The US data calendar is heavy ahead of Thanksgiving tomorrow

Market movers today

• Jean-Claude Juncker will present the EUR315bn EFSI (European Fund for Strategic Investment) programme to the European Parliament. So far there has been limited information on the terms the EFSI will offer private investors.

• The US data calendar is heavy ahead of Thanksgiving tomorrow. The final November University of Michigan consumer confidence is likely to attract most attention and we expect it to improve in contrast to the disappointing Conference Board yesterday. The survey also includes a gauge of 5-year inflation expectations, which is closely watched by the FOMC. Durable goods orders for October and home sales data will also be worth watching.

• The Swedish NIER’s business and consumer surveys are released this morning and we expect both to have increased slightly more than consensus. For more on Scandi markets see page 2.

Selected market news

European sovereign-debt yields reached fresh lows yesterday as markets continue to factor in a higher probability that the ECB will eventually be forced into buying government bonds.

Mixed data in the US, with a significant upward revision to final domestic demand in Q3 and a surprising decline in the Conference Board’s measure of consumer confidence, did little to move markets. The treasury curve bull flattened with 30-year yields down 5bp and EUR/USD moved slightly higher.

The weakness in the Conference Board confidence was also evident in the labour market component suggesting that job growth slowed this month, which is consistent with slightly higher initial claims data. One-year ahead inflation expectations ticked down and the similar 5-year ahead measure in today’s University of Michigan survey will be closely watched after minutes from the October FOMC meeting showed some concern about slowing inflation expectations.

Oil prices dropped yesterday as comments from the major oil producers’ meeting in Vienna ahead of the OPEC meeting on Thursday suggest that a production cut is not imminent. Although a cut in the OPEC output target on Thursday will do a great deal to support oil prices, the most probable scenario is that OPEC keeps its target unchanged amid lack of consensus within the cartel and expectation of higher oil demand next year.