The kneejerk shock from this weekend's Paris terrorism, which briefly pushed S&P futures below 2000, is now a distant memory, and has been replaced with another breathless, violent rally for the second day in a row, which has seen global stocks surge after yesterday's lackluster performance before the S&P500 soared in afternoon trading, and this morning US equity futures launched another push higher the moment Europe opened for trading, just like a day earlier, begging the question just which central bank is pushing this scramble to buy ES futures.

As a result the E-mini is now about 10 points higher driven mostly by the ongoing collapse in the EUR and the the all-important for the carry trade, Japanese Yen, as well as a continuation of the dollar rally, whose Bloomberg Dollar Spot Index just touched a new record high on continued speculation the US economy is strong enough to weather a rate hike in one month even as corporate revenues and earnings continue to plunge.

Bottom line: Who would have thought terrorism is so good for stocks.

Here is where we currently stand:

• S&P 500 futures up 0.4% to 2056
• Stoxx 600 up 2.1% to 378
• MSCI Asia Pacific up 1.1% to 132
• Nikkei 225 up 1.2% to 19631
• Hang Seng up 1.2% to 22264
• Shanghai Composite down less than 0.1% to 3605
• US 10-yr yield up less than 1bp to 2.27%
• Dollar Index up 0.09% to 99.53
• WTI Crude futures down less than 0.1% to $41.70
• Brent Futures up 0.6% to $44.83
• Gold spot down 0.2% to $1,080
• Silver spot up less than 0.1% to $14.27

Perhaps no other place captures the overnight surge better than France, where the CAC40 was up well over 2% at last check.The STOXX Europe 600 gained for a second day, rising the most in almost four weeks.

The real story, however, remains the dollar, whose ascendancy continues. As Bloomberg notes, a gauge tracking its performance against ten leading global currencies has risen to the highest on record. Hedge funds remain bullish on the greenback: along with other large speculators they've boosted bets of dollar gains versus eight major currencies in the last three weeks, according to data from the Commodity Futures Trading Commission. The dollar has risen against all 16 of its major peers in 2015 on expectations the Fed is close to raising interest rates.

The jump in the dollar has been so aggressive, it has even managed to unwind yesterday's paradoxical trade where both the greenback and oil soared at the same time, a pair trade that under normal conditions makes no sense, but these are not normal conditions. As a result after trading briefly above $42, WTI is now down 1% and sppears set to resume its drop to a 30-handle, ahead of the API inventory data today which is expected to show another build, and a Citi report noting that the US land storage "getting increasingly full" suggesting an overflow may be just a few weeks away.

Without the energy names, which drove the yesterday rally, it may be difficult to sustain the monstrous surge observed yesterday where futures swung some 50 points higher from overnight lows.

Looking at regional markets, European equities (Euro Stoxx: +2.0%) have traded in line with their Asian counterparts to reside firmly in the green this morning, with energy names leading the way higher after the bout of strength seen yesterday afternoon in the energy complex, with industrials also benefiting from commodity strength. In terms of stock specific news, Cable & Wireless (+6.5%) lead the way higher after being bought by Liberty Global, with Smith Group (+10.0%) also among the best performers on the back of their pre-market earnings. Of note, today sees pre-market earnings from Home Depot, Walmart and TJX.

Despite the strength in equities, Bunds also saw a bid in early European trade before coming off their best levels later in the session. The early bid came amid touted Asian demand switching out of French OATs and moving instead to the German benchmark. Meanwhile, the front month Euribor then came off the best levels, weighed on by good size bearish structure that was traded earlier in the session. In terms of the periphery, Greece are the notable mover, with the GR/GE spread tighter by (16.1) bps after reports from Greek Finance Minister Tsakalotos stating that there is a pact with Greece's lenders on all prior actions and the nation will receive a new tranche of payments.

On today's calendar in the US will be the October CPI print. As well as this, real average weekly earnings are expected, while the October industrial and manufacturing production prints will be closely watched. Capacity utilization and the NAHB housing market index print for November rounds off the data. Fedspeak wise Governor Tarullo is set to comment on the financial system at around 1.30pm GMT.

