Data-heavy day

Market Brief

Trading in the Asian session was subdued, weighed down by the shifting outlook for oil prices. The Nikkei fell -0.4%, the Hang Seng followed -0.2%, yet the Shanghai rose 0.3%. With a data-heavy day ahead, intraday volatility should increase significantly. Also, with the OPEC meeting just 24 hrs away, we should expect oil-linked assets to remain unstable. The expectation of a meaningful cut in production seems less likely as member demands diverge considerably. However, given the hype that OPEC created which drove oil prices 8% higher, we might see some weak-worded statement on cooperation to save face.

In Japan, the unemployment rate remained unchanged at 3.0% in October. The improvement in the labor markets seems to point to a changed demographic which is creating shortage, rather than an actual acceleration of economic data. In Japan, October household spending came in at -1.0% m/m against 0.1% expected. Japanese retail sales came in at -0.1% y/y against -1.2% expected. USDJPY held steady between 111.60 to 112.25. China commodity futures fell, sending AUDUSD down to 0.7459. NZDUSD shifted into a sideways consolidation pattern with all eyes on RBNZ tonight. In addition, the RBNZ will release their bi-annual financial stability report, followed by comments from RBNZ Governor Wheeler.

In Europe, the French GDP q/q Q3 preliminary estimate is unlikely to be revised, however, a slight uptick in data could suggest risks to the upside. EUR/USD was slightly higher bid, climbing to 1.0622 large 1.6bn 1.0620-40 strike option held the market in check. Swiss payroll reports should stay unchanged at 4.9% as recent economic data has firmed.

In the US, Q3 GDP growth to be revised slightly to 3.0% q/q, from 2.9% in the preliminary estimate. With consumer spending and confidence solid, growth will continue to expand at a modest pace. The US economy should continue to grow, yet the path has become a bit uncertain given the Trump fiscal proposal which could accelerate US growth 0.3 to 0.4% in 2017. Also, NY Fed President Dudley will be speaking on economic growth in Puerto Rico, with no expectations for comments regarding current US monetary policy. Finally, consumer confidence is expected to rise to 100.00 after the marginal decline in October to 98.6. Solid consumer confidence should support GDP growth. We remain bearish USD in the mid-term as we suspect Trump reflation fiscal play is already priced in. The risk is non execution.

In Japan, the unemployment rate remained unchanged at 3.0% in October. The improvement in the labor markets seems to point to a changed demographic which is creating shortage, rather than an actual acceleration of economic data. In Japan, October household spending came in at -1.0% m/m against 0.1% expected. Japanese retail sales came in at -0.1% y/y against -1.2% expected. USD/JPY held steady between 111.60 to 112.25. China commodity futures fell, sending AUD/USD down to 0.7459. NZDUSD shifted into a sideways consolidation pattern with all eyes on RBNZ tonight. In addition, the RBNZ will release their bi-annual financial stability report, followed by comments from RBNZ Governor Wheeler.

In Europe, the French GDP q/q Q3 preliminary estimate is unlikely to be revised, however, a slight uptick in data could suggest risks to the upside. EURUSD was slightly higher bid, climbing to 1.0622 large 1.6bn 1.0620-40 strike option held the market in check. Swiss payroll reports should stay unchanged at 4.9% as recent economic data has firmed.

In the US, Q3 GDP growth to be revised slightly to 3.0% q/q, from 2.9% in the preliminary estimate. With consumer spending and confidence solid, growth will continue to expand at a modest pace. The US economy should continue to grow, yet the path has become a bit uncertain given the Trump fiscal proposal which could accelerate US growth 0.3 to 0.4% in 2017. Also, NY Fed President Dudley will be speaking on economic growth in Puerto Rico, with no expectations for comments regarding current US monetary policy. Finally, consumer confidence is expected to rise to 100.00 after the marginal decline in October to 98.6. Solid consumer confidence should support GDP growth. We remain bearish USD in the mid-term as we suspect Trump reflation fiscal play is already priced in. The risk is non execution.

 

Global Indexes	Current Level	% Change
Nikkei 225 Index	18307.04	-0.27
Hang Seng Index	22752	-0.34
Shanghai Index	3282.92	0.18
FTSE futures	6765	-0.39
DAX futures	10545	-0.28
SMI Futures	7779	-0.42
S&P future	2202.2	0.06

 

Global Indexes	Current Level	% Change
Gold	1190.43	-0.29
Silver	16.61	-0.03
VIX	13.15	6.56
Crude wti	46.66	-0.89
USD Index	101.22	-0.1

 

