Today’s Comment
Today in the US, the realtors’ figures for pending home sales will be released. These figures are released one or two months ahead of the actual sales and therefore they constitute a leading indicator for the actual home sales. Pending home sales fell by no less than 16% in November after having increased for nine months on end. We expect that pending home sales has increased. For one thing because of the extension of the tax rebate for first-time buyers and for another because the underlying circumstances for home purchases in the form of prices and mortgage rates are quite favourable.
We revise up our 1-month forecast for CHF: We revise down EUR/CHF from 149 to 146 and revise up CHF/DKK from 500 to 510. Overnight we saw a minor weakening of CHF, which can primarily be attributed to purchases of EUR/USD as the Japanese equity market rebounded after the Japanese came back from lunch. Last Friday the SNB once more intervened but, almost as usual, the effect was fairly limited. We are, in respect of the recent development, of the opinion that the level 147 for EUR/CHF (CHF/DKK 506.50) forms the new limit where the SNB will intervene after its change of rhetoric about the non-conventional monetary policy at the interest-rate meeting in December. As previously mentioned, Switzerland is one of the countries with a current account surplus, and per se this supports the currency.
Under the current scenario, it make most sense to look at CHF in a slightly different time perspective than we normally do. As mentioned, we think the next movement will be downwards but the timing will fully depend on when the SNB will step aside and let CHF appreciate further – this may take place in a fortnight, yet most probably in a couple of months. Therefore our 1-month forecast is not to be seen as being accurate but rather as an indication of the direction of the next movement of the exchange rate.
Dagens begivenheder
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11:00 Producer prices (EUR)
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16:00 Pending home sales (USD)
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23:00 Car sales (USD)
Today’s Chart – EUR/CHF
