Dollar extends recent up trend against the Japanese yen but remains range bound against other major currencies. The minutes of the October 29 FOMC meeting released overnight provided no revelations. The minutes noted that "many participants observed the committee should remain attentive to evidence of a possible downward shift in longer-term inflation expectations." And, "some of them noted that if such an outcome occurred, it would be even more worrisome if growth faltered." But still, at this point, policy makers believed that inflation expectations remained "well anchored" and would climb back to the 2% target "over the medium term as resource slack diminished." Also, the participants at the meeting "observed that if foreign economic or financial conditions deteriorated further, U.S. economic growth over the medium term might be slower than currently expected."
Released from China, the HSBC PMI manufacturing dropped to a six-month low of 50.0 in November. The factory output component dipped to 49.5, the first contraction reading since May. HSBC chief economist for China noted that the fall in production was accompanied by disinflationary forces and slowdown in labor markets. From Japan, trade deficit narrowed to JPY -0.98T in October versus expectation of JPY -1.02T. New Zealand PPI dropped -1.5% qoq, -1.1% qoq in Q3, much lower than expectation of 0.3% qoq, 0.2% yoy.
Looking ahead, PMIs from Eurozone, Germany and France will be the major focus in European session. Germany will release PPI while Swiss will release trade balance, UK will release retail sales and CBI trends total orders. From US, CPI jobless claims, Philly Fed survey and existing home sales will be featured.