Business

It's a busy week as traders return from the long Thanksgiving holiday, with inflation releases in the Eurozone and Japan. We'll also get the second estimate of US GDP, housing data and ISM manufacturing, UK monetary aggregates and PMIs in China. Finally, the Russia-OPEC meeting takes place in Vienna on November 30, while the Senate hearing of Fed chair nominee Powell and Yellen's testimony before Congress will be closely watched. The Senate tax vote, tentatively expected on Thursday, will be the week's key event.

The traditionally illiquid post-Thanksgiving week has started with a series of whipsaws across stocks and bonds, as European stocks turned positive after starting the day on the back foot, initially mirroring a slide in Chinese stocks and price action in U.S. equity futures as investors look to a possible - and absolutely critical - tax-plan vote in the Senate this week.

Blain’s Morning Porridge – November 27th 2017, submitted by Bill Blain of Mint Partners

Germany - not solved and likely to prove an even larger problem..

“El castillo, le torre yo soy, le espada que guarda el caudal.

In early November, we discussed how commentators were disturbed by the sell-off in Chinese government bonds after the Party Congress, which saw yields rise to 4.0%. The anomaly was that yields in less-liquid, unsecured Chinese corporate bonds had barely moved. Some sleuthing on the part of the Wall Street Journal discovered that the most likely explanation was that redemptions in China’s shadow banking sector, especially in the infamous $4 trillion Wealth Management Products (WMP), meant that cash needed to be raised…quickly. Highly liquid government bonds were the easiest option.

Submitted by By Shant Movsesian and Rajan Dhall MSTA of FXdailyterminal.com