• *** ECONOMIC DATA ***
  • EU Sep Construction Output: M/M 0.0% v 0.4% prior || Prior revised from 0.4% to 0.3% |||| Y/Y 1.5% v 2.8% prior || Prior revised from 2.8% to 2.6%
  • *** COMMENTS/SPEAKERS ***
  • PBOC Governor Zhou: China supports the strong Dollar
  • PBOC Governor Zhou: PBOC does not need to change interest rates often
  • PBOC Governor Zhou: Notes excess in liquidity in China
  • PBOC Governor Zhou: PBOC will continue to withdraw liquidity by raising reserve requirements
  • PBOC Governor Zhou: Does not rule out rate hikes, but 'not for next week'
  • PBOC Governor Zhou: Hopes to see strong USD for sake of global economy
  • PBOC Governor Zhou: No Big Sub-prime Impact On Bank Of China Profitability
  • ECB Liebscher: The strong euro has weakened impact of high oil prices
  • ECB Liebscher: The ECB has taken into account the FX rate development    
  • ECB Liebscher: Reiterates that excessive FX moves not welcomed, FX should reflect fundamentals
  • GFMS Chairman: Gold may reach $850/oz by the year-end [GFMS is a UK based precious metals consultancy]
  • GFMS Chairman:  Gold may top $1000/oz in 2008
  • GFMS Chairman: Gold to rise on the back of a weak dollar and high oil prices
  • GFMS Chairman: US interest rates to fall below 3.00% this year
  • GE Finance Minister: The current outlook is for slightly weaker growth in Germany next year
  • GE Finance Minister: It is too early to say that the financial crisis has passed
  • *** FIXED INCOME/FX/COMMODITIES/ERRATUM ***
  • Currencies continue to consolidate within their recent ranges at the beginning of what its likely to be a light week as US markets will be closed for Thanksgiving on Thursday. The Yen is a touch firmer on continued credit market concerns after Swiss re announced CHF1.2B in losses for the month of October. Concerns were also on the rise after the ECB announced that a total of €874M was borrowed at its one-day marginal lending facility as of November 18.
  • The European indices are currently trading lower in the session as credit market concerns continue after Swiss re announced CHF1.2B in underwriting losses for the month of October. The lack of any major progress on a merger agreement between BHP Billiton and Rio Tinto was also a point of focus overnight. Further on the consolidation front in Europe, there were headlines circulating this weekend noting that China's top 3 banks are looking to buy a 17% stake in Standard Chartered from Temasek. Gyrus group received a 630p/share, £1.02B offer from Olympus representing a 59% premium to Friday’s closing price. SabMiller made a €48.25/share, €816M offer for Royal Grolsch. Severstal extended the offer period for Celtic Resources [the most recent offer stands at 280p/share].
  • Front month crude is trading in positive territory in the session following the OPEC summit this past weekend. As expected, there was no increase in output at the weekend. Current supply conditions are likely to add some upside momentum until the next OPEC meeting where supply discussions are likely to be on the agenda. Spot gold is slowly drifting lower as carry trades unwind, but remains in positive territory as the overall pace of the session has been slow, and the news front has been quiet. Notably, the chairman of the GFMS precious metals consultancy in the UK forecasted that gold prices may reach $850 be the end of the year. The forecast comes after UBS cut is gold price forecast to $700 from $850 for the same period at the beginning of November, and Bear Stearns raised its gold price forecast to $775 at the end of October.
  • Fixed income futures are trading slightly higher in the session on the back of weaker equities, and are in the upper end of their contract ranges.
By: John J. Phillips IV