France

People are scared, the market is uncertain and the world is for all intents and purposes in a constant state of turmoil and flux.

"Paris prosecutor says Abaaoud was been identified dead at the scene by his fingerprints. His body was found "riddled with impacts."

While it is still unclear just why the FOMC Minutes which are said to have made a December liftoff "more likely" unleashed a dramatic market rally, one which sent both stocks and TSYs higher, the sentiment continued overnight, with both Asian stocks surging on the US momentum, as well as Europe, where the DAX gapped solidly above the 200 DMA as most European shares advanced, led by resources, travel stocks. U.S. futures continue their ramp higher, and at last check were another 8 points, or 0.4%, in the green.  But if the Fed Minutes were enough to unleash the latest leg in this rally, than the ECB's own minutes due also today, should send futures back over 2100 without much difficult, regardless of their actual content.

As a result of the latest announcement by ISIS, namely that it had just executed its first Chinese hostage, China's isolationist position has now changed and as Bloomberg reports "Xi Vows Terror Fight After IS Kills Chinese Captive".  As it further adds, China's President Xi Jinping condemned the Islamic State’s execution of a Chinese national, "an act that raises pressure on China to take a greater role in resolving Syria’s civil war."

According to Reuters, the suspects targeted in a pre-dawn raid in France were planning to attack the Quatre Temps on Thursday, the busiest mall in France located in the business district at La Defense. Meanwhile, WaPo, citing European intelligence officials, says Abdelhamid Abaaoud was killed in Wednesday's operation.

Overnight none other than the German Interior Minister Thomas de Maiziere said that the "Syrian passport found next to a suicide bomber in the Paris terror attacks may have been planted." “There are indications that this was a planted lead, but it still can’t be ruled out that this was indeed an IS terrorist posing as a refugee,” he told reporters in Berlin on Tuesday, referring to Islamic State, which France blames for organizing the violence.

You didn’t think the surveillance state would give up that easily did you? Of course not. Unsurprisingly, fresh off the heels of the Paris terror attacks, the usual authoritarian suspects in the U.S. government are running around exploiting the tragedy in a bid to further erode privacy and civil liberties.

"... any time and every time we find ourselves philosophically dubious of what is going on and have attempted to take a bearish view our hands are slapped; our margins are depleted and our psyche struck down... We’ve no choice then but to see in the “reversals” that took place on Monday the propensity still for the markets to head higher. Indeed, they may go parabolically so as the shorts run for cover and as those left behind rush to be included."

• Security jitters drive European investors back to safe havens (Reuters)
• Global Anti-ISIS Alliance Begins to Emerge (WSJ)
• Merkel says cancelling soccer match was 'responsible' decision (Reuters)
• Paris attacker may have had accomplice on journey through Balkans (Reuters)
• Drop Assad demands if you want to unite against Islamic State: Russia to West (Reuters)
• Putin sets up commission to combat terrorism financing (Reuters)

If this weekend's gruesome terrorist attack on Paris ended up being hugely bullish for stocks, then two subsequent events, a stadium-evacuation scare in Hannover (where Angela Merkel was supposed to be present) and a raid in north Paris which left several dead in the ongoing manhunt against the alleged ISIS mastermind, appear to have but some question into if not stocks then algos whether a rising wave of terrorist hatred across Europe is truly what central bankers need to unleash more QE. That said, we expect the current weakness to last only until the traditional USDJPY carry ramp pushes stocks traditionally higher.

Heavy shooting, including explosions have been reported in St-Denis, a northern Paris suburb. St-Denis is where the Stade de France, one of the targets of Friday’s attacks, is located, although the current operation is about 2km away. The targets of the raid are the suspected mastermind of the Paris attacks, Abdelhamid Abaaoud; as well as Salah Abdeslam who has been the subject of an international manhunt. Police report three gunmen have been killed and there have been reports of a woman detonating a suicide belt. There have been three arrests.