I. Yesterday's News
1.The European Central Bank said the bond buys would be cut to 60 billion euros a month from 80 billion euros starting April but they would go on until the end of 2017, three months longer than expected to aid a still fragile recovery, and dismissed any talk of tapering the programme away. With still no sign of a sustained rebound in underlying inflation and heightened political risk from looming elections in four of the euro zone's five biggest economies, the ECB promised to keep borrowing costs depressed longer than predicted, even reserving the right to raise back purchases if the outlook sours. Although the cut in the volume of monthly assets buys suggests a concession to conservative countries such as Germany and the Netherlands, the underlying message was seen as dovish, catering to nations on the periphery and a boost for financial markets.

2. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 258,000 for the week ended Dec. 3, the Labor Department said on Thursday. It was the 92nd straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970. The number of Americans filing for unemployment benefits fell from a five-month high last week, pointing to labor strength that underscores the economy's sustained momentum. A tight labor market together with signs of a strengthening economy and steadily rising inflation will likely push the Federal Reserve to hike interest rates next week. U.S. financial markets were largely unmoved by the data as investors focused on the European Central Bank's unexpected decision to cut its asset purchases starting in April.

3. Only five of 14 non-OPEC oil producers have agreed so far to meet the group on Saturday for talks aimed at widening a deal to reduce output, casting doubt on whether OPEC will secure the full cuts it is seeking, two OPEC sources said. The Organization of the Petroleum Exporting Countries is to hold talks with non-member countries in Vienna on Saturday in the hope that they will also limit supply. Some OPEC sources familiar with discussions were reasonably sure the outside producers would deliver enough commitments. Other OPEC sources were sceptical a pledge for the full amount would be made this time. Among the 14 non-OPEC countries invited to attend Saturday's meeting, only Azerbaijan, Kazakhstan, Oman, Mexico and Russia have accepted. Saudi Arabia is informing its customers of cuts to their January crude oil supplies to comply with the latest OPEC agreement, according to a PIRA note late on Thursday.

4. The Paris-based Organisation for Economic Cooperation and Development said its leading indicator for its 35 member countries was unchanged in October for the third month in a row at 99.8, just below its long-term average of 100. Growth momentum is picking up in major advanced economies while growth is also expected to gain speed in China, the OECD's monthly leading indicators indicated on Thursday. "In the United Kingdom, there are also signs of improvement in the short term, although uncertainty persists about the nature of the agreement the UK will eventually conclude with the EU," the OECD said.

5. Japan's Cabinet Office slashed its economic growth reading for July-September on Thursday, revising down initial estimates of capital expenditure and inventories - renewing concerns about Japan's growth prospects. The Cabinet Office said the economy grew at a 1.3 percent annualized rate in July-September, a severe revision from the 2.2 percent annualized growth first estimated and barely over half the median estimate for a 2.4 percent annualized expansion. Capital expenditure fell 0.4 percent in the quarter, as steel and real estate companies reduced investment.

II. Market Overview
FX
The euro dropped over 1 percent on Thursday after the European Central Bank cut the size of its asset purchase program but extended it three months longer than expected. Traders will be watching for any indications of how many rate increases Fed officials expect in 2017. It briefly traded at a four-week high of $1.0872 in the aftermath of the ECB decision, before dropping to $1.0618, down 1.25 percent on the day. The dollar index against a basket of six major currencies gained 0.87 percent to 101.10. Against the Japanese yen, the greenback increased 0.25 percent to 114.06.

Precious Metals
Gold retreated into the red on Thursday after the dollar rebounded on the back of a decision by the European Central Bank to extend monthly asset purchases until next December albeit at a lower monthly level. The market focused on the central bank's move to extend its quantitative easing programme until the end of 2017, beyond the six-month extension expected. Spot gold fell to $1,171.04 an ounce. U.S. gold futures for February delivery settled to $1,172.40 an ounce.

Commodities
1.Crude Oil
Oil rebounded from the week's lows to close above $50 a barrel on Thursday, on growing optimism that non-OPEC producers might agree to cut output following a cartel agreement to limit production. Both Brent and U.S. benchmarks rallied after the former secretary general of the Organization of the Petroleum Exporting Countries made comments supportive of non-member production cuts. The benchmarks remain more than $1 below the highs reached Dec. 5 in the wake of the OPEC deal. Brent settled up 89 cents, or 1.7 percent, at $53.89 a barrel. U.S. light, sweet crude settled up $1.07, or 2.2 percent, at $50.84 a barrel.

2. Base Metals
Three-month copper on the London Metal Exchange closed 0.1 percent lower at $5,782 a tonne, reversing earlier gains. Three-month LME zinc closed 1.9 percent lower at$2,689. Lead closed down 1.6 percent at $2,284, tin closed 0.8 percent lower at $20,925 and nickel dropped 2.7 percent to $11,100 a tonne.

U.S. Treasuries
U.S. Treasury yields rose on Thursday in line with their European counterparts after the European Central Bank prolonged its bond purchase program, as expected, but stunned traders by scaling back on how much bonds it will buy each month. The benchmark 10-year Treasury note's yield was up over 4 basis points at 2.393 percent, retreating from a session high of 2.427 percent.

Stock Market
1. U.S. Equities
Major U.S. stock indexes climbed again on Thursday and set fresh record highs as a month-long rally following the presidential election of Donald Trump rolled on. Supporting the upbeat sentiment on Thursday was a report that showed the number of Americans filing for unemployment benefits fell, pointing to labor market strength that underscored the economy's momentum. The Dow Jones industrial average rose 65.19 points, or 0.33 percent, to 19,614.81, the S&P 500 gained 4.84 points, or 0.22 percent, to 2,246.19 and the Nasdaq Composite added 23.59 points, or 0.44 percent, to 5,417.36. The Russell 2000 index of small-cap stocks, which has soared 15 percent since the election, also hit a new high.

2. Hong Kong Equities
Hong Kong stocks rose for the third straight session on Thursday, drawing some support from Wall Street although demand was tempered by weakness in mainland shares after China's falling foreign exchange reserves deepened capital outflow concerns. The benchmark Hang Seng index pared some early gains and added 0.3 percent at the close, to 22,861.84 points, while the Hong Kong China Enterprises Index gained 0.7 percent, to 9,896.82 points.