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Real market moving data is in rather thin supply this U.S. thanksgiving holiday shortened week. The twin threats of forex volume and volatility working in crisis tandem is expected to be further curtailed as the week drags on with many investors observing the U.S.' biggest holiday celebrations, even bigger than Christmas. Investors will gratefully convert the remaining few days of this week into a rather unmemorable one so long as they can keep most of their remaining positions dry for a new month and for the plethora of economic releases during the first week of December. For the rest of U.S. not in celebration, deciphering global central bank rhetoric remains a priority.

Next week capital markets are fortunate enough to be at the mercy of a few central bank rate decisions, RBA, BoC, BoE and ECB. Otherwise we could be closing the year out with very little market emotion. On the bright side, there is last month's U.S. non-farm payroll situation to be offered up for scrutiny. Many are looking for a "healthier" headline number to be reported, alas, no dirty-data involved. A strong U.S. jobs display and a December taper decision may again be brought to the fore. Currently the market is buying into the Fed's message that to "taper is not to tighten." All one has to do is witness the fixed income class steepening their own curve while keeping short rates very much grounded. Now that U.S. policy makers are beginning to question the "efficacy of continued asset purchases" not all future decisions will be wholly "data dependent." Central banks have to compete in the innovative "rate" race, looking for the right combination of stimulus that is capable of battling the global phenomena of benign inflation, while also providing a shot in the growth arm argument. This is a big playing field with many investor opportunities. Next week has the potential to offer up to the market credible volatility that leads to investor opportunity.

In the overnight session, the Bank of Japan released the minutes of its Oct 31st meeting, containing no less than 3 dissenting voices out of 9 board members with a minority view. While the majority said the banks' +2% inflation target could still be achieved toward the latter half of the 2-year time frame, the dissenters said it might be difficult to reach the target. One member believed that inflation already peaked and noted yen weakness would be temporary. Another member is concerned that the central banks' credibility may be undermined if the "time frame is not met," requiring a more formal warning. The policy members who sought a language change to the October minutes were easily voted down by the majority.

The Nikkei and USD/JPY's resilience to revived Fed tapering has very much stood out in recent weeks. Holding short yen positions is finally paying dividends "the patience trade," especially with the dollar driven pair penetrating the strong psychological market handle of ¥101. However, the real threat to the upside for both the Nikkei and dollar is not expected to appear until the end of Q1 or Q2 of next year at the very earliest. The BoJ is likely to deliver further QE as it looks to alleviate the impact of April's consumption tax and strengthen policy makers' commitment to the inflation target, especially as further yen weakness has a less "flattening effect on inflation." However, the market continues to enjoy the current ride, with the BoJ policy remaining supportive and the Fed proving to be "less destabilizing" – make hay while the sun shines.

Even the PBoC Governor Zhou reiterated that China's central bank will preserve "prudent" monetary policy but also expressed some further support on widening the yuan band. There has been much noise on the yuan front over the past week, but little affirmative action. If nothing else, central bank rhetoric continues to have a mighty pull. The 17-member single currency was capable of finding some traction outright and on the crosses after the PBoC said the EUR is an important part of China's FX reserve management system. The Chinese authorities were even bullish for some of the questionable euro economies. The PBoC was also a supporter of French government debt. The market currently favors playing the EUR short side. Looking for losses below the 10-DMA of 1.3504 to be extended to the downside, while relying on plenty of resistance on the topside. However, the longer that the market wants to stay close to 1.3550, the weaker shorts will become nervous. Reverse-stops are beginning to congregate north of 1.3600. Currently this market is trapped within the two big figures 1.35 and 1.36.

Aussie policy makers continue to make an impact on weakening their own domestic AUD by rhetoric alone. The currency's recent decent has been orchestrated by Governor Stevens and his fellow policy makers at the RBA. Their economy is currently running on "fumes" and with an overvalued currency not helping anyone's objectives. Innovative central bankers are looking for the biggest bang for their buck. The RBA Deputy Governor Lowe reiterated Governor Stevens' comments from last week that an intervention cannot be ruled out, but also added the threshold for the move is fairly high – the AUD briefly rallied but has since returned, concentrating on its downward spiral and keeping the sub-0.9000 objective intact.

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