European Eco Data:

• U.K. Oct.
  Inflation Rate Unchanged at -0.1% Y/y; Est. -0.1%

• U.K. Oct.
  Factory Output Prices Fall 1.3% Y/y; Est. -1.4%
• Italy
  Sept. Trade Surplus At EU2.19b; Surplus Vs EU At EU 760m

In Asia, both the MSCI Asia Pacific index (up 1.1% to 132) and the Nikkei (+1.2%) jumped piggybacking on US strength, but China drooped as a rally for Chinese stocks fizzled as technology and small-company shares plunged on concern the resumption of initial public offerings will lure investors away from the nation’s priciest equities.

The Shanghai Composite Index slipped 0.1 percent to 3,604.80 at the close, erasing a gain of as much as 2 percent. Technology stocks, the best performers this year, posted the steepest loss among industry groups, while the ChiNext index dropped the most in a month. The small-caps index is four times more expensive than the large-cap Shanghai gauge. Brokerages rallied on speculation a jump in trading since the nation’s equities entered a bull market this month will bolster their earnings prospects.

“IPO shares will take some funds from the market as some investors are looking for cheaper assets,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “Small caps seem to be expensive now and some investors have started to take profits.”

Asia Top News:

• ‘Devastating’ Blow for Abe Seen in Japan Inc. Spending Cuts: Business investment blamed for GDP shrinking in 3Q
• China Roller-Coaster Market Ride Rewards Hedge Funds Who Held On: Greenwoods, Marco Polo funds post double-digit returns
• Standard Chartered’s Unraveling India Bet Means More Pain Ahead: ~$5b of India loans on internal watch list
• BofA-Merrill Starts VIP Program for Asia Hedge-Fund Startups: Emerging-manager platform to add five Asia startups each yr
• Citic Securities Said to Face Controls, Possible Restructuring: Chairman Wang to step aside; Citic Group’s Zhang to join

Overnight in FX, AUD was in focus in the wake of the RBA's November meeting minutes whereby the central bank remained optimistic in regards to the outlook for the economy, but also left the door open for further easing. Subsequently, AUD/USD broke above 0.7100 , however, gains were not sustained as the USD-index was kept bid amid expectations that the Fed is on course to raise rates next month. Once European participants came to their desks the USD came off highs, and the pair retook the 0.7100 handle.

In Europe, FX markets were dominated early on in the session by softness in the EUR, with EUR/GBP falling to its lowest level since August , while EUR/USD resides below the 1.0700 handle. However, later in the European morning, data dictated price action as GBP saw a bid on the back of the higher than expected UK CPI Core Y/Y (1.10% vs. Exp. 1.00%) with the majority of other readings coming in line with expectations. Separately today saw the latest release of German ZEW Survey Expectations (10.4 vs. Exp. 6), with the higher than expected number failing to see a sustained reaction on any major EU asset class.

The commodity complex has seen relatively choppy price action overnight with copper the notable underperformer in terms of metals to continue the recent downward trajectory and trade at its lowest level since May'09, with much of the decline being attributed to indications of slowing demand for metals in China. Separately, gold saw a paring of some of yesterday's gains after the post-Paris attack safe haven bid, with prices pressured by the USD¬index remaining firm on Fed-hike expectations.

On the now daily central bank speaker calendar, we had ECB's Praet who saw risk of inflation expectations de-anchoring and forecasts credibility risk in regards to the central bank's inflation path. Also, notes that there are indications that inflation expectations remain fragile, hence that the central bank are considering further action. The result: an even weaker Euro.

In the US we have Fed’s Powell speaking in New York at 1:15pm; and Fed’s Tarullo speaking along with Bernanke, in Washington at 1:30pm.

Top Overnight News:

