver to the House of Commons on Nov. 22. The chancellor of the exchequer must shore up Theresa May’s perilously shaky government ahead of a vital Brexit summit of European leaders in mid-December. At the same time Hammond has to keep a grip on the public finances. But the gravest challenge he faces is economic: Britain’s persistent productivity blight.



    MARKETS REACT TO GERMANY'S POLITICAL CRISIS
    [​IMG]



    MARKETS TODAY


    TREASURIES: Benchmark Treasury yields rose as investors awaited minutes on Wednesday from the Fed’s last meeting, with no major economic releases due this week and trading expected to be subdued before the Thanksgiving holiday on Thursday. Benchmark 10-year notes fell 3/32 to yield 2.36 pct. 2-year notes were down 2/32 with a yield of 1.75 pct. The yield curve between 2-year and 10-year notes flattened to 60.80 bps, the lowest level since late 2007. 30-year bonds were up 10/32, yielding 2.78 pct.

    FOREX: The dollar touched its highest against a basket of major currencies in nearly a week as the euro weakened on political risks linked to German Chancellor Angela Merkel's failure to form a three-way coalition government. The dollar index rose 0.46 pct to 94.092. The index earlier rose to 94.104, its highest since Nov. 14. The euro fell 0.55 pct to $1.1728. Against the Japanese yen, the greenback climbed 0.47 pct to 112.60 yen. Sterling was up 0.14 pct at $1.3230.

    CORPORATES: Corporate bond spreads were unchanged as investors were cautious with no major earnings or economic data scheduled this week. The CDX-IG.29 index was unchanged at 55 bps.

    STOCKS: Stocks rose with Verizon lifting the telecoms sector after the stock got an upgrade, while a deal in semiconductors boosted high-performing tech shares. Verizon gained 1.72 pct. Wal-Mart edged up 0.01 pct. The Dow rose 72.09 points, or 0.31 pct, to 23,430.33, the S&P 500 gained 3.29 points, or 0.13 pct, to 2,582.14 and the Nasdaq added 7.92 points, or 0.12 pct, to 6,790.71.

    C&E: Oil fell, extending recent weakness ahead of next week's OPEC meeting, while a rally in the dollar hurt commodities across the board. U.S. crude was down 0.81 pct at $56.09. Brent fell 0.88 pct to $62.17 a barrel. Gold fell 1.31 pct to $1277.40 an ounce. Reuters-Jefferies index lost 0.61 pct to 191.95.


    ICAP DATA

    [​IMG]


    LATAM NEWS

    Canada, Mexico to question U.S. auto content demands at NAFTA talks
    Canada and Mexico will not make counterproposals to U.S. demands for tougher NAFTA automotive content rules but instead will question and rebut them, people familiar with the talks said. Sources with knowledge of the talks said on Sunday that they ran the risk of grinding into a stalemate because of Canada and Mexico's unhappiness about U.S. proposals. Canada will say that would cause serious damage to the United States as well as North American automotive manufacturing, a Canadian source with knowledge of the negotiations said. An official from one NAFTA nation said the United States was frustrated that Canadians had not responded to the main proposals laid down by the Trump administration.

    Brazil economic activity index up more than expected in September
    Economic activity in Brazil expanded at more quickly than expected in September, central bank data showed, rebounding from the prior month's contraction and reinforcing the outlook for a gradual recovery. Activity rose 0.40 percent from August after seasonal adjustments, following an upwardly revised 0.37 percent decline the month before. The upswing in economic activity is unlikely to stoke inflation, however, as firms continue to grapple with idle capacity and employment gains concentrate on off-the-books jobs. That should grant the central bank wide space to cut the benchmark Selic interest rate to an all-time low at its December meeting, as is widely expected by economists.

    As many Venezuela bondholders stampede, some joust for advantage



    LATAM MARKETS
    [​IMG]


    EYE ON ASIA


    Thai Q3 GDP grows at best annual pace in years, despite soft domestic demand
    Thailand posted third-quarter economic data that shows it is on a firmer recovery track, after years of sluggishness, though economists say it needs higher private investment and government spending to stay there sustainably. On an annual basis, the economy expanded 4.3 percent in the third quarter, the best pace for any period since the first quarter of 2013, the National Economic and Social Development Board (NESDB) said. That handily beat the Reuters poll median of 3.8 percent and was also above its highest forecast. Annual growth for April-June was revised to 3.8 percent, from 3.7 percent. On a quarterly basis, GDP grew a seasonally adjusted 1.0 percent in July-September.

    Malaysia October inflation rate seen slowing to 4.0 pct y/y
    Malaysia's annual inflation rate for October likely moderated to 4.0 percent from a year earlier after increasing the previous two months, a Reuters poll showed, thanks to lower fuel prices. September's annual inflation rate was 4.3 percent, compared with August's 3.7 percent. Headline inflation reached an eight-year high of 5.1 percent in March, but has since moderated. Malaysia's central bank expects 2017 full-year inflation to be at the higher end of its projected range of 3-4 percent.


     
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    Tadhg Gaelach

    Tadhg Gaelach Legend Donator Battle Royale Political Irish

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    [​IMG]


    TUESDAY, NOVEMBER 21, 2017


    [​IMG]


    TOP NEWS


    [font=arial]• [/font]U.S. homes sales accelerate; supply still a constraint

    U.S. home sales increased more than expected in October as hurricane-related disruptions eased, but a chronic shortage of houses which is pushing prices beyond the reach of some first-time buyers remains an obstacle. The National Association of Realtors said that existing home sales rose 2.0 percent to a seasonally adjusted annual rate of 5.48 million units last month. They fell 0.9 percent on a year-on-year basis in October and remained well below a 10-year-high 5.70 million-unit pace touched in March. Economists had forecast home sales rising 0.7 percent from September to a 5.42 million-unit rate last month.

    [font=arial]• [/font]Bank of England rate-setters differ over chance of wage pick-up
    Bank of England rate-setters spelled out their differences over the central bank's first interest rate hike in a decade, as they focused on how to determine when low unemployment was about to push up inflation. Four of the Monetary Policy Committee's nine members spoke to lawmakers, nearly three weeks after the committee voted 7-2 to raise the main rate to 0.50 percent from 0.25 percent. Meanwhile, British government borrowing unexpectedly grew last month, underscoring finance minister Philip Hammond's challenge as he weighs calls for more spending in his budget on Wednesday against the prospect of weaker economic growth ahead. The deficit, excluding state-run banks, stood at 8.0 billion pounds, up 6.9 percent compared with October 2016, the Office for National Statistics said.

    ECB's Coeure expects bond-buying pledge to be dropped by Sept
    The man in charge of the ECB's money-printing program expects the ECB to drop by next September its pledge to continue buying bonds until inflation heads towards its target, he told a German newspaper. The ECB decided to cut the pace of its bond purchases to 30 billion euros per month at its October meeting but pledged to continue the stimulus programme until it is confident that inflation was "consistent with its inflation aim" of just under 2 percent. But Benoit Coeure, the ECB director in charge of its market operations, expected this part of the policy message to change by September, the earliest possible end-date for the purchases set by the ECB last month.

    China to step up property market regulation to avoid bubble risk
    China will step up financial regulation and crack down on speculation in the property market to stabilize prices and fend off bubble risks, state television CCTV reported, signaling renewed efforts to rein in risks from a rapid build-up in debt in the economy. The remarks from regulators at the PBOC, the Ministry of Housing and Urban-Rural Development and the Ministry of Land and Resources during a joint work meeting in central China's Wuhan laid out short-term tasks to be achieved in real estate, CCTV said.

