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The following is a summary of the major events that took place during the overnight session:
- In testimony before the U.S. Senate on Tuesday, CEOs of the 'Detroit Three' (Ford, General Motors, and Chrysler) said the auto industry will suffer greatly without government backing. Ford said it would be asking for $7 to $8 billion, Chrysler for $7 billion, and GM for a heftier $10 to $12 billion in government aid. Vote for drawing $25 billion from the TARP could come as early as today. - Global stocks are lower once again with the Japanese Nikkei closing down 0.66% and the Hang Seng Index closing lower by 0.77%. In Europe, the Eurostoxx is down 1.57% and the FTSE 100 is down 1.65%. S&P futures are down 1.05% ahead of the bell. - NY Times: Chinese automakers press Beijing for government aid. - FT: UK automakers write letter to Chancellor Darling for financial aid. - FT: GE plans to downsize the capital branch of GE Capital by selling $90 billion in assets. The move could cut costs by $2.0 billion and cause job losses of 75,000. - FT: Industry executives argue mortgage modifications could lead to further writedowns and lower house prices. - WSJ: Bank of America CEO Kenneth Lewis calls for scrapping Fannie Mae and Freddie Mac in favour of a several lender-owned cooperatives. - WSJ: A study by comScore suggests online spending grew 1% year-over-year, the slowest pace since 2001. - BASF has announced a massive decline in demand, preventing the chemical company from reaching last year's earnings levels. Shares fell 6.7% after the announcement. - BOE's MPC Minutes reveal a unanimous decision to cut rates 150 bps to 3.00% on Nov. 6. Cuts in excess of 200 bps were discussed. - CBI's factory orders index for UK rose to -38 in November from -29 in October. - President-elect Barack Obama asks Secretary of Defense Robert Gates to stay on in new administration. - Spanish GDP contracts 0.2% in Q3, in line with preliminary forecasts and above Q2's 0.1% gain. - ECB's Bonello said that although Europe is entering into a recession, it is likely to be less severe than that of the U.S. - ECB's Ordóńez is expecting an "enormous" drop in the inflation rate for the euro zone and said that the current crisis has "substantially eased" price tensions. - ECB President Jean-Claude Trichet says the central bank will lower rates as needed to combat the worst financial crisis since World War II. - RBA Assistant Governor Edey sees a sharp slowdown ahead for the Australian economy. - FP: Wednesday's Speech from the Throne will outline the creation of a national securities regulator for Canada. Plan has backing of all provinces except Quebec. - G&M: GM Canada's pension fund has a C$4.5 billion shortfall as of last November. - G&M: Scotiabank to take after-tax charge of C$595 million on losses from financial crisis. - G&M: Province of Alberta to post budget surplus of C$2.0 billion in 2008, down $6.5 billion from estimates just three months ago. - UK Guardian: Lloyds TSB shareholders expected to approve takeover of HBOS today. - NY Times: Advantages of corporate bankruptcy waning as firms cannot find funding to reorganize. - U.S. inter-bank lending rates mixed on Wednesday with overnight Libor rising 4 bps to 0.44% and three-month Libor falling 5 bps to 2.17%. The Ted spread narrowed 5 bps to 206 bps and the OIS/Libor spreads narrowed 5 bps to 171 bps. Wednesday's Highlights: - The main economic data point of the day will be the 8:30 a.m. EST release of U.S. CPI. The consensus is for a 0.8% month-over-month decline following September's flat result, translating into a 4.0% annual inflation rate. Core CPI is expected to rise 0.1% month-over-month, matching the previous result. On an annual basis, core CPI is expected to rise 2.4% following a 2.5% gain in September. - Also at 8:30 a.m. EST are U.S. housing starts and building permits for October. Housing starts are expected to decline to 780k from 817k in September, while building permits are expected to fall to 774k from 805k previously. - Comments from Bank of Canada Governor Mark Carney at 8:20 a.m. EST will draw some attention while the U.S. hears from Fed Vice-Chairman Donald Kohn