FX News Today

The USD traded mostly softer in Monday trade losing some ground following the November ISM missed expectations, while the U.S. stock market rallied in response to the weakness in the ISM index. The November figure dropped to 48.6, below the 50 break-even for the first time since 2012, and is the lowest since 2009. The November U.S. ADP employment survey will be the key event today, while the main market focus will be the scheduled speech from Fed Chairwomen Janet Yellen. However, the Fed Chairwomen will not commit to any specific timing on any interest rate hike, especially ahead of Friday’s jobs report and the FOMC meeting.

Notable U.S. Fed speak from Chicago Fed voter Evans reiterated that he favors later liftoff than his peers and that a gradual pace of hikes is required given downside inflation risks. He thinks it may be appropriate for rates to be below 1% by the end of 2016. He is not optimistic on a quick pick up in inflation as he judges core inflation will be just under 2% by the end of 2018. This is probably the most likely scenario.

The European calendar has prelim Eurozone Nov HCIP, and PPI, UK construction PMI, the main focus will be on the preliminary Eurozone HICP reading for November. The German and Spanish inflation ticked higher, and if confirmed, a 0.3% y/y reading in the overall Eurozone number would still be higher than the 0.2% y/y reported for October. This would then confirm the uptrend that has been visible in the last couple of months. EU core inflation also has been trending higher.

Main Macro Events Today

• AUD Australia’s Q3 GDP: grew 0.9%on a real basis (q/q, sa) , slightly better than expected after a revised 0.3% gain in Q2 (was +0.2%). But it was largely an exports story, as shipments abroad surged as projected, rebounding 4.6% in Q3 after port closures in Q2 held back shipments abroad. Exports fell 3.3% in Q2. Household spending grew 0.7% in Q3. Non-dwelling construction fell 5.3% while M&E investment dropped 4.6%, consistent with an ongoing drag from the resource sector. Governor Stevens said the result was “not a bad outcome.” He said ongoing moderate growth remains their projection for Australia’s economy.

• EUR Eurozone Nov Inflation: EU core inflation has been trending higher and the ECB’s preferred gauge for inflation expectations, the five year, five year break even rate has moved above 1.80%. November Eurozone HICP today (a rise to 0.3% y/y is expected after October’s 0.2%).

• USD The November ADP: private employment survey is expected to show a 190k increase in jobs.

• CAD Interest Rate Decision: rate seen unchanged at 0.50%

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

EUR traders are positioning ahead of the ECB meeting on Thursday, with markets preparing for the Eurozone central bank to cut its deposit rate and hoping for an expansion of the QE program.

Today’s European calendar, on tap U.K. manufacturing PMI, German unemployment. The final EMU manufacturing PMI, likely to be confirmed at 52.8 (median same). German jobless numbers are seen down -7K (median -6K), which will leave the adjusted jobless rate unchanged at 6.4%. The calendar also has the U.K. Manufacturing PMI, which is seen falling back to 53.5 (med 53.6) from 55.5 in October. Switzerland releases Q3 GDP numbers as well as October retail sales.

The U.S. calendar heats up today, to be released out of the U.S. we have, Manufacturing ISM, Construction Spending, and Auto Sales, although traders are mostly waiting for Friday’s NFP report, as well as Fed Chair Yellen’s comments tomorrow. Fed-speak resumes today with remarks from dove Evans of the Chicago Fed, who will be addressing current economic conditions and monetary policy from 12:45 ET. Fed Governor Brainard will next tackle the “Lower Neutral Rate and its Implications for Monetary Policy” from Stanford in California after the close from 20 ET, while VC Fisher speaks at a Financial Stability conference.

RBA left cash rate unchanged at 2.00%; RBI also held policy steady as was widely expected. The board was constructive regarding the economic outlook, saying that “prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate.” Of course, they maintained scope to ease if needed, saying the “outlook for inflation may afford scope for further easing of policy.” As for the currency, they noted the AUD is “adjusting to significant declines in key commodity prices.”

