Morgan Stanley

• No Sign of Thaw in Obama’s Brief Encounters With Putin (BBG)
• Japan Lawmakers Prepare for Snap Elections as Abe Mulls Tax (BBG)
• Global stocks rise, Brent crude hits four-year low (Reuters)
• U.S., China to Drop Tariffs on Range of Tech Products (WSJ)
• ‘Too-Big-to-Fail’ Rule Would Raise Bar for Bank Capital (WSJ) ... and mean even bigger taxpayer bailouts
• Pot in New York: $100 Ticket. No Charges. No Record. No Nothing (BBG)
• Microsoft unveils first Lumia smartphone without Nokia name (Reuters)
• Davos-Man Ackermann Lured to Cyprus Bank by Billionaires (BBG)
• Alibaba, Apple Talks on Payments Tie-Up Focused on China (WSJ)

• Obama urges China to be partner in ensuring world order (Reuters)
• China Sees Itself at Center of New Asian Order (WSJ)
• Xi Dangles $1.25 Trillion as China Counters U.S. Refocus (BBG)
• China's Xi, Japan's Abe hold landmark meeting after awkward handshake (Reuters)
• Revenue Softness Worries Stock Investors (WSJ)
• How BOJ’s Kuroda Won the Vote for Stimulus Expansion (WSJ)
• Bonus Season Brings More Pain for Traders (WSJ)
• Russia’s Military Encounters Risk Clash in Europe (BBG)

• US Change in Nonfarm Payrolls (Oct) M/M Exp. 235K (Low 140K, High 314K), Prev. 248K, Jul 180K.
• US Unemployment Rate (Oct) M/M Exp. 5.9% (Low 5.8%, High 6.1%), Prev. 5.9% European
• This will be the first employment report since the Fed announced the conclusion of QE3
• Stronger data of late has increased expectations of a solid October report
• Seasonal factors could also be supportive
• Focus could again may turn to the wage component of the jobs report as the Fed looks to exit easy policy

• From Yes We Can to Probably Not (BBG)
• How Mitch McConnell did it (Politico)
• Tough road ahead for Obama after Republicans seize Senate (Reuters)
• Election 2014: Who were the big winners and losers? (USA Today)
• GOP Senate Takeover Puts Fed on Hot Seat (WSJ), and other fables
• GOP Won by Recruiting the Right Candidates (WSJ)
• McCain could shake up U.S. defense in powerful new Senate role (Reuters)
• Investors Pulled Record Amount From Pimco’s Flagship Fund in October (WSJ)
• Taliban group threatens to attack India following border blast (Reuters)
• Oil Import Decline to U.S. Revealed by Louisiana as Truth (BBG)

• Republicans expect gains, but many races close on election day (Reuters)
• Ahead of tough election, White House blames dismay with Washington (Reuters)
• On Election Day, a Tale of the Young and the Old (WSJ)
• Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
• Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
• Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
• More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
• Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
• Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)

• To salvage his presidency, Obama faces pressure to reboot - but will he? (Reuters)
• Pro-Russian separatist Zakharchenko wins Ukraine rebel vote (Reuters)
• Russia's Recognition of Ukrainian Separatist Election Is 'Incomprehensible,' Germany Says (Moscow Times)
• Man Running World’s Biggest Wealth Fund Tackles China Riddle (BBG)
• Russian Supply Underpins Global Oil Glut (WSJ)
• Argentina accuses Procter & Gamble of tax fraud, says suspends operations (Reuters)
• ECB Skips Fireworks for Day One of New Role as Supervisor (BBG)
• HSBC Hit by $1.7 Billion of Provisions (WSJ)

On Friday Morgan Stanley cut a note highlighting European equity data.  Here's a few key charts.

“Kuroda loves a surprise - Kuroda doesn’t care about common sense, all he cares about is meeting the price target,” Folks, look-out below.  As George W. Bush said in another context... this sucker is going down!

