So far the start to December has not been kind to overextended stock markets. Indices in Australia, Hong Kong and across Europe are down for a second straight day. Overnight trading in US indices suggests the Dow and S&P appear poised to break down through 16,000 and 1,800 respectively when US exchanges open. This action along with trading in currency markets suggests that between yesterday’s generally positive manufacturing PMI numbers and today’s stronger than expected UK construction PMI and Spanish employment signs of a finally rebounding global economy continue to emerge. Plus, Cyber Monday sales reports have indicated growth of 16-20% over year depending on the source, indicating that US consumer spending remains robust and shifting increasingly online. This has raised speculation that both the Bank of England and US FOMC could soon be in a position to start cutting back on QE stimulus driving down stocks and gold, while boosting GBP. The top performer in currency markets today has been NZD, which has capitalized on relative weakness in AUD. While the RBA didn’t make any changes to interest rates, it did state that it still finds AUD “uncomfortably high” suggesting that it could still intervene in currency markets if needed. CAD has dropped to the bottom of the league today even through US crude is on the rebound and a trading correction in USD has enabled many majors to rebound a bit. This appears to be due to some traders speculating that the Bank of Canada could soften its stance and perhaps move to a more accommodative tone at tomorrow’s meeting, its last for 2013. Corporate News Bank of Montreal $1.64 vs street $1.58, raised dividend by 2.7% Potash 570 layoffs at operations in Saskatchewan and New Brunswick, plus 370 layoffs at Florida chemical plant Economic News Significant economic announcements released yesterday afternoon and overnight include: UK construction PMI 62.6 vs street 59.0 UK same store sales 0.6% vs street 1.1% Spain unemployment (2K) vs street 50K and previous 87K Australia retail sales 0.5% vs street 0.4% Australia interest rate decision 2.50% no change as expected China non-manufacturing PMI 56.0 vs previous 56.3 Singapore electronics index 51.2 as expected Singapore PMI 50.8 vs street 51.4 Brazil GDP 2.2% vs street 2.4% vs precious 3.3% Economic reports due later today include: 9:45 am EST US ISM New York street 59.3


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