    • [URL='[URL="http://content.emails.thomsonreuters.biz/emessageIRS/servlet/IRSL?v=5&a=10111&r=200989&m=1416&l=10&e=2&x=2458170.0"]Japan may cut CPI, growth estimates in midterm report - sources[/URL]'][color=#006699][b]Japan may cut CPI, growth estimates in midterm report - sources[/b][/color][/URL]
    The Japanese government is leaning towards cutting its mid- to long-term GDP and inflation estimates in its outlook report due in January, to factor in a more realistic scenario of economic growth, government sources told Reuters. The government currently projects nominal economic growth will reach as much as 3.9 percent for the fiscal year ending March 2021, compared with 1.1 percent growth last fiscal year. It has estimated annual consumer inflation will be stable around 2.0 percent from fiscal 2021. But a growing number of officials see those levels as difficult to achieve, and the consumer inflation forecast would likely be lowered to 1.5 percent, the sources said on condition of anonymity because the report is not yet public.



    DEEP DIVE


    COLUMN-One more sterling risk that may be less than first thought
    Given the disarray the British government finds itself in right now, there's not an insignificant chance of the country enduring another general election next year and left-wing Labour leader Jeremy Corbyn becoming an unlikely prime minister.

    ANALYSIS-German political limbo threatens European reform push
    Half a year ago, the political stars seemed perfectly aligned for a deep reform of the European Union and its euro currency.



    CHART OF THE DAY
    [​IMG]



    MARKETS TODAY


    TREASURIES: The Treasury yield curve flattened to its lowest in a decade as investors awaited minutes from the Federal Reserve’s last meeting, with no major economic releases due this week and trading subdued before the U.S. Thanksgiving holiday. Benchmark 10-year notes rose 3/32 to yield 2.36 pct. 2-year notes edged down 1/32, yielding 1.77 pct. The yield curve between 2-year and 10-year notes flattened to a low of 58.7 bps, the flattest level since late 2007. 30-year bonds were up 20/32 to yield 2.76 pct.

    FOREX: The dollar turned broadly lower, moving in line with declining U.S. 10-year Treasury yields and retracing gains from Monday in light trading ahead of Thursday's Thanksgiving holiday in the United States. The dollar index fell 0.09 pct to 93.999. The euro edged up 0.02 pct to $1.1734. Against the yen, the dollar fell 0.14 pct to 112.46 yen. Sterling edged down 0.01 pct to $1.3232.

    CORPORATES: Corporate bond spreads tightened as investors shrugged off political risk cheered by strong company earnings and economic growth that propelled the stock rally. The CDX-IG.29 index tightened by 2 bps to 53 bps.

    STOCKS: Stocks jumped and the S&P 500 closed at a record high for the first time in about two weeks, led by gains in this year's top-performing technology sector. Apple rose 1.86 pct. Medtronic gained 4.77 pct after the company reported better-than-expected results and backed its full-year forecast. The Dow rose 160.36 points, or 0.68 pct, to 23,590.69, the S&P 500 gained 16.91 points, or 0.65 pct, to 2,599.05 and the Nasdaq added 71.76 points, or 1.06 pct, to 6,862.48.

    C&E: Oil ended up, supported by expectations that OPEC and other producing countries next week would extend output cuts, but signs of higher U.S. crude output kept prices under pressure. Brent was up 0.61 pct at $62.60 a barrel. U.S. crude rose 0.97 pct to $56.97 per barrel. Analysts said Brent was expected to fluctuate in a narrow range, from $61 to $63, as the market awaited the outcome of the OPEC meeting on Nov. 30. Gold gained 0.22 pct at $1279.56 an ounce. Reuters-Jefferies index climbed 0.33 pct to 192.58.


    ICAP DATA

    [​IMG]


    LATAM NEWS

    NAFTA round wrapping up, 'significant differences' remain
    The United States, Mexico and Canada were wrapping up a fifth round of talks to update NAFTA with major differences yet to be resolved, casting doubt on whether a deal could be reached by the end of March 2018 as planned. "Significant differences remain on some key areas ... these are proposals we simply cannot agree to," Canadian Foreign Minister Chrystia Freeland told reporters in Ottawa. Mexico and Canada firmly pushed back against a U.S. demand to raise the minimum threshold to 85 percent NAFTA origin components from 62.5 percent, as well as insist that half the content was from the United States.

    As NAFTA talks stall, Mexico raises minimum wage to $4.71 per day
    Mexico will raise its minimum wage to $4.71 per day next month, President Enrique Pena Nieto said, a 10 percent hike unlikely to satisfy U.S. and Canadian NAFTA negotiators who see low Mexican salaries as unfair competition. Starting in December, Mexican workers will earn at least 88.36 pesos per day, up from 80.04 pesos. "Let me tell you something, this is not a minor adjustment, considering that since this administration began almost five years ago the minimum salary was barely 60 pesos," Pena Nieto said, adding there had been a 20 percent increase in the minimum wage in real terms since he took office in 2012. But the pay increase did not impress Canadian union leader Jerry Dias.



    LATAM MARKETS
    [​IMG]


    EYE ON ASIA


    Australian regulator warns "debt is easy to get into, hard to pay back"
    Australia's banking watchdog warned against sky-rocketing household debt, urging banks to further improve lending standards as well as their understanding of borrowers' spending patterns. The Australian Prudential Regulation Authority (APRA) will need to concentrate resources on mortgage lending issues into next year, Chairman Wayne Byres said in a speech in Sydney. Meanwhile, the RBA released the minutes of its November policy meeting which showed it harbored deep concerns about Australia's record-high household debt to income ratio of 190 percent.

    Thai October exports seen rising 11.8 pct y/y
    Thailand's customs-cleared annual exports likely grew for an eighth straight month in October, but at a slightly slower pace than in September, as global demand remained strong, a Reuters poll showed. Exports were forecast to increase 11.8 percent in October from a year earlier after rising 12.2 percent in September, according to the median forecast of 12 analysts surveyed by Reuters. Imports in October likely rose 6.7 percent year-on-year after September's 9.73 percent increase. Thailand is expected to have recorded a trade surplus of $1.3 billion in October after September's $3.35 billion surplus.



    ASIA ECON WATCH
    (Nov 22)

    Malaysia CPI (yy) for Oct: Expected 4.0 pct ; Prior 4.3 pct
    Thailand Customs based export data for Oct: Expected 11.80 pct ; Prior 12.20 pct
    Thailand Customs based import data for Oct: Expected 6.70 pct ; Prior 9.73 pct
    Thailand Customs based trade data for Oct: Expected 1.30 bln ; Prior 3.35 bln
     
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    Dow Jones Newswires, 22 Nov 2017 03:32 EST
    Global Forex and Fixed Income Roundup: Market Talk



    0832 GMT - Thai auto exports to the country's key Middle East market are seen picking up as oil prices continue to improve, says Tisco. The region made up 17% of Thailand's car exports in 2014, which was when crude began its slump from above $100/barrel. The Middle East has gotten just 8% of the exports this year. "There are signs that auto demand from Middle East has picked up," the Thai bank adds. October auto exports overall jumped 25% from a year earlier. (saurabh.chaturvedi@wsj.com; @journosaurabh)


    0830 GMT - USD/JPY was the dollar pair most affected by Federal Reserve Chair Janet Yellen saying prices in the U.S. could stay low for years during her speech at the NYU's Stern Business School on Tuesday, according to RBC. Still, USD/JPY has held above chart support at the 200-day moving average, currently at 111.74, according to Factset. USD/JPY is last down 0.4% at 112.02. Fed meeting minutes are due at 1900 GMT, and before that initial jobless claims and durable goods orders data at 1330 GMT. Other U.S. data include mortgage applications at 1200 GMT and the University of Michigan consumer sentiment index at 1500 GMT. (olga.cotaga@wsj.com; @OlgaCotaga)

