***Economic Data***

– (IN) India Sept Industrial Production Y/Y: 1.9% v 3.6%e
– (RU) Russia Narrow Money Supply (RUB): 6.41T v 6.35Tprior
– (IN) India Primary Articles WPI w/e Oct 29th Y/Y: 11.4% v 12.1% prior; Food Articles WPI Y/Y: 11.8% v 12.2% prior
– (SW) Sweden Oct PES Unemployment Rate: 4.5% v 4.5%e
– (CH) China Oct New Yuan Loans (CNY):586.8B v 500.0Be
– (CH) China Oct M2 Money Supply Y/Y: 12.9% v 13.0%e ; M1 Money Supply Y/Y:8.4% v 9.3%e
– (SP) Spain Q3 Preliminary GDP Q/Q: 0.0% v 0.0%e; Y/Y: 0.8% v 0.7%e
– (HU) Hungary Oct Consumer Prices M/M: 0.7% v 0.4%e; Y/Y:3.9% v 3.6%e
– (TU) Turkey Sept Industrial Production WDA M/M: +1.5% v -2.6% prior; Y/Y: 6.0% v 3.8% prior; Industrial Production NSA Y/Y: 12.0% v 6.4%e
– (HK) Hong Kong Q3 GDP Q/Q: 0.1% v 0.0%e; Y/Y: 4.3% v 4.2%e
– (UK) Oct PPI Input M/M: -0.8% v -0.3%e; Y/Y: 14.1% v 14.5%e
– (UK) Oct PPI Output M/M: 0.0% v 0.1%e; Y/Y: 5.7% v 5.9%e
– (UK) Oct PPI Output Core M/M: -0.1% v +0.1%e; Y/Y: 3.4% v 3.6%e
– (MA) Malaysia Central leaves the Overnight Rate unchanged at 3.00%; as expected
– (PO)) Portugal Oct Consumer Price Index M/M: 1.1% v 0.8% prior; Y/Y: 4.2% v 3.6% prior
– (PO)) Portugal Oct CPI EU Harmonized M/M: 0.9% v 0.6% prior; Y/Y: 4.0% v 3.5% prior

Fixed Income:
– (IN) India sold total INR130B vs INR130B indicated in 2017, 2023 and 2040 bonds
– (SA) South Africa sold total ZAR800M in I/L 2017, 2028 and 2033 Bonds

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***

***Notes/Observations:
– ECB continues to be quite aggressive in buying peripheral bonds
– Italy senate to vote on EU demanded austerity measures

Equities:

FTSE 100 +0.20% at 5455, DAX +0.50% at 5894, CAC 40 +0.30% at 3073, IBEX 35 +0.80% at 8380, IBEX +0.90% at 8385, FTSE MIB +1.1% at 15,376, SMI +0.30% at 5583

– Sentiment improved during the session prompting the shares to rally. The reason was political progress in the peripherals as Italian senate is set to vote later in NY morning, with Mario Monti as the new preferred leader. Greece has a new leader in Papademos who will act as the new interim prime minister, calming thus the political turmoil.
– Allianz [ALV.GE] missed expectations for its Q3 net profit – results included a €931M in impairment charges related to investments in Greece’s sovereign debt and the financial sector. However the company reiterated its guidance.

Speakers:

– EU said to have rejected China’s conditions for providing funds to ease debt crisis
– German Vice Chancellor Roesler rejected the concept that ECB had unlimited firepower and added that
once ECB opened the floodgates they could never be closed again
– German CDU (coalition) party said to pass motion to reject two-speed Europe concept
– German CDU General Sec Groehe (coalition) stated that he supported a motion to allow Euro member exit on a voluntary basis but continued to hold on to the goal of maintaining all 17 members within the union
– Austria Fin Min Fekter reiterated the view that the country’s ‘AAA’ sovereign rating was not in danger (Reminder: On Nov 10th Moody’s spokesperson stated that Austria was not under review for possible sovereign downgrade)
– China President Hu Jintao stated that China-US trade to exceed $500B in three to four year time and that Chine would focus on expanding domestic demand over the next five years (in line with calls from G20 on rebalancing global growth)
– China Commerce Ministry (MOFCOM) reiterated that a slow global recovery wouldl challenge export growth and that a failure to effectively resolve the European debt crisis would cause a fresh shock to the global economy. MOFCOM saw slower export and import growth in 2012 and would keep a stable trade policy. The ministry reiterated it would actively work to increase imports to balance trade and forecasted 2011 trade Balance to register a surplus of $150B
– China Researcher Ba Shusong reiterated that China monetary policy to remain ‘prudent’ while growth is likely to continue to moderate over the next few quarters and export growth likely to keep weakening. He cautioned that China’s potential growth rate might fall but saw little room for monetary policy adjustment in 2012. Aggressive stimulus (both fiscal and monetary) could lead to asset bubbles (cites Japan as the historical example)
– ECB’s Nowotny commented that economic forecasts were key to next governing council meeting on interest rates and the risk of serious downturn would call for more decisive ECB action if price outlook was stable. It was not necessarily the case that Italy would get involved with the EFSF but was important to get enlarged EFSF operational as soon as possible and expressed concern about risk of delay. He added that Italy was suffering crisis of confidence and key to correct that was implementing structural reforms
– India Central Bank Dep Gov Gokarn commented that global uncertainty continued and a challenge to contain the impact on markets as domestic growth slowed. He noted that recent interest rate hikes have impacted growth and that the RBI mioght have reached a peak in its current interest rate cycle. (in line with comments from its Oct 25th rate decision)
– Acting Russia Fin Min Storchak commented that 2012 overall borrowing seen at RUB 2.2T
With Russia planning to borrow RUB400B on external markets
– Czech Central Banker Hampl commented that it could not rule out policy action due to uncertainty and that the alternative central bank forecast did see a possible interest rate cut. He added that he believed that the alternative forecast was more likely than its baseline scenario
– Slovakia Fin Ministry forecasted lower state revenues for 2012 and 2013 period due to cuts in its GDP growth views. It saw 2012 tax revenues around €665M below current target and 2013 tax revenues around €1.15B below current target
– Thailand Central Bank Gov commented that there was room for flexibility in its monetary policy and that the Board to decided whether to adjust rates at its next meeting. He noted that economic growth risks were greater than risks from inflation and could again revise lower the 2011 GDP growth forecast from the current 2.6% leve. The shift from targeting headline inflation from Core in 2012 would not affect the conduct of monetary policy
– Philippine Central Bank Gov Tetangco commented that its policy rates remain appropriate but would consider policy moves of other central banks and gauge the impact of global developments to demand

