• USD: Lower, trade balance widens most in 10 years on higher imports, Michigan consumer confidence falls
      • JPY: Higher, Yuan revaluation rumors, sharp upgrade of September industrial production
      • EUR: Higher, EU economy emerges from recession in Q3, Q3 GDP rise was less than expected
      • GBP: Higher, supported by merger rumors, gains limited by uncertainty about BOE asset purchase plan
      • CAD and AUD: AUD & CAD higher, Canada's trade balance improves, tracking stocks

Overview

USD traded lower Friday with JPY supported by Yuan revaluation rumors, EUR supported by report that EU economy emerged from recession in Q3, GBP supported by merger rumors and the AUD supported by a statement from Australia's trade minister that strong AUD is not limiting Australian export sales. CAD was supported by report of better than expected Canadian trade data and a surge in exports. US economic data was mixed with import prices higher than expected, and the trade deficit rising much more than expected. The rise in the trade deficit reflects a sharp increase in imports and a smaller rise in export sales. The rise in imports is further confirmation of improving outlook for the US domestic economy. The widening of US trade balance may generate concern about global trade imbalance and increase pressure on G-20 nations to take action on rebalancing. Widening of the US trade balance is attributed to higher oil prices and demand for imports from China. A weaker USD and stronger Yuan will be needed to help foster rebalancing of global trade. Michigan consumer sentiment fell more than expected. USD price direction will likely continue to you track risk sentiment and equities with investors looking at upcoming data for clues to the shape of the global recovery. US equities rallied despite weaker Michigan consumer sentiment. Japan's Q3 GDP and US Empire Manufacturing and retail
sales on tap Monday.

Today’s US data: 

October import prices rose by 0.7%, a 0.5% rise was expected. September trade deficit widened to -36.4 7bln, a deficit of 30bln was expected. November Michigan consumer sentiment falls to 66 from 70.6 in October, a reading of 71 was expected..

Upcoming US data: 

Next week's US economic calendar includes November 16th release of November Empire State manufacturing index expected at 31 compared to 34.5 last month. October retail sales and business inventories will also be released on November 16th with retail sales expected to rise by 0.8% compared to -1.5% last month and business inventories expected to fall by 0.6%. On November 17th October PPI will be released expected to rise by 0.4% compared to -0.6% last month. October industrial production, capacity utilization and the November NAHB index will also be released on November 17th. Industrial production is expected to rise by 0.4% compared to 0.7% last month, capacity utilization is expected at 70.8 compared to 70.5 last month and the NAHB index is expected 19 compared 18 in October. On November 18th October CPI will be released expected unchanged at 0.2% along with October housing starts and building permits. The housing starts are expected to rise to 600k from 590k last month and building permits are expected at 580k compared to 573k last month. On November 19th initial jobless claims for week ending the 11/14 will be released expected at 497k compared to 502K last month. October leading indicators and November Philly Fed will also be released on November 19th. Leading indicators are expected to rise by 0.4% compared to 1% last month and the Philly Fed is expected at 12.5 compared to 1.5 last month.

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