European stocks are slightly higher but have reversed some of their earlier gains while US Equity futures are pointing towards a broadly neutral open. He suspects that today´s international data probably contributed to the consolidation in many currencies.
German and French consumer spending were both weaker and Eurozone consumer prices surprised to the downside. Germany’s parliament approved the financing deal for Greece, an outcome that was nonetheless expected. GDP figures from Poland, Brazil and Canada were all softer than expected, while U.S. data also
surprised to the downside.
Bennenbroek notes that investors are also watching U.S. budget talks closely and are inclined to take an optimistic view of those negotiations. However, the talks have not yet shown any concrete progress, with Republican’s yesterday rejecting President Obama’s initial tax-and-spend proposals as part of those talks.
He concludes by noting that he has a slight bias to USD strength and foreign exchange weakness in the coming days, though he acknowledges that US Budget talks, non farm payrolls and the Fed´s monetary policy announcement will likely be key FX drivers in the near-term.