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The following is a summary of the main economic events from the overnight:
- The Swiss National Bank cut its benchmark interest rate by 100 bps to 0.75% in an unscheduled meeting. - Following a 6.12% meltdown in S&P 500 on Wednesday, Japanese stocks sunk further with the Nikkei 255 closing lower by 6.89%, and the Hang Seng lower by 4.04%. In Europe, the carnage also follows with the Eurostoxx lower by 3.18% and the FTSE 100 down 2.18%. - On Thursday, U.S. two year yields traded at all time lows at 1.0436% while ten year yields are at their lowest levels since 2003, trading at an intraday low of 3.2427%. S&P futures are down another 1.88%. - WSJ: GM's bankruptcy plans are not on the table, but remains a possibility. - WSJ: Senate Majority Leader Harry Reid says he will not force a vote on the automaker bailout since it faces so much opposition. He said they might move on a republican proposal on Thursday. - WSJ: Foreign automakers in South Carolina, Alabama and other Southern states benefiting from non-unionized workforce to weather turmoil better than brothers to the north. - Publico: ECB's Bini Smaghi said the European Central Bank may lower its main refinancing rate again if the situation warrants. - FT: ECB's Nowotny said Germany should step up its stimulus package as part of European response to crisis. He also said ECB should cut rates in December. - FT: UK Chancellor Darling to unveil multi-billion pound package of support for small businesses on Monday. - UK retail sales fell by 0.1% in October, less than the 0.9% decline expected. Meanwhile, September's figure was revised down from an initial estimate of -0.4% to -0.5%. - Germany's Bundesbank is not expecting a quick recovery in the country's economy in the upcoming quarters, adding that the economic outlook is "worse than it has been in a long time" and would remain bleak, despite easing inflation pressures. - German Econ Minister Glos confirms European Commission preparing €130 billion stimulus package. - French President Sarkozy to allot €20 billion in strategic investment fund. - Japan posted a trade deficit of ¥63.9 billion in October, despite expectations for a ¥73.6 billion surplus. In September, Japan posted a downwardly revised ¥88.5 billion surplus. The original figure was recorded as a ¥95.1 billion surplus. - FT: Iceland secured $5.1 billion bailout consisting of $2.1 billion from IMF and $3 billion in funding from Denmark, Norway, Finland, Russian, Poland and the Faroe Islands. - FT: Junk bond yields spiked over 20% on recession fears and waves of corporate bankruptcies. - FT: IAEA reports that Iran is building up uranium stockpiles as talks break down. - WSJ: U.S. President-elect Barack Obama planning to intervene in economy in ways that haven't been done since the 1970s, favouring some industries over others. - WSJ: 15 heads of home building and financial services corporations have reaped over $100 million in compensation over the last five years. Thursday's Highlights: - U.S. jobless claims (8:30 a.m. EST) and the Philadelphia Fed's manufacturing index (10 a.m. EST) are the main data points of the North American trading session. Economists expect initial jobless claims to decline to 505k from 516k the week prior while continuing claims are expected to rise to 3900k from 3897k previously. - The Philly Fed's headline index is expected to rise to a reading of -35 from -37.5 previously. - Markets will also hear comments from Treasury Secretary Henry Paulson speaking at the Ronald Regan Library in California (2 p.m. EST). - After the SNB cut rates 100 bps intermeeting and ongoing comments from ECB policy-makers suggesting further rate cuts to come, one can only wonder if the European Central bank would follow suit. There is talk among traders to that effect. - Fed Governor Randall Kroszner will testify before the House Small Business