    0826 GMT - The euro has lost momentum since coalition talks in Germany broke down, taking it well below last week's peak of 1.1871. Losses have been limited, however, and on Wednesday EUR/USD trades firmer, up 0.26% at 1.1770. Ipek Ozkardeskaya, senior market analyst at London Capital Group, says movements in eurozone bond are providing "opposite forces" for the euro. German and other core eurozone yields are edging lower, which discourages traders from "taking and sitting on long positions." On the other hand, narrower spreads between core eurozone and peripheral bond yields support the currency. She cites resistance ahead of 1.1800, and support at 1.1707/1.1670. This could trap EUR/USD in a range for now. (jessica.fleetham@wsj.com)

    0823 GMT - The U.K. budget will be the key market focus for gilt investors on Wednesday, say RBC Capital Markets' analysts. RBC looks for gilt issuance to fall by GBP5 billion to GBP109 billion in the current fiscal year, with the reduction to be equally split across maturities. RBC expects the stock of treasury bills remaining at GBP60 billion at the end of the 2017-2018 fiscal. RBC reckons that scope for any market reaction on the back of the anticipated revisions to issuance in the current financial year is "rather limited." The 10-year gilt trades at a yield of 1.27%, down 0.5 basis points. (emese.bartha@wsj.com; @EmeseBartha)

    0822 GMT - Tech was the story early, but it ended up being financial stocks that were Asia's saving grace today. The sector was strong from Shanghai to Seoul to Tapei, allowing indexes in those locales to rise some 0.5%. Big banks also allowed Hong Kong's Hang Seng to top 30000 for the first time in a decade. HSBC, China Construction and ICBC combined contributed 111 points to the index, which rose 185 points overall. Elsewhere, Singapore's leading bank--DBS--finally topped its 1999 record high today. Most indexes in the region have or are poised to close up about 0.5% today. The Shenzhen Composite and the Philippines' benchmark each fell slightly. (ese.erheriene@wsj.com; @Ese_Journo)

    0801 GMT - Sterling rises slightly against the U.S. dollar, with GBP/USD last up 0.1% at 1.3254 after a report that the U.K. and the EU are likely to agree on a Brexit divorce bill within the next three weeks. Gains are shaky, however, the pound edges lower against the euro, with EUR/GBP up 0.06% at 0.8871. The U.K. Autumn Budget is due at 1230 GMT and RBC expects unfavourable revisions to the statement. "RBC forecasts a cumulative GBP58bn increase in borrowing over the five-year horizon, making it harder for the Chancellor to claim he has much headroom versus his fiscal rule to respond decisively to a Brexit shock in the future." (olga.cotaga@wsj.com; @OlgaCotaga)

    0755 GMT - German 10-year bund prices and bund futures trade marginally stronger early Wednesday as political uncertainty continues in Germany after the collapse of coalition talks. Following Tuesday's volatile session for bund futures, DZ Bank analysts say trading could well remain turbulent on Wednesday, with investors continuing to take some profit in response to current expensive valuations. Against this backdrop, further upward potential looks limited, DZ Bank says. Bund futures trade at 163.19, up 0.11, while the 10-year bund yield trades at 0.34%, down 1 basis point in early trade. Yields fall as prices rise.(emese.bartha@wsj.com; @EmeseBartha)

    0751 GMT - The FTSE 100 is expected to open 3 points higher at 7414, according to CMC Markets, with sentiment helped by U.S. stocks reaching record highs on Tuesday. This is likely to be offset, however, by a firmer pound while focus will be on the U.K. budget presentation around 1200 GMT. U.K. finance minister Philip Hammond is expected to have little room for fiscal giveaways, however, given a weak economy and Brexit uncertainty. Shares in United Utilities, Sage Group and Thomas Cook will be in focus after earnings. (jessica.fleetham@wsj.com)

    0727 GMT - The dollar eased to session lows in afternoon Asian trading amid thin pre-Thanksgiving volumes, building after breaking through support versus the Korean won, Malaysian ringgit and New Taiwan Dollar, says Andy Ji, Asian currency strategist at CBA. Stocks in all 3 locales have risen solidly today amid broad equities gains in the region. The dollar is at its lowest in slightly more than a year versus the won and ringgit while at levels last seen in August against the Taiwan dollar. Overall, the WSJ Dollar Index is down 0.2% today, hitting its lowest levels since European trading on Monday. (kenan.machado@wsj.com)

    0722 GMT - A fresh record low for the lira versus the dollar at TRY3.98 as measures by Turkey's central bank continue to prove unsuccessful in stemming the currency's slide. Policy makers yesterday announced that funding provided through interbank money markets was cut to zero, suggesting that the cost of banks' funding will increase a quarter-point to 12.25%. "History suggests that we're getting close to the stage where the [central bank] might now consider a more-aggressive tightening of policy," says Capital Economics. The dollar is currently up 0.3% at TRY3.9685. (yeliz.candemir@wsj.com)

    0712 GMT - Commerzbank expects a well-received auction for Germany's EUR1 billion offer of the August 2048 bund on Wednesday, says Christoph Rieger, head of rates and credit research. This is the last 30-year bund auction of the year, so is the last opportunity for investors to buy it in the primary market. "With investors forced out the curve to generate pick-ups...we expect a smooth auction," he says. (emese.bartha@wsj.com; @EmeseBartha)

    0621 GMT - The Aussie dollar eased slowly in Asian trading, reversing a bit of the late-Tuesday gains caused by RBA Gov. Lowe's comments. He said the next move in interest rates was more likely to be up--enough to see a market that was "uncomfortably short" bounce, says Stephen Innes, strategist at OANDA. Meanwhile, global stock gains the past 24 hours helped put a floor under the Aussie. With scant local data set for release the next week, the focus will return to markets overseas for leads. The Aussie is around US$0.7565; prior to the Lowe speech it was at US$0.7535. (james.glynn@wsj.com; @JamesGlynnWSJ)

    (END) Dow Jones Newswires
     
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    WEDNESDAY, NOVEMBER 22, 2017
    TOP NEWS

    Boxed in by slow growth, UK's Hammond readies budget
    British finance minister Philip Hammond will announce how much he can afford to help unhappy voters as he faces a potentially sharp deterioration in the economy's growth prospects. He is expected to tread carefully with measures to speed up house-building and improve Britain's weak productivity. Meanwhile, Britain's debt load has continued to rise to stand at about 80 percent of gross domestic product, double the level before the global financial crisis, even if its once-towering budget deficit has been slashed in recent years.

    ECB's Coeure expects bond-buying pledge to be dropped by Sept
    Benoit Coeure, the European Central Bank (ECB) director in charge of its market operations, expects the ECB to drop by next September its pledge to continue buying bonds until inflation heads towards its target. The ECB decided to cut the pace of its bond purchases to 30 billion euros per month at its October meeting but pledged to continue the stimulus programme until it is confident that inflation was "consistent with its inflation aim" of just under 2 percent. "We were not ready to make that change in October, but I expect it will come at some point between now and September 2018," Coeure said in an interview.

    Bank of England rate-setters differ over chance of wage pick-up
    Bank of England rate-setters spelled out their differences over the central bank's first interest rate hike in a decade, as they focused on how to determine when low unemployment was about to push up inflation. The officials said investment growth was weaker than they would have hoped, given the strong global economy, advanced stage of the business cycle and cheap cost of credit. This probably reflected Brexit uncertainties, as well as businesses' failure to lower the minimum return they expected from projects despite the sharp fall in financing costs compared with before the financial crisis, they said.


    Greece sees primary surplus at 3.82 pct, GDP growth 2.5 pct in 2018 budget
    Greece said it would post a better-than-targeted primary surplus of 3.82 percent of gross domestic product in 2018, and forecast an expansion in output of 2.5 percent next year, compared to a projected 1.6 percent in 2017. Under the country's third bailout programme, it was targeted to return a small primary surplus from 2016 onwards. It has exceeded those targets, giving Greek authorities some leeway in offering benefits and supporting sections of the population particularly worn down by pension cuts and heavy taxes.

