Morning from Europe.

Despite decent European PMI numbers from a sequential perspective, we still see Europe being in a shallow recession already. The PMI number to watch from Europe is now the employment sub-survey and composite expectations for employment in both France and Germany dropped below the all-important 50 handle. Is the labor market finally giving in?

The short-term positive seasonality in US key figures will likely not be seen as bullish news for markets due to the expected reaction in front-end USD rates. We are on high alert ahead of the ISM Manufacturing / ISM Services releases and we will take early clues from the S&P PMI later today from the US.

Chart 1: ISM Services model through the roof for November