Morning 12-2

All is well in the World or at least not as bad as handful of Economic Data points show that the Worst for global economy is behind us:

  • China Nov Caixin manf PMI: 51.8 vs 51.5 cons; best reading since Dec ‘16
  • -Japan Nov Final Manf PMI: 48.9 vs 48.6 prelim
  • South Korean PMI 49.4   prior 48.4
  • EZ Nov Final Manf PMI: 46.9 vs 46.6 cons
  • German Nov Final Manf PMI: 44.1 vs 43.8 cons
  • -Italy Nov  Manf PMI: 47.6 vs 47.5 cons
  • -French Nov Final Manf PMI: 51.7 vs 51.6 cons
  • JAPAN: Japan’s economic stimulus to surpass $91bn (Nikkei)

This optimism led to plenty of Selling of bonds worldwide. U.S. treasuries have a bit of Technicals providing  additional weight to prices, net Yield changes in Bps   for  ten year maturities so far today Italy  +11, Spain, Germany and France +Canadian  ten years +7.7 and U.S. tens +6 bps. 30-year yield show Bonds +7 and German Buxl +8, a new month and plenty of Selling in Bond complex. Stocks Mixed Spoos and Nasdaq little changed Dax was higher most of morning until a tweet by president trump reinstating tariffs on Brazilian  and Argentine  Steel took the wind out of Stocks, Dax -.3%,Mib -1% Cac -.44%. NKY closed higher by 1%

Oil bid as Both Saudi Arabia and Iraq calling for larger production cuts at this week’s OPEC meeting

  • Iraqi Oil Min (1 Dec): OPEC+ will consider deeper production cuts, which could be up to 400k bpd
  • WSJ Sources: Saudi Arabia wants to extend OPEC cuts thru mid 2020; they want oil PX above $60bbl to prop up Aramco shares; Saudis are considering deepening their own prod curbs & Saudis/OPEC are  also considering a meeting in March ; OPEC officials are worried that turmoil in Iraq could affect compliance efforts; OPEC+ will debate extending prod pact next week

China Trade news:

-Axios Source: A source close to Trump’s negotiating team told me the China deal was now “stalled because of Hong Kong legislation” and that time is needed “to allow Xi’s domestic politics to calm.” The “Phase One” deal with China would probably happen “year-end at the earliest,” and Trump is expected to hold off on his planned December tariffs to keep the deal alive

-@GlobalTimesBiz(30 Nov) Sources in Beijing informed the Global Times that China insists the tariffs must be rolled back as part of the first-phase trade deal. A US pledge to scrap tariffs scheduled for December 15 cannot replace the rollbacks of tariffs. #ChinaUSTrade #TheBusinessSource

Busy Economic calendar this week today we get ISM manufacturing which is the Second most watched data point every month

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