The US dollar rose considerably on Friday Vs the yen; it fell Vs the euro, Australian dollar and New Zealand dollar; it almost didn’t change Vs the pound and Canadian dollar – after the release of the U.S. Non-Farm Payrolls and Consumer Confidence which generally exceeded the expectations.
According to the Labor Department the U.S. Non-Farm Employment Change grew in November by 203 thousand having exceeded the forecasted growth by 180 thousand – which has become the highest growth for three months. Unemployment rate dropped by 0.3% at once to 7% having significantly exceeded the expected decrease to 7.2% - and has reached the lowest level for five years since November, 2008. The report released on Friday can strengthen the expectations that the Fed will start QE3 tapering faster than it was expected earlier.
Consumer Confidence also turned out better than expected. Preliminary U. of Michigan Consumer Sentiment rose unexpectedly in December to 5-month high 82.5 p. in comparison with the final reading for November of 75.1 and the forecast of 76 p. Both Current Assessment and Expectations have risen. At the same time Personal Income and Personal Spending report showed a decrease of personal income by 0.1% m/m in October against the forecasted growth by 0.3%.
By the end of the week the US dollar lost 0.50% according to the dollar index weakening for four weeks in a row. Currency dynamics was mixed. The dollar fell against the New Zealand (-1.94%), Swiss franc (-1.47%) and the euro (-0.87%) – but it grew Vs the Canadian dollar (+0.45%), Japanese yen (+0.41%), British pound (+0.15%) and Australian dollar (+0.09%).
There will not be a lot of important data during the second week of the month. In the USA on Tuesday Wholesale Inventories and Wholesale Trade Sales will be released; on Wednesday - Federal Budget Balance; on Thursday – Retail Sales, and import prices; and on Friday – Producer Price Index. From Tuesday to Thursday the U.S. Department of the Treasury will be holding long-term Bond Auction. James Bullard will deliver a speech about monetary policy on Monday.
In the euro-zone industrial output and ECB Monthly Bulletin will be released on Thursday. Industrial output will be also released in other euro-zone countries: in Germany – on Monday, in France and Italy – on Tuesday. In Germany Trade Balance will be released on Monday; and inflation – on Wednesday. On Tuesday Italian Final GDP for the second quarter will be released; and on Thursday – inflation data in France and Italy. ECB president Draghi will make a speech on Tuesday in Rome; and on Thursday – in European Parliament.
In the UK Industrial Output and Trade Balance will be released on Tuesday. Bank of England governor Carney will make a speech on Monday in New York. In Japan the Final GDP for the third quarter and Current Account will be released on Monday; on Tuesday - BSI Manufacturing Index; and on Wednesday - Core Machinery Orders.
In Australia NAB Business Confidence will be released on Tuesday and on Wednesday - Westpac Consumer Sentiment – but a labour report on Thursday may become the most important. On Thursday RBNZ Interest Rate Decision will be announced and a quarterly Press Conference of RBNZ governor Wheeler will be held. Bank of Canada governor Poloz will make a speech on Thursday about risks for Canadian financial system. In China inflation data will be released on Monday; and on Tuesday – industrial output, retail sales and investment.