Asian stock markets are mostly higher, despite disappointing data out of China, with markets in Japan, Hong Kong and Australia rebounding after strong capex data out of Japan and as bargain hunters move in. U.K. and U.S. stock futures are also higher.

Main Macro Events Today

• EUR Eurozone manufacturing PMI: The overall EMU number is likely to be confirmed at 52.8 (median same). German labor market data will also attract some attention and analysts are looking for a drop in the seasonally adjusted jobless number of -7K (median -6K), which will leave the adjusted jobless rate unchanged at 6.4%.

• GBP U.K. Manufacturing PMI: which is seen falling back to 53.5 (med 53.6) from 55.5 in October.

• CAD Canada Gross Domestic Product: Real GDP is expected to grow 2.3% in Q3 (q/q,) following the 0.5% drop in Q2 and 0.8% pull-back in Q1. The expected gain would only slightly undershoot the Bank of Canada’s 2.5% estimate (median is for 2.3%) and perhaps more importantly leave an economy that is moving in the direction anticipated by the bank.

• U.S. Manufacturing ISM: November ISM should reveal a slight headline increase to 50.5 (median 50.4) from 50.1 in October and 50.2 in September.

• U.S. Construction Spending: October construction spending should reveal a 0.5% (median 0.5%) headline which follows a 0.6% headline in September and 0.7% in August.

• U.S. Auto Sales: November auto sales data will be released over the course of the day on Tuesday and should reveal an 18.1 mln pace for the month, this would make the third month that sales have held at 18.1 mln.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

The U.S. calendar is busy today ahead of the U.S. Thanksgiving holiday tomorrow. Weekly jobless claims are a day early due to Thursday’s holiday, and are expected to rise to 285k from 271k.

European calendar quiet today, with Italian orders, retail sales, U.K. BBA lending.

Crude Oil has made two week highs of $43.40, as geopolitics are seen as the market mover following Turkey’s downing of a Russian military jet. Also providing support to price is the slightly softer dollar, also a rationale for traders to close short positions ahead of the U.S. Thanksgiving break.

U.S. reports yesterday revealed an expected Q3 GDP growth boost to 2.1% from 1.5%. Personal income revisions for both Q2 and Q3 saw a sharp raise in the savings rate, as will be reinforced in today’s monthly income report. The higher savings rate could be seen as evidence of greater household caution, though it also leaves room for a stronger consumption path into 2016.

The Fed discount rate minutes showed 9 District banks voted to hike the rate at its October 26 meeting. That’s one more than at the prior meeting on September 15, as the Boston Fed joined the ranks of those voting for a 25 bp increase in the primary credit rate to 1.0%. The number of District banks voting for an increase has been on the rise all year; in January 9 banks had voted to maintain a steady rate. Directors generally noted positive economic conditions, and those arguing for a tightening saw improving conditions in the labor market which should help boost inflation. This adds to the speculation that the FOMC will vote to lift rates at its December 15th, 16th policy meeting.

The U.K. CBI survey showed a much lower than expected reported sales reading for November, which dropped to 7 from 19 in the previous month. At the same time BoE members sounded dovish, with Chief Economist Haldane saying in his annual report that the balance of risks to growth and inflation outlooks is skewed materially to the downside, more so than reflected in the November inflation report. BoE’s Carney warned that the low interest rate environment is likely to remain for some time to come and BoE’s Forbes said the bank probably won’t have to implement further easing, and that the next rate move is probably more likely to be a hike.

Main Macro Events Today

• USD Durable Goods Orders (Oct): October durable orders are seen rebounding 0.5% after the 1.2% September drop. Analyst forecast October personal income to increase 0.4%, from September’s weak 0.1% rise, while PCE is seen up 0.4% as well, from the 0.1% increase previously.

• USD Initial Jobless Claims: Weekly jobless claims are a day early due to Thursday’s holiday, and are expected to rise to 285k from 271k.

