Spain Nov Unemployment show a surprise drop

Notes/Observations

- (CN) China Nov Non-manufacturing PMI: 56.0 v 56.3 prior (first MoM decline in 3 months)

- PBoC regular liquidity injection more modest than in recent sessions

- (AU) Australia Central Bank (RBA) leaves Cash Rate Target unchanged at 2.50% (as expected); statement nearly identical from last month and still concerned about AUD which it continued to view as "still uncomfortably high"

- Spain Nov Net Unemployment registers a surprise decline (-2.5K vs. +50-Ke)

- Norway Oct Retail Sales misses expectations (-1.0% vs. +0.2%e)

- UK Nov PMI Construction beats expectations for its highest reading since Aug 2007 (62.6 vs. 59.0e)

Economic Data

- (HU) Hungary Sept Final Trade Balance: €830.3M v €847.3M prelim

- (ES) Spain Nov Net Unemployment M/M: -2.5K v +50.0Ke; first decline in 3 months

- (TR) Turkey Nov CPI M/M: 0.0% v 0.5%e; Y/Y: 7.3% v 7.8%e; CPI Core Index Y/Y: 7.2% v 7.6%e

- (TR) Turkey Nov PPI M/M: 0.6% v 0.7% prior; Y/Y: 5.7% v 6.8% prior

- (ZA) South Africa Q3 Current Account (ZAR): -233.0B v -211.2Be; C/A to GDP: -6.8% v -6.0%e

- (EU) ECB €105M borrowed in overnight loan facility vs. €74M prior; €55.7B parked in deposit facility vs. €56.1B prior - Daily Eurosystem Liquidity Conditions

- (NO) Norway Oct Retail Sales W/Auto Fuel M/M: -1.0% v +0.2%e

- (UK) Nov PMI Construction: 62.6 v 59.0e; highest since Aug 2007

- (EU) Euro Zone Oct PPI M/M: -0.5% v -0.2%e; Y/Y: -1.4% v -1.0%e

Fixed Income:

- (ZA) South Africa sold total ZAR2.35B in 2030, 2041 and 2048 Bonds

- (CH) Switzerland sold CHF744.5M in 3-month Bills; Yield: -0.119% v -0.103% prior

- (EU) ECB allotted €94.6B in 7-day Main Refi Tender at fixed 0.25% vs. €95.0Be

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

***Equities**

Indices [Stoxx50 -1.0% at 3,046, FTSE 100 -0.5% at 6,561, DAX -0.8% at 9,321, CAC-40 -1.5% at 4,223, IBEX-35 -0.8% at 9,671, FTSE MIB -0.3% at 18,670, SMI -1.0% at 8,176, S&P 500 Futures -0.2% at 1,797

- Market Focal Points: European stocks open slight negative overall after losing sessions in the US and most of Asia. Stock continued their broad sell-off into the European morning on fears of a sooner-than-expected Fed taper coming on the heels of better than expected US macro data yesterday. Gold miners opened widely lower after spot Gold gave up about 2% yesterday. French telecom companies were lower on margin concerns after Iliad announced plans to offer fast 4G speeds on their cheapest monthly mobile plans. Better than expected UK Construction PMI failed to stop the slide in the FTSE. By Sector

- Consumer Discretionary [William Hill WMH.UK 2.0% (upgrade), Betfair BET.UK +2.8% (earnings, hikes div 50%), Pearson PSON.UK +0.1% (to acquire English language training company)]

- Industrials [ThyssenKrupp TKA.DE -0.9% (equity raise)]

- Technology [Kontron KBC.DE -5.8% (CEO to resign)]

- Telecom [Iliad ILD.FR -0.5% (add 4G service to mobile plan)]

- Financials [Numis NUM.UK +7.2% (strong earnings)]

- Energy [British Petroleum BP.UK 0.0% (wins court review on oil spill)]

- Healthcare [Fresenius FME.DE +0.7% (upgrade), Novo Nordisk NOVOB.DK +0.6% (confirms long-term targets), Morphosys MOR.DE +1.2% (new patent on cancer compound)]

