European markets opened higher driven by World Bank's forecasts that China would avoid hard landing. However, investors remained unnerved as deficit plan in the US remained unresolved and sovereign debt problems in the 17-nation Eurozone have probably spread to core economies. Sentiment deteriorated and sent financial markets lower in the US session as US GDP was revised down in the third quarter.

Although the drastic economic downturn in the Northern Hemisphere would have caused a slowdown in emerging market economies, the latest report from the World Bank suggested that China, the world's second largest economy as well as the world's largest growth driver, would be heading for a soft landing with annual GDP growth of above +8% in 2012 of growth. The world lender stated that 'clearly the region is being affected by Europe and the global environment has weakened'. Yet, 'imports into China are holding up quite nicely and it is becoming increasingly a market for consumption goods of manufacturing countries in the region'.

China released the final trade data yesterday, indicating robust demand for energy as well as other natural resources. China's oil demand climbed modestly higher, by +2.0% m/m and +1.2% y/y in October. Chinese crude oil imports fell for another month but remained above 4.9M bpd in October. Yet, exports slumped to the lowest level since February this year. Low domestic outputs and sluggish demand from China's trading partners have caused the reduction in shipments.

On the macro front US GDP for 3Q11 was revised lower to +2% from +2.5% projected previously. Downward revisions were found in inventory, business investment and consumer spending. The overall tone was disappointing and might trigger policymakers to accelerate monetary easing in coming months. The FOMC minutes for the November meeting will be released later today.