Big week looms in terms of data and events to set trading tone for remainder of 2015

Notes/Observations

- A big week looms in terms of data and events, including the ECB meeting on Thursday, US November payrolls report and OPEC meeting on Friday

- ECB, expectations are high (20bp of Deposit rate cut, QE extension of 6 months and possible increase of €10-15B in the monthly pace of purchases

- German Nov State CPI data generally improves from month ago level while Italy misses big

- IMF formally to decide today (Nov 30th) on CNY currency (Yuan) into the SDR basket

Economic data

- (JP) Japan Oct Annualized Housing Starts (miss): 862K v 908Ke; Y/Y: -2.5% v +2.6%e; Construction Orders Y/Y: -25.2% v +6.7% prior

- (DE) Germany Oct Retail Sales (miss) M/M: -0.4% v +0.4%e; Y/Y: 2.1% v 2.9%e

- (DE) Germany Nov CPI Saxony M/M: 0.1% v 0.0% prior; Y/Y: 0.4% v 0.2% prior

- (CH) Swiss Nov KOF Leading Indicator (miss): 97.9 v 100.2e

- (TR) Turkey Oct Trade Balance: -$3.6B v -$4.0Be

- (DE) Denmark Q3 Preliminary GDP Q/Q: -0.1% v 0.0%e; Y/Y: 0.9% v 1.1%e

- (SE) Sweden Q3 GDP (beat) Q/Q: 0.8% v 0.4%e; Y/Y: 3.9% v 3.4%e

- (PL) Poland Q3 Final GDP Q/Q: 0.9% v 0.9% prelim; Y/Y: 3.5% v 3.4% prelim

- (DE) Germany Nov CPI Bavaria M/M: 0.0% v 0.2% prior; Y/Y: 0.5% v 0.5% prior

- (DE) Germany Nov CPI Hesse M/M: 0.0% v 0.0% prior; Y/Y: 0.3% v 0.2% prior

- (UK) Oct Net Consumer Credit: £1.2B v £1.3Be; Net Lending Sec. on Dwellings: £3.6B v £3.4Be

- (UK) Oct Mortgage Approvals: 69.6K v 69.9Ke

- (UK) Oct M4 Money Supply M/M: +0.6% v -1.0% prior; Y/Y: +0.2% v -0.6% prior; M4 Ex IOFCs 3M Annualized: 3.7% v 3.0%e

- (DE) Germany Nov CPI North Rhine Westphalia M/M: 0.1% v 0.0% prior; Y/Y: 0.4% v 0.2% prior

- (IT) Italy Nov Preliminary CPI NIC incl. tobacco (miss) M/M: -0.4% v -0.1%e; Y/Y: 0.1% v 0.4%e

- (IT) Italy Nov Preliminary CPI EU Harmonized M/M: -0.5% v -0.2%e; Y/Y: 0.1% v 0.4%e

**Fixed Income Issuance:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.4% at 3,501, FTSE -0.3% at 6,356, DAX +0.6% at 11,363, CAC-40 +0.2% at 4,941, IBEX-35 +0.7% at 10,383, FTSE MIB +0.4% at 22,667, SMI +0.1% at 9,012, S&P 500 Futures -0.1%]

- Market focal points/key themes: European stocks opened higher despite depressed commodity prices, with expectations the ECB will step-up stimulus measures at its meeting later in the week; export-based companies supported with Euro hitting 7-month low; trading volume remained low despite improved risk sentiment; BHP Billiton impacted after Brazilian authorities would seek $5.2B fine for dam collapse at Vale subsidiary; Aberdeen Asset Management impacted after outflows came in worse than expected

**Sectors

- Consumer discretionary [Lufthansa LHA.DE +2.1% (agreement with ground crews)]

- Financials [Aberdeen Asset Management ADN.UK -4.5% (results), Delta Lloyd DL.NL -5.6% (share issue)]

- Materials [BHP Billiton BHP.AU -3.6% (legal action in Brazil)]

- Utilities [Pennon Group PNN.UK -2.4% (analyst move)]

Speakers

- BoE's Vlieghe stated that he was relaxed about waiting a little longer before raising interest rates. Wanted to see growth stabilize or accelerate and wages rise more strongly

- ESM chief Regling reiterated view that Greece debt will not be cut but maturities could be extended

- Fitch affirmed Singapore sovereign rating at AAA; outlook stable

- Japan's GPIF pension fund provides quarterly update (July-Sept period). Registered loss of ¥7.9T, -5.6% q/q (record loss)

