USD/JPY sees some support and trades slightly higher

Market movers today

In the US, Markit PMIs for November are due for release. The large gap between Markit and ISM manufacturing narrowed in October and we expect this trend to continue (driven by both variables). Hence, we est imate that Markit PMI rose to 55.6. We est imate the service index stayed around its current level of 55.3.
German Ifo expectat ions figures are due for release today.
In Japan, November PMI figures for the export -heavy manufacturing sector are due out on Friday. The manufacturing sector has looked solid for more than a year now with indust rial product ion up 4.2% y/y and PMI just below 53.
In Sweden, October retail sales follow today. In Sweden, PPI data is released at 09:30 CET.

Selected market news

It has been a relatively quiet session overnight on financial markets as the US celebrated Thanksgiving. The sell-off in Chinese equities which send the CSI 300 index 2.5% lower yesterday has lost steam and trading in Asian markets is rather mixed this morning as Japan returns from holiday. Chinese equity indices are still lower this morning, but the negat ive momentum has eased. In Japan, the large equity indices trade higher and USD/JPY sees some support and trades slightly higher.

The minutes from the ECB meet ing on 26 October , released yesterday, revealed that ‘several members' (probably Benoît Coeuré, Francois Villeroy and Jens Weidmann) favoured delinking the forward guidance on QE from the requirement of a sustained rise in inflat ion and instead link it to the overall monetary policy stance (new QE purchases, QE stock and reinvestments and forward guidance in policy rates). If that view is becoming more prominent in the Governing Council over coming months, it would open up the possibility for the ECB to end the QE programme in 2018, even without a clear pick-up in inflat ion.

The latest PMI surveys From Europe and Japan indicate that the global business cycle is likely to underpin growth in coming quarters: Yesterday, PMI surveys from France, Germany and the aggregate euro zone came out very st rong and cont inue to paint an opt imist ic picture for growth in Europe in coming quarters. In Japan, the Nikkei manufacturing PMI index, released early this morning, rose to the highest level since March 2014 indicat ing that the manufacturing sector is likely to continue to support GDP growth.

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