Yuan

In a statement, the People’s Bank of China thanked the IMF for the recommendation and said it was “an acknowledgment of the progress in China’s recent economic development, reform and opening up”.

• Russia Takes Aim at Turkish Economy Amid Fighter-Jet Spat (WSJ)
• ‘Commercial scale’ oil smuggling into Turkey becomes priority target of anti-ISIS strikes (RT)
• Russia-Turkey Ties Are Headed Into a Deep Freeze (WSJ)
• France signals softer stance on Assad after Russia talks (FT)
• China Calm Shattered as Brokerage Probe Sparks Selloff in Stocks (BBG)
• China Stock Bulls Hit Breaking Point as State Dials Back Support (BBG)
• China's Bond Stresses Mount as Two More Companies Flag Concerns (BBG)

Why Now?

• European stocks up, oil slides as concerns ease over Russia-Turkey tension (Reuters)
• ECB discusses two-tiered bank charges, broader bond buys (Reuters)
• New agonies, alliances as Fed debates post-liftoff plan (Reuters)
• A New Military Power Rises in the Mideast, Courtesy of One Man (BBG)
• Russia's Gazprom says halts gas supplies to Ukraine over payment (Reuters)
• Other central banks set to act, but Swiss policy cupboard bare (Reuters)

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.

• Turkey downs Russian warplane near Syria border, Moscow denies airspace violation (Reuters)
• Investors seek safety in bonds, yen after Turkey downs Russian jet (Reuters)
• Donald Trump Is Not Backing Down (BBG)
• Uber's Exposure May Grow as U.S. Drivers Seek 57.5 Cents a Mile (BBG)
• U.S. issues global travel alert as manhunt continues for Paris attackers (Reuters)
• Stung by Oil, Distressed-Debt Traders See Worst Losses Since '08 (BBG)

• Brussels on Edge as Lockdown Continues (WSJ)
• Stocks Pare Decline as Crude Oil Erases Drop on Saudi Comments (BBG)
• Italy’s Eni Plans to Pump Arctic Oil, After Others Abandon the Field (WSJ)
• Treasuries Decline as Economists Say GDP to Be Revised Higher (BBG)
• Why the Housing Rebound Hasn’t Lifted the U.S. Economy Much (WSJ)
• Argentina Fever Is Back for Investors as Kirchner Rival Triumphs (BBG)

As a result of the global commodity weakness, global stocks have fallen for the first time in six days as the sell-off in commodities continued, dragging both US equity futures and European stocks lower. However, putting this in context, last week the MSCI All Country World Index posted its biggest weekly gain in six weeks: alas, without a coincident rebound in commodity prices, it will be merely the latest dead cat bounce.

A big catalyst for the ongoing collapse in the Bloomberg commodity index which just hit a fresh 16 year low, is the relentless surge in the dollar, with the DXY rising as high as 99.98 the highest since April, as a result of rising prospects for a December U.S. rake hike (odds are now at 70%, up from 36% a month ago) boosting currency differentials and flows into the USD, making commodities more expensive for buyers in other currencies.

“Brazil is confronting a toxic combination of a primary budget deficit, high public debt (relative to EM countries), very high real interest rates (the Selic stands at 14.25%), sluggish trend growth, a negative commodity price shock and potential contingent liabilities for the sovereign, which together spell trouble for public debt dynamics.”

By now, everyone knows Brazil is stuck in a stagflationary nightmare that's made immeasurably worse by the country's seemingly intractable political crisis. But what about the rest of Latin America? Goldman takes a close look at the regional outlook for the next four years and finds a decidedly unfavorable growth-inflation mix. 

While recent market turmoil in China has meant the government has been burning through its cash reserves at a record pace, for the electric utility plant in Yancheng; money is quite literally power as 3 billion yuan of outdated or damaged bank-notes are incinerated to generate electricity for Jiangsu province each and every year...

The global economic order is shifting beneath the feet of Washington and Tokyo as Xi marches ahead with "One Belt, One Road" and prepares to extend the first loans from the China-led development bank that embarrassed the Obama administration earlier this year. 

1.3 million transactions were scrutinized, 3,000 accounts were frozen, and according to Jinhua City Public Security Bureau of Economic Investigation Detachment Vice Captain Zhang Hui, it took 35,000 sheets of paper to print out all of the evidence.

China’s producers couldn’t get the prices they wanted anymore, as early as 4 years ago, and that’s where deflationary forces came in. No matter how much extra credit/debt was injected into the money supply, the spending side started to stutter. It never recovered.