Speakers:

- EU's Rehn stated that Italy had not respected debt-cut objectives. Country in line with targets on deficits needed to respect a certain rhythm of debt reduction. Skeptical on impact of Italy's privatization plan and added that spending review was important with cuts next year being important

- EU's Rehn: Spain may need more labor adjustments

- Sweden Central Bank (Riksbank) Dep Gov Skingsley stated that : Not considering changing its CPI target; cannot fully compensate for developments overseas. He did concede that Swedish CPI was too low and criticism of CPI target was partly justified. He also reiterated view that Riksbank has not target for SEK currency (krouna)

- Russia Econ Ministry cut its both 2013 and 2014 GDP growth forecasts. It cut 2013 GDP growth forecast to 1.4% from 1.8% prior and cut 2014 GDP growth forecast to 2.5% from 3.0% prior

- Finland PM Katainen: Govt likely to cut spending or raise taxes in 2014. He saw pension age likely rising from 63 from 2017 after labor market organizations decide the matter in H2 2014

- Spain Dep Min Social Security Burgos: Foreseeable to continue tapping pension reserve fund in 2014 as it enables the Govt to gain time while adopting necessary reforms

- Romania PM Ponta: IMF canceled review in Dec and the accord was suspended at this time after President Basescu refused to sign end mission memorandum. He noted that the govt was now watching effects on exchange rate and borrowing costs

- IMF stated that it was awaiting on Romania govt decision on fiscal policies and aware of differences and disagreement between President and govt on fiscal matters

- BOE publishes record of Financial Policy Committee (FPC): UK economic recovery had strengthened but risks to financial stability remained. FPC to monitor banks' affordability tests on borrowers and ask staff to assess impact of FPC power over LTV ratios

- Poland Dep Labor Min Mecina: Nov Unemployment Rate seen between 13.2-13.3% vs. 13.0% m/m. Labor market to gradually improve and likely below 13.8% by end 2013

- Israel Fin Min Lapid: Says the central bank and finance ministry did meet to discuss bitcoin

- Bank of Korea (BOK) Minutes: Voted unanimously (7-0) to hold rates steady in Nov. One BOK member stated that economic recovery momentum was being sustained

- China Defense Ministry stated that its Air Defense Zone would not threaten any country or region and was for cooperation and not confrontation. It warned that Japan's actions did jeopardize stability in East Asia and that it was irresponsible of certain countries to not report flight plans in the air zone

- Japan PM Abe: Cannot accept China's one sided establishment of air defense zone - comments from meeting with US VP Biden

- Iraq Oil Min Luaibi: Expects OPEC to maintain its production target at 30Mbpd at its meeting this week

Currencies/Fixed Income:

- The EUR/USD was slightly higher in the session aided by the surprise drop in Spain's Nov Net Unemployment

- USD/JPY tested above 103.30, highest level since May, amid further speculation over the need for more BOJ easing. The EUR/JPY cross hit a fresh 5-year high as it tested the psychological 140 level. The yen pared its losses ahead of NY NY morning

- The GBP/USD moved back above the 1.64 handle after UK PMI Construction beat expectations with its highest reading since Aug 2007

Political/In the Papers:

- (IT) Italy PM Letta: Discussed political situation with President Napolitano, to hold vote of confidence (**Note: Letta had to go to Parliament to mark 'political discontinuity' following the exit of Forza Italia Party from the coalition)

- (GR) Fitch affirms Greece sovereign rating at B-; outlook Stable

- (DE) Germany's SPD party reportedly agrees to drop demand for control of finance ministry as condition for participating in governing coalition

- (ES) Morgan Stanley is bullish on Spain debt; expects the country to fund at yields better than the US in 2014 - Expansion

- (LX) Luxembourg reaches coalition agreement with new govt - financial press

- (SA) Saudi Oil Min Naimi:: Inventories are in the right position, oil market is well balanced, not concerned about higher Iraq output (**Reminder: OPEC meets on Dec 4th)

