Eurozone Eco-stats in Focus Today
The Euro is likely to witness a more data-influenced movement today as various key Eurozone eco-stats feature in the economic calendar today. A few of these data releases have already crossed the wires. Data showed that German import price index advanced less than expected in October. Looking ahead, market participants await the release of German consumer price index (CPI) along with the Euro zone’s consumer confidence index, due in a few hours.
Meanwhile in the UK, the just released data showed that the nation’s net consumer credit and mortgage approvals surpassed investor expectations for October. Later in the day, the US provisional Q3 GDP figures are up for release. Separately, the Organisation for Economic Cooperation and Development (OECD), in its latest outlook report, provided a modest upward push to projected global growth for the next two years.
Pound Sterling – UK Markets
The Pound is trading mixed against its major peers this morning, after the just out data showed that UK’s net consumer credit rose to a 11-year high in October. Moreover, the nation’s mortgage approvals advanced above expectations during the same month. Looking ahead, British economy watchers have a lot to ponder upon further ahead this week, as there are some crucial economic data points lined up for release.
Sterling drifted lower against both the greenback and the Euro in yesterday’s session, owing to renewed Brexit concerns. With the projected March 2017 date for the formal Brexit process fast approaching, Brexit related jitters have returned to haunt market participants. Although the Eurozone’s coveted single market access continues to be the bone of contention between the disputing parties, it is predominantly the eerie uncertainty surrounding the Brexit process that is hammering the Pound. Separately, the OECD appeared less pessimistic about the British economy in its November economic outlook and revised up the nation’s growth forecast for 2017.
US Dollar – US Markets
The US Dollar is trading mixed against the Euro and the Pound this morning. Investors shift focus to crucial economic data points to be released in the US today, i.e. consumer confidence index, personal consumption expenditure and third quarter gross domestic product data. The second estimate of US economic growth is expected to be revised higher in 3Q 2016. Moreover, consumer confidence index is likely to advance in November, following a slight decline in the previous month. Additionally, Federal Reserve Bank of New York President, William Dudley, will be speaking today in Puerto Rico.
Yesterday, Paris-based think tank, OECD, projected the US economy to grow 2.3% in 2017 and further accelerate to 3.0% in 2018. The outlook came in more upbeat as newly elected President Donald Trump’s infrastructure plans, tax cuts and consumer spending are expected to boost US economic growth going further. On the macro front, the Dallas Fed manufacturing index strongly rebounded in November, reaching its highest level since July 2014.
Euro – European Markets
The Euro has reversed its previous session gains and is trading lower against its major peers this morning. Data released earlier in the session showed that German import prices rose at a less than expected pace in October. Meanwhile, a second reading from the French statistical office showed that the nation’s economy expanded as initially estimated in the third quarter. Further, French consumer spending strongly rebounded last month, backed by an increase in spending on home furnishings, clothing and energy. Going ahead, investors await the preliminary estimate of German consumer prices for November, which is expected to register a slower growth in comparison to the October figure. Apart from this, the Eurozone’s consumer confidence and economic sentiment indicators are also up for release in a few hours.
Yesterday, the European Central Bank President, Mario Draghi, in his testimony to the European Parliament reiterated that the central bank’s monetary stimulus has been a key ingredient of the ongoing Eurozone recovery. Separately, the OECD slightly revised up the Euro region’s economic growth forecast for 2016 and 2017.
Other Currencies – Highlights
The Japanese Yen is trading lower against the greenback this morning, falling for the first time in four sessions. Japan witnessed a string of economic releases earlier in the session. Data showed that Japan's unemployment rate held steady at a 21-year low of 3.0% in October, as job availability improved, thus indicating continued strength in the domestic labour market. Japan’s employment picture appears as a bright spot in an otherwise moribund economy plagued with deflation and weak underlying growth. In contrast, Japan’s household spending declined for the eighth consecutive month in October, as consumers continue to spend cautiously amid lacklustre gains in real wages. Nevertheless, it was a smaller decline as compared to the September drop, partly due to higher vegetable prices. Further, Japan’s annual retail sales slightly inched down last month.
Separately, the OCED upgraded Japan’s economic growth forecast for this year and the next, citing a likely rebound in international trade which will help drive the nation’s export growth higher, thus, supporting business investment.