Today's Calendar	Estimates	Previous	Country/GMT
HU Oct Unemployment Rate	4,90%	4,90%	HUF/08:00
GE Nov CPI Saxony MoM	-	0,30%	EUR/08:00
GE Nov CPI Saxony YoY	-	0,90%	EUR/08:00
AS WIFO GDP Final 3Q 2016	-	-	EUR/08:00
TU Oct Foreign Tourist Arrivals YoY	-	-32,80%	TRY/08:00
SP Nov P CPI EU Harmonised MoM	0,10%	0,80%	EUR/08:00
SP Nov P CPI EU Harmonised YoY	0,40%	0,50%	EUR/08:00
SP Nov P CPI MoM	0,20%	1,10%	EUR/08:00
SP Nov P CPI YoY	0,50%	0,70%	EUR/08:00
SW 3Q GDP QoQ	0,50%	0,50%	SEK/08:30
SW 3Q GDP WDA YoY	3,10%	3,40%	SEK/08:30
GE Nov CPI Brandenburg MoM	-	0,20%	EUR/09:00
GE Nov CPI Brandenburg YoY	-	0,90%	EUR/09:00
GE Nov CPI Hesse MoM	-	0,30%	EUR/09:00
GE Nov CPI Hesse YoY	-	0,80%	EUR/09:00
GE Nov CPI Bavaria MoM	-	0,20%	EUR/09:00
GE Nov CPI Bavaria YoY	-	0,80%	EUR/09:00
AS Nov Bank Austria Manufacturing PMI	-	53,9	EUR/09:00
PO Nov Consumer Confidence Index	-	-11,6	EUR/09:30
PO Nov Economic Climate Indicator	-	1,3	EUR/09:30
UK Oct Net Consumer Credit	1.5b	1.4b	GBP/09:30
UK Oct Net Lending Sec. on Dwellings	3.2b	3.2b	GBP/09:30
UK Oct Mortgage Approvals	65.0k	62.9k	GBP/09:30
UK Oct Money Supply M4 MoM	-	-0,40%	GBP/09:30
UK Oct M4 Money Supply YoY	-	6,20%	GBP/09:30
UK Oct M4 Ex IOFCs 3M Annualised	-	10,00%	GBP/09:30
GE Nov CPI North Rhine Westphalia MoM	-	0,30%	EUR/09:30
GE Nov CPI North Rhine Westphalia YoY	-	0,90%	EUR/09:30
EC Nov Economic Confidence	106,8	106,3	EUR/10:00
EC Nov Business Climate Indicator	0,6	0,55	EUR/10:00
EC Nov Industrial Confidence	-0,5	-0,6	EUR/10:00
EC Nov Services Confidence	12,5	12	EUR/10:00
GR 3Q F GDP (QoQ)	0,50%	0,50%	EUR/10:00
GR 3Q F GDP NSA YoY	1,20%	1,20%	EUR/10:00
SA 4Q BER Business Confidence	-	42	ZAR/10:00
EC Nov F Consumer Confidence	-6,1	-6,1	EUR/10:00
BZ Nov FGV Inflation IGPM MoM	0,07%	0,16%	BRL/10:00
BZ Nov FGV Inflation IGPM YoY	7,24%	8,78%	BRL/10:00
IR Nov Unemployment Rate	-	7,70%	EUR/11:00
BZ Oct National Unemployment Rate	11,80%	11,80%	BRL/11:00
BZ Oct PPI Manufacturing MoM	-	0,24%	BRL/11:00
BZ Oct PPI Manufacturing YoY	-	0,64%	BRL/11:00
GE Nov P CPI MoM	0,10%	0,20%	EUR/13:00
GE Nov P CPI YoY	0,80%	0,80%	EUR/13:00
GE Nov P CPI EU Harmonized MoM	0,10%	0,20%	EUR/13:00
GE Nov P CPI EU Harmonized YoY	0,80%	0,70%	EUR/13:00
CA 3Q Current Account Balance	-$16.50b	-$19.86b	CAD/13:30
US 3Q S GDP Annualized QoQ	3,00%	2,90%	USD/13:30
US 3Q S Personal Consumption	2,30%	2,10%	USD/13:30
US 3Q S GDP Price Index	1,50%	1,50%	USD/13:30
US 3Q S Core PCE QoQ	1,70%	1,70%	USD/13:30
US Sep S&P CoreLogic CS US HPI MoM SA	-	0,61%	USD/14:00
US Sep S&P CoreLogic CS 20-City NSA Index	-	191,66	USD/14:00
US Sep S&P CoreLogic CS 20-City MoM SA	0,40%	0,24%	USD/14:00
US Sep S&P CoreLogic CS 20-City YoY NSA	5,20%	5,13%	USD/14:00
US Sep S&P CoreLogic CS US HPI NSA Index	-	184,42	USD/14:00
US Sep S&P CoreLogic CS US HPI YoY NSA	-	5,32%	USD/14:00
US Nov Consumer Confidence Index	101,5	98,6	USD/15:00

 

Currency Tech

EURUSD
R 2: 1.1259
R 1: 1.0954
CURRENT: 1.0585
S 1: 1.0518
S 2: 1.0458

GBPUSD
R 2: 1.2857
R 1: 1.2674
CURRENT: 1.2417
S 1: 1.2302
S 2: 1.2083

USDJPY
R 2: 121.69
R 1: 114.87
CURRENT: 112.95
S 1: 106.14
S 2: 104.97

USDCHF
R 2: 1.0328
R 1: 1.0257
CURRENT: 1.0154
S 1: 0.9632
S 2: 0.9537

• S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot