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  
Market Sentiment Hinging On Progress In Brexit

The British parliament will vote on the Brexit agreement today at 18:00 GMT. In theory, this should be a simple vote, with a definite...

Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...


Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...

Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...


Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...

  


Share it on:   or