China conference board leading index at a 3-month low

EU Market Update: BOE's MPC continued its unanimous vote of steady policy under Carney's tenure

Notes/Observations

- Japan Oct Trade Balance registers its record 16th consecutive deficit (and 3rd largest) as energy import costs mount

- (CN) China MoF auctions 10-yr bonds, Avg yield 4.7121% (highest yield in 9 years)

- China conference board leading index at a 3-month low

- Outgoing Fed chief Bernanke struck a familiar dovish tone, reiterating that interest rates may remain near zero for considerable time after bond buys end

- No surprises in BOE minutes; MPC continued its unanimous vote of steady policy under Gov Carney's tenure

Economic Data

- (DE) Germany Oct PPI M/M: -0.2% v 0.0%e; Y/Y: -0.7% v -0.6%e

- (JP) Japan Oct Convenience Store Sales Y/Y: -0.8% v v -1.6% prior

- (TW) Taiwan Oct Export Orders Y/Y: 3.2% v 0.8%e

- (ZA) South Africa Oct CPI M/M: 0.2% v 0.3%e; Y/Y:5.5% v 5.7%e

- (ZA) South Africa Oct CPI Core M/M: 0.2% v 0.2%e; Y/Y: 5.3% v 5.3%e

- (EU) ECB €0M borrowed in overnight loan facility vs. €2M prior; €46.0B parked in deposit facility vs. €48.7B prior - Daily Eurosystem Liquidity Conditions

- (TW) Taiwan Q3 Current Account Balance: $14.9B v $13.8B prior

- (NL) Netherlands Nov Consumer Confidence Index: -18 v -25e

- (SE) Sweden Q3 Total Number of Employees Y/Y: 1.3 v 1.2% prior

- (ES) Spain Sept Trade Balance: No est v -€1.8B prior

- (UK) Bank of England (BOE) Monetary Policy Committee Minutes : Voted unanimous again to leave interest rates at 0.50% and Asset Purchase Target (APT) at £375B

- (CH) Swiss Nov Credit Suisse ZEW Expectations Survey: 31.6 v 24.9 prior

Fixed Income:

- (RU) Russia sold RUB13B in 2028 OFZ Bonds; Yield: 7.93% vs. guidance of 7.88-7.93%

- (IN) India sold total INR120B vs. INR120B indicated in 3-month and 6-month Bills

- (SE) Sweden sold SEK15B vs. SEK15B indicated in 3-month Bills; Yield: 0.8818%

- (EU) ECB allotted $0.0M in 8-Day USD Liquidly Tender at fixed 0.58% vs. $0.0M (9th straight week without an allotment)

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

***Equities**

Indices [Stoxx50 flat, FTSE 100 -0.2% at 6,682, DAX -0.10% at 9,188, CAC-40 -0.1% at 4,267, IBEX-35 -0.4% at 9,595, FTSE MIB -0.2% at 18,721, SMI -0.40% 8,266, S&P 500 Futures flat at 1,785]

- Market Focal Points: Equities open lower following mixed trading in Asia, FTSE 100 lags on ex-dividends, Fed's Bernanke Comments, FOMC minutes due later today

By Sector

- Telecom [Alcatel-Lucent ALU.FR -3% (capital raise), Vodafone VOD.UK -1% (ex dividend), Sky Deutschland -1% (broker commentary); Telecom Plus TEP.UK +12.5% (raised dividend, H1 Rev +17% y/y)]

- Industrials [Zodiac ZC.FR +2% (FY profits +16% y/y)]

- Basic Materials/Resources [ThyssenKrupp TKA.DE -2% (reports earnings on Thursday); Nyrstar NYR.BE +5.5% (issued update on Talvivaara Mining)]

- Healthcare [Tigenix TIG.BE -20% (share placement)]

- Technology [Soitec SOI.FR -2% (H1 net loss widened)]

- Consumer Discretionary [TF1 TFI.FR +6% (talks with Discovery Communications, France qualified for World Cup); Metro MEO.DE +3% (broker commentary)]