On balance, Morgan Stanley feels that broad-based QE, (i.e. large-scale purchases of government bonds) is further away for the ECB than the market currently believes. Presently they only assign a subjective 40% probability to such a step being taken; whereas the euro rates market is already pricing in the ECB resorting to a broad-based purchase programme with a very high probability of 80-100%. Goldman agrees warning specifically that "Sovereign QE is not imminent... and indeed may never happen." It appears no matter what, disappointment is guaranteed for the market.

• "Soaring consumer confidence" - How the Economy Is Stoking Voter Anger at Incumbent Governors (WSJ)
• Euro zone deflation worries shield German Bunds from upbeat Fed (Reuters)
• Greece’s Euro Dilemma Is Back as Minister Sees Volatility (BBG)
• Ukraine gas supplies in doubt as Russia seeks EU payment deal (Reuters)
• Sterling Lads Chats Show FX Traders Matching Fix Orders (BBG)
• NATO Tracks Large-Scale Russia Air Activity in Europe (WSJ)
• U.K. SFO Charges Ex-Tullett Prebon Broker in Libor-Rigging Probe (BBG)
• Jerusalem on edge after shooting of rabbi (FT)
• Israeli police kill Palestinian suspected of shooting far-right activist (Reuters)
• Samsung seeks smartphone revamp to arrest profit slide (Reuters)

• Fed set to end one crisis chapter even as global risks rise (Reuters)... you mean, for the third time?
• Insider-Trading Probe Focuses on Medicare Agency (WSJ)
• He's sorry: Rajoy Apologizes as New Wave of Graft Allegations Hits Spain (BBG)
• China could 'punish' Hong Kong over protests, says ex-HK central bank chief (Reuters)
• Dubai Insists the Boom is Not a Bubble This Time Around (BBG)
• Bank-Data Sharing Accord Expands Push to Find Tax Cheats (BBG)
• Deutsche Bank Sinks to Third-Quarter Loss on Legal Costs (BBG)
• Kim Jong Un Executes 10 Officials for Watching Soap Operas (BBG)
• French drugmaker Sanofi sacks CEO Viehbacher (Reuters)

• CDC says returning Ebola medical workers should not be quarantined (Reuters)
• Sweden’s central bank cuts rates to zero (FT)
• Hacking Trail Leads to Russia, Experts Say (WSJ)
• Discount-Hunting Shoppers Threaten Stores’ Holiday Cheer (BBG)
• Apple CEO fires back as retailers block Pay (Reuters)
• Repeat after us: all China data is fake - China Fake Invoice Evidence Mounts as HK Figures Diverge (BBG)
• FX Traders’ Facebook Chats Said to Be Sought in EU Probe (BBG)
• Euro Outflows at Record Pace as ECB Promotes Exodus (BBG)
• Apple boosts R&D spending in new product hunt (FT)

The market environment is turning sour...

• Russia Loses Oil Ally in De Margerie After Moscow Crash (BBG)
• Austria's Erste denies report it has failed stress tests (Reuters)
• Sweden gets two new sightings, as hunt for undersea intruder goes on (Reuters)
• Companies Try to Escape Health Law’s Penalties (WSJ)
• Mud and Loathing on Russia-Ukraine Border (BBG)
• NOAA employee charged with stealing U.S. dam information (Reuters)
• Lower Oil Prices Seen Easing Japan’s Trade Pain (WSJ)
• Michigan becomes 5th U.S. state to thwart direct Tesla car sales (Reuters)
• Maglev Train Seen Making Washington-to-Baltimore Trip at 311 MPH (BBG)

The Japanese Yen's real effective exchange rate (REER) has collapsed to the weakest since 1982, according to Mitsubishi UFJ Morgan Stanley Securities. Simply put, REER is a trade-weighted measure of Yen strength (or weakness) against, in this case, 59 trading partners; and as the nation posts an unprecedented 27th straight month of trade deficits, Bloomberg reports MUFJ indicates "a structural shift" has taken place. As MUFJ chief FX strategist warns, "If the trade deficit doesn’t noticeably narrow from here, the yen’s real effective rate could fall to levels never seen before," and, ominously, "from a supply and demand perspective, yen selling for foreign currency by Japanese importers will just continue endlessly." And Japan becomes Venezuela...