OECD raised its forecasts for economic growth in the advanced economy but reiterated emerging economies, especially those in Asian regions, should expand faster. The organization anticipated the combined economy of its 30 member countries to grow +1.9% in 2010, more than doubling its projection of +0.7% in June. Specifically, the US is expected to grow +2.5% (June: +0.9%) 'on the back of policy stimulus, improving financial conditions, non-OECD demand growth, normalization of stock building and stabilization of the housing market'. US' unemployment rate may peak in the first half of 2010.

For the Eurozone, GDP will expand +0.9% (June: 0%) due to similar factors affecting the US economy. However, 'work-sharing schemes which cushioned employment in the downturn may also weaken the employment intensity of growth going forward. With unemployment not set to peak before the end of 2010 or the beginning of 2011, household confidence is likely to be weak and sap the strength of the recovery'.

OECD also introduced for the first time forecasts for 2011 which suggest further acceleration.

Concerning developing economies, China will continue to be the growth driver with GDP growing +10.2% and +9.3% in 2010 and 2011 respectively. The accompanying statement said that 'the upturn in the major non-OECD countries, especially in Asia and particularly in China, is now a well established source of strength for the more feeble OECD recovery. The strength of the upturn reflects both the limited direct exposure to the financial origins of the crisis and the strong policy stimulus these countries were in a position to apply. The major policy issue in many of these countries is now becoming one of withdrawal of stimulus so as to avoid igniting asset or general price inflation'.

Despite the upgrades, commodity prices do not react favorably. Instead, retreats are seen in European morning as USD recovers against the euro. WTI Crude oil edges lower although still hovering above 79. Comex gold plunges to as low as 1133.8 as traders book in profits after the sharp rally yesterday.

The dollar pares losses against the euro and bounces back to 1.487. Against other currencies, USD also strengthens further. For instance, USD rises against GBP for the third consecutive day. Currently trading as 1.666, a temporary top was seen at 1.687 for GBPUSD on November 17. Against commodity currencies, the dollar also moves higher.

Retail sales in the UK grew +0.4% mom in October while September's reading was revised up to +0.4% (previous: 0%). On annual basis, sales increased +3.4% during the month. M4 money supply in the UK rose +1.8% mom in October, higher than market expectation of +1% and September's +0.8%. The reading also translated into annual growth of +11%, the pace was slightly moderated from a month ago.

The US will report leading indicators and Philly Fed Index. The former is expected to have eased to +0.4% in October from +1% a month ago. This would be the smaller rise so far since April. Philly Fed index probably climbed higher to 11.6 in November from 11.5 in the prior month.

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