China Factory Activity Growth Fell in November

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From Trading Economics:  The Caixin Manufacturing PMI in China fell to 50.9 in November of 2016 from 51.2 in October but slightly higher than market consensus of 50.8. It was the fifth straight month of expansion, as output and new orders rose at a slower pace while new export orders were broadly stable and companies continued to shed staff, though at the weakest pace in 18 months. November also saw a sharp pick up in inflationary pressures, with both input costs and prices charged rising at the fastest rates since early 2011.

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In Asian Equity Markets  Japan's Nikkei ended at its highest since last December on Thursday, led by mining stocks after OPEC agreed to cut crude output for the first time since 2008 to support oil prices, while a weak yen lifted overall sentiment. The Nikkei share average gained 1.1 percent to 18,513.12, the highest closing level since Dec. 30, 2015. Australian S&P/ASX 200 Index added 0.42 percent to 5,463.60. In the oil sector, Woodside Petroleum was up 6 percent while Oil Search jumped 10 percent. Among the major miners, BHP Billiton is rising almost 4 percent, Rio Tinto is advancing more than 1 percent and Fortescue Metals is higher by more than 3 percent.

In Currency Markets the U.S. dollar was broadly firm, hitting 9 1/2-month highs against the yen as oil prices jumped after OPEC agreed to output cuts - lifting inflation expectations and U.S. bond yields. Steven Mnuchin, President-elect Donald Trump's pick to lead the U.S. Treasury, gave no hint of any unease at the strong dollar in his first remarks since being named for the job, giving traders fresh impetus to buy the U.S. currency. The dollar's index against a basket of six major currencies rose to 101.60, edging close to last week's high of 102.05, which was its highest level since March 2003. The euro fetched $1.0596, slipping back from Wednesday's high of $1.0666. The Australian dollar rose to 84.80 yen, its highest level in seven months.

In Commodities Markets oil jumped more than 10 percent on Wednesday to over $50 a barrel and its highest in a month as some of the world's largest producers agreed to curb production for the first time since 2008 in a bid to support prices. Crude prices rose nearly 5 percent for the month. OPEC agreed to cut production from January by around 1.2 million barrels per day (bpd), or over 3 percent, to 32.5 million bpd. The cut will put production at the low end of a preliminary agreement struck in Algiers in September, and will reduce output from a current 33.64 million bpd. Non-OPEC member Russia agreed to cut output by 300,000 bpd. OPEC will meet with non-OPEC producers on Dec. 9.

In US Equity Markets stocks ended with big gains for November on Wednesday thanks to a sharp post-election rally but finished the day mostly lower as drops in utilities and technology offset energy's bump. Energy shares jumped with oil prices after OPEC agreed to cut production. U.S. oil prices soared 9.3 percent, while the S&P energy index jumped 4.8 percent. Bank shares also rose after comments by Steven Mnuchin, President-elect Donald Trump's pick for U.S. Treasury secretary, told CNBC that tax reforms and trade pact overhauls would be top priorities of the new administration. Bank of America gained 4.5 percent, while Goldman Sachs ended up 3.6 percent and hit a high of $220.77, its best level since the financial crisis.

In Bond Markets Japanese government bonds mostly slipped on Thursday, taking their cue from stronger stocks after OPEC agreed to cut crude output for the first time since 2008 to support oil prices. The oil output deal helped the Nikkei stock index end at an 11-month high. The outcome of a sale of 10-year JGBs showed weaker demand than last month's sale, although the results were not as bad as some investors feared, and the benchmark yield came off its earlier highs. The 10-year yield rose half a basis point (bp) to 0.020 percent, down from a session high of 0.035 percent and below last week's nine-month high of 0.045 percent.

Source: Institute of Trading and Portfolio Management