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  
The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...

Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...


Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...

Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...


Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

US-China trade talks: deadline postponed

China's blue-chip index jumped more than 6% on Monday morning on news that Trump would postpone of the tariff's introduction. The U.S. President...

China buys American oil again

The first U.S. oil shipments to China in months will reach their destinations just days from now, punctuating a pledge by President Donald Trump in December that China would begin buying...

  


Share it on:   or