25 November, 2015
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.
U.S. trade tariffs tightened market conditions. Coeure said that “while the effects of any tariffs on output and inflation may take time to materialise, falls...
China and Hong Kong alongside other markets were closed for Lunar New Year holidays, which muted trading, but the Nikkei gained 1.19%...
The U.S. currency has been correlating inversely with global stock market direction of late on the causation that risk-on phases have seen investors...
U.S. personal income rose 0.3% in November with spending up 0.6%. The 0.4% increase in October income was not revised. The 0.3% spending increase..
The FOMC meeting is front and center this week following the solid November jobs report on Friday, which provided the final bit of cover for...
Asian stock markets headed south again, as declines and energy and mining stocks led shares lower amid a further drop in metal prices. Concern China’s regulators may limit the flow...
The rout on Chinese bond and stock markets that dominated Thursday’s session faded and the Nikkei managed a 0.12% gain as the yen...
After a couple of panicky moments in global equities over the past week, the markets will keep a wary eye on political developments. In Washington...
A round of positive earnings from U.S. companies reports and progress on the U.S. tax reform plan underpinning risk appetite. The Hang Seng...