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Businesses Remain Optimistic Heading into 2018





Businesses appear bullish heading into 2018, surveys will likely show in the coming week, which indicates a possible boost for strong growth in the world's largest economies.


Preliminary readings of plans being made by purchasing managers, the executives who buy what their companies need, have implied a bullish outlook for the euro zone, particularly for its two largest economies, Germany and France.


IHS Markit's flash Purchase Managers' Index for euro zone manufacturers increased to 60.0 this month, ahead of 58.3 in Reuters poll, marking the second-highest reading since the index was first collected in 1997. Anything above 50 indicates growth.


November PMI's for many other major economies are set to be released next Friday.


In the United States, which is ahead of Europe in the growth cycle, the Institute for Supply Management's measure of factory activity is seen to come in at 58.5, marginally lower from October's 58.7.


In China, the Caixin/Markit Manufacturing PMI was flat at 51.0 in October, which reflects slowing GDP growth and indicating further modest improvement ahead.


In Japan, the Markit/Nikkei Manufacturing PMI held up above the 50 threshold for 14 months in a row, while British factories also reported good activity through the autumn.


Some policymakers have argued that globalization and technological changes have made value chains more international, making low inflation a global phenomenon and limiting central banks' ability to control prices in their own jurisdiction.


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China's Industrial Profits Continue To Grow Sharply In October





China's industrial profit growth remained strong in October despite easing slightly from a month earlier, figures from the National Bureau of Statistics showed Monday.


Industrial profits surged 25.1 percent year-over-year in October, slower than the 27.7 percent spike in September, which was the sharpest growth since 2011.


During the first ten months of the year, total profits of industrial enterprises grew 23.3 percent annually, up from 22.8 percent rise in the January to September period.


Earnings at state-owned firms jumped 48.7 percent and private firm's profits climbed by 14.2 percent in the January to October period.


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ARGENTINA: Merval Gives Up On Profits And Falls 1.21%





Merval, the main index of the Buenos Aires Stock Exchange, gave up its early gains to fall 1.21%, closing at 27,131.89 points Monday amid high volatility in the local financial market.


Analysts said that investors are closely following the progress of the tax, pension and labor reform bills in Congress to gauge how broad the changes will be.


"The local market had no volume to sustain the initial rise and ended with a decline of 1.21%," said analysts at Bull Market Brokers.


PGR posted a significant rebound that led it to rise 8.21%, while Banco Macro earned 0.98% on the day that its chairman - now on leave - Jorge Brito testified in a corruption case.


The sharpest falls of the day were Comercial del Plata (-5.22%), Edenor (-2.91%), TGS (-2.80%), and Petrobras (-2.57%).


The locally traded U.S. dollar closed down 0.15%, at 17.32 Argentinean pesos, while the local currency continues to appreciate against the greenback.


"With the drop today, the U.S. dollar returned to levels at the end of last September and moved away again from its annual peak," said Gustavo Quintana, an analyst at PR Corredores.


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Treasury Prices Rally as Senate GOP Starts Push for Tax Bill





U.S. government prices increased, causing yields to fall as Senate Republicans launch this week's push to pass their version of the tax bill.


The benchmark 10-year Treasury note declined by 1.4 basis points to 2.382 percent. Meanwhile, the two-year note yield fell 0.7 basis points to 1.777 percent. The 30-year bond yield was steady at 2.765 percent.


With the House pushing for its own version of the tax plan, the Senate Republicans have kicked off their efforts to put their own bill to vote by the end of the week. However, with only a narrow majority in the Senate, there are worries that defections from the GOP could dash the bill have raised skepticism.


According to a source on Monday, Montana Republican Senator Steve Daines was against the current terms of the tax legislation.


A deficit-funded tax cut is seen to drive a rally in Treasury yields, as the federal government will need to bolster the size of U.S. government debt auctions.


The U.S. bond market can be affected by big sales of government paper.


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Treasury Prices Fall after Poor Reception to Latest Auction





U.S. government bond prices declined on Tuesday, driving up yields, with the weakness mostly faulted to a poorly received auction of seven-year notes and worries over federal budget negotiations.


The ten-year Treasury note increased 1.1 basis points to 2.338 percent, meanwhile, the two-year note edged up 1.4 basis points to 1.758 percent. The yield on the 30-year Treasury bond rose 0.2 basis points to 2.767 percent.


There are several factors affecting the bond market. A sale of $28 billion in seven year Treasury notes received weak demand.


Meanwhile, top congressional Democrats boycotted a meeting with President Donald Trump after he tweeted that he did not perceive prospects for an agreement on government spending. The Trump administration faces a December 8 budget deadline.


Federal Governor Jerome Powell, Trump's nominee to take Federal Reserve Chairwoman Janet Yellen's place at the central bank when her term ends in February, made no waves in a Senate confirmation hearing. Powell sent a message of continuity to follow a path of gradual rate hikes and a slow tapering of central bank's balance sheet that was outlined by Yellen.


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European Economics Preview: Eurozone Economic Sentiment Data Due





Economic confidence data from euro area is due on Wednesday, headlining a light day for the European economic news.


At 2.00 am ET, Swiss UBS consumption indicator for October is due. The consumption indicator stood at 1.56 points in September compared to 1.50 in August.


At 2.45 am ET, revised quarterly national accounts and consumer spending from France are due.


