OECD and Mario Draghi to Command Attention Today
There are two key events in the global economic calendar today. First up is the Organisation for Economic Co-operation and Development’s (OECD) latest global economic outlook report which would provide analysis and projections about major economies. Next of significance today is the European Central Bank (ECB) President Mario Draghi’s speech before the European Parliament’s Economic Committee in Brussels. Market participants will look out for clues about the future of the ECB’s asset purchase programme. Apart from this, Eurozone economy watchers also await the region’s consumer confidence index for November.
The British economic calendar appears data-empty today. Across the Atlantic, the Dallas Federal Reserve’s (Fed) manufacturing business index is up for release later in the day.
Pound Sterling – UK Markets
The Pound is trading lower against the US Dollar and the shared currency this morning. The British economic calendar kicks-off this week on a subdued note with no major market moving indicators up for release today. However, things will start heating up on the UK economic front as this week progresses, with some high-impact data points scheduled to cross the wires. These include UK’s GfK consumer confidence figure for November along with manufacturing and construction purchasing managers’ indices. In addition to all this, any British government response in relation to Brexit will continue to grab eyeballs along this week.
On Friday, the Office for National Statistics, through its second estimate, confirmed that the UK economy grew by 0.5% in the third quarter. There will be a third estimate of the figure next month. Separately, the Confederation of British Industry's distributive trades survey showed that British retail sales grew at their fastest rate in over a year, largely driven by a rise in sales of clothing, home hardware and online purchases.
US Dollar – US Markets
The greenback weakened against most of its major peers on Friday, reversing previous sessions gains. On the data front, the US preliminary Markit services PMI unexpectedly declined in November. Nevertheless, it is the second strongest reading in almost a year and marked the ninth straight month of expansion. Further, the nation’s wholesale inventories surprisingly fell in October from September. Additionally, advance goods trade deficit widened more than market expectations in October.
Today, the US calendar looks dull with only one economic release scheduled, i.e. the Dallas Fed manufacturing business index, which is expected to rebound in November. Looking ahead in the week, the US labour market will come in the spotlight as investors will be paying close attention to nonfarm payrolls figures and unemployment rate. A modest rise in employment numbers will give away a clear indication that the Fed will raise the benchmark interest rate at its December meeting.
Euro – European Markets
The shared currency is trading higher against its major peers this morning. Data released earlier in the session showed that the Eurozone’s annual M3 Money Supply, or the amount of money in circulation, rose at a slower pace in October in comparison to its previous month’s increase. Meanwhile, private loans advanced at a less than expected pace last month. Moving ahead, investors look forward to the Euro region’s economic sentiment indicator along with industrial and consumer confidence index for November. In addition to this, the ECB President, Mario Draghi, is scheduled to testify about the central bank’s perspective on economic and monetary developments and the consequences of the Brexit vote before the European Parliament's Economic Committee in Brussels.
On Friday, data showed that Italian retail sales deteriorated in September. Over the weekend, François Fillon resoundingly defeated Bordeaux Mayor Alain Juppe to be France’s center-right Republican Party candidate. He will now take on the National Front leader, Marine Le Pen, in the presidential election this spring.
Other Currencies – Highlights
The Kiwi Dollar is trading on a stronger footing against the greenback this morning, recording its third consecutive session of gains. The most significant New Zealand data out this week will be the nation’s business confidence index, which is expected to register an increase for November. Apart from this, building permits data for October will probably provide some insight on the prospects of the New Zealand’s housing market. Additionally, the Reserve Bank of New Zealand (RBNZ) is scheduled to release its bi-annual financial stability report this week, where the central bank will provide an assessment of the New Zealand’s financial conditions along with growth and inflation forecasts. This will then be accompanied by a press conference by the RBNZ Governor, Graeme Wheeler, and he could likely lay out future monetary policy options.
Last week, the Kiwi Dollar ended higher against the greenback, due to high investor optimism on New Zealand’s trade stats. The nation’s October trade balance showed a significant drop in trade deficit.