at 9 a.m. EST and Richmond Fed President Jeffrey Lacker at 1:30 p.m. EST, both voting members at the FOMC. - The FOMC's minutes at 2 p.m. EST may provide further details on the Fed's next move. - U.S. Congress could bring a vote on whether to allot $25 billion from the TARP to aid the U.S. automakers, but the legislation faces fierce opposition on the Hill. - Energy traders will be paying attention to Department of Energy's weekly oil inventories at 10:35 a.m. EST. Market Snapshot: At 7:14 a.m. EST: Euro/USD up 0.22 cents to 1.2641. USD/CAD up 0.17 cents to 1.2332. USD/Yen down 0.2175 points to 96.79. GBP/USD up 1.03 cents to 1.5062. Aussie/USD down 0.45 cents to 0.6479. US ten-year Note futures up 16.5 ticks to 117.995. German 10-year Bund futures up 84 ticks to 119.6. UK ten-year Gilt futures up 54 ticks to 115.44. Eurostoxx down 35.31 points to 2092.58. UK FTSE 100 down 70.78 points to 4137.77. German Dax down 55.173 points to 4524.297. Japanese Nikkei down 55.19 points to 8273.22. Hong Kong Hang Seng down 100.09 points to 12815.8. Shanghai Composite up 115.044 points to 2017.474. Dow Futures down 89 points to 8405. S&P 500 Futures down 9.75 points to 856.75. WTI Crude down $ 0.21 to $ 54.18 per barrel. Economic Data Snapshot: NZ Producer Prices- Inputs (Q/Q) Q3 +3.7% vs. Prior: +5.6% NZ Producer Prices- Outputs (Q/Q) Q3 +2.8% vs. Prior: +3.5% AU Westpac Leading Index (M/M) September -1.0% vs. Prior: -0.1% JP All Industry Activity Index (M/M) September -0.1% vs. Exp: -0.1% Revised: -1.7% Prior: -1.8% AU New Motor Vehicle Sales (M/M) October -0.5% vs. Revised: -0.4% Prior: +0.4% AU New Motor Vehicle Sales (Y/Y) October -10.6% vs. Revised: -8.6% Prior: -8.2% EU Construction Output SA (M/M) September -1.3% vs. Revised: +0.4% Prior: +0.1% EU Construction Output WDA (Y/Y) September -3.8% vs. Revised: -1.7% Prior: -2.5% GB UK CBI November Industrial Trends Factory Orders November -38 vs. Prior: -39 Wednesday's Events: 7:00 US MBA Mortgage Applications W/E November 14 Prior: +11.9% 8:20 CA BOC Governor Mark Carney in London at UK Chamber of Commerce 8:30 CA International Securities Transactions September Exp: -C$1.350 Prior: -C$0.730 8:30 CA Leading Indicators (M/M) October Exp: -0.3% Prior: -0.2% 8:30 CA Travel Between Canada and Other Countries 8:30 US CPI (M/M) October Exp: -0.8% Prior: 0.0% 8:30 US CPI Ex Food & Energy (M/M) October Exp: +0.1% Prior: +0.1% 8:30 US CPI (Y/Y) October Exp: +4.0% Prior: +4.9% 8:30 US CPI Ex Food & Energy (Y/Y) October Exp: +2.4% Prior: +2.5% 8:30 US CPI Core Index SA October Prior: +216.956 8:30 US Consumer Price Index NSA October Exp: +216.700 Prior: +218.783 8:30 US Building Permits October Exp: 774K Prior: 786K Revised: 805K 8:30 US Housing Starts October Exp: 780K Prior: 817K 8:30 US Real Earnings October 9:00 US Fed Vice-President Donald Kohn Speaks on Asset Prices at Cato Conference 9:25 CA BOC Governor Mark Carney To Hold Press Conference in London 10:30 CA Bank of Canada will sell $13.3 billion in Cash Management Auction 10:35 US DOE U.S. Crude Oil Inventories W/E November 14 Exp: +1000K Prior: +22K 10:35 US DOE U.S. Gasoline Inventories W/E November 14 Exp: 0K Prior: +1982K 10:35 US DOE U.S. Distillate Inventory W/E November 14 Exp: +700K Prior: +516K 10:35 US DOE U.S. Refinery Utilization W/E November 14 Exp: 0.00% Prior: -0.69% 10:35 US API U.S. Crude Oil Inventories Prior: +899K 10:35 US API U.S. Gasoline Inventories W/E November 14 Prior: +3606K 10:35 US API U.S. Distillate Inventory W/E November 14 Prior: +1493K 12:00 CA Bank of Canada Will Repurchase $7.5B in Bond Repurchase Program 12:20 CA Bank of Canada Will Repurchase $500M in Bonds Repurchase Program 12:30 US Treasury's Kashkari will Speak on Bank Rescue in Washington 13:30 US Richmond Fed President Jeffrey Lacker Speaks at Conference on Subprime Crisis 14:00 US Fed Releases Minutes and Forecasts from Oct. 28-29 monetary policy meeting 13:40 GB BOE Deputy Governor Sir John Gieve to deliver speech at an event in London 13:40 GB BOE Deputy Governor Charles Bean to deliver speech at an event in London By Erik Kevin Franco,
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, edited by Nancy Girgis,
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