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Trending Economic: Morning Brief (18 November 2015)

Attention will today shift to the FOMC meeting minutes at 1900GMT and markets are likely to remain subdued until then. Many are looking for further guidance as to whether the Fed will tighten monetary policy in December as markets begin to fully price in a year end liftoff. Of course recent data out of the US (with Non-Farm payrolls earlier this month being a particular highlight) has been relatively robust and as we mentioned yesterday the CFTC report shows increasing net long dollar positions in the market as traders and investors anticipate an increase in rates by the end of 2015. The other main data points to watch out for today out of the US will be Building Permits and Housing Starts both of which will be released at 1330GMT.  FOMC member Dudley is also set to speak today at 1300GMT.

On the geo-political front, events in Paris continue to unfold with further gunfire as at least two people have been killed in Saint Denis including a woman who blew herself up. Residents are being told to stay indoors and away from windows and a number have been moved to temporary shelter in the town hall.  Two Air France flights were also diverted yesterday due to anonymous bomb threats, the flights were set to go to Paris from the US.

Looking at Crude Oil today sees the release of EIA Oil Inventories with the market currently expecting a release around 2.0M vs. 4.2M previously. It has also been announced that the UAE energy minister said he did not regret OPEC’s decision last year to keep the production ceiling in place despite plummeting prices.  The energy minister also stated that cutting production was not the right move but rather defend market share, as a cut in production would not be sustainable. Commodities more generally remain weak, not just oil and therefore commodity currencies are also likely to remain weak. This is evidenced by the weak dairy prices in New Zealand as prices fell 7.9% yesterday, which is the third consecutive fall in prices.