    'Very uncertain' Yellen still predicts U.S. inflation rebound
    Janet Yellen stuck by her prediction that U.S. inflation will soon rebound but offered on Tuesday an unusually strong caveat: she is "very uncertain" about this and is open to the possibility that prices could remain low for years to come. Yellen said the Fed is nonetheless reasonably close to its goals and should continue to gradually raise interest rates to keep both inflation and unemployment from drifting too low. The Fed's top policymakers have repeated their belief that inflation would rebound even while their preferred price measure has slipped to 1.3 percent, below a 2-percent target.


    ANALYSIS AND COLUMN
    BOJ gives early sign of lift-off with warnings on the costs of easing

    The Bank of Japan is dropping subtle, yet intentional, hints that it could edge away from crisis-mode stimulus earlier than expected, through a future hike in its yield target, according to people familiar with the central bank's thinking.

    One more sterling risk that may be less than first thought
    With the BoE tentatively raising interest rates and Brexit casting a huge cloud of uncertainty over the economy, the pound's near-term fate won't be decided by a surge in public spending.



    CHART OF THE DAY
    [​IMG]



    MORNING MEETING


    JGB'S FUTURES' RALLY CONTINUES

    BONDS, EQUITIES, OTHER ASSET MARKETS
    • US Treasury 10s indicated 2.355%, JGB 10s 0.021%, Bund 10s 0.342%
    • US-Japan-Germany respective 2s indicated 1.770%, -0.199%, -0.745%
    • JGB futures continue outperforming cash, swaps
    • At 151.14, futures up 12 ticks on day, range 151.07/151.19
    • Despite futures' strength, yields in 10s, 20s, 30s down only 0.5bp
    • 7yr swaps down only 0.25bp
    • 3mo auction strong, stop at -0.2456%, BTC 3.58, tail 0.8bp
    • Nikkei up on fresh highs on Wall St overnight
    • Gap up open at 22,601 and to 22,677 before retracement to 22,536
    • At 22,530, index still up 113 points or 0.51% on day
    • AXJ mostly up too - SSEC 0.5%, HSI 0.9%, KOSPI and STI 0.3%, TWI 0.7%
    • ASX also up 0.5% and NZX50 0.2%

    Currency Summaries
    JPY

    • USD/JPY, JPY complex soggy ahead of Japan, US Thanksgiving holidays tom
    • USD/JPY in modest ease from 112.50 early to 112.19, ceiling lower
    • Good offers from @112.50, trail up, some option-related
    • Bids still ahead of 112.00, large option expiries at strike today, Friday
    • Expiries - 112.00 USD1.4 bln, 112.50-80 total 896 mln, 113.00 680 mln
    • As case yesterday, USD/JPY soggy with 100-HMA, 112.51 today, 55-DMA 112.36
    • EUR/JPY soggy too, 132.12 to 131.72, in middle of 130.98-132.55 Ichi cloud
    • Rejection from ascending 100-DMA/cloud base Monday, 100-DMA 131.31 today
    • GBP/JPY soggy between 148.60-97 in Asia, above 148.60 daily Ichi cloud top
    • AUD/JPY off modestly from early 85.25 to 84.91, retracement high o/n 85.31
    • NZD/JPY heavy too, from 76.94 to 76.62 in Asia, topside limited

    EUR
    • EUR/USD opened unchanged @ 1.1738 as soft USD offset cloudy German politics
    • USD weakness persisted into Asia and EUR/USD traded up to 1.1747
    • Option related selling around 1.1750 strikes capped the price action
    • Heading into the afternoon the EUR/USD was trading around 1.1740
    • Lower US yields in the long-end weighing on USD as yield curve flattens
    • FX market not focusing in German political uncertainty for the time being
    • EUR/USD support at 50% of 1.1553/1.1862 move at 1.1707
    • Resistance at 1.1755/60 where yesterday's high and 100-day MA converge
    • No EZ data today and US market likely to quiet down ahead of Thanksgiving

    GBP
    • Cable up small in thin Asia trade, USD broadly soggy, 1.3237 to 1.3256
    • Flows few and far between ahead of Japan and US holidays tomorrow
    • Cable holding not far from ascending 55-DMA at 1.3252
    • EUR/GBP on hold, little action in Asia, 0.8857-64

    CHF
    • USD/CHF off small in Asia on broad USD sogginess, range 0.9905-13
    • Resistance from descending 200-HMA above at 0.9923
    • Downside seen limited for now too though, low yesterday 0.9900
    • EUR/CHF quiet in Asia, 1.1628-32, support from @1.1615 daily Ichi kijun

    Market Briefs
    • Boxed in by slow growth, UK's Hammond readies budget
    • ECB's Coeure expects bond-buying pledge to be dropped by Sept
    • Britain to detail Brexit bill when EU agrees to move talks forward
    • EU and UK aim to strike Brexit divorce deal within 3 weeks - FT
    • Bank of England rate-setters differ over chance of wage pick-up
    • 'Very uncertain' Yellen still predicts U.S. inflation rebound
    • U.S. FCC chief plans to dump Obama-era 'net neutrality' policy
    • Trump defends Senate candidate Moore despite misconduct allegations
    • Ninth Australian lawmaker quits as citizenship crisis widens
    • BOJ gives early sign of lift-off with warnings on the costs of easing- Rtrs Analysis
    • China c.bank gov says to strengthen policy coordination nationwide-state media

    Looking Ahead - Economic Data (GMT)
    • No significant data

    Looking Ahead - Events, Auctions, Other Releases (GMT)
    • N/A ECB Governing Council meeting
    • 08:30 Riksbank to publish financial stability report - Stockholm
    • 08:30 Riksbank's Ingves and Sandstedt participate in a conference - Stockholm
    • 15:30 BoE's Cleland participates in a event - London
    • 19:00 Fed's FOMC minutes
    See North American Open for a detailed listing of US/NorAm releases, events
     
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    WEDNESDAY, NOVEMBER 22, 2017


    TOP NEWS


    [font=arial]• [/font]Fed policymakers say rate increase likely warranted soon -minutes

    Many Federal Reserve policymakers expect that interest rates will have to be raised in the "near term," according to the minutes of the U.S. central bank's last policy meeting. The readout from the Oct. 31-Nov. 1 meeting, at which the Fed kept rates unchanged, also showed policymakers generally agreed the economy was poised for strong growth. Several Fed officials also saw improved chances that the U.S. Congress would pass significant tax cuts that would boost business investment. While some policymakers said they still needed to see more data before deciding the timing of a rate hike, many of the officials said the jobless rate appeared to be too low for inflation to remain at its current weak level.

    [size=2][color=#333333][color=#000000][font=arial]• [/font][/color][/color][/size]U.S. core capital goods orders drop; business spending strong
    New orders for key U.S.-made capital goods unexpectedly fell in October after three straight months of hefty gains, but a sustained increase in shipments pointed to robust business investment and economic momentum as the year winds down. The Commerce Department said orders for non-defense capital goods excluding aircraft declined 0.5 percent last month. Overall orders for durable goods fell 1.2 percent last month as demand for transportation equipment tumbled 4.3 percent. Durable goods orders increased 2.2 percent in September. In a separate report, the Labor Department said initial claims for state unemployment benefits declined 13,000 to a seasonally adjusted 239,000 for the week ended Nov. 18, reversing the prior week's increase.

    [size=2][color=#333333][color=#000000][font=arial]• [/font][/color][/color][/size]UK sees weak growth, more borrowing, but Hammond says will spend
    Brexit-bound Britain slashed its economic growth forecasts and ramped up its borrowing plans going into the 2020s, but finance minister Philip Hammond announced a number of spending steps aimed at winning back voters. Hammond said he would offer help to voters by abolishing a property purchase tax for 80 percent of first-time home-buyers, keeping a freeze on fuel duty and spending more on the health service. Britain is set to borrow 29.1 billion pounds more by the end of the 2021/22 tax year than it expected eight months ago. Britain's budget forecasters now expect gross domestic product will grow by 1.5 percent in 2017, compared with a forecast of 2.0 percent made in March, reflecting a slowdown this year as the Brexit vote weighed.

