Strong Consumer Spending Buoys U.S. Futures

European stock markets managed to shrug off early wobbles and moved higher with the DAX managing a small gain, despite a EUR that is above 1.19 against the dollar. Spanish markets led the recovery amid opinion polls suggesting that pro-Spain parties have as much support as pro-independence parties ahead of the snap election in Catalonia in December. The IBEX is slight down from earlier highs, but still up and the FTSE 100 is also up. Leads from Asia were mostly negative, as a stronger Yen weighed on Japanese stocks and the selloff in Chinese equities resumed, led by big caps. U.S. stock futures are following European markets higher, though and oil prices are down on the day, and the front end WTIfuture is trading at USD 58.45 per barrel.

The Asian economic calendar is dominated by Japan month-end releases, which will include retail sales, employment, industrial production and CPI figures. China’s docket includes just manufacturing PMIs, while elsewhere, the usual mix of trade, production and prices dot the calendar. The only central bank meeting scheduled comes in South Korea, where the BoK is set to keep policy steady, with rates at 1.25%.

The U.S. Holiday Season Kicks Off with a Bang

The holiday shopping season in the U.S. kicked off in style on Black Friday with strong retail spending, both in brick and mortar shops and online, with estimates around $33 billion, according to Customer Growth Partners data, which would be a 4.9% year over year pick up. The improved economy, the strength in the job market, along with rising optimism domestically and globally, are all ingredients for a cheerful holiday season. Along with the focus on holidays, attention will turn to Congress which returns from the Thanksgiving recess and will set to work on the tax bill where a version passed the House last week, and will be taken up on the Senate floor this week.

German President Steinmeier will host a meeting between Chancellor Merkel and SPD head Schulz this week to try and convince both sides that a rerun of the grand coalition is the preferable option to new elections and Merkel’s bid to get a functioning government continues to remain in focus amid concerns that the political wrangling in Germany will also delay Brexit decisions and the EU reform process. On the data front, the highlights are the European Commission’s ESI Economic Confidence Indicator which concludes this month’s survey round and is expected to rise to 114.5, from 114.0 in the previous month. The PMI reports already point to rising underlying price pressures and even in the short term headline rates are likely to recover from the dip in October.