US markets were closed for the Thanksgiving Holiday. There will be early market closures on Friday. For more information, please see “NOTICE: Please see below the desk and market closures for this week’s US Thanksgiving Holiday” on the RANsquawk newsfeed.


New Zealand Trade Balance (Oct) M/M -871mln vs. Exp. -760mln (Prev. -1143mln). (Newswires)
New Zealand Trade Balance YY (Oct) -2.990B vs. Exp. -2.705B (Prev. -2.910B)
New Zealand Trade - Exports (Oct) 4.56B vs. Exp. 4.20B (Prev. 3.78B)
New Zealand Trade - Imports (Oct) 5.43B vs. Exp. 4.95B (Prev. 4.92B)

South Korean Consumer Confidence (Nov) 112.3 (Prev. 109.2). (Newswires)


ECB MEETING MINUTES: Keeping QE open-ended had broad support among policymakers, but a few wanted a clear end date to the programme. Policymakers also discussed both bigger and smaller cut in QE purchases at the meeting; a shorter and longer QE extension was also discussed, but there was a general agreement on a nine-month extension. The minutes also stated that several argued to de-link forward guidance from rises in inflation.

ECB's Coeure said ECB deposit rate will stay at -0.4% for a long time, while he added that EU recovery is robust and homogeneous across countries and sectors. (Newswires)

ECB's Villeroy said eurozone inflation is still below target but much better than 18 months ago and that some stimulus must be maintained. (Newswires)

EU Markit Manufacturing Flash PMI (Nov) 60 vs. Exp. 58.3 (Prev. 58.5). (Newswires)
EU Markit Services Flash PMI (Nov) 56.2 vs. Exp. 55.1 (Prev. 55.0)
EU Markit Comp Flash PMI (Nov) 57.5 vs. Exp. 56.0 (Prev. 56.0)

UK GDP 2nd Release QQ (Q3) 0.4% vs. Exp. 0.4% (Prev. 0.4%). (Newswires)
UK GDP 2nd Release YY (Q3) 1.5% vs. Exp. 1.5% (Prev. 1.5%)



USD: The dollar continued its slide in holiday-thinned trade, with traders digesting the FOMC’s latest meeting minutes released on Wednesday which suggested that, while a December rate hike is now looking to be a mere formality – policymakers have concerns about the longer-term inflation outlook. Accordingly, traders have struggled to price in a third hike in 2018, in line with the FOMC forecasts.


EUR: The combination of a soggy dollar and good fundamental data out of the Eurozone has helped nudge the single currency towards the 1.1850 region vs. the USD, eying the month-to-date high around 1.1860 as it shakes off political concerns out of Germany (the CHF has also been resilient amid these concerns too, suggesting that EUR traders are putting more stock into the fundamental improvements in the Eurozone economy, and the prospects of ECB normalisation of policy). Today, solid PMI data out of the Eurozone not only confirmed the growth narrative, but suggested that price pressures may also pick-up in the months ahead, while the employment sub-indices also look solid, feeding into the argument that slack will continue to be eroded, and inflation will pick-up in the months ahead.


GBP: Traded negative against the dollar and the euro, unable to take advantage of thin trade in the former, while the stronger data of the latter piled pressure onto sterling. The pound slipped before the UK growth data (pre-data moves are almost customary, these days) which was mixed; the headline growth rates were unrevised, consumption was firmer, however, net trade was a drag and the rate of business investment growth slowed to weakest levels seen since Q2 2016.


CAD: The CAD saw downside weakness against the dollar after weak retail sales data; 0.1% M/M missed an expected 0.9%, and the ex-autos measure was 0.3% M/M, missing the 0.9% estimate. USDCAD managed to punch it’s way back onto the 1.27 handle; Over the last few weeks, CAD has been trading in a range between ~1.2665 and ~1.2850, and the next catalyst for any move will probably come from a combination of next week’s Financial System Review, and speech by Governor Poloz – the last speech before the 6/Dec BOC meeting, with markets pricing a circa 10% chance of further tightening at theDecember meeting.


JPY: The yen drifted sideways post-FOMC meeting minutes, shrugging-off the sell-off in Chinese equities overnight (Japanese markets were closed overnight, and reopen today). High-yield FX (AUD, NZD) took advantage of quiet yen trade, both rising around 0.25% against the Japanese currency in European dealing. Analysts have been surprised by the seeming divergence between global risk sentiment and the JPY (as well as the divergence between the yen and Japanese equities), with the yen remaining resilient despite significant build up in short positions, which may hint at a change in the composition of flows in and out of Japan, according to Morgan Stanley.


TRY: There was attention on the lira, after the central bank said that it could hike rates at any time, not necessarily waiting for the December policy meeting. Offsetting that strength, however, was headlines out of the EU, which noted that it was considering adding Turkey to the list of tax havens. Heading into the European close, however, the lira was more or less flat.


MXN: There was some weakness in the peso in quiet trade, with traders booking profits after two days of solid gains. Mexican policymakers continue to cite risks of a negative outcome from NAFTA negotiations; additionally, yesterday the BANXICO governor said any peso depreciation must be gradual, again reminding traders of the possibility that the central bank could intervene if the need arises. Furthermore, Carstens also commented that MXN is reflecting the possibility of a bad NAFTA result.


BRL: The BRL was around 0.4% weaker against the dollar after inflation data rose to a five-month high.


ZAR: The ZAR was off against the buck after the SARB held rates, as forecast. The SARB also alluded to risks of inflation rising.


CHF: SNB’s President Jordan said the Franc is highly valued and policy is still aimed at weakening the franc despite the recent reduction in value. (Newswires)



Oil flows between Iraq and Kurdistan rose to 270k BPD from between 200k-230k BPD, according to a shipping source cited by newswires.

Ahead of next week’s OPEC meeting, where the cartel is expected to extend its supply cut agreement by a further nine-months, Russia continues to sound cautious. The Russian economy minister today said that economic growth had slowed in October, and he partly blamed the OPEC deal to curb output.

23 Nov 2017 - 22:00- Fixed IncomeData- Source: Newswires

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