Flash readings of Euro Area Purchasing Managers’ Indices for November showed that the manufacturing and services sectors recorded their best combined month since April of 2011. On the political front, coalition talks between German Chancellor Angela Merkel’s Christian Democratic Union and the pro-business Free Democratic Party broke down, throwing the country into a nearly unprecedented political crisis. However, the centre-left Social Democratic Party, which secured the second largest share of votes in the September 24 general election, reversed an earlier decision and agreed to talk with Merkel on Friday, raising the prospect of a new “grand coalition.” Across the Channel in the UK, Prime Minister Theresa May received a 10-day deadline from the European Union to improve her Brexit divorce offer or risk a stalemate during a December summit.
The most notable economic event of the holiday-shortened US trading week was the release of minutes of the Federal Open Market Committee's October 31 - November 1 meeting. Policymakers generally agreed that the economy was headed for strong growth, and confirmed that a December interest rate hike was in the offering despite softer inflation. Among commodities, US crude oil futures were the standout performer, surging to their highest level in over two years, after a partial shutdown of TransCanada’s Keystone pipeline reduced delivery estimates for the month.