ASIA JGB's were lower (-0.14) at 0630, weighed by the rally in the Nikkei (+2.38%) and a fall in UST's overnight. Fan Gang, a member of the PBOC monetary policy committee, said China must continue to pursue a policy of gradual Yuan appreciation (Shanghai Securities News) However, Fan said significant appreciation in the Yuan will trigger massive speculation, which China would find difficult to resolve under the current monetary system. GLOBAL FIXED INCOME SPREADS: US 2s/10s (0630): 89.84 bps (84.11 bps at 2100); US 10s/30s (0630): 38.88 bps (37.68 bps at 2100); EU 2s/10s (0630): Unchanged (31.80 bps at 2100); EU 10s/30s (0630): Unchanged (42.62 bps at 2100) US/GE 10s (0630): 8.77 bps (7.25 bps at 1800) UK/GE 10s (0630): Unchanged (56.92 bps at 2100) US Fed's Beige Book offers relatively downbeat assessment of economy, economy expanded but at a 'slower pace than previous period' (RTRS)** Across regions, demand for residential real estate was quite depressed in October to mid-November, upward pressure on prices modest but input prices from high food and energy were strong, labour markets relatively tight, retail spending downbeat, holiday sales seen slow. Fed's Fisher: 'Fed is aware of inflationary pressure, financial market turmoil puts FOMC in a dilemma, doesn't currently foresee recession (BBG)** Fisher also said that the dollar does enhance inflationary pressure but higher credit costs may offsetting policy. Fed moves to open its option on cut in rates (FT) The paper writes that Kohn's comments yesterday repositions the Fed, making it more obviously open to a December cut, and narrow the gap with the bond market, at the price of revealing significant divisions within the central bank. Plunge in US commercial credit threatens consumers (NYT) The amount of credit available to US companies has tightened the fastest since records were kept in 1973, threatening job creation and business expansion. Commercial paper declined almost 9% to USD 3trl in November from USD 3.3trl in August, according to the Fed. USD 20 billion 2-year note auction sees tepid demand (BBG) The bid-to-cover was 2.21 times vs. 2.98 times neutral (2.86 times previous), indirect bidders were 24.4% vs. 26.2% neutral (22.7% previous). Lehman Bros month-end extentions in treasuries extends by an exceptionally large +0.21 years into December (MNSI) EUROPE iBoxx Euro Sovereign index extends by +0.01 years into December, lower than the historical average (MNSI) COMMODITIES Oil prices rebounded by over $1 a barrel after an explosion and fire at an oil terminal in Minnesota shut down most of the main pipeline that delivers Canadian crude to US Midwest refineries (RTRS) At 0630 crude was trading $92.16 up 154c. The above commentary was provided by Real-time Analysis & News (R.A.N) Ltd (known to traders as âRansquawkâ) operates from 0630GMT until 2200GMT to incorporate full coverage of the US bond and equity futures markets. Currently R.A.N covers Bond, STIR and Index futures in the US, UK and Eurozone as well as NYMEX crude and Gold. Furthermore, R.A.N has a stand alone Forex service (Ransquawk FX) which covers all the major currency pairs. Coverage is based around the economic calendar for that day but the product finds its value looking at flows, rumours and breaking news and delivers that information to the customer via an internet âsquawk-boxâ. For more information and a 1-week free trial please email us at info@ransquawk.com