- (CN) China may set 2014 GDP growth target at 7.0% v 7.5% in 2013; may target 2014 CPI growth at 3.5% - Chinese press citing think tank

- (CN) UK PM Cameron: Britain supports "very balanced" EU stance on China air defense identification zone

- (CN) China, UK agree to increase economic ties. UK PM Cameron, China Premier Keqiang agreed to increase cooperation economically, trade, finance, high-speed rail construction and civil nuclear power - Japanese press

- (JP) Japan Chief Cabinet Sec Suga: US, Japan on same footing about finding China's air defense identification zone being unacceptable

- (JP) Japan Fin Min Aso: Not yet at stage where we can determine size of economic package - financial press

- (JP) Japan stimulus package said to be ¥5.4-5.6T- financial press

- (SG) Singapore Central Bank (MAS) in annual Financial Stability Review: Risks for Asia's economic growth tilted to the downside; Sudden increase in interest rates could strain debt-service ability in Asia.

- Fitch affirmed Singapore sovereign rating at AAA; Outlook stable

- Thailand PM Yingluck: Protest situation within the country has eased

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)

- (EU) NATO Foreign Ministers

- (PT) Portugal Debt Agency (IGCP) confirms to perform bond exchange

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills

- 05:30 (UK) DMO to sell £1.25B in 5% 2025 Gilts

- 05:30 (BE) Belgium Debt Agency to sell up to €1.0B in 3-Month and 6-Month Bills

- 06:00 (BR) Brazil Q3 GDP Q/Q: -0.3%e v +1.5% prior; Y/Y: 2.4%e v 3.3% prior

- 06:00 (EU) OECD Oct annual inflation: No est v 1.5% prior

- 06:00 (TR) Turkey to sell 2015 and 2023 bonds

- 06:30 (EU) ESM to sell €2.0B in 3-month Bills

- 06:45 (US) Daily Libor Fixing

- 07:00 (EU) ECB allotment in 7-day Term Deposit Tender to offset govt bond purchases under SMP

- 07:00 (ES) Spain Fin Min de Guindos in Madrid

- 07:45 (US) Weekly ICSC Chain Store Sales

- 08:25 (SE) Sweden FSA Director-General Andersson speech

- 08:30 (SG) Singapore Nov Purchasing Managers Index: 51.4e v 51.2 prior; Electronics Sector Index: No est v 51.0 prior

- 08:55 (US) Weekly Redbook Retail Sales

- 09:00 (EU) Weekly ECB Forex Reserves: No est v €206.8B prior

- 09:30 IEA Chief Economist Birol presents global energy outlook

- 09:45 (US) Nov ISM New York: No est v 59.3 prior

- 10:00 (US) Dec IBD/TIPP Economic Optimism: 43.0e v 41.4 prior

- 10:00 (DK) Denmark Nov Foreign Reserves (DKK): No est v 491B prior

- 10:00 (MX) Mexico Weekly International Reserves

- 10:20 (SE) Sweden Central Bank (Riksbank) Jansson participates in panel debate

- 11:00 (US) Fed to purchase $0.75-1.00B in Notes

- 11:30 (US) Treasury to sell $45B in 4-Week Bills

- 13:00 (US) Fed's Lacker testifies on bankruptcy to House subcommittee

- 13:00 (EU) ECB's Nowotny (Austria)in Brussels

- 13:00 (US) Fed to purchase $3.00-4.00B in Notes

- 13:00 (DE) German Bundesbank member Thiele in Berlin

- 14:15 (NZ) New Zealand Fin Min English in Parliament

- 16:30 (US) Weekly API Oil Inventories

- 17:00 (US) Nov Total Vehicle Sales: 15.75Me v 15.15M prior; Domestic Vehicle Sales: 12.10Me v 11.73M prior

- 19:30 (AU) Australia Q3 GDP Q/Q: 0.7%e v 0.6% prior; Y/Y: 2.5%e v 2.6% prior

- 20:30 (JP) BOJ Board Member Sato speech & Press Conference in Hokkaido

- 20:45 (CN) China Nov HSBC/Markit Services PMI: No est v 52.6 prior