• USD New Home Sales: October new home sales are expected to bounce 2.6% to 480k from the prior 11.5% drop to 468k. The September FHFA home price index is forecast at 225.4 from 224.9.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

EURUSD is slightly firmer today, after printing a new seven month low of 1.0592 yesterday. The market will now focus on the up- coming data releases out of Europe, while the U.S. has economic data to be released later today.

Commodity prices largely stabilized, with oil prices picked up in overnight trade. The oil market has been choppy after Saudi Arabia said it was ready to work with other OPEC members to stabilize the market.

German Q3 GDP was confirmed at 0.3% q/q, as expected. The breakdown, which was released for the first time, was pretty much as expected with strong domestic demand helping to compensate for a negative contribution from net exports. Consumption is holding up the economy, but also boosting import growth, although the sharp rise in government consumption of 1.3% q/q was a bit of a surprise. The data confirms pronounced investment weakness over the summer, with machinery and equipment investment down -0.8% q/q and construction investment down -0.3% q/q. Not really a picture of balanced growth, even if for once this recovery is not export led, but consumption led.

German Nov Ifo, the stronger than expected PMI readings for Germany yesterday coupled with the improvement in the ZEW and the rise in Eurozone consumer confidence all back our forecasts for a slight rise in the German Ifo Business Climate index to 108.3 (med 108.1), versus 108.2 in October. The improved numbers, as well as vocal resistance against additional QE measures make it unlikely that the central bank will expand its asset purchase program next week, but in our view won’t prevent another cut in the deposit rate, especially as even some of the hawks seem to agree that the zero lower bound has moved since the ECB first introduced negative rates.

Main Macro Events Today

• The German Ifo index: Beat expectations and jumped to 109 from 108.2 in the previous month. Expectations had been for a broadly steady number, but with both current conditions and future expectations indices moving up, the overall index rose to the highest level since June last year. The diffusion index, shows optimists outnumber pessimists in all sectors, although most notably is the rebound in manufacturing confidence, which belies the weak orders data, concerns about slowing growth in emerging markets and the emission scandal. Bund futures actually moved higher going into the data and took a while to come off highs after the release, but the strong round of confidence data backs our view that a widening of the ECB’s asset purchase program at the current juncture is unlikely, although another cut in the deposit rate further into negative territory remains on the cards.

• USD GDP: Analyst expect that Q3 GDP to be revised up to 2.1% from 1.5% in the first report, following 3.9% growth in Q2. Forecast risk: downward, given the huge inventory boost that might be absorbed via price assumptions. Market risk: downward, as a weaker report could delay the Fed rate hike. Inventories are expected to be revised up by $28 bln. Net exports should be revised down by $2 bln. Construction spending should be revised down by $1 bln. Consumption spending should be revised down by $1 bln.

• USD Consumer Confidence: November Consumer Confidence is expected to increase to 98.5 from 97.6. This compares to a low of 25.3 in February of 2009. Forecast risk: upward, given the increase in the first Michigan release. Market risk: downward, as weaker data could impact rate hike time-lines.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

ECB Heading for 20 bp Deposit Rate Cut: The ECB is heading for additional stimulus measures in December, with governing council members clearly pushing for further easing as Draghi and Praet once again raise the specter of deflation fears even as core inflation is moving higher. But while officials are not tiring of highlighting that the ECB cannot be the only player supporting growth, it seems pretty clear that central bankers are having their eye more on equity markets than the traditional long term inflation indicators the Bundesbank focused on. Boosting growth and keeping markets happy has become the centre focus and despite the fact that a move further into negative territory will put additional pressure on insurers and banks, a deposit rate cut in December, and likely a sizeable one is coming into focus.