- Stoxx 50 movers [Telecom -0.5, Utilities -0.4%, Industrials -0.1%; Consumer Non-Cyclical +0.3%, Technology +0.2%, Consumer Cyclical +0.1%, Basic Materials +0.1%, Financials flat]

Speakers:

- Bank of England (BOE) Monetary Policy Committee Minutes noted that all MPC agreed no guidance knockouts had been breached and reiterates that saw no case for no rate hike when 7% jobless threshold was hit. It reiterated market rate rise likely to slow pace of growth. Expected growth to pick up in the near term, due to housing and household spending but moderate over the next 2-3 years

- ECB's Weidmann (Germany) stated that it was not sensible to further loosen monetary policy. He added that ECB was not technically at the end of its options. He noted that Competitiveness is key remedy to European situation not interest rates

- Spain Deputy Econ Min Latorre: To change banks' DTA treatment by year-end

- Greece Finance Ministry preparing legislation to give Development Fund more ways to raise revenue

- ECB Ireland bailout official Rodriguez-Palenzuela: EU bank deleveraging remained a major task. Deleveraging was proceeding at a pace in aid program countries but happening slowly in others

- Russia Central Bank chief Nabiullina stated that 1.5-2% GDP growth is the new normal for the country

- Hungary Central gov Matolcsy reiterated view of further room for interest rate cuts (in line with recent post rate decision press conferences)

- Czech Central Banker Tomsik: Flash Q3 GDP estimate (of -0.5% q/q) showed economy might be headed back to recession. He reiterated the central bank's aims to keep Koruna around 27 level vs Euro as deflation would have started in Jan without fx interventions.

- Japan GPIF pension fund advisory panel report: GPIF should review domestic bond-focused portfolio and diversify investments. The panel should consider investing in REIT, Private Equity, commodities, and infrastructure; consider investing in inflation-linked JGBs

- Moody's raised Malaysia sovereign outlook to positive from stable; reaffirms A3 rating

- Iran Supreme Leader Ayatollah Ali Khamenei stated that Iran was not a global threat and not hostile to the US. He supported nuclear negotiators but Iran would not step back in any way from its nuclear rights

Currencies/Fixed Income:

- The USD was steady during the European morning following Bernanke's dovish comments overnight. The EUR/USD took out stops above 1.3550 in Asia (1.3580 was the high) before settling back down into familiar territory. The pair was at 1.3522 ahead of the NY morning.

- BoE MPC minutes were a non-event after the BOE quarterly inflation report talked about forward guidance last week. Market has still revised expectations for a BoE rate hike and BOE Gov Carney stated overnight there was a 40% chance that his threshold could be met by the end of next year. The GBP/USD tested 1.6150 in the session and appeared supported on dips

- The USD/JPY moved back above the parity level after Japan pension fund GFIF advisory panel report came out and recommended that the world's largest pension fund should review domestic bond-focused portfolio and diversify its investments

Political/In the Papers:

-(GR) Troika said to have rejected Greece's 2014 rev targets as optimistic; Greece needs to make cuts to health, defense and the public sector - financial press

- (BE) Fitch affirms Belgium sovereign rating at AA; outlook Stable

- (EU) ECB's Constancio: QE is still an option but has not been discussed in great technical detail; there are concerns about the possible impact of negative deposit rates

- (EU) FT comments on how euro zone banks have accelerated the repaying of LTRO loans ahead of stress tests

-(US) Fed Chairman Bernanke: Rates may remain near zero for considerable time after bond buys end, and possible well after unemployment declines to less than 6.5% - National Economists Club speech; The US economy still far from where we would like it to be, maybe sometime before return to normal.

