•Oil prices fall further, impacting all financial markets
– Are lower oil prices good because consumers have more money, or
bad because oil companies spend a lot and hire a lot of people?
–Stocks up on good US retail sales, then fall on lower oil prices.
VIX jumps again
• Commodity currencies hit hardest
– AUD falls after RBA Gov. Stevens says he now prefers 75¢, down
from 85¢
– USD/CAD hits new high for 2014
– In EM, oil producers MXN, BRL, RUB and IDR lead the way down. Oil
importers also weaken vs USD but nowhere near as much
• Today:
– Eurozone: Industrial production expected to have slowed in
Oct
– Sweden: PES unemployment rate forecast to have
declined; could boost SEK
– US: Headline PPI expected to slow in Nov, core expected to
hold steady = not big effect. Preliminary UoM consumer sentiment for Dec seen
higher, may boost USD
– Japan: Lower House election on Sunday. Ruling LDP
expected to win; question is whether it gets 2/3rds majority or needs to remain
in coalition. Currently have 294 seats in 475-seat house; a gain in seats but
less than 317, or 2/3rds, would be best result for stocks and therefore best
for USD/JPY
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