Atlanta Fed centrist Lockhart said he’s comfortable raising rates assuming there’s no marked downturn in the economic outlook, but the path after lift-off may be “slow and halting” as the Fed attempts to find a potentially lower equilibrium. He said the criterion for lift-off has been met on the labor front, while inflation is expected to pick up amid little evidence of disinflation. He’s encouraged that the economy is growing at a moderate pace despite weak energy and export sectors. The rate complex has largely already bought into a December hike and is discounting this via curve flattening, though Lockhart is seen as the fourth most credible at the Fed, according to the WSJ survey, just behind Yellen, Fischer and Dudley

Fed funds futures continue to point to a 25 bp hike in December with close to 70% probability in the wake of the FOMC minutes on Wednesday, and along with recent Fedspeak and data. At this point it might take something extra ordinary to again delay a move, though we won’t put it past the markets to try via a tightening tantrum heading into the December 15-16 policy meeting. The futures market is also pricing in a shallow trajectory of hikes over the first half of 2016, with the implied March contract trading at 0.37% and July at 0.56%. The Fed has indicated it won’t follow the predictable 25 bp hikes seen during Greenspan’s tenure, but we don’t look for any outsized rate boosts in the early goings. Note that hawks take over the voting rotation in 2016 with Bullard, George, and Mester coming on board.

US leading indicators bounced 0.6% to 124.1 in October after falling 0.1% to 123.3 (August was revised slightly lower to 123.4 from 123.5). The index has risen in 6 of the 10 months to date and is above 124.0 for the first time since April 2006. Nine of the 10 components made positive contributions, led by the yield curve (0.22%), stocks (0.16%) and building permits (0.12%).

 

Main Macro Events Today

• ECB Draghi’s Speech: marketsexpect clues on the next month’s ECB meeting and to get Draghi’s view on how recent terrorist attack in Paris will impact on confidence in Europe.

• Canada Retail Sales Preview: We expect retail sales, due today, to fall 0.1% m/m in September (median +0.2%) after the 0.5% gain in August. The ex-autos sales aggregate is seen falling 0.4% m/m (median same at -0.4%) versus the flat reading in August, as a 7.9% plunge in gasoline prices drives both measures lower.

• Canada CPI Preview: We expect CPI to slow to a 0.9% y/y pace in October following the 1.0% y/y growth rate in September as lower gasoline prices again exert a drag. Core CPI is projected to grow at 2.1% y/y in October, matching the 2.1% in September.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

BoJ’s Kuroda: Concern about balance sheet won’t stop any more easing; with BoJ’s Kuroda adding that he doesn’t see problems in the financial system from continuing easing. At the same time Kuroda said there is the possibility that the current low rate of CPI may affect wage growth, and that the BoJ will be watching the 2016 wage talks with great interest. Speaking at the briefing following the policy meeting where the BoJ left rates unchanged, he said there is no need to change the view that price expectations are rising over the longer term. We expect the BoJ to add further stimulus in the future.

Germany’s Schaeuble would prefer higher interest rates. Not that that the comments from Germany’s Finance Minister will impress Draghi much, who seems to be heading for another cut in the deposit rate in December, even though he admitted that the low interest rate environment is very challenging for banks and insurers.

FOMC minutes: most participants thought liftoff conditions could be met by December, and hence wanted the statement to show a December hike could be appropriate. Indeed, that was the message read by the markets. The minutes also showed most officials also thought global risks had diminished. Officials also mostly agreed that the process of removing accommodation would be gradual. This is all consistent with subsequent Fedspeak since the October 27, 28 meeting. But there was nothing definitive in the minutes that the FOMC will pull the trigger in 5 weeks’ time.

US housing starts undershot estimates with an 11.0% October drop after small downward Q3 revisions, leaving a weaker than expected report despite a 4.1% rise in permits. Starts were hit by a big drop for multi-family units with a concentration of weakness in the South and West.

 

Main Macro Events Today

• ECM Monetary Policy Meeting Accounts are revealed today and are studied carefully for further information and details on the expected easing by the central bank.

• US Initial Jobless Claims: Claims for the week of November 14th are out today and should reveal a headline improvement to 267k (median 270k) after holding at 276k for the prior two weeks. The holiday season is typically a volatile time for claims and we expect November to set a slightly higher average of 266k for the month from 263k in October and 269k in September.

