The week of reckoning

30 November, 2015

Moving into December, it’s usually the time when markets start winding down for Christmas. As it is, there are two key events that will shape the month, the first of which arrives this week in the form of the ECB meeting on Thursday. The anticipated policy divergence between the ECB and the Fed has been a key driver on EURUSD since the middle of October, since when the dynamics on respective 2Y interest rates (which embody short-term rate expectations) have been moving firmly in favour of the dollar and against the single currency. The dollar index is once again nudging the 100 level this morning, whilst EURUSD is being pressured below the 1.06 level as the dynamics continue. What is true is that there is a huge burden of expectations on the ECB for this Thursday, meaning that if the ECB falls short of expectations, we’re going to be heading for a very large short squeeze on the euro.

Ahead of then, we have the initial readings of November inflation data in Germany at 13:00 GMT, with the market looking for the headline rate to move up from 0.3% to 0.4% in YoY terms. Many inflation rates are set to move higher over the coming months as the sharp fall in energy prices seen a year ago falls out of the YoY calculation. Elsewhere, on the crosses, EURJPY continues to set on the 130 level, with a push below still on the cards.


Source link  
German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...


US Equities at Record Levels

US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy...

USD Stabilizes

Hurricane Irma has, reportedly, inflicted less damage on the US mainland than was originally predicted, thereby reducing the economic impact of the devastation it was expected to...

Markets on Edge

With the markets risk appetite dampened after North Korea’s most powerful nuclear test to date, USD and Global equities fell whilst Gold, Yen and Sovereign Bonds all rose....


Risk Appetite Returns

North Korea official news agency reported on Monday that leader Kim Jong Un will watch the actions of the United States for a while longer before making a decision to fire missiles at Guam...

US-Korean Tensions Rattle Markets

Markets were cautious on Wednesday, as safe-haven assets pushed higher after tensions grew between the US and North Korea. Markets are concerned...

Global Manufacturing Grows

Recent data releases have shown that global manufacturing saw an increase in July, further confirming global economic momentum has carried into H2...

  


Share: