Economic Data

- (SA) South Africa Sept M3 Money Supply Y/Y: 6.8% v 6.7%e; Private Sector Credit Y/Y:5.5% V 5.9%Er

- (GE) Germany Sept Retail Sales M/M: 0.4% v 1.0%e; Y/Y: 0.3% v 1.6%e

- (FI) Finland Aug Final Trade Balance:€224M v -€140M prelim

- (TH) Thailand Sept Current Account: $400M v $400Me; Total Trade Account Balance: $2.4B v $2.3Be; Overall Balance: -$1.7B v -$556M prior

- (TH) Thailand Sept Business Sentiment Index:48.5 v 52.2 prior

- (FR) France Sept Producer Prices M/M: 0.2% v 0.1%e; Y/Y: 6.1% v 6.1%e

- (SP) Spain Aug Total Housing Permits M/M: -41.9% v -11.8% prior; Y/Y: -13.5% v -12.9% prior

- (SZ) Swiss Central Bank Q3 FX Reserves (CHF): 305.3B v 196.8B q/q

- (TT) Taiwan Q3 Preliminary GDP Y/Y: 3.4% v 3.6%e

- (SW) Sweden Aug Non-Manual Workers Wages Y/Y:2.3% v 2.1% prior

- (HK) Hong Kong Sept M3 Money Supply: -0.4% v +6.9% prior; M2 Money Supply Y/Y:-0.3% v +7.0% prior

- (MA) Malaysia Sept M3 Money Supply Y/Y: 12.5% v 10.6% prior

- (CZ) Czech Sept Money Supply Y/Y: 4.4% v 3.1% prior

- (HK) Hong Kong Sept Govt Monthly Budget Balance (HKD):-3.7B v +5.4B prior

- (IT) Italy Sept Preliminary Unemployment Rate: 8.3% v 7.9%e

- (NO) Norway Sept Retail Sales Volume M/M: -0.5% v +0.2%e; Y/Y: 3.0% v 2.2%e

- (UK) Sept Net Consumer Credit: £0.6B v £0.4Be; Net Lending: £0.3B v £0.6Be

- (UK) Sept Mortgage Approvals: 51.0K v 50.6Ke

- (UK) Sept M4 Money Supply M/M: -0.4% v -0.4% prior; Y/Y: -1.7% v -0.8% prior; M4 Ex OFCs 3M Annualized:4.9% v 3.8% prior

- (SP) Spain Aug Current Account: -€1.5B v -€1.5B prior

- (EU) Euro Zone Oct CPI Estimate Y/Y:3.0% v 2.9%e

- (EU) Euro Zone Sept Unemployment Rate: 10.2% v 10.0%e; highest figure since June 2010

- (IT) Italy Oct Preliminary CPI (NIC incl. tobacco) M/M: 0.6% v 0.1%e; Y/Y:3.4% v 2.9%e

- (IT) Italy Oct Preliminary CPI EU Harmonized M/M: 0.9% v 0.6%e; Y/Y: 3.8% v 3.5%e

- (GR) Greece Aug Retail Sales Y/Y: -1.5% v -4.3% prior

- (BE) Belgium Sept Unemployment Rate:6.7% v 6.8% prior

- (PO) Portugal Sept Industrial Production M/M: -5.9 v 8.6% prior; Y/Y:-2.0 v -0.4% prior

- (PO) Portugal Sept Retail Sales M/M: -3.7 v 0.9% prior; Y/Y:-6.3 v -4.4% prior

- (IT) Italy Sept PPI M/M: 0.2% v 0.4%e; Y/Y: 4.7% v 4.7%e

Fixed Income

- (GE) Germany sold €1.93B in 12-Month BuBills; Avg Yield 0.3460% v 0.2418%; Bid-to-cover:4.3x v 2.5X prior

- (SO) Slovakia Debt Agency (ARDAL) sold €30M in 3.5% 2016 Bonds; Avg Yield 3.311%; Bid-to-cover:1.17x

- (EU) ECBallotted €182.8B in 8-Day Main Refinancing Tender vs. €191Be

- (BE) Belgium Debt Agencysold €2.16B vs. €1.7-2.7B indicated range in 2014, 2017 and 2021 Bonds

- Sold €665M in 4.0% Mar 2014 OlO; Avg Yield 2.739% v 2.357% prior; Bid-to-cover:1.71x v 3.15x prior

- Sold €530M in 3.5%Jun 2017 OlO; Avg Yield 3.897% v 3.819% prior; Bid-to-cover:2.11x v 2.78x prior

- Sold €960M in 4.25% Sept 2021 OlO; Avg Yield 4.372% v 3.751% prior; Bid-to-cover:1.65x v 1.64x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations:

- BoJ appears to get serious and will intervene until satisfied. Real money tests Japan's resolve to weaken the JPY

- China cautious on EU aid

- ECB Trichet last day as chief and noted that the EU debt crisis was not over.