• French Jets Bomb Islamic State Targets in Syria for Second Day: bombing destroys a command center and a training site at the terror group’s stronghold in Raqqa, Syria
• Weakened Hollande Faces Election Backlash in Wake of Attacks: polls show socialist rout in next month’s regional vote
• Belgium Raises Terror Threat Level, Cancels Soccer Game vs Spain: two suspects charged with taking part in Paris attacks
• Putin Vows Revenge as He Blames Terrorists for Russian Air Crash: explosive traces found in Egypt plane wreckage, FSB chief says
• Global Economic Cost of Terrorism at Highest Since Sept. 11: nearly 10 times as many killed in attacks than 15 years ago
• Obama Takes Pacific Trade Agreement Momentum to Asia Summits: U.S. president may use TPP success for leverage with China as Asia-Pacific leaders gather in Manila for APEC summit
• Obama Raises Sea Spat at APEC With Philippine Warship Tour: U.S. president tours naval vessel that has come to represent Philippine resistance to China over disputed South China Sea
• U.K. Inflation Rate Stays Below Zero for a Second Month: Bank of England expects low inflation to continue into 2016
• ECB’s Praet Sees Risk of De-Anchored Inflation Expectations: executive Board member, chief economist comments in interview
• Liberty Global to Acquire Cable & Wireless in $5.3 Billion Deal: Liberty Global agreed to buy Cable & Wireless Communications in cash-and-stock transaction valued at GBP3.5b
• Don’t Move On From the BRICs Just Yet: Mohamed A. El-Erian says Goldman Sachs was right to end its fund, but the concept still has value for investors

Bulletin Headline Summary from RanSquawk and Bloomberg

• FX markets in Europe have been dominate by broad based EUR weakness, with GBP supporter by UK inflation data
• European equities reside firnly in the green in a continuation of the trend seen in the US, with energy names leading the way higher
• Today see the release of US CPI and Real average wage earnings, API crude inventories and comments from Fed's Powell and Tarullo
• Treasuries decline led by 5Y amid global rally in stocks as market participants bet on additional stimulus from ECB and tightening by Fed in December.
• Vladimir Putin vowed to retaliate against terrorists who blew up a Russian airliner last month as the interests of Russia and western powers in Syria began to align following a wave of Islamic State attacks from Beirut to Paris
• For France’s Hollande, the failure to stop the Paris attacks may have inflicted a mortal wound on a leader weakened by record joblessness and a mounting threat from Marine Le Pen’s populist National Front party
• The European Central Bank sees a risk that investors and consumers will lose faith in policy makers’ projections for reviving inflation, Executive Board member Peter Praet said
• German investor confidence rose in Nov., with the ZEW index increasing to 10.4 from 1.9 the previous month, the first increase in eight months
• U.K. inflation stayed below zero for a second month in October, extending the weakest run in more than half a century
• A “devestating” blow is seen for Abe in spending cuts by Japanese firms; just as before, manufacturers continue to shun building factories or spending on machinery in the world’s third-largest economy as companies hoard record levels of cash
• Last week’s appointment of Neel Kashkari to run the Minneapolis Fed means a third of the 12 district banks will soon be run by officials with past ties to Goldman; studies suggest trend may mean increased bias toward tighter policy
• Obama’s characterization of Canadian oil as dirty is “rhetoric” prompted by Canada’s inaction on environmental issues, Prime Minister Justin Trudeau said, in effect placing the blame on Canada’s past environmental policy
• Financial firms are preparing to lavish this year’s biggest raises on health-care bankers, who will probably see a 20% bump on average, according to an Options Group Inc. report projecting this year’s biggest pay swings
• Sovereign 10Y bond yields mostly higher. Asian and European stocks gain, U.S. equity-index futures rise. Crude oil steady, gold falls, copper extends recent losses

US Event Calendar

• 8:30am: CPI m/m, Oct., est. 0.2% (prior -0.2%)
  • CPI Ex Food and Energy m/m, Oct., est. 0.2% (prior 0.2%)
  • CPI y/y, Oct., est. 0.1% (prior 0%)
  • CPI Ex Food and Energy y/y, Oct., est. 1.9% (prior 1.9%)
  • CPI Index NSA, Oct., est. 237.738 (prior 237.945)
  • CPI Core Index SA, Oct., est. 243.692 (prior 243.206)
  • Real Avg Weekly Earnings y/y, Oct., (prior 2.2%, revised 2.3%)
• 9:15am: Industrial Production, Oct., est. 0.1% (prior -0.2%)
  • Capacity Utilization, Oct., est. 77.5% (prior 77.5%)
  • Manufacturing (SIC) Production, Oct., est. 0.2% (prior -0.1%)
• 10:00am: NAHB Housing Market Index, Nov., est. 64 (prior 64)
• 10:00am: Mortgage Foreclosures, 3Q (prior 2.09%)
  • Mortgage delinquencies, 3Q (prior 5.3%)
• 4:00pm: Net Long-term TIC Flows, Sept. (prior $20.4b); Total Net TIC Flows, Sept. (prior -$9.2b)