It’s amazing how quickly a market can turn around. Two days ago, crude oil was in free fall with traders increasingly worried about a glut of supply in the world market. Yesterday Saudi Arabia took steps to defend the $40.00 level, which has emerged as a threshold of pain big enough to cause some producers to rethink their strategies. Today, crude is on the rebound with WTI and Brent gaining 3% and gasoline gaining 6% in what looks like a classic short squeeze. Today’s rally was sparked by Turkey’s shooting down of a Russian jet fighter which reminded the street of the ongoing political risks and the need to avoid complacency as things can change in a big hurry. Indices fell early on the news but following an initial bout of weakness that shook out weak hands, stocks have been regaining strength, a sign of strong underlying support. USD has been falling back a bit today as traders reassess how fast follow-on rate increases could come following the initial hike which appears likely in December following comments from FOMC Chair Yellen. Consumer advocate Ralph Nader recently wrote an open letter criticizing the Fed for keeping interest rates too low due to the negative impact low rates have on savers. In her response, she reiterated her preference for gradual hikes suggesting that aggressive hikes would only benefit savers temporarily (implying that the negative impact an aggressive rate hike campaign could have on the economy and employment could outweigh the positive impact for Main Street savers) So even though it looks like an initial hike may be coming next month, the second increase could still be a while off. USD appears to have priced in a more aggressive rate hike campaign in 2016 than we are likely to get, leaving it vulnerable to a correction as expectations adjust. Resource currencies like AUD, NZD and CAD which had fallen off more deeply earlier tin the week have made the most of their opportunity to rebound today. Looking forward, the main focus over the next 18-24 hours is on US economic data with three days of reports crammed into one due to the Thanksgiving holiday on Thursday. Today’s US data was mixed with GDP in line and consumer sentiment disappointing but it still looks like it would take a major miss to have an impact on Fed speculation. Corporate News There have been no major announcements after the US close today. Economic News Significant announcements released overnight include: US Q3 GDP update 2.1% as expected US Q3 personal consumption update 3.0% vs street 3.2% US Q3 Core PCE inflation update 1.3% as expected US consumer confidence 90.4 vs street 99.5 US Richmond Fed (3) vs street 1 US advance goods trade balance ($58.4B) vs street ($60.7B) Germany GDP 1.8% vs street 1.7% Germany IFO business climate 109.0 vs street 108.2 Germany IFO current assessment 113.4 vs street 112.4 Germany IFO expectations 104.7 vs street 104.0 UK CBI sales 7 vs street 25 vs previous 19 Upcoming significant economic announcements include: (Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore) 11:00 am AEDT Singapore GDP street 1.4% 4:00 pm AEDT Japan leading index previous 101.4 8:00 am GMT Sweden consumer confidence street 98.0 8:00 am GMT Sweden manuf confidence street 111.9 9:00 am GMT Norway unemployment rate street 4.6% 9:00 am GMT Poland unemployment rate street 9.6% 10:00 am GMT Italy retail sales street 1.4% 8:30 am EST US durable goods orders street 1.7% 8:30 am EST US durables ex transport street 0.3% 8:30 am EST US personal income street 0.4% 8:30 am EST US personal spending street 0.3% 8:30 am EST US core PCE inflation street 1.4% 8:30 am EST US jobless claims street 270K 8:30 am EST US continuing claims street 2,161K 9:00 am EST US FHFA house prices street 0.4% 9:45 am EST US Markit flash service PMI street 55.1 vs previous 54.8 10:00 am EST US new home sales street 500K 10:00 am EST US U Michigan sentiment street 93.1 10:30 am EST US DOE crude oil inventories street 1.0 mmbbls 10:30 am EST US DOE gasoline inventories street 0.95 mmbbls 10:30 am EST US DOE oil implied demand previous 16,114 mmbbls 12:00 pm EST US natural gas street 6 BCF 1:00 pm EST US Baker Hughes drill rigs previous 757 10:00 am EST Canada report on Toronto housing market