A look at the day ahead in European and global markets from Rae

Wee

It's been a slow start to the week in Asia with Japanese

markets closed for a holiday on Monday, but currency traders are

watching with bated breath for any signs of official yen buying

from Tokyo to stem its slide.

The trading week will be interrupted by the U.S.

Thanksgiving holiday on Thursday, followed by Black Friday which

will see shortened hours, opening a possible window for

authorities to step in.

Past interventions haven taken place during periods of low

liquidity, allowing the authorities to move prices more sharply,

or, as analysts put it, get the most "bang for their buck".

In such cases, the Ministry of Finance decides when to step

in and the Bank of Japan acts as its agent.

The yen fell slightly on Monday in line with the

broader market, and last stood at 156.62 per dollar.

It remained pinned near last week's 10-month trough of

157.90, though the yen appears to have found a floor after

Finance Minister Satsuki Katayama ramped up verbal warnings of

official yen buying on Friday.

Japan can actively intervene in the currency market to

mitigate the negative economic impact of a weak yen, Takuji

Aida, a private-sector member of a key government panel, said in

a television programme on public broadcaster NHK on Sunday.

Elsewhere, stocks found much-needed reprieve after last

week's beating, helped by comments from influential Federal

Reserve policymaker John Williams who said on Friday that

interest rates can fall "in the near term".

That sent traders ramping up bets of further easing next

month, with Fed funds futures now pointing to a 57% chance of a

25-basis-point cut.

Still, with global equity markets in the midst of a grim

month, attention will turn in the week ahead to holiday shopping

trends and U.S. retail sales for signs of strength in consumer

spending, which accounts for more than two-thirds of U.S.

economic activity.

Over in Europe, focus will be on Britain's upcoming budget

announcement, with Finance Minister Rachel Reeves seeking to

reassure investors that the government can be trusted to be

fiscally prudent while appeasing voters by honouring

pre-election promises not to raise taxes on working people.

Recent selling in bonds, sterling and bank shares shows

markets on edge. The budget wait is almost over but UK market

volatility is likely not.

Key developments that could influence markets on Monday:

- German Ifo business sentiment (November)

- France: Reopening of 3-month, 6-month and 11-month

government debt auctions

- Germany: Reopening of 7-month government debt auction

(Editing by Jacqueline Wong)