    Euro zone consumer confidence near 17-year high in November
    Euro zone consumer confidence rose to its highest level in nearly 17 years in November, figures released showed. The European Commission said a flash estimate showed euro zone consumer morale increased to 0.1 from a revised -1.1 points in October. It was the first positive reading of the index since January 2001. In the European Union as a whole, consumer sentiment rose to -0.7 from -1.6 in October. Separately, five sources said the ECB will reaffirm its policy stance at its December meeting, and rate-setters hope to put off debate on new moves until well into next year.


    U.S. bond fund investors stirred, not shaken
    U.S. fund investors pumped millions into bond funds for a 50th straight week, the Investment Company Institute (ICI) said, showing that caution in recent weeks may not portend a flight from debt generally. Taxable-bond mutual funds and exchange-traded funds took in $839 million during the turbulent week ended Nov. 15, the lowest in nearly a year, as high-yield debt came under pressure, according to the trade group. But the funds still have not posted a week of outflows in nearly a year that has seen them pull in nearly $270 billion, according to Thomson Reuters' Lipper research unit. Overall, bond funds took in $1.5 billion during the week, aided by a 19th straight week of flows into municipal funds, ICI said.


    DEEP DIVE


    COLUMN-Even sticking to cautious rate path, Fed is on thin ice
    Economic growth and corporate earnings look solid, unemployment is the lowest in decades and there's no inflation to speak of, so the U.S. economy and world markets can take two or three more U.S. rate hikes in their stride, right?

    BREAKINGVIEWS-Hammond struggles in Brexit straitjacket
    Philip Hammond is struggling with his Brexit straitjacket. Britain’s chancellor announced giveaways to homebuyers and the health service in his autumn budget. But bleak growth forecasts and the economic drag caused by leaving the European Union severely limit his generosity.

    ANALYSIS-Whether new dawn or another false one, euro zone economy is full of surprises
    The surprise economic star of 2017, when it wraps up next month, will have been the euro zone: growth looks set to come in at 2.2 percent compared with a forecast this time last year of just 1.4 percent.



    CHART OF THE DAY
    [​IMG]



    MARKETS TODAY


    TREASURIES: Treasuries gained slightly after the minutes from the Federal Reserve’s latest meeting affirmed market expectations that it will hike rates in December, with trading volumes subdued before Thursday’s Thanksgiving holiday. Interest rate futures traders are pricing in a 92 percent chance of a December rate hike, according to the CME Group’s FedWatch Tool. Benchmark 10-year notes gained 11/32 to yield 2.32 pct. 2-year notes rose 3/32 to yield 1.73 pct. The yield curve between 2-year notes and 10-year notes held at 59.10 bps. 30-year bonds were up 12/32, yielding 2.74 pct. The Treasury Department said it will sell $88 billion in short- and intermediate-dated supply next week, including $26 billion in two-year notes, $34 billion in five-year notes and $28 billion in seven-year notes.

    FOREX: The dollar fell, hitting its lowest level since October against a basket of major currencies and marking its worst one-day performance in five months. The dollar index fell 0.74 pct to 93.253. Against the yen, the dollar lost 1.09 pct to 111.20 yen. The euro rose to a five-day high against the dollar of $1.1827 and was last at $1.1819, up 0.70 pct on the day. Sterling rose 0.61 pct to $1.3318.

    CORPORATES: Corporate bond spreads tightened propelled by bullish company earnings outlooks. The CDX-IG.29 index tightened by 1 bps to 52 bps.

    STOCKS: Stocks closed little changed with telecom services shares among the biggest gainers, while the energy sector rose, tracking gains in crude oil futures. Verizon and AT&T rose 1.99 pct and 1.57 pct respectively on bets they will benefit from the U.S. government's plan to rescind net neutrality rules. Hewlett Packard Enterprise was down 7.22 pct. The Dow fell 64.65 points, or 0.27 pct, to 23,526.18, the S&P 500 lost 1.96 points, or 0.08 pct, to 2,597.07 and the Nasdaq added 4.88 points, or 0.07 pct, to 6,867.36.

    C&E: Oil pared gains after U.S. crude stockpiles fell less than an industry group's expectations, but remained near a two-year high as the shutdown of one of the largest crude pipelines from Canada cut supply to the United States. The restart of the 590,000 barrel-per-day Keystone pipeline shut last week due to a spill could take several weeks. U.S. crude was up 2.09 pct at $58.02 per barrel. Brent rose 1.17 pct to $63.30 per barrel. Gold rose 0.86 pct at $1291.47 an ounce. Reuters-Jefferies index was up 0.94 pct at 194.39.


    ICAP DATA

    [​IMG]



    LATAM NEWS

    Venezuela bondholders look to form alliances under restructuring limbo
    Holders of Venezuelan bonds are meeting with each other and considering forming committees, advisers and fund managers told Reuters, as questions mount about the feasibility of President Nicolas Maduro's proposal to restructure $60 billion of debt. Maduro has said the country will keep servicing its obligations for now. But bondholders ranging from longstanding investment funds to hedge funds and emerging markets funds in the U.S. and elsewhere are starting to lay the foundations for a potentially bitter and messy battle over a possible default down the road. Standard & Poor's said on Tuesday, it was downgrading the ratings on Venezuela’s global bonds due 2025 and 2026 to ‘D’ from ‘CC.’

    Brazil power costs seen lifting inflation rate to five-month high
    Surging power costs likely lifted Brazil's inflation rate to a five-month high in mid-November, just a hair away from the government's target range, a Reuters survey showed. Consumer prices as measured by the official IPCA index probably rose 2.84 percent in the 12 months through mid-November, according to the median forecast of 21 economists. The IPCA index likely rose 0.40 percent from the prior month, the poll showed, which according to Morgan Stanley is "not enough to worry the central bank regarding its monetary policy stance."



    LATAM MARKETS
    [​IMG]


    EYE ON ASIA


    Singapore October industrial output seen up 15.5 percent y/y
    Singapore's industrial production is expected to expand for a 15th consecutive month in October, thanks to continued demand for its technology products, a Reuters poll showed. Manufacturing output is expected to rise 15.5 percent from a year earlier, after growing 14.6 percent in September, according to a forecast by 10 analysts in the poll. Industrial production is seen up 1.5 percent in October from the previous month on a seasonally adjusted basis, after contracting 0.5 percent in September, according to the median forecast.

    South Korea end-Q3 household debt growth slows to 2-year low
    South Korea's annual household debt posted its slowest growth in two years in the third quarter as the rules governing mortgage borrowing were tightened, the central bank said. Home loans and other debt owed by South Korean households jumped 9.5 percent from a year earlier to 1,419.1 trillion won in the third quarter, but that was the slowest debt growth since a 9.2 percent annual gain in the second quarter of 2015. Quarter-on-quarter debt growth inched up to 2.2 percent after expanding 2.1 percent over the April to June period, preliminary data from the Bank of Korea showed.



