Miley Cyrus
flickr / Julia Stavale
Good morning. Here's what you need to know.
  • Asian markets were higher in overnight trading, with the Nikkei rising 0.1 percent and the Shanghai Composite rising 1.1 percent. Markets are falling across Europe, led by Italy, down 3.2 percent, and Spain, down 1.7 percent. In the United States, futures point to a negative open.

  • China CPI inflation rose to 2.0 percent in November, off its 33-month lows of 1.7 percent the month before but short of estimates of a 2.1 percent rise in the index. The gain was driven by a rise in food inflation. Societe Generale economist Wei Yao said, "The return of food inflation has been gradual, especially given the sharp rise in global food commodity prices during the summer."

  • China industrial production rose 10.1 percent in November, slightly ahead of the consensus estimate of a 9.8 percent gain, while retail sales growth rose to 14.9 percent, ahead of estimates of a 14.6 percent rise. BofA economist Ting Lu said, "The Chinese economy is in the sweet spot now with rebounding GDP growth, rebounding earning growth and low inflation." 

  • China export growth fell sharply to 2.9 percent in November, missing expectations of a smaller drop to 9.0 percent. Import growth was flat, below expectations of a 2.4 percent rise. BofA economist Ting Lu weighed in on these numbers as well in a note to clients, saying the Port of Los Angeles strike could have been a major driver of the weakness.

  • The final estimate for Q3 GDP growth figures out of Japan confirm that the country has slipped into recession. Economic output contracted 3.5 percent in Q3, slightly worse than the consensus estimate of a 3.3 percent decline. The current account fell 29.4 percent from last year, but came in stronger than expected. Nomura economist Shuichi Obata said, “It’s likely that Japan’s economy hit bottom in the last quarter.”

  • German exports unexpectedly rose 0.3 percent in October after falling 2.4 percent the month before. Economists expected a 0.3 percent drop. The gains reflected a pickup in demand from outside the euro area. Import growth came in at 2.5 percent, much higher than the consensus estimate of 0.4 percent.

  • Italian bond yields are rising after news over the weekend that technocratic Prime Minister Mario Monti would resign, while former Prime Minister Silvio Berlusconi announced he would seek re-election. Many do not expect Berlusconi to have a very good shot at regaining office, but Nomura's Alistair Newton gives a few reasons why the possibility can't be ignored.

  • French industrial production unexpectedly fell 0.7 percent in October, while an index measuring business confidence among manufacturing executives ticked down to 91 from 92. BNP Paribas economist Dominique Barbet said, "Clearly things are not great and the car industry in particular is a disaster.”

  • In another blow to Iran's oil industry, Reuters reports that South Korea will cut its imports of crude oil from Iran by as much as 20 percent in 2013 in order to avoid sanctions from Washington. The plan follows a 40 percent contraction in imports of Iranian crude over the first 10 months of 2012.

  • U.S. and U.K. regulators released the first-ever cross-border regulatory plan for dealing with failures of global systemically important financial institutions. The main features of the plan are the ability to shield taxpayers from losses at the expense of bondholders and uninsured depositors.