At 3.00 am ET, the National Institute of Economic Research releases Sweden's economic tendency survey data. The economic tendency survey index is forecast to fall to 111.9 in November from 113.3 a month ago.


In the meantime, flash consumer prices from Spain and unemployment from Hungary are due. Inflation is forecast to rise slightly to 1.7 percent in November from 1.6 percent in October.


At 3.30 am ET, Sweden's GDP data is due. The economy is forecast to grow 3.5 percent annually in the third quarter following second quarter's 3.1 percent increase.


At 4.30 am ET, the Bank of England releases UK mortgage approvals for October. The number of mortgages approved in October is seen at 65,000 compared to 66,200 in September.


At 5.00 am ET, European Commission is scheduled to issue euro area economic sentiment data. The confidence index is seen rising to 114.6 in November from 114 in October.


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Australia Manufacturing PMI Spikes In November - AiG





The manufacturing sector in Australia continued to expand in November, and at an accelerated rate, the latest survey from the Australian Industry Group showed on Friday with a PMI score of 57.3.


That's up sharply from 51.1 in October, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.


It also marks the 14th straight month of expansion.


Individually, new orders, exports, deliveries, production, sales, employment and stocks all expanded.


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European Markets Under Pressure as Oil Shares Dip





European equities fell on Thursday, as market sentiment in the region failed to be lifted by upbeat trade in the US and in oil.


The pan-European Stoxx 600 declined 0.33 percent provisionally by the finish, with the majority of the sectors ending in the red. The index was supported by broad-based gains in the banking sector.


The U.K.'s FTSE 100 dropped 0.9 percent as sterling posted solid gains against the U.S. dollar. France's CAC 40 and Germany's DAX were 0.47 and 0.29 percent lower respectively.


Telecoms outperformed fellow industries, with most of its stocks closing in the black. Construction & material and basic resources were the worst performers. Mining stocks, in particular, was under pressure, as nickel prices dropped around 2.5 percent.


Oil companies lost ground as oil prices turned mixed as OPEC agreed to extend output reductions. Among energy firms, shares of BP PLC and Royal Dutch Shell PLC each fell 1.1 percent, while Total SA lost 0.6 percent.


Banks were again among the biggest advancers, continuing Wednesday's push higher. That advance came after U.S. Federal Reserve Chairman-nominee Jerome Powell said he hopes to ease financial regulations.


Swiss lender Credit Suisse Group advanced two percent, after it provided a strong outlook and pledged to return a large amount of profits to investors.


Mediclinic closed 4.7 percent higher, after Jefferies improved its rating on the stock from "underperform" to "buy".


Euronext jumped 4.2 percent after it announced it would acquire 100 percent of the Irish Stock Exchange's shares, for 137 million euros ($162 million).


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Australia Q3 Company Operating Profits Ease 0.2%





Company gross operating profits dipped a seasonally adjusted 0.2 percent on quarter in the third quarter of 2017, the Australian Bureau of Statistics said on Monday.


That missed forecasts for an increase of 0.1 percent following the 3.3 percent decline in the three months prior.


Inventories were up 0.2 percent on quarter, beating forecasts for a flat reading after sinking 0.5 percent in Q2.


On a yearly basis, company profits jumped 20.0 percent, while inventories added 1.1 percent.


Wages and salaries were up 1.1 percent on quarter and 2.5 percent on year.


Sales of manufacturing goods and services were up 2.0 percent on quarter and 1.5 percent on year, while wholesale trade added 0.7 percent on quarter and 2.3 percent on year.


Also on Monday, the latest forecast from TD Securities and the Melbourne Institute showed that consumer prices in Australia are predicted to rise 0.2 percent on month in November. That follows the 0.3 percent increase predicted for October.


On a yearly basis, consumer prices are called higher by 2.7 percent in November - up slightly from 2.6 percent in October.


Also, ANZ Bank noted that job ads were up 1.5 percent on month in November, unchanged from the October reading.


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UK and EU on the Verge of Sealing Brexit Divorce Deal





Britain and the European Union are on the edge of finalizing a Brexit separation deal on Monday, as UK Prime Minister Theresa May travels to Brussels to open trade talks.


Northern Ireland and the future role of European courts in Britain are the most delicate issues that remain to be endorsed in a draft joint text that May hopes to sign-off over the meeting with European Commission President Jean Claude Juncker.


According to diplomats involved in the negotiations, objections from Northern Irish unionist politicians are currently the main potential deal-breaker. A senior Irish official said that they await signs of a definitive breakthrough, leaving the agreement hanging in the balance.


The largest risk is the consent of the British cabinet and Northern Ireland's Democratic Unionist party, May's parliamentary ally, to the wording of a proposed compromise on the Northern Ireland border.


The EU side calls for May to endorse draft language that would, in effect, acknowledge the need for a unique fallback option for Northern Ireland if EU-UK trade relations make a hard border impossible to avoid.


A group of 30 Eurosceptic figures from a campaign group known as Leave Means Leave said that Britain should pull out from talks unless certain demands were met.


May gave in to EU demands on the UK paying a financial settlement of €40 billion-€60 billion net and the rights of EU citizens in Britain.


EU leaders have cautioned May that today's meeting is a deadline for resolving outstanding issues if she hopes to guarantee a “sufficient progress” EU summit on December 14-15.


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