A Light Economic Calendar Day Globally Nov 26, 2015
US markets are closed today for Thanksgiving holiday, but even then investors appear to be gearing up for next month’s crucial monetary policy meeting. But before that, US November jobs report which is scheduled in the coming week will grab the spotlight as it is the last major bit of information for the Fed to mull before its rate decision meeting. Also, there will be the European Central Bank’s (ECB) meeting next Thursday, where it is expected to introduce further stimulus measures and the diverging central bank policies should continue to play out in markets.
Meanwhile, in a light session today, data in Europe showed that the Spanish economy grew moderately in the third quarter. Going forward, German consumer confidence as measured by the GfK is also on radar today.
Pound Sterling – UK Markets
The Pound regained lost ground against the US Dollar yesterday as the UK Chancellor’s Autumn Statement somewhat surprised markets after suggesting that economic growth in 2016 will be stronger than initially thought and government borrowing will be lowered to help achieve the budget surplus target by the end of this decade. The Chancellor also announced a number of attractive measures for the house building and banking sector. Also, spending cuts were not as severe as anticipated, particularly as George Osborne chose to remove the previously proposed tax credit cuts which had been voted down by the House of Lords. Consequently, sentiment for Sterling improved across the board, with the Pound – US Dollar currency pair moving above the 1.50 mark despite some strong economic data releases in the US.
This morning, recovery momentum in the Pound - US Dollar currency pair has faded amid the absence of notable macro data in both the economies. Tomorrow, a raft of data is scheduled in Britain, which includes UK preliminary Q3 GDP prints, GfK consumer confidence survey and nationwide house prices data.
US Dollar – US Markets
The US Dollar is trading on a firmer footing against the Pound this morning, despite the absence of significant economic data in the major economies. Looking ahead, the second tier releases from the Euro bloc such as the German GfK consumer climate survey due in a short while will be eyed for further trading momentum in the Euro – US Dollar currency pair.
With the US markets closed for today’s Thanksgiving holiday, the greenback still remains buoyed on the back of some notable positive economic data released in the US yesterday. A strong rebound witnessed in the US durable goods orders report for October bolstered expectations that the Federal Reserve (Fed) will increase its borrowing costs at its next monetary policy meeting. The strength was led by a surge in demand for commercial aircrafts and a modest pickup in a number of categories from machinery to computers. However, Fed’s preferred inflation gauge, core personal consumption expenditures remained flat for October, suggesting sluggish inflationary pressures. Yesterday’s US economic reports served up a mixed picture for the US Fed policymakers.
Euro – European Markets
The common currency lost its footing against the majors yesterday, following some reports which revealed that the ECB policy setters were mulling over several plans, particularly the implementation of a two-tier penalty charge on banks parking their cash with the ECB and widening of its assets purchases programme. This speculation coerced the Euro sharply lower against the US Dollar and the Pound. Also, in its latest financial stability report, the ECB cautioned about the higher financial vulnerabilities stemming from emerging markets which have increased the downside risks to the Euro area’s economic outlook.
The Euro has extended its losses against the US Dollar this morning, amid broad based strength in the greenback as the latest upbeat macroeconomic data in the US boosted expectations of a December Fed rate rise. More so, revised numbers of Spain’s third quarter GDP data earlier today reaffirmed that growth has moderated in Europe’s fourth largest economy. Moving ahead, investors will eye a GfK’s survey report which is anticipated to show another slide in German consumer sentiment for December.
Other Currencies – Highlights
The US Dollar – Swiss Franc currency pair has currently resumed its upside rally, with the pair trading well above the 1.02 mark. Though the trading session is light in the absence of major US macroeconomic data on account of the Thanksgiving holiday, renewed investor interest was seen for the greenback earlier today, supporting gains in the currency pair. Also, official Swiss data published earlier today indicated that industrial production in Switzerland contracted on an annual basis for the third quarter. The production data failed to show any improvement in the three months to September, thus adding to losses in the Swiss currency against the US Dollar today.
With nothing further to tap in the session ahead, market participants will continue to monitor the broader market sentiment that could have an influence on trading in the currency pair. In the upcoming week, Switzerland’s third quarter GDP reading will attract noteworthy market attention.