US Morning Update

China to ‘speed up’ interest rate reform, ‘generally reduce’ government intervention in resource allocation

Euro Area October CPI (core) confirmed at 0.8% YoY

Germany continues to thwart preferences held by many to use ESM as an SRM backstop

Thanks to China, the bulk of interest this morning in London was pinned on headlines as opposed to flow or price action. Presumably discussed and hammered out at the CPC’s Third Plenary Session of the 18th CPC Central Committee, the importance of the more detailed list of sweeping social and market-based reforms in mainland China can hardly be exaggerated. In terms of ‘image’, we view these details of reform as something which should instantly boost the medium-term profile of the CNY, and we’d be very surprised if reserve managers everywhere weren’t ‘taking note’.