Separate report showed that business activity stabilized in New York State, according to firms responding to the November 2016 Empire State Manufacturing Survey. The headline general business conditions index climbed out of negative territory for the first time in four months, rising eight points to 1.5. The new orders and shipments indexes also turned positive, rising to 3.1 and 8.5, respectively. Labor market conditions remained weak, with the number of employees and average workweek indexes both at -10.9. The inventories index fell eleven points to -23.6, pointing to a marked decline in inventory levels. Although price indexes were lower, they remained positive, suggesting a slower pace of growth in both input prices and selling prices.

Wednesday was marked by PPI and Industrial Production figures. The Producer Price Index for final demand was unchanged in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.3 percent in  September and were unchanged in August. On an unadjusted basis, the final  demand index increased 0.8 percent for the 12 months ended in October, the largest 12-month  rise since advancing 0.9 percent in December 2014.

Industrial production was unchanged in October after decreasing 0.2 percent in September. Although the level of industrial production in September was the same as the previous estimate, revisions to the index for utilities raised the rate of change in total industrial production in August and lowered it in September. In October, manufacturing output increased 0.2 percent, and mining posted a gain of 2.1 percent for its largest increase since March 2014.

Thursday's US session was quite eventful with CPI, Building Permits, Housing Starts, Unemployment  Claims and Philly Fed Manufacturing Index figures being released, as well as Janet Yellen's testimony. The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent  in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics  reported today. Over the last 12 months, the all items index rose 1.6 percent  before seasonal adjustment. As in September, increases in the shelter and gasoline indexes were the main  causes of the rise in the all items index. The gasoline index rose 7.0 percent in October and accounted for more than half of the increase in the all items index. The shelter index increased 0.4 percent for the second straight month.

Separate report showed that in the week ending November 12, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 19,000 from the previous week's unrevised level of 254,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 253,500, a decrease of 6,500 from the previous week's revised average. The previous week's average was revised up by 250 from 259,750 to 260,000.

U.S. new-home construction jumped to a nine-year high in October as an outsized advance in the number of apartment projects accompanied a strong pickup for single-family housing. Residential starts surged 25.5 percent to a 1.32 million annualized rate, the fastest since August 2007 and exceeding the highest projection in a Bloomberg survey, a Commerce Department report showed Thursday. The increase from September was the biggest since July 1982. Multifamily-home building was up a whopping 68.8 percent. Permits, a proxy for future construction, increased 0.3 percent to a 1.23 million annualized rate. They were projected to fall to a 1.19 million pace, according to the survey median.

Separate report on Philly Fed Manufacturing Index showed that the index for current manufacturing activity in the region edged down, from a reading of 9.7 in October to 7.6 this month. The index has been positive now for four consecutive months. Other broad indicators showed improvement. The current new orders and shipments indexes increased from their readings in October, by 2 points and 4 points, respectively. Both the delivery times and unfilled orders indexes were positive this month, suggesting longer delivery times and an increase in unfilled orders. The current inventories index moved into positive territory for the first time in 17 months.

In a prepared speech to the U.S. Congress Joint Economic Committee, Federal Reserve (Fed) Janet Yellen warned of the danger of waiting too long to tighten monetary policy. In her remarks, Yellen referenced the November 2 Fed meeting and stated that policymakers judged back then that an increase in rates could “become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the Committee's objectives.” She further emphasized that the Committee must remain forward looking when setting monetary policy.

This week markets will be looking at:

Existing Home Sales (Tuesday 16:00)

Durable Goods Orders (Wednesday 14:30)

Unemployment Claims (Wednesday 14:30)

New Home Sales (Wednesday 16:00)

Revised UoM Consumer Sentiment (Wednesday 16:00)

FOMC Meeting Minutes (Wednesday 20:00)