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Sentiments have remained generally weak this week so far.
US equities reversed earlier gains, as Microsoft led a selloff towards the end of the session
which saw the DOW Jones close 58.9 points lower and the S&P 500 was down 5.5 points.
Asian equities are mixed: with the Nikkei flat, the Hong Kong H-S-I rising over 180
points, and Singapore Straits Times down 17 points over night.
The Dollar and yen continue to lose upside momentum against other major currencies, but
there is no confirmation of topping in these two safe haven currencies yet.
The New Zealand dollar is the weaker currency after poor retail sales data.
The UK will be the major focus in the European session today with the Bank of England inflation
report and employment data featured.
The U-S will release PPI, retail sales and Federal Open Market Committee minutes.
Market minds are clearly on Friday's meeting between US president Obama and the Republican
and Democratic leaders of Congress on the issue of the fiscal cliff.
Before that, Dallas Fed Fisher warned that the Fed is not the "safety net" in case Congress
failes to reach agreements on the fiscal cliff issue.
He urged the "fiscal authorities get their act together so we wouldn't be dependent on
monetary policy" as there is a "limit" on what the Fed can do.
And he grieved that "the more we do at the Fed, the more excuses politicians have to
do nothing."
Also, Fisher warned that the Fed will not "continue down the road of an infinite expansion
of monetary policy.".
Fed Vice Chairman Yellen said that the "highly accommodative policy path generates a faster
reduction in unemployment than in the baseline".
And she advovated that the "optimal policy" to implement the balanced approach, minimizing
deviations from ifnlation and unemployment target, "involves keeping the federal funds
rate close to zero until early 2016".
Meanwhile, she also expressed her strong support to the idea to "eliminate the calendar date
entirely and replace it with guidance on the economic conditions".
That is, the Fed could "define a zone of combinations of the unemployment rate and inflation" and
within which, the Fed will hold rates near zero.
In Europe, European Central Bank Vice Preisdent Constancio said he's "against any kind of
two-tier system" in the banking supervision in Eurozone.
He said the E-C-B wants "to retain some powers and right of initiative in the center of the
single supervisory mechanism".
Finance Minister Moscovici called for a "fully unified" supervisory system and he beleived
that an agrement would be reached by the end of the year.
Italian Finance Minister Grilli said that no bank will be left "out of this framework,
all are part of it," and "the E-C-B sets the rule and can intervene whenever".
Looking ahead, the UK will be the center of focus in today's European sesion.
Sterling has been supported against the Euro on recent economic data, including Q3 G-D-P
as well as yesterday's strong inflation data.
The Bank of England's quarterly inflation will be a key guidance to how likely the central
bank would be to expand its asset purchase program.
Employment data will also be watched where claimant count is expected to drop 2,500 in
October and the unemployment rate is expected to rise to 8% in September.
Also to be released are Swiss Z-E-W and Eurozone industrial production.
From the U-S, P-P-I, retail sales and business inventories will be released, followed by
the Federal Open Market Committee minutes.