- China President Xi: Working hard to make progress with US on relations; cooperation on trade is effecting - Cop21 comments

Currencies

- A big week looms in terms of data and events including the ECB meeting on Thursday, US November payrolls report and OPEC meeting on Friday. The FX market began the session relatively quiet but the monetary policy divergence theme remains the overall theme. The USD was firmer against the majors ahead of the NY morning. Dealers noting that the upcoming payroll data to cement expectations for a Fed rate lift-off at the Dec 16th meeting

- ECB, expectations are high (20bp of Deposit rate cut, QE extension of 6 months and possible increase of €10-15B in the monthly pace of purchases. The EUR/USD hit a fresh 7-month low at 1.0580.

- The GBP/USD was testing just below the 1.5000 level for fresh 7-month lows. Dealer chatter of option barrier keeping the figure intact for now.

- SEK currency (Krona) firmed to 9.22 level (5-month high) after Q3 GDP data beat expectations.

- Chinese yuan midpoint was set at the lowest level in 3 months, but offshore market saw some pronounced buying ahead of the widely expected green light by the IMF to include the Yuan in its SDR basket.

**Fixed Income:

- Bund futures trade at 158.27, down 32 ticks coming off contract highs seen on Friday. Having touched multi-month highs at 158.78, support moves to 158.15 then 157.89, followed by 157.51, with further downside seeing 156.99. Resistance now stands at 158.98, with a break seeing 159.46, with an eventual target of 160.62.

- Mar 16 Gilt futures trade at 117.72, down 16 ticks trading in sympathy with Bunds and T-Note futures . Analysts eye support at 117.35, followed by 117.08. Resistance lies at 118.55 after making a high of 117.97 on Friday. A break would see a test of 118.81 then 119.32.

Weekly Supply

- EGB Supply is expected to amount to €9.5B this week, with Spain to auction €4.0-5.0B in 5, 10, 15 year SPGBs, alongside a 10 year SPGBei; and France is to auction 8,19 and 25 year OATs for €3.5-4.5B on Thursday. Cash flow for the week is positive with €16.5B in C&R to be repaid by Italy on Tuesday.

- Gilt Supply: The DMO is to tap its 5 year Gilt for £3.75B on Wednesday, the DMO will also auction its 31 year I/L Gilts, size is yet to be announced. Cash flow for the week is negative with no C&R to be repaid.

- US Supply Sees no issuance this week. Net cash flow for the week is positive with $71.5B in C&R to be repaid.

**Political/In the Papers:

- Upcoming OPEC meeting said to be the most contentious in years with pressure building on the Saudis to cut output. Article noted members including Iran were ready to press Saudi Arabia directly to pull back on production at the group's meeting this week. Even inside S Arabia, there was building disagreement about strategy.

Looking Ahead

- IMF formally to decide today (Nov 30th) on CNY currency (Yuan) into the SDR basket

- 05:30 (IN) India Oct Fiscal Deficit (INR): No est v 9.3B prior

- 06:00 (PT) Portugal Oct Retail Sales M/M: No est v -2.2% prior; Y/Y: No est v 1.4%prior

- 06:00 (PT) Portugal Oct Industrial Production M/M: No est v -0.5% prior; Y/Y: No est v 3.8% prior

- 06:00 (PT) Portugal Q3 Final GDP Q/Q: 0.0%e v 0.0% prelim; Y/Y: 1.4%e v 1.4% prelim

- 06:00 (IT) Italy Oct PPI M/M: No est v -0.2% prior; Y/Y: No est v -3.8% prior

- 06:45 (US) Daily Libor Fixing

- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)

- 07:00 (ZA) South Africa Oct Trade Balance (ZAR): -7.8Be v -0.9B prior

- 07:00 (IN) India Q3 GDP Y/Y: 7.3%e v 7.0% prior; GVA Y/Y: 7.4%e v 7.1% prior

- 07:00 (CL) Chile Oct Unemployment Rate: 6.4%e v 6.4% prior

- 07:00 (CL) Chile Oct Manufacturing Production Y/Y: -1.4%e v +1.8% prior; Industrial Production Y/Y: -1.1%e v +0.4% prior