Currencies:

– The USD was softer during the European morning as equity markets dollar is trading on an easier footing after stock markets stabilized and Italian yields remain under the pivotal 7% mark. The ECB was again aggressive in buying periphery bonds and said to be targeting 7-10year part of the Italian curve. The EUR/USD tested above 1.3650 on the upcoming Italian budget vote set for Friday and Saturday would pave the way for a unity government
– The USD/JPY continued to drift farther away from the pivotal 78 level. Senior Vice Fin Min Igarashi stated that he had no discussion of Japan’s latest intervention at APEC summit

Political/ In the Papers:

– The EU Commission warned that the British economy will stagnate until next summer with there being a significant risk of a double-dip recession. It added that the government deficit reduction plan is failing. The slowdown which began at the end of 2010 now looks more like a prolonged soft patch than a simple weather-related blip. The worsening growth outlook implies clear downward risks to the latest UK official fiscal forecasts published in March. It forecasted 2011 Growth at 0.7% (2012 at 0.6%, 2013 at 1.5%) compared to the guidance released by the Office for Budget Responsibility (OBR) in March at 1.7% (2.5% and 2.9%, respectively).
– RBS and HBSC may lay off up to a fifth of their investment banking staff. Over 10% of the workers in RBS’ investment banking unit could lose their jobs (approximately 2,000 workers). Barclays has already started to cut jobs in its investment banking unit. HSBC previously announced plans to cut 3,000 jobs. Last month it was reported that RBS might cut 5,000 jobs from its investment banking unit. In August, Barclays said that it was on track to complete about 3,000 jobs cuts this year.
– Ambrose Evans-Pritchard dismissed recent speculation related to any reshaping of the Euro. He believed that French and German officials are not seriously thinking about any plan to break up the Euro because the consequences of such an action would be too grave. He suggested a more effective alternative to a Euro break up is a scenario which Germany leaves the EU and France becomes the leading country in a union of the Southern European nations. Under this scenario Euro debt contracts would remain legitimate. The creation of a Southern European euro would be cheaper than the current methods being used by EU officials to deal with the debt crisis.
– Ireland’s state-owned bank AIB is to pass along the rate cuts by the ECB to its standard variable mortgage customers despite the refusal during the prior trading session. The decision follows a meeting yesterday with government ministers and the bank’s Chief Executive David Hodgkinson. The Deputy Prime Minister later went on Irish National Radio (RTE) and commented that he hoped that both Ulster Bank and the Bank of Ireland will do the same. On Wednesday EBS announced its plan to reduce rates, joining Permanent TSB, KBC, Irish Nationwide (part of the Irish Bank Resolution Corporation (IBRC), formerly Anglo) and Bank of Scotland in their intention to cut variable rates.

**Looking Ahead***

– (CO) Colombia Monetary Policy Meeting Minutes
– (PE) Peru Sept Trade Balance: No est v $1.2B prior
– (CO) Colombia Central Bank monetary minutes
– (PE) Peru Sept Trade Balance: $552.0Me v $1.2B prior
– (EU) ECB member Stark
– (GE) German Econ Min Roesler
– (EU) EU Almunia
– (PO) Portugal Parliament debates 2012 budget
– 6:00 (BR) Brazil Oct IBGE Inflation IPCA M/M: 0.4%e v 0.5% prior; Y/Y: 6.9%e v 7.3% prior
– 6:30 (EU) ECB member Gonzalez Paramo in panel discussion in Madrid
– 6:30 (GE) Worldbank Chief Economist Lin speech on Chinese Economy
– 6:30 (SP) ECB member Gonzalez-Paramo speaks in Madrid
– 6:45 (IC) Iceland to Sell Bills
– 7:00 (IT) Expected Italian Senate vote on budget bill
– 7:00 (IC) Iceland Oct Unemployment Rate: No est v 6.6% prior
– 9:00 (EU) EU President Van Rompuy gives speech in Florence
– 9:00 (FR) France President Sarkozy
– 9:00 (EU) ECB member Kranjec
– 9:00 (MX) Mexico Sept Industrial Production M/M: No est v -1.1% prior; Y/Y: 3.1%e v 3.1% prior
– 9:55 (US) Nov Preliminary University of Michigan Confidence: 61.5e v 60.9 prior
– 11:00 (IC) Iceland Oct International Reserves (DKK) No est v 911.7B prior
– 13:15 (US) Fed member Yellen speaks at Banking Conference in Chicago
– 14:00 (AR) Argentina Oct Consumer Price Index M/M: No est v 0.8% prior; Y/Y: No et v 9.9% prior
– 14:00 (AR) Argentina Oct Wholesale Price Index M/M: No est v 0.9% prior; Y/Y: No et v 12.6% prior
– 14:45 (US) Fed member Williams speaks on Panel at IMF Conference

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