    ASIA ECON WATCH

    November 23
    Singapore GDP Final (qq) for Q3: Expected 7.4 pct ; Prior 6.3 pct
    Singapore GDP Final (yy) for Q3: Expected 5.0 pct ; Prior 4.6 pct
    Singapore Core CPI (yy) for Oct: Expected 1.5 pct ; Prior 1.5 pct
    Singapore CPI (yy) for Oct: Expected 0.45 pct ; Prior 0.40 pct

    November 24
    Malaysia CPI (yy) for Oct: Expected 4.0 pct ; Prior 4.3 pct
    Singapore Manufacturing output (mm) for Oct: Expected 1.5 pct ; Prior -0.5 pct
    Singapore Manufacturing output (yy) for Oct: Expected 15.5 pct ; Prior 14.6 pct
     
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    Dow Jones Newswires, 23 Nov 2017 03:48 EST
    Global Forex and Fixed Income Roundup: Market Talk



    0848 GMT - The euro rises after French provisional composite purchasing managers' index rose to a 78-month high of 60.1 in November from 57.4 in October, while German manufacturing PMI rose more than expected to 62.5. Meanwhile, reports that the German SPD party is open to talks with Chancellor Angela Merkel to offer support to her party and avoid new elections also help the euro. EUR/USD is up 0.2% at 1.1840. A rise above 1.1861 would mark its highest since mid-October. Eurozone flash PMI figures are due at 0900 GMT. (olga.cotaga@wsj.com; @OlgaCotaga)


    0837 GMT - Italy is lining up the eurozone's only government bond auctions next week, as several countries within the bloc have already completed their annual bond issuance programs as the year's end approaches. On Monday, Italy's treasury will offer EUR1.5 billion to EUR2 billion in October 2019-dated CTZ bonds, a zero-coupon note. It cancelled a sale of inflation-linked bonds that had been set for the same day due to reduced funding needs. At another auction on Wednesday, the treasury is expected to sell five- and 10-year fixed-rate bonds, or BTPs, and some of its floating-rate notes, or CCTeu. The treasury will detail the offer further on Friday evening. (emese.bartha@wsj.com; @EmeseBartha)

    0833 GMT - The second estimate of U.K. 3Q GDP is due at 0930 GMT and no revision expected to the first estimate of 0.4% quarter-on-quarter growth, according to a WSJ poll, with full-year GDP at 1.5%. Any unexpected downgrade would see sterling drop, but most analysts see this unlikely. RBC says stronger industrial output will offset weak construction. GBP/USD falls slightly on the day to 1.3311, after a weaker dollar lifted it to its highest in nearly 6 weeks at 1.3337 overnight as the dollar weakened after U.S. Federal Reserve minutes. The pound falls versus a firmer euro, with EUR/GBP up 0.18% at 0.8889. Projections for U.K. GDP for the next five years were lowered in Wednesday's budget.(olga.cotaga@wsj.com; @OlgaCotaga)

    0831 GMT - ANZ remains positive on China's ongoing deleveraging, saying it's unlikely to significantly drag on the country's GDP growth. It predicts the economy will expand 6.5% next year after 2017's projected 6.8%. The investment bank adds deleveraging may cause some positive impacts in companies' operating conditions as many in less-profitable industries have been highly leveraged, dragging on overall return on assets. "This is exactly where there are potential gains from improving the credit efficiency and reducing excess capacity in the economy." (chester.yung@wsj.com; @chester_yung)

    0814 GMT - The PMIs for France were much higher than expected, perhaps a sign that the eurozone economy also accelerated in Nov. The manufacturing measure for the eurozone's second largest economy rose to 57.5 from 56.1, against a consensus forecast of 55.9. The services measure shot up to 60.2 from 57.3, again confounding expectations of a small decline. The overall composite measure hit a 78-month high of 60.1. "The party goes on for the French private sector economy" said IHS Markit, and if this is spread across the wider eurozone economy, the ECB may have to remove the punch-bowl sooner than it had expected to. (paul.hannon@wsj.com Twitter: @PaulHannon29)

    0806 GMT - Bond markets are likely to move into calmer waters on Thursday due to the US holiday of Thanksgiving, says Commerzbank analyst Rainer Guntermann. In the eurozone, there will no input from the supply side given no bond auctions in the rest of the week, and next week only Italy is scheduled to sell debt. The 10-year bund yield trades at 0.35% in early trade, down 0.7 basis point, while the bund futures trade at 163.05, up 0.07. (emese.bartha@wsj.com; @EmeseBartha)

    0804 GMT - Tapering is no longer a factor making for a widening of eurozone sovereign spreads, says Natixis rates strategist Cyril Regnat. "One of the ECB's big successes is probably that it has modified investor perception concerning the effect of tapering on spreads," he says. The strategist attributes this, among other things, to the ECB's clearer communication about reinvestment volumes and the strengthening of its forward guidance. Therefore, changes in sovereign spreads will depend on the emergence of idiosyncratic risks and of rating actions, he says. (emese.bartha@wsj.com; @EmeseBartha)

    0759 GMT - The FTSE 100 index is expected to open down 15 points at 7404, tracking falls in Chinese and other Asian equities. Overnight gains in the pound against the dollar, which rose above 1.33 to reach its highest in more than a month, could weigh on U.K. stocks, although the pound is lower against the euro. Property stocks are likely to remain in focus after measures in Wednesday's budget to increase housing supply and support first-time buyers. Shares in Severn Trent will be watched after the company released results, as well as Centrica after a trading update. The second estimate of U.K. third quarter GDP is due at 0930 GMT. (jessica.fleetham@wsj.com)

    0753 GMT - New draft regulations unveiled Friday spooked Chinese asset managers who are dumping stocks to shore up liquidity, says Nathan Chow, an economist at DBS. The regulations seek to set leverage ceilings on asset-management products at 140% of net assets. It's resulted in fresh selling of government bonds, which can be unloaded more easily than other assets, the past several days, pushing 10-year yields back above 4% and at fresh 3-year highs. (kenan.machado@wsj.com)

    0752 GMT - The dollar slides after U.S. Federal Reserve minutes show some policymakers are unsure about raising interest rates due to low inflation, pulling USD/JPY to its lowest in nine weeks and EUR/USD to a one-week high. This is unlikely to alter expectations for a rate increase next month, but may raise questions over how much rates will rise next year. As doubts linger over the prospects for U.S. tax reform, Marshall Gittler, chief strategist at ACLS Global, says "both the monetary and political reasons to buy USD are evaporating." USD/JPY drops to a low of 111.07. EUR/USD rises to 1.1841, last at 1.1835. (jessica.fleetham@wsj.com)

    0746 GMT - Months after overhauling the country's indirect taxation system, India is now taking a step forward in making substantial changes to the direct tax law. It has constituted a panel of experts to look into the best international practices on direct taxes and tailor a new law in "consonance with economic needs of the country" within 6 months, says the finance ministry. With an emphasis on using technology and plans to make larger transactions non-cash, the government is expected to increase the tax base and move towards further moderation in rates. (rajesh.roy@wsj.com)

    0732 GMT - This week's moves to fresh 3-year highs for Chinese 10-year bond yields was another likely factor in today's stock slide, says Mun Hon Tham, head of research for greater China at UOB Kay Hian. The bond weakness is fueling concerns about market liquidity and in particular stoking selling of mid-cap stocks, which have risen sharply this year, he notes. Meanwhile, some brokers are calling in clients to meet margin calls, says the head of a foreign brokerage in Hong Kong. (kenan.machado@wsj.com)

    (END) Dow Jones Newswires
     
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    THURSDAY, NOVEMBER 23, 2017
    TOP NEWS

    UK sees weak growth, more borrowing, but Hammond says will spend
    Brexit-bound Britain slashed its economic growth forecasts and ramped up its borrowing plans going into the 2020s, but finance minister Philip Hammond announced a number of spending steps aimed at winning back voters. Britain is set to borrow 29.1 billion pounds more by the end of the 2021/22 tax year than it expected eight months ago. Britain's budget forecasters now expect gross domestic product will grow by 1.5 percent in 2017, compared with a forecast of 2.0 percent made in March, reflecting a slowdown this year as the Brexit vote weighed.

    Fed policymakers say rate increase likely warranted soon -minutes
    Many Federal Reserve policymakers expect that interest rates will have to be raised in the "near term," according to the minutes of the U.S. central bank's last policy meeting. The readout also showed policymakers generally agreed the economy was poised for strong growth. A couple of policymakers were concerned enough about persistently weak price gains that they suggested the Fed consider a new framework in which it committed to allowing higher inflation to make up for periods of low price rises.

