American FX Outlook: US taxes & Fed speakers in focus
|What you need to know
- The risk-off market's sentiment faded away with the US Dollar retreating from multi-day lows against major counterparts.
- The UK retail sales rose slightly above forecast but remained on a weak side supporting extra dovish monetary policy stance from the Bank of England.
- The US Tax cutting plan voted in the House and the Fed speakers including Loretta Mester, Robert Kaplan, John Williams, Lael Brainard headline the day.
Thursday’s market moving events
- The US initial jobless claims are seen rising 235K in a week ending November 10.
- Philadelphia Fed manufacturing index is expected to decelerate to 25.0 in November.
- Canada’s manufacturing sales are expected to fall 0.3% m/m in September.
- Canada’s private employment survey from ADP will be released for the first time.
- The Bank of England policymakers including Governor Mark Carney, Deputy Governor Ben Broadbent, and David Ramsden are due to speak about economics at various public schools, in Liverpool at 14:00 GMT.
- Cleveland Federal Reserve President Loretta Mester addresses Cato Institute's 35th Annual Monetary Conference: The Future of Monetary Policy, in Washington at 14:10 GMT.
- The US industrial production is expected to rise 0.5% m/m in October.
- Dallas Federal Reserve President Robert Kaplan is scheduled to speak at the Chartered Financial Analyst Society of Houston meeting at 18:10 GMT.
- San Francisco Federal Reserve President John C. Williams speaks in San Francisco at 20:00 GMT.
- ECB Vice President Vitor Constancio speaks in Ottawa at 20:00 GMT.
- The Federal Reserve Governor Lael Brainard is due to speak about financial technology at the Third Annual Financial Stability Conference hosted by the University of Michigan at 20:45 GMT.
- New York Fed Vice President Simon Potter speaks in New York at 21:30 GMT.
Major market movers
- With EUR/USD turning lower and GBP/USD ticking up, the EUR/GBP is a loser of the day falling 0.5%.
- With the US Tax cut plan approved and Fed speakers confirming the current path of rate hikes including December and three hikes next year, the US Dollar will be well supported.
Earlier in Asia/Europe
- Australian unemployment fell to 5.4% while employment rose by 3.7K in October and the unemployment rate remaining at 5.5%.
- France unemployment rate increased to 9.7% in Q3 2017 vs. previous 9.5%.
- ECB's Mersch said the Bank could raise growth forecast in December with coming inflation setback may not be as steep as feared. Mersch confirmed that the policy normalization will be gradual, keeping in line Draghi’s doctrine.
- ECB’s stance on inflation was complemented by Slovenian ECB GC member Jazbec who said that inflation rates are moving in line with ECB expectations and changes in oil prices do not have a major influence by themselves.
- The UK retail sales increased 0.3% m/m beating the forecast of 0.1% m/m while core retail sales excluding motor fuel fell -0.3% m/m in October.
- The Eurozone CPI decelerated to 1.4% over the year in October while core inflation remained unchanged at 0.9% y/y.
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