Portugal

1. Top Trade #1: Long USD vs short EUR and JPY
2. Top Trade #2: Long US 10-year ‘Breakeven’ Inflation
3. Top Trade #3: Long MXN and RUB versus short ZAR and CLP.
4. Top Trade #4: Long EM ‘External Demand’ vs. Banks stocks
5. Top Trade #5: Tighter Spread between Italy and Germany Long Rates
6. Top Trade #6: Long large-cap US Banks relative to the overall S&P500

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 Europe grapples with political turmoil in the periphery stemming partly from voters' collective frustration with years of austerity, RBS takes a look at the history of European expenditure cuts and how they correlate to anti-government demonstrations, riots, assassinations, general strikes, and attempted revolutions. 

We're not persuaded that world opinion will ever “make sense” of the Paris attacks. The non-linear rules the day. One thing seems assured: hard-line governments are coming soon. Politically, the West had boundary problems that go way beyond the question of national borders to the core psychology of modern liberalism. When is enough of anything enough? And then, what are you really willing to do about it? The answer lately among the Western societies is to do little and do it slowly. The behavior of college administrators and faculties in the USA these days is emblematic of this cowardly dithering.

Brutal news is pouring in from pretty much everywhere. The world, in short, is rolling over. Debt monetization on the scale so far attempted has failed to stop the implosion of tens of trillions of dollars of bad paper, growth has stalled and geopolitics has begun to turmoil. And none of this is a surprise. It’s just what you get when you put monetary printing presses in the hands of governments and/or big banks.

"They helped us understand what was going on beyond what you see on the screens."

In the next financial crisis, physical gold held outside the banking system in safe vaults in safe jurisdictions will prove to be a “financial cushion” to individuals, companies, pension funds, family offices,  and indeed nations.

For once, the overnight session was not dominated by weak Chinese economic data (which probably explains why the Shanghai Composite dropped for the second day in a row, declining 1.4%, and ending an impressive run since the beginning of November) and instead Europe took the spotlight with its own poor data in the form of Q3 GDP which printed below expectations at 0.3% Q/Q, down also from the 0.4% increase in Q2, with several key economies rolling over including Germany, Italy, and Spain while Europe's poster child of "successful austerity" saw Q3 GDP stagnate, far worse than the 0.5% growth consensus expected.

Evidently, voters are in a very bad mood just about everywhere. Unfortunately, they are bereft of good choices in most places. Usually one essentially gets to exchange one bunch of psychopathic looters for another – so it is like jumping from the frying pan into the fire. Very often, things will simply go from bad to worse, as the underlying basic problems are usually misdiagnosed, resp. there is no-one willing to actually tackle them. Investors should pay very close attention to this trend...When the performance of financial markets diverges from underlying social mood trends, it is usually time to be very careful.

Gold bullion coin and bar demand surged in Q3 as gold’s continuing COMEX driven price weakness in July and sharp falls in stock markets in China and globally in August saw store of wealth buyers internationally again accumulate bullion.

Spain's Constitutional Court has ordered the suspension of Catalonia's independence bid and threatened to arrest its leader Artur Mas. Separately, Mas lost a bid for re-election as the same lawmakers who support his push for independence are unwilling to support him as President citing corruption.

"The ECB’s bond buying programme has created favourable financing conditions and provides member states with an incentive to defer much-needed budget consolidation and structural reforms. However, further structural reforms to strengthen markets and competitiveness are crucial for a self-sustaining economic recovery. In addition, monetary policy is leading to a build-up of risks to financial stability which could pave the way for a new financial crisis."

Now that there are "no taboos," and assuming the ECB doesn't take our advice on the '52 Mantles or the lumber, the only question is whether the central bank will pair a depo rate cut with the PSPP expansion (in whatever form it takes)....