- Russia: Ready to help EU via IMF tools and would hold bilateral talks with Euro Zone members.

- EU Periphery spreads widen

- German retail sales data disappoints

- EU unemployment rises to highest level since June 2010

Equities:

FTSE 100 -1.1% at 5639, DAX -1.7% at 6238, CAC 40 -2% at 3280, IBEX 35 -1.6% at 908-, FTSE MIB -2.8% at 16,194, SMI -1.1% at 5790

- European shares lost the euphoria of the European debt crisis agreement and traded down during the session as uncertainties and unknowns remain over details of the package. Miners also declined following Japan's intervention on the forex market.

- Barclays[BARC.UK] turned negative after initial gains which followed its earnings report. Pretax profit had risen on a yearly basis and beat expectations. Bank's earnings showed the challenging conditions of capital markets as underlying income were down 16% in fixed income, down 40% in equities/prime services and down 25% in investment banking. CEO also noted that headcount reduction trend would continue. Shares were down over 3%

Speakers:

- Moody's commented on the European debt plan and noted that is was a negative for regions 'AAA' nations and for Greek creditors. Moody's did note that the plan was slightly positive for the banking sector

- China President Hu:Monitoring the European situation carefully and those recent developments have been positive in the region. Hu reiterated belief that Europe can overcome its debt crisis and that China has a comprehensive strategic partnership with EU for cooperation

- OECD cut its 2011 Euro Area GDP view to +1.6% from +2.0% prior view and noted that uncertainty on economic outlook until 2013 had risen dramatically. The OECD also cut its 2012 Euro Area GDP forecast to +0.3% from +2.0% prior

- BoJ Gov Shirakawacommented that the recent currency actions would stabilize the market and that the JPY currency rise was a spillover from EU debt crisis, He stressed that one needed to carefully monitor global markets and do the utmost to prevent the European debt crisis from triggering a global financial crisis. He added that the Euro Zone needed to lay out details on regaining market trust in its financial system. On Japan the BOJ Gov noted that its fiscal conditions were among the world's worst and that the BOJ was always thinking of more that can be done to achieve sustainable economic growth. He cautioned that JGB Yields could spike if fail to earn market trust on fiscal discipline, BOJ currently implementing aggressive e and would maintain zero interest rates until 1% CPI in sight

- BoJ Gov Shirakawa again spoke on FX and noted that the JPY currency intervention would have reasonable impact and not aimed at daily price moves. He noted that Japan's FX action was based on G20 agreement that excessive and disorderly FX moves were undesirable. He noted that the JPY currency was not really strong in nominal effective terms but reiterated that would carefully watch JPY price moves as a JPY currency appreciation impacted on exports and corporate profits thus a downside risk to overall economy

- Japan Senior Vice Fin Min Igarashi commented that there had been excessive speculation in JPY currency moves but added he did not believe that the Finance Ministry had a specific JPY currency target but did have a strong will in its recent action. It was too early to judge the impact of the JPY intervention but Japan had the right to take action over excessive speculation

- German govt official: German sought G20 to maintain the Toronto debt goals and expected G20 plan to promote the local debt markets. Germany to discuss spillover effects from fiscal policy and surveillance and would talk about IMF cooperation with regional financial institutions. There was no reason to increase IMF resources but to discuss EFSF-IMF cooperation. G20 was to identify 29 systemically relevant financial bodies .He noted that Chancellor Merkel and President Obama would meet ahead of the G20 summit this Thursday.

- Spain's Central Bank (BOS) commented that it saw flat economic growth on quarter in Q3, and +0.7% y/y. It cautioned that it saw risks that Spain might not meet 2011 deficit target of 6.0%

Currencies:

- The Asian session was dominated by BoJ currency intervention in the USD/JPY pair after the central back backed its recent rhetoric with action. Prior to the intervention the USD again tested fresh WWII lows against the JPY. As a result of the BOJ action during Asia the USD/JPY soared over 350 pips to test the 79.50 level (level where G7 first intervened back in March). This was the BOJ's third solo effect in combating JPY currency strength since Sept 2010 (there was also the G7 coordinated move in March). Dealers noted that throughout the European morning 'real money 'flows took advantage of the JPY weakness and took on the BOJ in its action. The pair tested below 78 level ahead of the NY morning.