• US Leading Indicators: The October Leading Indicators report is expected to reveal a 0.5% (median 0.4%) headline following a -0.2% headline in September and two months of flat readings before that. Most component data has been stronger in October and the improvements in the stock market should help lift the headline. For the whole story read our preview.

• US Philadelphia Fed Index: The November Philly Fed should reveal a headline improvement to 0.0 (median -0.5) from -4.5 in October and -6.0 in September. The already released Empire State Index for the month improved to -10.7 from -11.4 in October. We expect producer sentiment to remain steady in November with the ISM-adjusted average of all measures holding at 50 from September.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

ECB’s Mersch: No indication yet of economic pessimism after Paris. The Executive Board member said in a speech in Frankfurt that “we should shy away from drawing premature conclusions about whether the terror attacks will have any economic impact”, adding that “we have no indication of any economic pessimism as a result of the Paris attacks, let alone weaker hard data”. He warned that “doom-and-gloom talk is not warranted at this stage”. Clearly, with the attacks less than a week away, we don’t have any data yet that fully reflects the impact of the events and Mersch is right, it is too early to draw conclusions, even if markets seemed to stabilise relatively quickly. The fact that Bund futures dropped on the comments highlights though just how sensitive markets are to central bank remarks ahead of the December council meeting.

Asian stock markets are narrowly mixed, with Chinese equities under pressure for a second day, after President Xi Jinping said the economy is facing “considerable downward pressure”. Japanese markets struggled to make headway as the Yen advanced. GBP is under pressure and the EUR is little changed against USD. Oil prices meanwhile are slightly higher.

US NAHB home builder sentiment index fell 3 points to 62 in November, from an upwardly revised 65 in October (was 64). It’s the first decline since May, but it’s from a post-recession high, with the 65 level the best since 2005. The current single family sales index dipped to 67 from 70. The future sales index dropped to 70 from 75. But the index of prospective buyers traffic rose to 48 from 47. Homebuilders continue to cite low inventories as problematic, while the stronger labor market and expanding economy are beneficial.

US industrial production slid 0.2% in October. Capacity fell to 77.5%. Those missed expectations. The 0.2% September decline in production was not revised, though August was nudged up to 0.1% from -0.1% previously. September capacity utilization was revised to 77.7% from 77.5%. Manufacturing improved last month, rising 0.4% after declines in June, August, and September. Motor vehicle/parts production picked up, rising 0.7%. Excluding vehicles/parts, manufacturing was up 0.4%. Machinery production increased 0.3%. Computer, electronics production was up 0.1%. Utilities slumped 2.5%, however, with Mining down 1.5%.

The 0.2% October U.S. CPI headline and core price gains both beat estimates, with little in the way of rounding errors from respective gains of 0.200% and 0.202%. We saw the expected small 0.3% energy price rise with a 0.2% food price gain, but medical care prices surged 0.8% alongside a firm 0.4% tobacco price rise.

 

Main Macro Events Today

• US Housing Starts: October housing starts are out today and should reveal a 2.2% decline to a 1,180k (median 1,160k) headline from 1,206k in September.

• US Building Permits: We expect permits to rise to 1,150k from 1,105k and completitions to edge up to 1,030k from 1,028k in September.

• FOMC Minutes:  markets focus on the Fed minutes to find out clues on whether the Fed is still likely to raise rates in December and what might be the rate hike path in 2016.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

 

FX News Today

Canada’s consumer confidence improved to 58.3 in week ended November 13, according to the Nanos Economic Mood Index. That follows a 58.3 figure in the prior week and leaves the strongest level since the 58.4 seen in the week ending October 17. The index slumped to 53.6 in the final week of February and was a run of 52 and 53 readings from late July through mid-September. But confidence has returned (although the index remains below the peak 60.6 seen in mid-July of 2014), which could be expressed through retail sales gains in Q4 as consumer spend gas price savings and take advantage of low interest rates.

