Archive - Nov 8, 2013

If last year it was the East Coast's turn to suffer a freak super storm, this year it is the already battered Philippines, which suffered a 7.2 magnitude earthquake last month, turn as Super Typhoon Haiyan, the equivalent of a Category 5 hurricane, slammed into the Philippines today after forcing thousands of people to evacuate. With sustained winds of 315 kph (195 mph) and gusts as strong as 380 kph (235 mph), Haiyan was probably the strongest tropical cyclone to hit land anywhere in the world in recorded history. "If it maintains its strength, there has never been a storm this strong making landfall anywhere in the world,” said Jeff Masters, founder of Weather Underground in Ann Arbor, Michigan. “This is off the charts.” Not taking chances, the local government has ordered over 125,000 people from 22 provinces to evacuate.

• Fed Anxiety Rises as QE Raises Risk of Loss With Political Cost (BBG)
• Iran Nuclear Deal Expected as Early as Friday (WSJ)
• Israel rejects mooted interim Iran nuclear deal, Kerry heads to talks (Reuters)
• JPMorgan Banker Backed $200 Million Madoff Loan in 2008 (BBG)
• Unleashing the food nazis - FDA Says Trans Fats Aren't Safe in Food (WSJ)
• Draghi Aggression Shows Pledges Backed by Rate Surprise (BBG)
• S&P Cuts France's Credit Rating by One Notch to Double-A (WSJ)
• S&P criticises France’s high tax rates for stifling growth (FT)
• Payroll Gains in U.S. Probably Cooled Amid Government Shutdown (BBG)

While today's big event is the October Non-farm payrolls print, which consensus has at 120K and unemployment rising from 7.2% to 7.3%, there was a spate of events overnight worth noting, starting with Chinese exports and imports both rising more than expected (5.6% and 7.6% vs expectations of 1.9% and 7.4% respectively), leading to an October trade surplus of $31.1 billion double the $15.2 billion reported in August. This led to a brief jump in Asian regional market which however was promptly faded. Germany also reported a greater trade surplus than expected at €20.4bn vs €15.4 bn expected, which begs the question just where are all these excess exports going to? Perhaps France, whose trade deficit rose from €5.1 billion to €5.8 billion, more than the €4.8 billion expected. Of note also was the French downgrade from AA+ to AA by S&P, citing weak economic prospects, with fiscal constraints throughout 2014. The agency added that the country has limited room to maneuver and sees an inability to significantly cut government spending. The downgrade, however, was largely a buy the EURUSD dip event as rating agencies' opinions fade into irrelevance.