Markets Overview

Note that the US markets will be closed for Thursday’s US Thanksgivingholiday (27 Nov). Despite the Thanksgiving holiday on Thursday,it will be a big day for the crude oil market as the OPEC’s meeting inVienna on 27 November could see the oil-producing bloc agreeing topotential production cuts that will stem the recent over 20% drop inglobal oil prices. However, latest commentary from news wires seemsto be no agreement among its members for any meaningful productioncuts to influence the direction of global oil prices. That said, OPEC’sshare of world’s production is now just around 43% of world’s total (asof 2013) and with non-OPEC producers in the market, OPEC’s influenceon oil price is much less than before. OPEC still controls a large chunkas a whole but as with any cartel, the test will be when prices are fallingand members have to make sacrifices, and make sure every memberplays by the same rule. In addition, some of the conditions, such asweaker demand and expected behavior from non-OPEC members tograb whatever they can, may further exacerbate the oil price drop thatOPEC may be helpless to stop.

    This will also be a very busy Thursday for Europe’s data docket with GermanNovember CPI & employment data, the German GfK Decemberconsumer survey, Italian November business confidence & economicsentiment surveys, euro-zone October money supply data, UK NovemberLloyds’ business barometer, UK November GfK consumer survey,France October total/net jobseekers data and various November confidenceindicators from the euro-zone.

    On the eve of Thanksgiving holiday, the US stock markets ended on apositive note in a quiet trading session with the DJIA and S&P 500 closingat record highs on Wednesday (26 Nov) despite a set of lacklustreUS economic data that came mostly below expectations. The US dollarwas also weaker against the euro and the yen for the second straightsession after disappointing US economic data reinforced expectationthat the Fed will not hike rates until next year. Investors also took opportunityto take profits from the recent dollar rally. The US treasuryprices also strengthened for the fifth straight session on the back ofthe disappointing US economic data boosting safe haven demand andstrong demand from the 7-year note auctions. US and global oil pricescontinued to slide lower to fresh multi-year lows on Wednesday afterSaudi oil minister hinted that he will not push for a cut in OPEC oil productionin its 27 November meeting.

    Today will be a light day for Asian data. This morning, South Korea reportedOctober current account balance coming in at US$9.0 billion,better than the US$7.4 billion surplus a month ago. Else, we are watchingout for the release of Philippine’s 3Q GDP growth numbers at 10amSGT (exp: 6.5% y/y, vs prev: 6.4% y/y).