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Japan continues to make progress in deflation fight. Japan's "core core" CPI, which excludes energy and fresh food, rose 0.3% on year in October, the first gain for five years and the biggest increase since 1998. Unemployment held steady at 4% in October, while manufacturing PMI rose to 55.1 in November from 54.2 last month. However, October industrial production improved just 0.5% on month and badly missed expectations, while the growth in overall household spending slowed, and worker incomes - which are crucial in the battle against deflation - dropped 1.3%.

Holland loses AAA rating. S&P has stripped the Netherlands of its AAA rating and cut the country's debt to AA+, with the ratings agency explaining that Holland's growth outlook is not as strong as previously thought. "We do not anticipate that real economic output will surpass 2008 levels before 2017, and believe that the strong contribution of net exports to growth has not been enough to offset a weak domestic economy," S&P said. The agency's decision leaves Germany, Luxembourg and Finland as the only nations in the eurozone with a AAA rating. Dutch shares were +0.1% at the time of writing.

Australia rejects ADM takeover of GrainCorp. Australia's government has rejected Archer Daniels Midland's (ADM) $2.6B takeover bid for GrainCorp (OTC:GRCLF), bowing to pressure from the country's grain growers. Treasurer Joe Hockey said he made the decision on the grounds of national interest, but it brings into doubt the pledge of the new right-wing government that "Australia is open for business." The S&P/ASX 200 dropped 0.3%.

Top Stock News
Insurers vie for major Asian distribution deal with Citigroup. Metlife (MET), Prudential (PUK) and Manulife (MFC) are reportedly among five insurers bidding to form a bancassurance distribution partnership with Citigroup (C) in 14 Asian markets in a deal that could generate more than $10B of revenue over 15 years. The winning insurer will make an exclusivity payment of $1.5-2B to Citigroup and split the sales with the U.S. bank. In return, the insurer will gain access to Citigroup's 600 branches and more than 34M consumer accounts.

Fortress, Centerbridge eye LightSquared. Fortress Investment (FIG) and Centerbridge have reportedly shown interest in buying bankrupt communications carrier LightSquared, which owns attractive spectrum assets. The private-equity funds would vie with Dish (DISH), whose $2.2B bid for LightSquared is the highest one filed with the bankruptcy court.

Rio slices $3B+ off cost of boosting Australia iron-ore ouput. Rio Tinto (RIO) intends to increase its annual iron-ore production capacity in Australia to 360M tons by 2017 from 290M tons in H1 2014. Rio will focus on existing mines, which will help save the company over $3B in expenses compared with its original plans. Rio is making the bet that China's appetite for steel will continue to grow over the long term despite any short-term economic stuttering.

Top Economic & Other News
Black Friday deals draw the crowds on Thanksgiving Thursday. As has become an American tradition as ensconced as the Thanksgiving turkey, shoppers formed long queues in front of retail stores yesterday ahead of the doors opening for the Black Friday sales, which once again began on a Thursday. The National Retail Federation has forecast that as many as 140M consumers will go shopping over the long weekend, up a bit from 139.4M last year. IBISWorld has projected that total sales through Cyber Monday will rise 2.2% to $40.5B.

Eurozone unemployment drops for first time in almost three years Eurozone unemployment has unexpectedly fallen for the first time since February 2011, dropping to 12.1% in October from 12.2 in September. Austria had the lowest rate (4.8%) and Spain the highest (26.7%). Meanwhile, inflation has risen a preliminary 0.9% in November from 0.7% in October, but it still remains well below the ECB's target of just under 2%.

S&P lifts outlook on Spain to stable. S&P has upgraded its outlook on Spain to stable from negative and affirmed the country's sovereign-debt rating at BBB-/A-3. The agency expects that Spain's GDP will shrink 1.2% in 2013 but recover to grow 0.8% next year and 1.2% in 2015, lifted by strong exports. S&P also believes that the government will hit its 2014 budgetary deficit target of 5.8%. The IBEX 35 was +0.4% at the time of writing.

Problems persist as Obamacare deadline draws near. Tomorrow is the White House's self-imposed deadline for the federal HealthCare.gov Web site to be working properly for 80% of users. However, "navigators" whose job it is to help people sign up for insurance coverage say that problems persist. It's "kind of hit and miss," says one, although "there have definitely been more hits lately than in the past." The COO of Enroll Alaska rates the site at 4/10.

Tensions rise over East China Sea islands. The heat over the islands dispute in the East China Sea has been turned up further, with China sending fighter jets and an early warning aircraft into an area that the country last week designated as an Air Defense Identification Zone. China's action follows the U.S., Japan and South Korea sending military planes into the region without telling Beijing first, in defiance of the latter's directives that they should provide notification and its threats of military action if they don't, which it has now downplayed.


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Today's Markets:
In Asia, Japan -0.4% to 15662. Hong Kong +0.4% to 23881. China +0.05% to 2220.5. India +1.25% to 20792.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt flat.
Futures at 6:20: Dow +0.3%. S&P +0.2%. Nasdaq +0.45%. Crude +0.25% to $92.53. Gold +0.6% to $1245.40.
Ten-year Treasury Yield +2 bps to 2.76%.

Today's economic calendar:
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

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Source: Wall Street Breakfast: Must-Know News