    Six euro zone states risk EU budget rule breach in 2018
    The national budgets of six euro zone countries may break EU deficit rules next year, the European Commission said, issuing what has become a frequent plea for governments to stay within the limits. For 2018, the draft assumptions of Belgium, Italy, Austria, Portugal, Slovenia and France posed a risk of not cutting the structural budget gap - which strips out business cycle swings and one-offs - fast enough, the EU's executive said. Euro zone finance ministers complain that the rules have become too complex and their application by the Commission has not been consistent, and the two sides are exploring ways to make the framework simpler.


    ECB hopes to go into policy hibernation, sources say
    The European Central Bank will reaffirm its policy stance at its December meeting, and rate-setters hope to put off debate on new moves until well into next year, five sources with direct knowledge of the discussion told Reuters. Although the ECB kept the door open to further extensions of the asset purchases, the sources said that there was a common understanding that bond buying would be phased out by the end of 2018 if the economy and inflation develop as now forecast.

    Euro zone consumer confidence near 17-year high in November
    Euro zone consumer confidence rose to its highest level in nearly 17 years in November.The European Commission said a flash estimate showed euro zone consumer morale increased to 0.1 from a revised -1.1 points in October, which was higher than the average expectation of economists in a Reuters poll of -0.8. It was the first positive reading of the index since January 2001.The long-term average is below -10 points.


    BREAKINGVIEWS

    Hammond struggles in Brexit straitjacket
    Britain’s chancellor announced giveaways to homebuyers and the health service in his autumn budget, but bleak growth forecasts and the economic drag caused by leaving the European Union severely limit his generosity.

    COLUMN

    Even sticking to cautious rate path, Fed is on thin ice: McGeever
    Economic growth and corporate earnings look solid, unemployment is the lowest in decades and there’s no inflation to speak of, so the U.S. economy and world markets can take two or three more U.S. rate hikes in their stride, right? Maybe not.



    CHART OF THE DAY
    [​IMG]



    ANALYSIS


    Sterling seismograph eerily calm on EU summit

    For a currency that has seen some of its biggest ever one-day moves on the back of Brexit, there is a peculiar calm in sterling hedging prices surrounding December’s critical European Union summit.For many, the Dec. 13-14 get-together marks a critical juncture in the process of Britain leaving the bloc, with some market analysts seeing it as a potential make-or-break moment for the pound.
    At stake is whether Prime Minister Theresa May can satisfy other EU leaders that Britain has made enough commitments on issues like a final settlement bill and the Irish border to quickly start trade negotiations next year as the clock ticks down. Otherwise, the risk of economically-damaging ‘no deal’ Brexit rises dramatically.
    Yet, even with so much at stake, options markets that reflect expected volatility around next month’s event and data on speculative sterling positioning appear largely neutral.

    In fact, one-month implied volatility in sterling against the U.S. dollar is currently less than its 8.6 percent average of the past 20 years.
    Traders still think the pound will be more volatile than other major currencies such as the euro and Swiss franc, though, and say the indication of calm is more reflective of the subdued price action of the most recent period, rather than of what could be in store.
    “Sterling volatility has tended to remain higher even as FX volatility has declined, which suggests markets have a greater capacity to discount negative headlines,” said Timothy Graf, head of macro strategy at State Street Global Markets.
    Implied volatility for sterling for one month against the dollar is higher than three-month rates and stands at a chunky 8 percent. Sterling volatility against currencies such as the Japanese yen and the Australian dollar is even higher.
    In comparison, three-month implied volatility for the euro against the dollar stands at a relatively tame 6 percent while overall stock market volatility is within touching distance of a record low of 9 percent hit this month.
    One factor making traders wary of translating signals from derivatives into trades in the cash market is that the former have thrown up some conflicting signals in recent weeks.
    For example, three-month ‘risk reversals’ on sterling which shows the relative pricing of puts and calls on the pound, consistently indicated a bias to further sterling weakness throughout the year even as the pound gained ground against the dollar. It is up 10 percent to date in 2017.
    “As a result, betting on sterling via the options markets has been a bit of a money losing trade this year,” said a trader at a global macro hedge fund in London.
    Still, that hasn’t stopped directional bets and the cost of buying sterling puts - options to sell - remain more expensive than calls - options to buy - and show some traders at least are assuming the outcome of the EU summit will be sterling negative.
    Underlying structural factors for sterling have also worsened markedly in recent months, such as a widening current account deficit, prompting some money managers to call for the British pound to be traded like an emerging market currency at a Reuters Investment Summit last week.
    With few if any precedents for an event like Brexit to guide traders through the next month, large investors are harking back to trading patterns leading up to the referendum vote last year.
    “The problem for investors is there are no historical references to form an expectation on something such as Brexit with a long agenda of negotiations leading up to it,” Pascal Blanque, who oversees 1.4 trillion euros at Europe’s largest asset manager Amundi told the Reuters Global Investment Summit.
    As a result, some traders are taking recourse in the options markets, although expiries around the summit are less about taking directional bets and more about guarding against spikes in volatility.
    What’s more, the one-month options that surround the crucial EU summit also capture key central bank policy decisions in both the United States and Britain.
    “It is very difficult for investors to take a directional view given the mixed messages from politicians on the negotiation progress, therefore long volatility positions such as straddles are a good choice over outright cash bets,” said Jordan Rochester, an FX strategist at Nomura in London.
    As a result, speculative bets on sterling are broadly flat, unlike before the Brexit vote, while institutional investors such as pension funds and sovereign wealth funds are broadly underweight the British currency in their portfolios.
    With expectations for a major breakthrough in policy talks low, buying so-called “option straddles” which involves simultaneously selling and buying currency derivatives on either side of the summit have gained popularity.
    A survey by Nomura showed that only 31 percent of its clients expected a Brexit transition deal to be agreed by January 2018, although a majority still think Brexit will go ahead.
    But unlike the sharp run-up in volatility gauges in May-June last year, implied volatility on sterling remains a fraction of what it was in the final days before the Brexit vote suggesting some market participants are toning down their expectations for next month’s summit.
    “Unlike the hard binary event Brexit vote last June, this is a summit and so markets are not getting too worried about this,” said SSGM’s Graf.
     
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    FRIDAY, NOVEMBER 24, 2017
    TOP NEWS

    UK consumer confidence slumps to post-Brexit vote low - YouGov/Cebr
    British households are their least confident since immediately after last year's Brexit vote, partly because of this month's interest rate hike and further signs of a slowdown in the housing market, a survey showed. A consumer confidence index produced by polling firm YouGov and the Centre for Economics and Business Research sank to 106.6 in November, down sharply from 109.3 in October. All eight of the index's underlying measures weakened and a score for household finances over the past 30 days sank to its lowest level since January 2014.

    Japan Nov manufacturing activity grows at fastest pace in over 3 years - flash PMI
    Japanese manufacturing activity expanded at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak, a preliminary survey showed. The Markit/Nikkei Japan Manufacturing flash PMI rose to 53.8 in November on a seasonally adjusted basis from a final reading of 52.8 in October. Most of the growth in the third quarter came from exports as consumer spending fell and capital expenditure slowed.

    Brexit putting Europe's UK friendship to the test - ECB's Villeroy
    European Central Bank (ECB) policymaker Francois Villeroy de Galhau said Britain's divorce with the European Union was putting strain on its friendship with the bloc, and that deregulation would put global financial systems on course towards another crisis. The structure of the European financial system will have to evolve as a result of Brexit, he said, also emphasising that all banks and companies should prepare to avoid any potential cliff-edge risk. The euro area recovery is robust and broad-based across countries and sectors, Villeroy added, saying the ECB's accommodative monetary policy has helped spur growth.