Canada existing home sale rose 1.8% m/m in October (seasonally adjusted) following the 2.1% drop in September. Not surprisingly, sales strength was led by growth in Vancouver and Toronto. BoC Senior Deputy Governor Wilkins expressed confidence in the bank’s call for a soft landing in the housing sector, and this report does not present a new challenge to her view.

Boston Fed dove Rosengren leaned towards a quicker hike given risks like faster growth in commercial real-estate in a lengthy FT.com article over the weekend. Basically it is the old unintended consequences theory that might be forcing a stretch for yield or returns in a zero rate environment, as employment and inflation goals come within reach. He also said that the recent October jobs report was “pretty unequivocally positive,” though he was less certain about nascent signs of wage growth. Rosengren did hint that the policy divergence with other countries was boosting the dollar, though offset somewhat by domestic demand. If that divergence grew too far, however, it could imply a more gradual U.S. policy path than otherwise. Note, Rosengren is number 8 in terms of policy signaling, according to a WSJ survey.

Bundesbank cautiously optimistic on growth. The German central bank said in its latest monthly report that the labour market is in a “very good condition”, and that “the positive labour-market and wage outlook, as well as the strong immigration, create the conditions for spirited consumption in the economy to continue and for overall growth in the medium term to exceed potential”.

Main Macro Events Today

• UK October CPI (Core Consumer Price Index) is released today. No change is anticipated and the figure is expected to come in at 1%.
• German ZEW investor sentiment was expected to improve slightly to 5.0 (median 6.1) from 1.9 but mainly on the back of hopes of further stimulus measures, so the number itself would not remove pressure on Draghi to act again. There also is the risk of a downside surprise, as late responses will have been impacted by the Paris attacks, so uncertainty is higher than usual, as the number will depend very much on when the answers came in.
• US CPI: October CPI is out today and should show a 0.1% (median 0.2%) headline increase with an accompanying 0.1% (median 0.2%) increase for the core. This comes on the heels of a 0.2% headline decline in September and a 0.2% increase for the core in that month. Data in line with this forecast would leave the headline flat y/y and the core figure at 1.8% y/y.
• US Industrial Production: October industrial production data should reveal an unchanged (median 0.1%) rate for the headline following the 0.2% decline in September and a 0.1% drop in August. The capacity utilization rate is expected to remain steady at 77.5% (median 77.5%) for a second month.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

FX News Today

German Q3 GDP slowed to 0.3% q/q, from 0.4% q/q in Q2, in line with expectations. The working day adjusted annual rate improved to 1.7% y/y from 1.6% y/y. There is no full breakdown with the preliminary numbers, but the statistics office said in its press release that growth was mainly driven by private and public consumption. Investment seems to have contracted slightly and there was a negative contribution from net exports, as import growth outstripped export growth. So for once a consumption driven economy, not the usual export led growth pattern. This clearly is also due to the ECB’s ultra-accommodative policy, that is also causing problems for banks and insurers, but also households forced to increase private pension provisions.

Bullard and Lacker look for higher rates. Lacker: the case for raising rates is “strong”said the Fed hawk, who dissented at the last two meetings against the consensus to keep policy on hole. He acknowledged to reporters that his “dots” are higher than the FOMC median, something we had already surmised given his very public hawkish stance. On the policy path, he added that the “gradual” pace is just an expectation and warned the FOMC could change its mind. He worries that the Fed could get into a rut of 25 bp hikes per meeting. He, of course, rotates out of voting status next year, but will be replaced by three other kestrels, including Bullard, Mester, and George. Bullard: a shallower tightening path is likelycompared to 1990s or 2000s, said the St. Louis Fed president, dependent on the economy — steeper if it booms. G7 nations as a whole, however, are still a ways away from normalizing and near zero rates appear to be the norm there for at least a couple of years. The Fed will rely on the usual metrics for each hike, including whether the labor market becomes very tight. He sees the debate over the Fed role as healthy given the large one it played in response to the financial crisis. This is about par for moderate Bullard, again focusing more on the longer-term.

