• *** ECONOMIC DATA ***
  • GE Oct Import Price Index: M/M 0.7% v 0.4%e || Y/Y 2.3% v 1.9%e
  • German import prices exceeded consensus expectations led by a surge in energy prices, however the rise was roughly in line with the recent trend in the indicator.
  • FR Oct Consumer Spending: M/M –1.1% v –0.2%e || Prior revised from 0.1% to –0.3% |||| Y/Y 2.7% v 4.4%e || Prior revised from 5.8% to 5.1%
  • French consumer spending declined by more than expected, weight down by all of its components. The most notable declines were seen in the house hold goods component, which declined to –3.6% m/m from 0.7% in September, and the textiles/leathers component, which declined to –2.0% from 0.0% in September.
  • EU Nov Advanced PMI Manufacturing: 52.6 v 51.0e
  • EU Nov Advanced PMI Services: 53.7 v 55.1e
  • EU Nov Advanced PMI Composite: 53.8 v 53.9e
  • Manufacturing PMI exceeded expectations, bolstered by a rise in all components, but most significantly, a rise in the quantity of purchases, and input prices components. The services PMI declines by more than expected, weighed down by increasing credit and energy costs, according to analysts.
  • UK Q3 Preliminary GDP: Q/Q 0.7% v 0.8%e || Y/Y 3.2% v 3.3%e
  • UK Q3 Preliminary Private Consumption: 1.0% v 0.9%e
  • UK Q3 Preliminary Government Spending: 0.3% v 0.6%e || Prior revised from 0.8% to 0.3%
  • UK Q3 Preliminary Gross Fixed Capital Formation: 1.6% v 1.4%e || Prior revised from –1.1% to –0.9%
  • UK Q3 Preliminary Exports: 2.7% v 1.6%e || Prior revised from –1.0% to 0.2%
  • UK Q3 Preliminary Imports: 3.9% v 2.9%e
  • UK Sep Index of Services: 0.9% v 1.0%e || Prior revised from 1.0% to 0.9%
  • UK Oct BBA Mortgage Lending: £5.0B v £5.9B prior
  • Preliminary third-quarter GDP fell shy of estimates today, weighed down by small downward revisions to the services output, manufacturing output, and industrial production.
  • *** COMMENTS/SPEAKERS ***
  • BOE Lomax: The BOE faces a difficult period
  • BOE Lomax: Lenders are tightening conditions for borrowers
  • BOE Lomax: There is no evidence of a sustained slowdown in spending
  • BOE Lomax: BOE’s central forecast is for a mild slowdown in growth
  • ECB Ordonez: High inflation is likely to last through April
  • ECB Orzonez: The ECB will act if secondary effects take hold
  • ECB Ordonez: A sharp Dollar decline is not good for the US
  • ECB Orzonez: The ECB does not have sufficient data to determine if inflationary expectations have become unanchored from their target
  • GE Economic Ministry: The Euro exchange rate is leading to cost pressures
  • FR Finance Ministry: Expresses heightened concern on Euro FX rate
  • FR Finance Ministry: Unfair Euro bears forex adjustment weight
  • FR Finance Ministry: Seeks global accord on all currencies
  • FR Finance Ministry: Forex rates must reflect fundamentals
  • ECB Trichet: The present market corrections should not come as a surprise
  • ECB Trichet: Very early to draw lessons from the market correction
  • ECB Trichet: Will closely monitor complexity of financial instruments
  • ECB Trichet: Says markets are very vulnerable to shifts in investor sentiment, will monitor closely
  • ECB Trichet: Will anchor inflationary expectations and care for liquidity needs of the market
  • ECB Trichet: Continue to steer interbank rates near policy rate
  • GE VDMA: If the Euro stays high it will be a problem for many engineering companies
  • GE VDMA: Companies are already losing orders and profits due to the strong Euro
  • *** FIXED INCOME/FX/COMMODITIES/ERRATUM ***
  • On the fixed income front the Agence France Trésor noted that there has been no plans to change the AFTs strategy amid the financial market turmoil. The AFT added that buybacks are ongoing and will cut billions from 2008 issuance. Finland confirmed that they will tap the 4.25% 2012 bond issue on November 29 in the amount of €1.0B, while the Belgian Debt Agency announced that it will sell between €2.5 and €3.5B in 4.00% March 2013 OLO 50s, 4.00% March 2017 OLO 49s, and 4.00% March 2022 OLO 48s on November 26. In trading, fixed income futures are on the decline after rising for the earlier part of the session as uncertainty turns the market amid thinned trading during the holiday week in the US. Futures are trading lower in the session on the back of a rise in equity markets. Surprisingly, the lower than expected GDP number in the UK wasn’t enough to reverse the downside momentum in the long-gilts.
  • On the currency front Euro strength has become the main focus once again after flirting with the 1.50 level during Asian trading. Officials, associations, and company heads, mostly in France and German, have been signing the “Euro is too high” song all night, with more and more people joining the chorus. The general theme overnight has been heightened verbal intervention on the Euro from all levels.

By: John J. Phillips IV