*Stocks were mixed in Asian trade. The Nikkei gained one percent and so too did Shanghai, but Australia lost a fraction and the Hang Seng was lower by 0.8%. European indexes are generally higher, with the Dax currently up by a third of a percent and the Footsie has a fractional gain. US stock futures are higher by a third to a half percent.
*The first look at Japan’s Q3 GDP was stronger than forecast at +3.9% on an annualized basis, more than double the result from the previous quarter and well above the estimate for growth of 2.5%. On a quarter on quarter basis Japan’s GDP was +0.9%, better than the forecast for a growth rate of 0.6%.
*The October reading of Switzerland’s Producer and Import Prices was -0.4% on a month on month basis, missing the estimate for an unchanged result.
*Following a detailed audit of the Greek balance sheet, by the EU data agency Eurostat, the country’s headline deficit for 2009 was raised to 15.4% of GDP from a previously reported 13.6% deficit. Representatives from the EU, ECB and IMF are due in Athens today to assess Greece’s efforts to stabilize their public finances. Additionally the EU Commission says that there is no doubt that the Ireland situation is delicate and clearly serious, but they support Ireland’s 4-year deficit reduction plan.
*In a speech to her CDU Party convention Germany’s Merkel reiterates that changes to EU treaties may be needed for the stability of the common currency and that Europe’s future is tied to that of the euro. “If euro fails, then Europe fails” she said.
*”A group of prominent Republican leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional US Treasury bonds,” reports the Wall Street Journal this morning. This group of economists say in an open letter to be published in ads this week in the WSJ and New York Times that “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.” The letter says that the new round of quantitative easing “should be reconsidered and discontinued.” A spokeswoman for the Fed responded to the letter by saying in part, “The Federal Reserve is committed to both parts of its dual mandate and will take all measures to keep inflation low and stable as well as promote growth in employment. In particular, the Fed has made all necessary preparations and is confident that it has the tools to unwind these policies at the appropriate time.”
*The October reading of Retail Sales is due out at 7:30am CST. Headline Sales are forecast to rise 0.7% on a month on month basis and Sales ex-autos are expected to be +0.4%. Also due out at 7:30am is the November reading of the Empire State Manufacturing Index; the average estimate is 14.00, down a bit from the October result of 15.73. The September reading of Business Inventories is due out at 9:00am CST, it is expected to be +0.8%.
*The Fed is scheduled to buy Treasuries today that are due to mature between 5/31/16 and 11/15/17; the results of the operation will be announced just after 10:00am CST, should there be no technical glitches in the process.
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