92% of economists surveyed expect a December Fed hike according to the latest WSJ survey published, barring a cataclysmic event of some sort. 5% see the Fed remaining on hold until March and 3% see ZIRP for longer than that. Back in October 64% of those surveyed saw a December hike. It seems Janet and company have done their guidance job well, backed up by the October payrolls report, though this leaves their credibility at stake on December 16 to follow through this time.

Main Macro Events Today

• US PPI: October PPI is out Friday and should reveal a 0.3% (median 0.2%) headline for the month with the core up 0.1% (median 0.1%) This follows respective September figures of -0.5% for the headline and -0.3% for the core. Declining oil prices have weighed on the various inflation measures over the year but they appear to have leveled off in recent months and even posted a small gain in October which should allow for headline increases.
• US Retail Sales: October retail sales will be released today and the headline is expected to be up 0.4% (median 0.2%) with the ex-autos rate up 0.5% (median 0.4%). There is upside risk to the release from the firm vehicle sales data, improvements in consumer confidence and the bounce in construction hours worked that we have seen in October. This should be enough to offset the potential downside from slightly slower chain store sales.
• US Business Inventories: The September business inventory data is out on Friday and should reveal an unchanged (median 0.1%) figure for inventories with shipments flat as well. This comes on the heels of respective August figures which had inventories unchanged and shipments down 0.6%. Data in line with this forecast would leave the I/S ratio steady at 1.37 from August, prior to that the ratio had held at 1.36 since March.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

German final Oct HICP confirmed at 0.2% y/y, with the national CPI rate at 0.3% y/y, versus -0.2% y/y and 0.0% y/y respectively in September. The jump in headline rates largely reflects less negative annual rates for energy related prices. A marked rise and while still below the ECB’s 2% limit for price stability, a sign that inflation is moving back to the ECB’s target.

The AUDUSD outperformed on a solid employment report out of Australia, and while the credibility of the data has been called into question by at least some economists, few doubt that the validity of the underlying trend. AUD-USD is up 1.2% having rising above 0.7150. The employment report showed a rise of 58.6k, nearly triple the median forecast, while the unemployment rate fell to 5.9% from 6.2%. The details of the report were encouraging, including labour participation, aggregate hours worked and back revisions.

Reuters: ECB examines purchases of muni, regional bonds. Reuters reported that municipal and regional bond buying could be rolled out in coming months, with the plan likely to come in March next year. ECB officials are reportedly also examining the purchase of bonds from municipalities and German states ahead of the rate setting meeting in December 3. According to the report an unidentified person told Reuters that while muni bonds were risky, they had the backing of central governments. The step would widen the pool of eligible assets at a time when yields on both French and German 2-year yields have fallen so far into negative territory that they are no longer eligible for purchases under the QE program. It would also give the ECB more room to manoeuvre on a possible extension of the QE program.

US MBA mortgage market index sank 1.3% in data released earlier, in addition to an increase of 0.1% on the purchase index and a 2.2% decline on the refinancing index for the week ended November 6. There was a an 11 basis point increase in the average 30-year fixed mortgage rate to 4.12% in the wake of stronger jobs data, which lifted the potential for December rate lift-off. For more on the relatively firm housing sector, see our existing home sales, housing starts and new home sales reports.

Main Macro Events Today

• US Initial Jobless Claims are expected to be 269k (median 270k) in the week-ended November 7. Continuing claims are expected to rise to 2,170k for the week-ended October 31. Forecast risk: downward, as volatility concerns could give businesses pause. Market risk: downward, as weaker than expected data could delay rate hike expectations.

• Canadian New Home Price Index is out today and projected to expand 0.2% m/m in September after the 0.3% gain in August.

• ECB President Draghi speech. Market participants will follow Draghi’s speech with interest as they wait for further clarification on the planned easing operations.

• Fed Chair Yellen speaks. This is potentially yet another opportunity to hear what the Fed has been discussing on the interest rate policy. Markets expect that the December rate hike is a given and therefore the focus has turned to what Yellen might be communicating regarding the rate hike path in the coming year.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.