Morning folks. Here’s your Week Just Gone, Week To Come and What The Papers Said bulletin.

THE WEEK JUST GONE
In what appeared to be a tough week for equities FTSE was barely changed and US markets were marginally higher. Asia fared worse with Japan down nearly 3% and Hong Kong 4%.

Despite UK inflation moving back above its target rate, the Bank of England, in its Quarterly Inflation Report, signalled the probability of two 0.25% rate cuts next year. Mervyn King, with one eye on a job in the City, warned of the risk of a major fall in world equity markets.

Money markets witnessed a return of the liquidity crunch with banks’ increasing reluctance to lend to one another pushing up the 3-Month Libor rate to just below 6.4%, the highest since September’s problems. A similar problem in the US saw the Federal Reserve inject $47 Billion to ease pressure in their money markets. Bank shares were hit hard with investors concerned that another bank could be in difficulty.

The Nationwide Building Society added to the downbeat mood, forecasting no rise in UK house prices next year.

The markets saw FTSE –0.2%, Dow +1.0%, S&P +0.3%, Dax –2.6%, Nikkei –2.8%.

Standard Life gave up on its bungled takeover attempt of Resolution, leaving the door open for Pearl, and the Carlsberg/ Heineken combo increased their offer for Scottish & Newcastle.

The Bank of Ireland reported record results but shocked investors with a profit warning, sending the shares down nearly 7%. Chav outfitter Burberry pleased the market with a 31% rise in profits.

Sterling was knocked by hints of lower interest rates in the next few months; it fell to $2.0510 against the Dollar and finished close to a record low against the Euro at £0.715. There was little change in the EURUSD rate at $1.4660. An aversion to risk saw further closing of Yen carry trades, which pushed the Yen to an 18-month high against the Dollar.

Brent Crude oil dropped $2 to $91.6 following a surprise rise in weekly inventories. Gold was hit hard by profit-taking, falling $41.5 to $790.

THE WEEK TO COME
This will be a shortened trading week, probably with low volumes either side of Thursday’s US Thanksgiving Day. With little data out this week the focus will remain on liquidity in the money markets and whether banks become more, or less, willing to lend to each other. Pick of the economic data is likely to be US Housing starts, and possibly FOMC minutes, on Tuesday. Traders might use the lower volumes to try and push FTSE out of its recent 6269-6450 range; this will be made easier if the rumours of emergency borrowing by a UK bank persist.

Monday
Economic indicators
IRE 08.30 Producer Prices
Results
UK: Cranswick interims
US: Campbell Soup, Hewlett-Packard

Tuesday
Economic indicators
UK: 09.30 Money Supply
EU: 07.00 German Producer Prices
US: 13.30 Housing Starts, 19.00 FOMC minutes
Results
UK: Easyjet, Enterprise Inns and Paragon finals, ICAP, SSL and Oxford Instruments interims, Scottish & Newcastle trading statement, Clinton Cards and Smiths Group agm

Wednesday
Economic indicators
UK: 09.30 Bank of England minutes
IRE: 08.30 Retail Sales
US: 13.30 weekly jobless, 15.00 University of Michigan Confidence, Leading Indicators, 15.30 oil inventories
Results
UK: Daily Mail finals, Rotork trading statement
IRE: United Drug finals
US: Abercrombie & Fitch, Gap and Office Depot

Thursday (US Thanksgiving Day)
Economic indicators
IRE: 08.30 Wholesale Price Index and External Trade
EU: 08.00 German GDP, 09.00 EU Current Account, 10.00 EU Industrial New Orders
Results
UK: Halfords interims

Friday (Japan closed)
Economic indicators
UK: 09.30 GDP Q3, BBA mortgage lending
EU: 09.00 advance PMI for manufacturing and services
No results today

WHAT THE PAPERS SAID
Not many earth-shattering articles in the papers this weekend I’m afraid, but here’s the pick of the bunch:

The Independent expresses surprise at the level of bids for the beleaguered Northern Rock. Details remain sketchy on both sides of the negotiations but early indications suggest several bids at close to £6bn, significantly more than first expected.

The Sunday Times reports that Northern Rock’s two biggest shareholders are calling for an end to the auction process. Two hedge funds that between them hold 13% of Northern Rock don’t want it to be sold off or broken up, preferring the bank to be given more time with some strong leadership.

The Sunday Business Post reveals that Bank of Ireland might change its dividend policy if profits growth starts to slow. Despite announcing record profits for the first half, shares fell to a four-year low as the bank warned that full-year profits would be below forecasts. The article warns that the bank’s recent trend of increasing dividends might be stopped if there’s a slowdown in profit growth.

The Sunday Telegraph understands that Royal Bank of Scotland’s chief executive, Sir Fred Goodwin, has been informally approached by Citigroup in their search for a new boss. Royal Bank of Scotland is due to issue its trading statement on December 6th, but an impatient market may force an earlier announcement on sub-prime related write-downs.

David Smith in the Sunday Times says that the UK is headed for the slowest rate of growth for 15 years, though the fears of sub-2% growth next year hardly constitute a recession. The article is really a compilation of analysts’ views.

The Observer expects Barratt Developments to add further gloom to the markets, announcing worsening trading conditions, though it does concede that if things were really bad then the group would have put out a profit warning.