ECB's Mersch will speak at 15:30 CET

Market movers today

• Euro PMIs are due for release and it will be interesting to see whether the improvement in the financial ZEW expectations is mirrored in the PMIs. The manufacturing PMI seems to lag the ZEW expectations a bit and we stick to our expectation of a decline as the order-inventory balance weakened in October. On the other hand, the service PMI should remain at the current level. Euro consumer confidence is also released and we expect it have gone slightly higher after it increased marginally in October. Finally, ECB’s Mersch will speak at 15:30 CET.

• In the US the Markit PMI manufacturing is due for release and in line with the euro figure we look for a slight decline as the order-inventory balance in October points to more downside this month.

• US headline CPI is expected to fall 0.1% m/m, leading to an annual inflation rate of 1.6% y/y. For core CPI, we expect a rise of 0.1% m/m, below consensus of 0.2% m/m, which should keep the annual rate unchanged at 1.7%. Inflation pressures are generally low, as commodity prices are declining and wage increases are moderate.

• US existing home sales is also due for release and we expect a small decline as pending home sales, which is a good leading indicator, have declined. Finally, US initial jobless claims are released.

• Norwegian Q3 GDP data is released today. For more on Scandi markets see page 2.

Selected market news

Fed minutes modestly dovish. Relative to the statement from the October FOMC meeting, the minutes were slightly dovish, showing that ‘a few’ policymakers were concerned about prices not rising fast enough. Not surprisingly, it was discussed whether to retain the ‘considerable time’ phrase in the statement but most participants preferred to keep it for now, with the caveat about data dependency added. There seems to be no indication that the Committee is about to change that wording in December (see Keypoints from the minutes of the October FOMC meeting for details).

The initial market reaction was for US stocks to trim losses and bond prices to rally but these moves proved short-lived. The key US stock indices closed the day slightly lower, while Treasury benchmark yields increased up to 3bp.

Chinese data a bit softer than expected. This morning, the preliminary HSBC/Markit manufacturing PMI declined slightly more than expected to 50.0 (October: 50.4, expected: 50.2), i.e. the lowest reading in six months and just above levels signalling contraction.