Markets Overview

The major US stock exchanges will reopen on Friday (27Nov) after the US Thanksgiving holiday but will closetrading early (1pm NY time) so liquidity in US is likelyto be thin for today & rest of this week. There will be nomajor US data release scheduled for 27 November andmarkets will instead be focused on sales number from BlackFriday when millions of Americans hit the stores in search ofthe best post-Thanksgiving bargains. As for the rest of thedeveloped economies, Japan just released a series ofimportant economic data out early Friday (27 Nov, 7:30am Singapore time onwards). The Japan October headlineCPI inflation surprised with a +0.3% increase (from 0%y/yin Sep and above the Bloomberg forecast of +0.2%). Butcore inflation (which excludes fresh food) remained at -0.1%in October (unchanged from Sep and was the 3rd straightmonth the core inflation stayed below 0%. The core-coreinflation (which excludes food and energy) also unexpectedlyeased lower to 0.7% (from 0.9% in Sep), below the medianforecast of 0.8% and still well off the above 2% readingbetween April 2014 and March 2015). The October joblessrate was a bright spot as it unexpectedly eased lower to3.1% (lowest since July 1995) from 3.4% in Sep while jobsto-applicants ratio stayed unchanged at 1.24. Markets hadexpected unemployment rate to stay unchanged at 3.4%.

    Overall household spending disappointed again in Octoberdeclining 2.4%y/y after recording -0.4% contraction in Sep.

    We were hoping to see a slight +1%y/y increase and thispersistent weakness in household spending will continue toweigh down on domestic consumption recovery.

    Later during Asian afternoon, the BOJ will release itscalculated Japan October national CPI (ex food andenergy) which was at 1.2% in September. For the rest ofthe developed economies, we have the UK November GfKconsumer survey, various November confidence indicatorsfrom the euro-zone, French October PPI, Italian Novemberbusiness confidence & economic sentiment surveys, thefinal print for UK 3Q 2015 GDP data and the final print forEurozone November consumer confidence.

    The US financial markets as was closed for the Thanksgivingholiday on Thursday (26 Nov) and resumes operations Friday(27 Nov) with shortened business hours (close by 1pm NYtime). Global equity was higher on Thursday especiallyEuropean shares touching 3-month highs as expectationsare rising for more ECB stimulus coming up in the 3 Decmonetary policy meeting. The US dollar held on to its gainson Thursday as the prospect of imminent monetary policydivergence between US and ECB helped keep the US dollarhang on to a 7-month strength against the euro. London Brent crude futures declined on Thursday as Russia andTurkey are not escalating matters into a military confrontationalthough Russia has stepped up border checks on Turkishfood imports. Meanwhile, oil prices were also dampened bystill robust US crude production.

    Today, the key event in Asian data will be Taiwan’s 3Q GDP,where consensus is expecting a contraction of 1.0% y/y.

    China will report October industrial profits, and Thailand willbe reporting October manufacturing production numbers(exp: -4.0% y/y) as well as capacity utilisation. Thailand willalso be releasing Nov foreign reserves, while the Philippineswill be reporting Oct bank lending numbers.