Oil Struggles to Hold Above 6 Week Trendline

Germany PPI steadies, Gold drifts around 55 & 100 dma, oil licks wounds at 98.50, Draghi's speech awaited. The fast-moving market let 3 of the trades go unfilled, 2 hit all targets, 5 remain in progress and 2 have been stopped out

German October PPI +0.2% m/m (exp +0.1%) +5.3% y/y from prev 5.5%. PPI ex-energy -0.1% m/m, +2.8% y/y from prev +3.1% y/y.

Central bank speakers in focus will be ECBs Draghi and Bundesbanks Weidman, where the theme is widely expected to be the ECBs opposition against being a lender of last resort.

France 10 yr yield hit 3.80% on Thursday, beating the April high to reach a new Eurozone-Era record. This pushed the FRA-GER 10 10 yr spread to a record 1.91%.

US crude prices fell $5 to 98.80s fell back sharply yesterday as the expiry of the December contract prompted some squaring following Wednesday's jump. The sell-off in shares worsened the decline in oil. US crude. A Friday close below 98.20-30 would signify the break of the important 6-week trendline and may spell further losses.

Gold fell to a 2-week low of 1712 before settling around 1722, which is the overlap point of the 55 and 100 day moving averages.

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In the UK BoE member Weale told the FT there is "a very strong case" for further QE next year. This was considered a notably dovish turn for a member who spent the first half of his current tenure voting for higher interest rates. Weale added the UK economy could already be in contraction.

Separately, Britains banks are reported to have reduced their peripheral Eurozone lending exposure by a quarter in Q3.