    "Macron effect" turns U.S. business bullish on France - survey
    The election of pro-business centrist President Emmanuel Macron to lead France has caused a sea change in American investors' view of the country, a survey showed, with many planning to expand. The survey of 156 top executives of U.S. groups' French divisions by the American Chamber of Commerce and Bain & Company showed 52 percent were now planning to add more staff in France over the next 2-3 years, compared with only 21 percent a year ago. Some 72 percent of respondents - whose companies employ about 70,000 people in France - said they now had a positive view of the economic context in France, compared with 49 percent in 2016 and 27 percent in 2015.

    ECB split over keeping bond buys open-ended: minutes
    European Central Bank policymakers broadly agreed last month on extending their asset purchase scheme but a decision to keep the bond buys open-ended appeared to generate fiercer debate, minutes of the meeting showed. While the nine-month extension of the scheme at 30 billion euros per month enjoyed broad support, policymakers discussed a range of alternatives, debated an eventual change in the bank's guidance, and agreed that other components of central bank stimulus should also be highlighted. The debate highlights the split in the Governing Council and suggests that any further extension of the asset purchase scheme would run into opposition, even if inflation will miss the ECB's target of almost 2 percent for years to come.



    CHART OF THE DAY
    [​IMG]


    MORNING MEETING

    JGBS WEAKEN AS BOJ REDUCES ITS BUY OP


    BONDS, EQUITIES, OTHER ASSET MARKETS
    • US Treasury 10s indicated 2.341%, JGB 10s 0.027%, Bund 10s 0.343%
    • US-Japan-Germany respective 2s indicated 1.742%, -0.188%, -0.717%
    • JGBs weaken as BoJ reduces its long-end bond purchases
    • BoJ trims purchases of 25-40 year JGBs to Y90 bln from Y100 bln
    • 30yr yields up to 0.835% but off to 0.825%
    • MoF said to be planning to reduce long-end bond issuance
    • But such issuance reduction concerns offset by BoJ move
    • At 151.02, futures off 13 ticks on day, range 151.13/150.94
    • Nikkei gaps down at open but up later from 22,381 to 22,567
    • At 22,550 index up 27 points or 0.12% on day
    • AXJ mostly up too with exceptions of Shanghai -0.6% and ASX -0.2%
    • HSI +0.3%, KOSPI +0.2%, STI +0.3%, TWI above par, NZX50 +0.35%

    Currency Summaries
    JPY
    • USD/JPY, JPY complex quiet, unmoving for most part post-US, Japan holidays
    • USD/JPY 111.20-48 range, bid into Tokyo fix, little downside thereafter
    • Low yesterday 111.07, good bids in area still, 111.02 50% of recent uptrend
    • USD/JPY 9-/-11/6 107.32-114.73, Fibo 61.8% retracement of move at 110.15
    • Option expiries today - some at 111.00-05, 111.50-60, 112.00-10 USD1.45 bln
    • Risk still down with Fed maybe more dovish than thought, soggy US yields
    • EUR/JPY better bid too, 131.81 to 132.03, talk SPD may back Merkel bills
    • Cross holding in 130.98-132.67 daily Ichi cloud, 100/55-DMAs 131.35/132.58
    • GBP/JPY quiet, Asia 147.88-148.15, also in 146.06-149.36 daily Ichi cloud
    • AUD/JPY 84.77-92, steady at recent lows, effective range 84.50-85.31
    • Ditto for NZD/JPY, 76.57-75, recent range 76.10-94, likely to hold on 76
    • MoF flow data week-ended Nov 18 - Japan buy net Y231.3 bln foreign bonds
    • Net Y330.9 bln foreign stocks, Y8.9 bln bills bought too
    • Foreign investors sell Y324.5 bln Japan stocks, Y285.1 bln JGBs

    EUR
    • EUR/USD, EUR complex buoyant on news of possible deal between Merkel-SPD
    • SPD won't join in a coalition government but would support a Merkel minority
    • EUR/USD 1.1837-56 in Asia, quiet after US and Japanese holidays yesterday
    • US markets open today but trading likely minimal on Black Friday effect
    • Some option expiries nearby - 1.1800-25 E459 mln, 1.1900 363 mln
    • EUR/USD in 1.1825-77 thin daily Ichi cloud, cloud to ratchet lower next week
    • 100 and 55-DMAs help contain cross, at 131.35 and 132.58.
    • EUR/GBP buoyant, Asia 0.8901-15, break back into Ichi cloud? Base 0.8917
    • Support from area of gradually ascending 200-HMA at 0.8905
    • EUR/CHF quiet, Asia 1.1632-35, heavy from 200-HMA at 1.1645, 55-DMA 1.1556

    GBP
    • Cable does little in Asia, tight 1.3292-1.3308 range
    • On hold above ascending 1.3290 55-HMA, 1.3259 55-DMA, high yesterday 1.3337

    CHF
    • USD/CHF equally quiet in Asia, 0.9813-23 range, just above 55-DMA at 0.9812
    • 55-DMA ascending, has traversed gradually declining 200-DMA at 0.9808
    • Bias still down on recently soggy USD, low yesterday 0.9795, stop likely below
    • Next support around 0.9750, low Oct 20 0.9759, Oct 19 0.9737

    Market Briefs
    • ECB split over keeping bond buys open-ended: minutes
    • German Social Democrats under pressure to form grand coalition
    • Irish government on verge of collapse ahead of EU Brexit summit
    • Despite grim Brexit budget, UK's Hammond hushes critics for now
    • UK consumer confidence slumps to post-Brexit vote low - YouGov/Cebr
    • 'Macron effect' turns U.S. business bullish on France - survey
    • JP Nov flash mfg PMI 53.8 best since Mar '14, Oct 52.8, new export orders up
    • New Zealand trade deficit narrows despite imports at record high
    • NZ Oct Trade Balance YY -2.99 bln, -2.91 bln last
    • In Thanksgiving message, Trump hails military gains and 'big, beautiful, fat tax cuts'
    • Saudi to allow smaller foreign funds into stock market, ease other rules
    • Foreign CB US debt holdings -4.24 bln to $3.371 trln Nov 15 week
    • Treasuries -5.19 bln to $3.04 trln, agencies -396 mln to +$262.6 bln

    Looking Ahead - Economic Data (GMT)
    • 09:00 DE Nov Ifo Business Climate f'cast 116.6, 116.7 last
    • 09:00 DE Nov Ifo Current Conditions f'cast 125.0, 124.8 last
    • 09:00 DE Nov Ifo Expectations f'cast 108.9, 109.1 last

    Looking Ahead - Events, Auctions, Other Releases (GMT)
    • N/A - Eastern Partnership Summit - Brussels
    • 08:00 ECB's Coeure speaks at a conference - Paris
    • 10:30 ECB's Nouy speaks at a regulation - Frankfurt
    • 14:30 ECB's Galhau speaks at a conference - Paris
    See North American Open for a detailed listing of US/NorAm releases, events

    USD/JPY slump likely to persist, cloud base in view
    The USD/JPY outlook is bearish, but bears need a break and daily close below 111.03 -- 50% retracement of the 107.32 to 114.73 (Sept to Nov) rise -- in order to fully open up the daily cloud base currently at 110.38. If there is a subsequent break of the cloud base, then 110.15 -- 61.8% of the 107.32 to 114.73 will be unmasked. The long black candlestick line on Wednesday was a very bearish sign, along with the daily close below 111.90 -- 38.2% retracement of 107.32 to 114.73. Bears should watch out for repeated failures to sustain a break below the 111.03 Fibonacci level, as this would indicate that a recovery back to Wednesday's 112.50 high will become increasingly likely. A sustained break above 112.50 would signal a shift in the bias back to the upside and reduce the scope for a drop to 110.15.
     
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