Committee in Washington D.C. (10 a.m. EST). - Eyes and ears will also be on Capitol Hill, which continues to deliberate on a bailout package for the auto industry. An alternative proposal to using $25 billion from the TARP may be heard. - Longer term U.S. interbank lending rates continue to head south on Thursday with the three-month Libor shedding another 2 bps to 2.15% while the overnight Libor remained virtually unchanged at 0.44%. The Ted spread narrowed 2 bps to 209 bps while the OIS spread remained little changed at 171 bps. Market Snapshot: At 7:18 a.m. EST: Euro/USD up 0.65 cents to 1.2553. USD/CAD up 0.15 cents to 1.2562. USD/Yen up 0.08 points to 95.81. GBP/USD down 0.85 cents to 1.4866. Aussie/USD down 0.68 cents to 0.6299. US ten-year Note futures up 17.0 ticks to 118.93. German 10-year Bund futures up 78.0 ticks to 120.48. UK ten-year Gilt futures up 69.0 ticks to 115.98. Eurostoxx down 45.66 points to 1986.63. UK FTSE 100 down 51.33 points to 3954.35. German Dax down 58.84 points to 4295.25. Japanese Nikkei down 570.18 points to 7703.04. Hong Kong Hang Seng down 517.24 points to 12298.56. Shanghai Composite down 33.71 points to 1983.76. Dow Futures down 21.00 points to 8006.00. S&P 500 Futures down 4.50 points to 808.00. WTI Crude down $ 1.21 to $ 52.89 per barrel. Economic Data Snapshot: JP Merchandise Trade Balance Total October -¥63.9B vs. Exp: +¥73.6B Revised: +¥88.5B Prior: +¥95.1B Revised: +¥88.5B JP Adjusted Merchandise Trade Balance October -¥175.6B vs. Exp: +¥71.0B Revised: -¥67.1B Prior: -¥33.0B JP Foreign Buying Japan Bonds W/E November 14 -¥89.8B vs. Revised: -¥573.7B Prior: -¥573.8B JP Foreign Buying Japan Stocks W/E November 14 -¥512.8B vs. Revised: -¥198.6B Prior: -¥198.0B JP Japan Buying Foreign Stocks W/E November 14 +¥162.7B vs. Prior: +¥430.4B JP Japan Buying Foreign Bonds W/E November 14 +¥213.9B vs. Prior: +¥635.7B AU RBA Foreign Exchange Transactions October -A$3150M vs. Prior: A$407M JP Convenience Store Sales (Y/Y) October +8.1% vs. Prior: +6.6% DE Producer Prices (M/M) October 0.0% vs. Exp: -0.7% Prior: +0.3% DE Producer Prices (Y/Y) October +7.8% vs. Exp: +7.3% Prior: +8.3% IT Industrial Orders (M/M) (SA) September -1.5% vs. Exp: -4.2% Revised: -0.9% vs. Prior: -0.3% IT Industrial Orders (Y/Y) (NSA) September +1.2% vs. Exp: -6.4% Prior: -5.2% IT Industrial Sales (M/M) (SA) September +1.7% vs. Exp: -0.8% Revised: -3.1% Prior: -3.0% IT Industrial Sales (Y/Y) (NSA) September +5.4% vs. Exp: +2.3% Prior: -11.0% GB Retail Sales (M/M) October -0.1% vs. Exp: -0.9% Revised: -0.5% Prior: -0.4% GB Retail Sales (Y/Y) October +1.9% vs. Exp: +1.4% Revised: +1.7% Prior: +1.8% GB Public Finances (PSNCR) October -4.9B vs. Exp: -2.5B Revised: -12.9B Prior: +12.6B GB Public Sector Net Borrowing October +1.4B vs. Exp: 0.4B Revised: -7.9B Prior: 8.1B GB M4 Money Supply (M/M) October Preliminary +2.3% vs. Exp: +0.8% Revised: +1.7% Prior: +1.5% GB M4 Money Supply (Y/Y) October Preliminary +15.1% vs. Exp: +12.7% Revised: +12.6% Prior: +12.4% Thursday's Events: 8:30 CA Wholesale Sales (M/M) September Exp: -0.6% Prior: -1.5% 8:30 US Initial Jobless Claims W/E November 15 Exp: +505K Prior: +516K 8:30 US Continuing Claims W/E November 8 Exp: 3900K Prior: 3897K 10:00 US Fed's Kroszner Speaks on Effects of Turmoil on Small Business 10:00 US Philadelphia Fed manufacturing survey November Exp: -35.0 Prior: -37.5 10:00 US Leading Indicators October Exp: -0.6% Prior: +0.3% 10:00 US Fed's Kroszner Testifies Before House 10:35 US EIA Natural Gas Storage Change W/E November 14 Exp: -5 Bcf Prior: +46 Bcf 10:30 CA Bank of Canada Review 14:00 US Treasury Secretary Henry Paulson speaks at an event in Simi Valley, California 21:00 US St. Louis Fed President James Bullard to Speak economic conference in Indiana By Erik Kevin Franco,
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, edited by Stephen Huebl,
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