NEWS STORIES OF NOTE FROM OVER THE EU & US SESSIONS: US stocks were mostly positive on what was a quiet start to a holiday shortened week, while focus was also on AT&T and Time Warner as the DoJ sued to block their proposed merger

ASIA-PAC

Australian PM Turnbull flagged tax reductions in the lead-up to the next federal budget as he commented at a Business Council of Australia dinner that work on tax reductions had already begun. (Newswires)
 

UK

BoE's Ramsden commented on QE in which he said it won't be a consideration until the Bank Rate is at a level from which it can be 'materially' cut around 150bps. Ramsden also stated that low long-term rates are due to long-term growth prospects. (Newswires)

UK Chancellor Hammond said he has authorised GBP 25bln increase in BoE's asset purchase facility to allow increased use of Term Funding Scheme. (Newswires)

UK PM May's policy board chief George Freeman stands down, according to the BBC. (Newswires)
 

EU

ECB's Draghi stated that inflation dynamics have yet to show convincing signs of a self-sustained upward trend and that sequenced ordering of the outlook for our net asset purchases and the policy rate path is a central element of our monetary policy at present. Draghi also reiterated that the “well past” condition that governs the policy rate horizon lays out a critical enabling factor for asset purchases to have their full impact. (Newswires)

ECB is said to be edging towards taking small steps in guidance on QE exit, according to press reports, while there were also comments from ECB's Villeroy that the central bank took a decisive step towards QE end. (Newswires/Telegraaf)

Germany’s Merkel said she is not planning a minority government and that the goal is to form a stable government. (Newswires)

 

FX

S&P affirmed Canada ratings at AAA; Outlook Remains Stable. (Newswires)

 

MARKET RECAP

The holiday-shortened week got off to a very quiet start. Markets were aligned in a risk-on fashion, with equities rising, Treasuries selling-off, gold sharply lower, and safe-haven FX down. US stocks mostly drifted higher, with chipmakers rising on reports that Cavium would acquire Marvell for $6bln. The healthcare sector was under pressure after Roche announced a positive outcome in a cancer drug, which weighed on Merck and Bristol-Myers. Telecoms were buoyed after Verizon was upgraded to outperform at Wells Fargo. Wal-Mart, however, sank after Goldman slashed its price target cut its rating to neutral. Industrials meanwhile rebounded, helping to lift the Dow. Focus was on Time Warner and AT&T after it was reported that the US was set to announce ‘a major antitrust review’ on Monday. The news also weighed on Charter, Comcast and Fox, after recent reports that Fox’ assets were being eyed with Comcast and Charter in the frame. S&P 500 +0.13% at 2582; Dow Jones +0.31% at 23431; Nasdaq-100 -0.09% at 6307.

The US yield curve bear-flattened on Monday, with yields from the fronts to the 10-year sector rising, though yields in the long-end were slightly lower. This left the major curves to flatten slightly again, with 5s30s breaching 70bps, and 2s10s came close to piercing 60bps (low was 60.6bps); 2s30s, meanwhile, flattened by around 2bps by settlement, holding just above 103bps. US Dec 2017 T-Note futures settle 7 ticks lower at 124-22.

20 Nov 2017 - 22:10- ForexResearch Sheet- Source: Newswires

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