- (US) Fed's Evans (dove, FOMC voter): Not in a hurry to see the flow of QE purchases tapered, while there have been improvements in the labor market, more sustainability is needed

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)

- (EU) EBA Management Board Meeting in London

- (CH) Swiss government meeting

- (CN) EU-China Summit Nov. 21-22 in Beijing

- (IR) negotiators meet Iran officials in Geneva through Nov 22nd

- (RU) Russia President Putin with Israel PM Netanyahu

- (IT) Italy Chamber of Deputies (Lower House) no-confidence vote on Justice Min Cancellieri

- 05:30 (UK) BOE's Dale in London

- 05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.0B 3-month and 12-month bills

- 05:30 (HU) Hungary to sell Bonds in Switch Auction

- 06:00 PM Tusk: Will announce Polish govt changes on Wed, Nov 20th

- 06:00 (DE) German Chancellor Merkel with Norway PM Solberg

- 06:00 (PL) Poland to sell Bonds

- 06:45 (US) Daily Libor Fixing

- 07:00 (RU) Russia to sell 2020 OFZ Bonds;Yield guidance between 7.27-7.32%

- 07:00 (US) MBA Mortgage Applications w/e Nov 15th: No est v -1.8% prior

- 07:00 (UK) Prime Minister's Question Time in House of Commons

- 08:30 (US) Oct Advance Retail Sales M/M: 0.1%e v -0.1% prior; Retail Sales Ex Auto M/M: 0.1%e v 0.4% prior; Retail Sales Ex Auto and Gas: 0.2%e v 0.4% prior; Retail Sales Control Group: 0.3%e v 0.5% prior

- 08:30 (US) Oct CPI M/M: 0.0%e v 0.2% prior; Y/Y: 1.0%e v 1.2% prior

- 08:30 (US) Oct CPI Ex Food and Energy M/M: 0.1%e v 0.1% prior; Y/Y: 1.7%e v 1.7% prior

- 08:30 (US) Oct CPI NSA: 223.600e v 234.149 prior; CPI Core Index: 234.929e v 234.589 prior

- 08:30 (CA) Canada Sept Wholesale Trade Sales M/M: 0.3%e v 0.5% prior

- 09:00 (BE) Belgium Nov Consumer Confidence Index: No est v -6 prior

- 09:00 (MX) Mexico Sept Retail Sales Y/Y: -2.5%e v -2.2% prior

- 10:00 (EU) Netherlands Fin Min Dijsselbloem holds Annual Europe House Lecture in The Hague

- 10:00 (IT) Italy PM Letta meets French President Hollande in Rome

- 10:00 (US) Fed's Dudley to speak on Economy at Briefing in New York

- 10:00 (US) Oct Existing Home Sales: 5.14Me v 5.29M prior

- 10:00 (US) Sept Business Inventories: 0.3%e v 0.3% prior

- 10:00 (MX) Mexico Weekly International Reserves

- 10:30 (US) Weekly DOE Crude Oil Inventories

- 11:00 (IS) Iceland Central Bank Minutes

- 11:00 (US) Fed to purchase $1.25-1.75B in Notes

- 11:30 (NO) Norway PM Solberg speaks at CDU Foundation

- 12:00 (CA) Canada to sell 2-Year Bonds

- 12:10 (US) Fed's Bullard speaks on Economy and Monetary Policy in Chicago

- 13:30 (UK) BOE's Weale in London

- 14:00 (US) Fed Minutes from Oct 29-30 FOMC Meeting

- 14:00 (AR) Argentina Q3 Unemployment Rate: 7.2%e v 7.2% prior

- 16:00 (KR) South Korea Oct Discount Store Sales Y/Y: No est v -5.3% prior; Department Store Sales Y/Y: No est v 2.8% prior

- 16:00 (NZ) New Zealand Oct ANZ Job Advertisements: No est v 1.1% prior

- 16:00 (CO) Colombia Sept Retail Sales Y/Y: No est v 6.9% prior

- 16:00 (CO) Colombia Sept Industrial Production Y/Y: No est v -3.9% prior

- 16:15 (CA) Bank of Canada's Poloz, Macklem speak at Senate Committee

- 20:45 (CN) China Nov HSBC/Markit Flash Manufacturing PMI: 50.8e v 50.9 prior

- (JP) Bank of Japan (BOJ) Monetary Policy Statement ; Expected to leave both Interest Rate Target and Monetary Base Target unchanged at 0.1% and ¥270T respectively