Online sales hit record for Thanksgiving

Good morning,

- The correlation between $EURUSD and Germany's DAX 30 stock index is -0.80 on 60-day studies amid ECB stimulus expansion bets.

- Early reports for Thanksgiving Black Friday sales show a record number of consumers using their mobile devices for shopping. Software firm Adobe, which tracks sales at 4,500 websites, predicts $1.7 billion will be spent for the 24-hour Thursday period. Researcher Shoppertrack says retail stores rang up $3.2 billion in sales last Thanksgiving, while the Thursday/Friday period total was some $12.29 billion in sales at retail. Target CEO Brian Cornell spoke to reporters shortly after stores opened Thursday, and said he saw “really strong traffic,” in-store and expects “record breaking results,” for online. “We’re seeing very strong results, and expect it to continue throughout the weekend.”

- Fed funds futures put the priced-in probability of a 25bps rate hike at the December FOMC meeting at 77.5%

- EUR Bank of Italy's Visco: More EU integration needed to tackle geopolitical risks.

- A huge economic experiment will begin in Switzerland and Sweden in 2016, and some people are calling it the "war on cash." Both countries have central banks that have imposed negative interest rates on their commercial banks, making it costly for those banks to store cash. The intent is to force the banks to lend out the cash, thus spurring the economy and a small amount of healthy inflation. But the two countries have very different attitudes to holding actual hard cash. So negative interest rates could have very different effects on the cash-free Swedes and the cash-loving Swiss. That, some right-wing economists are arguing, is why you're not seeing Swiss people complaining about the fact that they are penalized for keeping money in the bank. The SNB (the Swiss central bank) expects to hold its rates negative until 2017, according to board member Andréa Maechler — so this war seems likely to last at least two years. At least one consumer bank will charge its customers negative rates beginning in 2016. This is interesting if you believe, as conservative "war on cash" theorists do, that the banks want to abolish cash in order to end your financial privacy and force you into the banking system for all electronic transactions. Those banks can then change the value of cash any time they want, thus making fiat currency even more of sham than it already is, these voices say.

- As we head into the holiday season and the last 20+ trading days of the year, an important question should be on your mind if you’re planning on being exposed to the EUR. That question is, “What is potentially not priced into the EUR on the downside given the risks ahead?”Markets are a discounting mechanism meaning that once credible information comes onto the scene, that information quickly priced into the market. This article is designed to spell out the dangers of counting on EURUSD or EUR/XXX downside into this data-heavy first week of December, especially December 3rd. “Be aware that the market does not turn when it sees light at the end of the tunnel. It turns when all looks black, but just a subtle shade less black than the day before.”

- Global Bonds (10Y, Govt): Japan 0.290%; Germany 0.469%; France 0.796%; Canada 1.559%; UK 1.839%; US 2.207%; Australia 2.819%.

- The latest economic numbers in Australia point to a stunted economy but there are also signs this could be the bottom. In FX trading on the US Thanksgiving holiday, the dollar didn't get any love as it was the laggard on the day as the yen led the way. Japan's Oct CPI rose 0.3% y/y, beating expectations of 0.2% and previous 0.0%. The Premium Insights have two GBP trades ahead of Friday's release of UK Q3 GDP revision. Yesterday's Australian capex numbers were the worst in 30 years of records. Private capital expenditures fell a whopping 9.2% compared to the -2.9% consensus. The immediate reaction was a 40-pip decline in AUD/USD but it's stabilized since. That's two poor readings for Q3 ahead of the RBA decision on Tuesday and GDP on Wednesday. What's impressive is that the market hasn't shuddered despite such scary numbers. If the Aussie can make it past the RBA and GDP without another push lower, it's a good sign that the worst is behind for the Aussie.

- The USD depreciated 0.0632 percent versus the CAD during the U.S. Thanksgiving holiday. There was little trading volume during the session. The USD/CAD traded in a range between 1.3320 and 1.3280. The Loonie opened weaker versus the U.S. dollar and as the price of oil dropped as the oversupply narrative grew during the day. As the session winded down the CAD started to advance versus a USD as America was getting ready for Thanksgiving dinner. The Euro is hovering near seven-month lows with little movement during the American Thanksgiving holiday that has restricted liquidity in today’s market.

- UBS Group AG, the world's largest private bank, is telling its wealthy clients that the US dollar's gains are set to be limited as the Federal Reserve will probably tighten policy gradually after liftoff next month. The Swiss bank initiated a trade this month to sell the euro versus Norway's krone - rather than against the dollar - for clients who have given it the mandate to manage their assets, said James Purcell, Hong Kong-based cross asset strategist at UBS's wealth management business.

- OIS rates show traders pricing in at least one RBNZ rate cut over the coming 12 months, with a 56% probability of easing in December.

- GfK’s long-running Consumer Confidence Index has decreased one point to +1 in November. Three of the measures used to calculate the Index saw decreases this month, one increased, and the other one was unchanged. “From summer’s 15-year high, consumer confidence in the UK has continued to slide to +1 this month. Overall, despite the good news agenda of rock-bottom inflation, falling fuel prices and higher wage growth boosting spending power, confidence appears to be depressed by a combination of wider economic, political and social events.

- The Chinese economy grew at an average annual rate of 9.75% between 2000 and 2014, according to the World Bank’s World Development Indicators. This performance has been widely hailed – not only for its impact on poverty alleviation in the world’s most populous country, but also as a driver of the global economy. Positive spillovers from Chinese growth are widely thought to include the availability of cheap producer and consumer goods – benefiting consumers and firms in developed countries – and increased demand for commodities – benefiting emerging markets. However, some also blame the Chinese growth model for creating imbalances in the global economy.China’s growth rate has fallen since the beginning of this decade. Official annual growth was 9.5% in 2011, 7.8% in 2012, 7.7% in 2013 and 6.9% in the first three quarters of 2015. The Chinese government forecasts a growth rate of 7% for 2015. The IMF forecasts 6.8%, the World Bank’s Global Economic Prospects predicts 7.1%, and the Asian Development Bank’s Asian Development Outlook, 6.7%. However, some private sector forecasters are markedly more pessimistic. In any case, while there is disagreement on the extent of the slowdown, its existence is not in dispute.

- Copper Jumps to Report China Will Probe Short Sales; Oil, Gold Steady.

- Major news for today: UK Q3 GDP, Germany Consumer Climate, EZ Business and Consumer Survey.

Have a great weekend!