- 07:00 (CL) Chile Oct Retail Sales Y/Y: 2.4%e v 3.1% prior

- 07:00 (CL) Chile Oct Total Copper Production: No est v 466.9K tons

- 07:30 (BR) Brazil Oct Primary Budget Balance (BRL): -12.9Be v -7.3B prior; Nominal Budget Balance: -34.1Be v -77.3B prior; Net Debt % GDP: 34.0%e v 33.2% prior

- 08:00 (PL) Poland Central Bank Nov CPI Expectations Survey: 0.2%e v 0.2% prior

- 08:00 (DE) Germany Nov Preliminary CPI M/M: 0.1%e v 0.0% prior; Y/Y: 0.4%e v 0.3% prior

- 08:00 (DE) Germany Nov Preliminary CPI EU Harmonized M/M: 0.1%e v 0.0% prior; Y/Y: 0.3%e v 0.2% prior

- 08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming bond auction

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (CA) Canada Q3 Current Account Balance: -$15.2Be v -$17.4B prior

- 08:55 (FR) France Debt Agency (AFT) to sell combined €6.4-7.6B in 3-month, 6-month and 12-month bills

- 09:00 (BE) Belgium Q3 Final GDP Q/Q: No est v 0.2% prior; Y/Y: No est v 1.3% prior

- 09:00 (US) Nov ISM Milwaukee: 48.0e v 46.7 prior

- 09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

- 09:40 (EU) ECB announces Covered-Bond Purchases

- 09:45 (US) Nov Chicago Purchasing Manager: 54.0e v 56.2 prior

- 10:00 (US) Oct Pending Home Sales M/M: +1.0%e v -2.3% prior; Y/Y: 4.5%e v 2.5% prior

- 10:00 (MX) Mexico Oct Net Outstanding Loans (MXN): No est v 2.961B prior

- 10:00 (CO) Colombia Oct Urban Unemployment Rate: 9.4%e v 9.7% prior; National Unemployment Rate: No est v 9.0% prior

- 10:30 (US) Nov Dallas Fed Manufacturing Activity: -10.0e v -12.7 prior

- 11:30 (US) Treasury to sell $54B in 3-Month and 6-Month Bills

- 14:00 (AR) Argentina Oct Industrial Production M/M: No est v -0.7% prior; Y/Y: -0.1%e v +0.2% prior;

- 14:00 (AR) Argentina Oct Construction Activity M/M: No est v 2.7% prior; Y/Y: No est v 5.8% prior

- 15:30 (MX) Mexico Oct YTD Budget Balance (MXN): No est v -438.9B prior

- 16:00 (US) Weekly Crop Progress Report

- 18:00 (KR) South Korea Nov CPI M/M: -0.1%e v 0.0% prior Y/Y: 0.9%e v 0.9% prior; CPI Core Y/Y: No est v 2.3% prior

- 19:00 (KR) South Korea Nov Trade Balance: $7.0Be v $6.7B prior; Exports Y/Y: -9.0%e v -15.8% prior; Imports Y/Y: -14.7%e v -16.6% prior

- 19:30 (AU) Australia Q3 Current Account Balance: -A$16.5Be v A$19.0B prior

- 20:00 (CN) China Nov Manufacturing PMI (official): 48.3e v 49.8 prior; Non-manufacturing PMI: No est v 53.1 prior

- 20:35 (JP) Japan Nov Final PMI Manufacturing: No est v 52.8 prelim

- 20:40 (KR) South Korea Nov PMI Manufacturing: No est v 49.1 prior

- 20:45 (CN) China Nov Caixin China PMI Manufacturing: No est v 48.3 prior

- 20:45 (CN) China Nov Caixin China PMI Services

- 20:50 (TW) Taiwan Nov PMI Manufacturing: No est v 47.8 prior

- 21:00 (VN) Vietnam Nov PMI Manufacturing: No est v 50.1 prior

- 21:15 (MY) Malaysia Nov PMI Manufacturing: No est v 48.1 prior

- 22:00 (ID) Indonesia Nov PMI Manufacturing: No est v 47.8 prior

- 22:30 (AU) RBA Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 2.00%

- 22:30 (HK) Hong Kong to sell 3-month and 6-month Bills

- 22:45 (JP) Japan to sell 10-Year Bonds

- 23:00 (ID) Indonesia Nov CPI M/M: 0.1%e v -0.1% prior; Y/Y: 4.8%e v 6.3% prior; CPI Core Y/Y: 4.9%e v 5.0% prior

- 00:30 (Tues) India Central Bank (RBI) Interest Rate Decision and Statement