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team Graham Parlane

26 November 2014

Posted by Graham Parlane on 26 November 2014

Good morning


# Australian Construction Work Done

# UK Q3 GDP Revision

# U.S. Durable Goods Orders

# U.S. Weekly Unemployment Claims

# U.S. PCE Price Index

# U.S. Chicago PMI

# U.S. New Home Sales

# U.S. Pending Home Sales



# European stocks edged higher for a 3rd straight day continuing their advance on the recent Chinese rate cut and soothing words from ECB chief Draghi. However many investors are expressing concerns on just what foundations the relatively lofty valuations are based on. The Stoxx600, after being up 0.80% early ended up just 0.16%. Across the Atlantic U.S. stocks received an initial boost from a much better than expected revision to U.S. Q3 GDP but later in the session a couple of more timely economic releases took the top off the move. The S&P500 is trading around par with 30 minutes to go.

# U.S. Q3 GDP was revised up showing growth in the quarter to be far stronger than originally thought. The Commerce Department raised its estimate of gross domestic product to a 3.9% annual pace from the 3.5% rate reported last month, reflecting upward revisions to business and consumer spending. Economists had expected growth to be revised lower to 3.3%. Growth had increased at a 4.6% rate in Q2 after a dreadful weather impacted Q1. The economy (somewhat distortedly) has now experienced the two strongest back-to-back quarters of growth since 2003.

# U.S. consumer confidence deteriorated sharply in November, one month after hitting the highest level in 7 years. The Conference Board, said its index of consumer confidence fell to 88.7 this month from a reading of 94.1 in October, whose figure was (perhaps notably) revised down from a previously reported 94.5. Analysts expected the index to increase to 95.9 in November. Less positive responses were seen across all the sub-indexes including current business conditions and the present state of the job market.

# The Richmond Fed survey of manufacturing suffered a sharp drop in November to 4 vs 20 in October (expected 16). This was its lowest read since June, with the key subseries including new orders, employment and shipments all down notably. The outlook series was also weaker. On the upside, wages strengthened.

# The U.S. treasury market saw a huge block trade go through, the flows sending yields lower, a move that traders on the floor at the time said was in anticipation that long-term U.S. bond yields would fall further due to muted inflation and sluggish domestic growth. The 10 year note ended the session down from a high of 2.31% to 2.26% and in the process breaking the bottom of a 16 session 2.3%-2.40% range. A notable break lower we suspect.

# The BoE Gov. Carney said the global economic outlook has deteriorated primarily via Europe and Japan whilst geopolitical risks are increasing.

# Crude oil futures slid once again after a meeting between nations supplying a third of the world’s oil failed to result in a pledge to curb output in the run-up to this week’s OPEC meeting. Venezuela, Saudi Arabia, Mexico and Russia did say they plan to start quarterly monitoring of oil prices but the talks didn’t result in any joint commitment to reduce supplies. WTI for January delivery fell $1.38, or 1.8%, to $74.40 a barrel back toward 4 year lows.

# The FDA published sweeping new rules requiring chain restaurants, movie theatres and large vending machine operators across the U.S. to post calorie counts on their menus and menu boards. The new rules also require other nutritional information including calories from fat, cholesterol, sugars and protein to be made available in writing upon request. The rules apply to food establishments with 20 or more outlets, including fast-food chains like McDonalds, KFC and Subway.


Cheers G.

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