- The EUR/USD was testing the 1.40 handle ahead of the NY morning after failing to finish last week above the pivotal 1.42 handle. The peripheral spreads continued to widen following last Friday's poor auction result out of Italy.

- The dealers were also saying that the upcoming week was seen as key with vital data due for release (US payrolls on Friday) and interest rate decisions from several central banks including the Fed and ECB. Last the end of the week will hold the G20 Leader Summit in Cannes , France.

Political/ In the Papers:

- The UK Coalition is expected to announce a jobs project on Monday. Deputy Prime Minister Clegg will announce 35,000 jobs will be created using approximately £1 billion in public funds. The investment in more than 100 projects should follow with billions of pounds of investment from private enterprises.

- The British Treasury held discussions with the London Stock Exchange in reference to simplifying the process for companies to issue corporate bonds. The talks were part of the government's plan to improve corporate financing conditions.

- The Irish Central Bank released data last week on business lending conditions for September. The data indicated that although there was a decline in lending, it was at a lower rate at 1.4% against the 2.5% seen in the prior month. September loans to businesses increased by €594 million, reversing the €436 million decline in August; the increase was driven by short-term loans including overdrafts as opposed to term loans. Additional relevant data include: Household lending decline 4% y/y, rate of decline was in line with prior month; mortgage lending declined 2.5%; lending for other purposes declined 8.9%.

- The Telegraph's Ambrose Evans-Pritchard commented on the social problems being dealt with by southern European governments. The governments there are facing political issues amid weak economic growth and austerity measures. Unemployment in Germany remains low, as austerity measures push up the jobless rates in the southern European countries.

- Germany discovered €55 billion following an accounting error. The BBC reported that following an accounting error at Hypo Real Estate, Germany now anticipates 2011 debt-to-GDP at 81.1%, down 2.6% from the prior forecast. The error was announced last Friday the 28th of October, although the discovery was made earlier during the month. Previously, the German government had overstated the debt level of its bad bank. Note that In September of 2010, the German Finance Minister said the transfer of €191 billion in Hypo Real Estate assets to the 'bad bank' could increase the German debt-to-GDP level by as much as 7.5-8.5%.

- The German Chancellor Merkel requested that her own CDU party support a statutory minimum wage. According to press reports the German chancellor, following decades of opposition to it, will support minimum wage to secure a third term. In a fortnight's time, CDU delegates at a party conference will debate the wage/market-based lower limit for wages of at least €6.89 per hour. Citing leaked party conference documents, the CDU is not interested in a political minimum wage. The article added that the CDU plan is likely to extend the minimum pay scale to all labor sectors not covered by traditional agreements between employers and unions. A party commission is likely to set wages to existing rates for temporary workers at €6.89 in the eastern regions and €7.79 in the west.

Looking Ahead

- 8:00 (EU) ECB to drain €173.5B in 8-day Term Deposit tender

- 8:00 (SA) South Africa Sept Trade Balance (ZAR): +1.0Be v -3.7B prior

- 8:30 (CA) Canada Aug Gross Domestic Product M/M: 0.2%e v 0.3% prior; Y/Y: 2.2%e v 2.3% prior

- 8:30 (CA) Canada Sept Industrial Product Price M/M: 0.2%e v 0.5% prior; Raw Materials Price Index M/M: -1.9%e v -3.2% prior

- 8:30 (BR) Brazil Sept Nominal Budget Balance (BRL): No est v -17.1B prior; Primary Budget Balance: No est v 4.6B prior; Net Debt to GDP Ratio: No est v 39.2% prior

- 9:00 (PD) Poland Oct NBP Inflation Expectations: no est v 3.8% prior

- 9:45 (US) Oct Chicago Purchasing Manager: 59.0e v 60.4 prior

- 10:00 (US) Oct NAPM-Milwaukee: 56.0e v 55.4 prior

- 10:00 (FR) France Debt Agency (AFT) to sell total €7.5B in 3-month, 5-month and 6-month Bills (4.5b in 3-month, 1.0B in 4-month and 2B in 6-month

- 10:30 (US) Oct Dallas Fed Manufacturing Activity: -5.0e v -14.4 prior

- 10:45 (UK) BOE to purchase £1.7B in reverse auction for 2015-2020 Gilts

- 11:30 (US) Treasury to sell $29B in 3-Month and $27B in 6-Month Bills

- 12:00 (CO) Colombia Sept Urban Unemployment Rate: 10.2%e v 10.4% prior

- 14:00 (GE) Bundesbank member Boehmler speaks in Schwabisch Gmund, Germany

- 15:00 (AR) Argentina Sep Construction Activity M/M: No est v 1.80% prior; Y/Y: No est v 11.5% prior