Italian 10 Yr Yield Above 7%; US Retail Sales Next

Eurozone Q3 GDP growth same as Q2 while German and French GDP grew faster; ZEW economic sentiment fell further in Eurozone as well as in Germany; UK inflation slips. Italian 10 year yield rose back above 7%. Market turns to US PPI, retail sales and Empire state manufacturing. Today's Premium Intermarket Insights due at the US open.

The greenback is the relative strength winner again as it rises across the board with the exception of JPY. Major European equity indices are losing about 1%.

Eurozone's GDP grew 0.2% in Q3 the same pace as in Q2. However, the annual print declined from 1.6% to 1.4%. Two largest Eurozone's economies, Germany and France, maintained GDP growth, albeit a slow one. German Q3 GDP rose 0.5% up from 0.3% while French Q3 GDP grew 0.4% up from previous -0.1%. However, German economy minister Philipp Roesler warned today that economic growth will slow down in coming months which corresponds to ZEW's projection that Germany will contract in Q1 2012.

German ZEW economic sentiment index fell for the 10th time in a row in November to -55.2 from -48.3 and its Eurozone's counterpart declined further to -59.1 from -51.2. Greek and Italian government crises contributed to the worsening the Center for European Economic Research noted.

EUR is being pressured again as Italian 10 year yield moved back above the critical 7% mark and the German-Italian 10 year spread widened to 5.24% (last week's Eurozone-era high was 5.54%)

EURUSD trades have near session lows slightly above 1.35.

It seems that the long standing BOE projection about peaking inflation is finally becoming a reality. UK consumer inflation declined to 5% y/y from previous 5.2% which is below market expectations of 5.1%. BOE governor Mervyn King reiterated today that MPC sees CPI falling sharply in the next six months and should reach 2% target by the end of 2012. GBPUSD fell after the release to 1.5828 and currently trades around 1.5860.

The New York session will start at 8:30 am with October PPI that is seen lower at 6.3% from 6.9% on annual basis (core PPI is expected higher at 2.9% from 2.5%). Advance October retail sales are seen lower at 0.3% from previous 1.1% (core sales are expected lower at 0.2% from 0.5%).

November Empire state manufacturing is seen at -2.0 from previous -8.5 and Canadian manufacturing sales are anticipated lower at 1.3% in September from 1.4% in August.