OPEC is considering exemptions for three nations

Good Morning,

- The euro trade stable and Asian shares on profit taking mode, give back some gains triggered by China's rate cut yesterday.

- A sharp rise in private consumption more than compensated for stubborn weakness in investment, helping the German economy post modest growth in the third quarter and avoid recession, data showed on Tuesday. Germany's Federal Statistics Office confirmed an earlier flash estimate showing a 0.1 percent rise in seasonally-adjusted gross domestic product (GDP) on the quarter between July and September. Private consumption rose 0.7 percent quarter on quarter, the biggest increase in three years, and exports climbed at a faster pace than imports, helping trade make a positive 0.2 percentage point contribution in the third quarter.

- ECB’s Noyer: Weak European inflation is despite accommodative monetary policy. When policy rates go to zero, central banks must resort to unconventional measures to avoid involuntary policy tightening. Very low inflation can aggravate situation because this increases real interest rates. Monetary policy must aim at influencing both nominal rates and inflation expectations. ECB’s purchases of covered bonds, ABS will ease bank funding conditions, bring down risk premiums on private assets. The ECB’s action on nominal interest rates has been strong and efficient.

- Nomura on EUR/USD: The right shoulder idea in EUR/USD proved wrong because prices did not break the key neckline at 1.2578 and the move back to the Nov lows negated the pattern, notes Nomura. As such, Nomura now thinks that the only bright spot for its technical outlook for a longer-term upward correction is a possible double bottom forming at 1.2358. "S/t, resistance is 1.2444 (the picot lows from last week). A break through last weeks pivots will encourage a test of the October downtrend line but there is a lot of work to do to form a second bottom,". "Critical support is much closer at 1.2358 and a break leaves little support down to a long-term uptrend at 1.2262," Nomura adds.

- BOJ Governor Kuroda: Won’t comment on specific fx levels, daily moves. Weak yen has positive effect on economy such as boost to exports, profits of globally operating firms. Weak yen also has effect of weighing on households’ real income, profits of small firms and non-manufacturers. Desirable for forex to move in a way reflecting economic fundamentals. Japan export volume growth flat now but seen rising ahead as demand in Asian markets, including china’s, picks up. No change to my view on forex market Japan only halfway in meeting boj’s 2 pct inflation target, 2 pct inflation target is now a ‘global standard’.

- BOJ Oct 31 minutes: Some Bank of Japan board members expressed concern that expanding the central bank's quantitative easing could increase the risk that it will be seen as financing the government deficit. Also some members said the expanded quantitative easing may not yield as much results as when the BOJ first introduced the policy. The minutes also showed that BOJ Governor Haruhiko Kuroda proposed expanding debt and risk asset purchases to maintain its commitment to reaching its 2 percent inflation target next year.

- RBNZ 4Q Survey: Fourth-quarter inflation expectations eased further, according to a Reserve Bank of New Zealand survey on Tuesday. Expectations for consumer-price gains for the next 12 months declined to 1.59% from 1.96% in the third quarter. Expectations for inflation in the next 24 months fell to 2.06% from 2.23%. The central bank has raised interest rates four times this year to 3.5%.

- OPEC is considering exemptions for three nations from any potential oil-production cuts, two people with knowledge of the proposal said. Saudi Arabia’s oil minister said he doesn’t anticipate a difficult meeting when the group meets on Nov. 27 to decide its response to slumping crude. Iraq, Iran and Libya wouldn’t have to reduce supplies should the Organization of Petroleum Exporting Countries agree to cut output at its gathering in Vienna.

- Watch today: French business mood, US store sales, US consumer mood

Have a nice Day !