Copper

"The exception to this global picture is in the US, where sector performance was a Pavlovian response to the much expected upcoming US rate rises (Utilities down and Basic Materials up). Global investors may be cyclically bearish, but US investors appear distracted by the historically cyclically positive message US rate rises might imply. We think this may prove a mistake."

The S&P 500 has completely disconnected from most risk assets, driven by the usual manipulation during options expiration week, performance gaming by hedge funds before end of the month results are posted, and short covering.

There was something for everyone in last night's much anticipated Chinese PMI data, with the official number sliding to the lowest in over 3 years, suggesting the PBOC will need to do more stimulus and is thus bullish, while the unoffocial Caixin print rising to the highest since June, suggesting whatever the PBOC is doing is working, and is also bullish. Not unexpectedly, global stocks decided to take the bullish way out, and have risen across the globe led by Asia, where stocks rose as much as 1.8%, Europe also green and US equity futures up 10 points as of this writing.

Scott Sumner said he had a “modest” proposal: there should be a highly liquid futures market in Nominal Gross Domestic Product. Let's look at that.

While the storm clouds continue to build above Trafigura, we now know the fate of Galena and why its CEO Letchford departed the company in a hurry last week: according to a follow up from Bloomberg, Trafigura has decided to close the flagship Galena Metals Fund, the latest hedge fund victim of the rout in raw materials markets from oil to copper.

• Dollar rises versus euro, oil drops before ECB, OPEC meetings (Reuters)
• Smog chokes Chinese, Indian capitals as climate talks begin (Reuters)
• Obama: COP21 Paris Climate Talks Could Be ‘Turning Point’ For Planet (BBG)
• China plans to launch carbon-tracking satellites into space (Reuters)
• Scientists Dispute 2-Degree Model Guiding Climate Talks (WSJ)
• At NATO, Turkey defiant over downing of Russian jet (Reuters)
• ECB Left With No Choice But Action After Draghi's Priming (BBG)

Without a rerun of last Friday's Chinese stock market rout, European traders could focus on what "really matters", namely how much of the ECB's upcoming 20 bps rate cut and €20 billion QE expansion (with Commerzbank saying Draghi may even hint at Europe's QE3) is priced in, and whether the ECB's actions are just modestly priced in, or more than fully, and just how big the "sell the news" event will be.The result: the Euro falls to a new 7 month low, the dollar spot index hits a new all time high, and European stocks and US futures stage another remarkable overnight comeback on the usual low volume levitation and central bank intervention.

If we assume that China’s hard landing can and will get hard-er-er, it’s worth asking which assets and currencies have priced in a further deceleration in the world’s engine of global growth and trade. Barclays has more on what’s expensive and what’s cheap vis-a-vis persistent deterioration in the Chinese growth story.

Within the last week China appears to have hit the panic button with regards the seemingly unstoppable collapse of commodity prices. First, desperate Chinese producers began to demand a QE-for-commodities bailout; then, following the well-trodden (and failing) path of China's equity market maipulation, authorities began to crackdown on "malicious" commodity short-sellers. So why now? Why focus attention on the commodity markets? Perhaps this chart holds the key...

After several months of artificial, centrally-planned calm in Chinese markets, where "malicious sellers" found out the hard way the Politburo means business, overnight the relative quiet in Chinese stocks since August broke with a bang when the Shanghai Composite tumbled as much 6.1% before closing down 5.5%, the biggest drop in three months and the largest weekly loss since the depth of the Chinese rout in mid-August while a gauge of Chinese volatility surged from the lowest level since March.

The China Nonferrous Metals Industry Association has submitted a request to Chinese regulators to probe "malicious" short-selling in domestic metal contracts amid recent price declines. Becase it is always the "malicious" sellers who are the cause of all the world's problems, never the "malicious" buyers, especially when said buyers are the central banks themselves.

While US floor markets are closed for the Thanksgiving holiday (equity, rates and energy futures are open until 1pm Eastern), Europe and Asia (as well as US equity futures) were busy rebounding overnight on strength in the commodity complex following yesterday's news that China's metals producers have asked for a wholesale government bailout or the "QEmmodity" as we have dubbed it, for the first time since 2009, which together with news that China would soon start arresting "malicious metal sellers" has provided a push for commodity prices across the board.

China's aluminum and nickel producers have asked Beijing to buy up surplus metal, sources said, the first coordinated effort since 2009 to revive prices suffering their worst rout since the global financial crisis. China Nonferrous Metals Industry Association had suggested that the state buys 900,000 tonnes of aluminum, 30,000 tonnes of refined nickel, 40 tonnes of indium, and 400,000 tonnes of zinc. Or, in other words, "QE for metals."

Following yesterday's dramatic geopolitical shock, U.S. equity index futures rise as Russia has not escalated the confrontation with Turkey as some had feared, while Asian shares fall, reversing earlier gains. European stocks are rallying and the euro is falling on the back of a Reuters report that the ECB is mulling new measures to prop up lending, although it’s not clear at this point what the real impact from these measures would be.