BOE minutes not as dovish as anticipated

Notes/Observations

- (CL) Chile Central Bank pauses as inflation remains over target; leaves Overnight Rate Target unchanged at 3.00%

- (JP) Bank of Japan Monetary (BOJ) maintains monetary base at ¥80T but lowers its assessment of inflation (y/y rate of increase in CPI around 1% vs the previously seen 1.25%)

- BOE Nov Minutes not as dovish as expected with a spread of views; vote remained 7-2 to keep policy steady

Key Economic Data

- (ZA) South Africa Oct CPI in line; M/M: 0.2% v 0.2%e; Y/Y: 5.9% v 5.9%e

- (EU) Euro Zone Sept Current Account data beat; Seasonally adj SA: €30.0B v €18.9B prior; Current Account NSA: € v €15.1B prior

- (UK) Bank of England (BOE) Nov Minutes were less dovish: Voted 7-2 for the 4th straight time to keep rates steady (Weale and Mccaffery again voted for 25bps rate hike)

Fixed Income:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.2%, FTSE 100 -0.1% at 6,696, DAX +0.4% at 9,492, IBEX-35 +0.2% at 10,431, FTSE MIB flat at 10,431, SMI +0.2% at 8,991, S&P 500 Futures -0.1% at 2,046]

- Market Focal Points/Key Themes: Equity markets open mixed following recent gains, Markets later rebound amid release of BoE minutes, Mining sector weighs on FTSE, Areva's outlook weighs on shares, ICAP's H1 profits decline, Inspection services firm Intertek issues cautious outlook, Code changes in the UK weigh on pubs (Punch Taverns -8%, Enterprise Inns -12%), Upcoming US Fed minutes in focus

By Sector

- Energy [Areva AREVA.FR -20% (suspended outlook)]

- Consumer Discretionary [Intertek ITRK.UK -8% (cautious outlook)]

- Financials [ICAP IAP.UK -5% (H1 profits declined)]

- Industrials [Royal Mail RMG.UK -5% (cautious outlook)]

- Stoxx50 sectors [Technology +0.5%, Consumer Non-Cyclical +0.4%, Financials +0.3%, Industrials flat; Telecom -0.6%, Consumer Cyclical -0.2%, Basic Materials -0.2%, Utilities -0.1%, Energy -0.1%]

Speakers

- Bank of Japan (BOJ) Gov Kuroda post rate decision press conference reiterated the view that domestic economy was recovering moderately; inflation to hit 2% target around FY15. virtuous cycle seen working in Japan economy with seen improvement in Japan employment and wages. Reiterated BOJ to check risks and make necessary policy adjustments as necessary; policy was flexible. He did note tat any chance of uncontrollable risk from delayed sales tax to economy was seen limited but hard to address such risks if they did appear. Should yields spike would be difficult for BoJ to respond

- Bank of England (BOE) Nov Minutes was less dovish. Material spread of views on balance of risks to the outlook among members who voted to hold rates. MPC members expressed concerns about overshooting inflation target if wages pick up. Also some MPC members noted signs that slack was being absorbed sharply and could fuel inflation

- SNB's Jordan stated that he did not see SNB's current challenges going away soon and was hard to predict when global crisis would be over. He reiterated view that passing of gold initiative would limit SNB ability at act

- ECB's Linde (Spain): Domestic economy was facing less favorable environment as external conditions had deteriorated over the past year

- China NDRC economic planner: China faces increasing downward pressure on the economy in 2015

Currencies

- EUR/USD remained in a corrective form following the stronger than expected German ZEW investor confidence yesterday and dealers suspected this would continue for the time being.

- The GBP/USD moved off 14-month lows after the Bank of England (BOE) Nov Minutes was less dovish as expected. The pair moved from 1.5590 to test above 1.5650 as a result. There had been some speculation on markets that either Ian McCafferty or Martin Weale would climb down from voting for an immediate rise in rates

- USD/JPY hit fresh 7-year highs above 117.50 during the European session

- EUR/CHF currency cross continues to creep lower, the focus is now on any upcoming polls which help markets to put probabilities on a 'Yes' or 'No' vote

**Political/In the Papers:

- (EU) ECB's Knot (Netherlands): Low inflation is a global problem caused in part by decline in oil prices; have seen no classic deflation in the EMU

- (UK) BoE's McCafferty: have been voting and encouraging rate hikes since August

- (CN) China Premier Li Keqiang: To study for feasibility of China-Europe free trade agreement

Looking Ahead

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

- 05:30 (NO) Norway Central Bank (Norges) Gov Olsen in Bergen

- 05:30 - (PT) Portugal Debt Agency (IGCP) to sell combined €0.75-1.0B indicated range in 3-month and 12-month Bills

- 06:00 (BR) Brazil Nov IBGE Inflation IPCA-15 M/M: 0.5%e v 0.5% prior; Y/Y: 6.5%e v 6.6% prior

- 06:00 (BR) Brazil Oct Unemployment Rate: 4.9%e v 4.9% prior

- 06:45 (US) Daily Libor Fixing

- 07:00 (UK) PM Cameron weekly question time in House of Commons

- 07:00 (RU) Russia to sell RUB5.0B in OFZ 2016 bonds

- 07:00 (US) MBA Mortgage Applications w/e Nov 14th: No est v -0.9% prior

- 07:45 (UK) BOE's Shafik in Parliament

- 08:00 (PL) Poland Oct Average Gross Wages M/M: 1.7%e v 0.2% prior; Y/Y: 3.3%e v 3.4% prior

- 08:00 (PL) Poland Oct Employment M/M: 0.1%e v 0.0% prior; Y/Y: 0.8%e v 0.8% prior

- 08:15 Baltic Dry Bulk Index

- 08:30 (US) Oct Housing Starts: 1.025Me v 1.017M prior; Building Permits: 1.040Me v 1.031M prior (revised from 1.018KM)

- 09:15 (BR) Brazil to sell 2015, 2016 and 2018 Bills

- 09:30 (BR) Brazil Weekly Currency Flows

- 10:00 (SE) Sweden Central bank (Riksbank) Dep Gov Floden

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

- 12:00 (CA) David Tulk speaks about Central Banks

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

- 14:00 (US) Fed Minutes from Oct. 28-29 FOMC Meeting

- (MX) Mexico Central Bank Quarterly Inflation Report

- 18:50 (JP) Japan Oct Trade Balance: -¥1.027Te v -¥960.6B prior (revised from -¥958.3B); Adj Trade Balance: -¥1.100Te v -¥1.0701T prior; Exports Y/Y: 4.5%e v 6.9% prior; Imports Y/Y: 3.4%e v 6.2% prior

- 20:35 (JP) Japan Nov Preliminary Manufacturing PMI: 52.7e v 52.4 prior

- 20:45 (CN) China Nov Preliminary HSBC Manufacturing PMI: 50.2e v 50.4 prior