American FX Outlook: A day before NFP, US government is facing shutdown problem

What you need to know

  • Bitcoin madness continues as the cryptocurrency rose to a new all-time high of $14,000 and now it is seen jumping as high as $20,000 by the year-end.
  • The US Dollar rose to its highest level in two weeks on Thursday fueled by tax reform optimism in the US as the US Senate and House have already appointed members of the reconciliation committee.
  • World equity markets rebounded after two days of heavy losses.  
  • The US government is facing a government shutdown on Saturday, so both House and Senate are expected to vote on a measure to extend the spending authorization until December 22.  

Thursday’s market moving events

  • The US weekly initial jobless claims are expected to reach 240K in the week ending December 1.
  • New York Fed President William Dudley is scheduled to speak at the "Higher Education Financing and Costs and Returns of Higher Education" event in New York at 13:30 GMT.
  • Canadian Ivey PMI is seen stable at 63.5 in November.
  • Canadian building permits are expected to rise 1.5% m/m in October.
  • The ECB President Mario Draghi participates as chair of the Group of Governors and Heads of Supervision (GHOS) in a press conference by the Bank for International Settlements, hosted at the European Central Bank in Frankfurt at 16:00 GMT.
  • Japan’s Q3 GDP is seen rising 0.4% q/q while growing 0.1% over the year.

Major market movers

  • Sterling is stuck to the lower bound of its three days range supported by rising channel trendline around $1.3360 as Brexit uncertainty persists.
  • EUR/USD falls to the 11-day low of $1.1776 as broad US Dollar strength dominates the market.

Earlier in Asia/Europe

  • German industrial production unexpectedly fell by -1.4% m/m in October with Destatis revising September from -1.6% m/m to -0.9% m/m. Two consecutive months of negative growth is a source of concern, but analysts say it is because of unusually high number of public holidays and long weekends.
  • French trade balance reached a deficit of -5.0 billion EUR in October.
  • The second revision of Eurozone’s GDP confirmed the preliminary reading of 0.6% q/q increase while rising 2.6% over the year in Q3.
  • Moody's estimates ECB asset purchases have lowered 10-yr Eurozone government bond yields by between 50-150 basis points.


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