Markets are waiting for the voting today in the US Congress about the Tax program and gold Down to 1281
The Dollar had a mixed performance against its Rivals with the Index (USD/DXY) finishing dead flat at 93.239. The Japanese Yen slipped against the Greenback as the US Ten Year Bond yield climbed to 2.37% (from 2.34%). Sterling rallied on hopes that a deal on the Brexit divorce bill would be forthcoming. A modest rise in German inflation numbers lifted EUR/USD off it’s to lows to finished slightly higher.
Germany’s Preliminary CPI rose 0.3%, in line with forecasts but up from the previous month’s 0.0%.
The second reading on US Q 3 GDP growth was in line with consensus at 3.3% but faster than initially thought (3.0%). The growth was the fastest recorded in 3 years.
US Pending Home Sales rose 3.5%, ending a3 month losing streak.
Wall Street stocks were mixed. The Dow rose 0.4%, while the S&P 500 slipped -0.03%. A sell-off in technology shares saw the NASDAQ slump 1.3%.
Treasury prices were lower. The yield on the US Ten Year Treasury climbed 3 basis points to 2.34%. Germany’s Ten Year Bund yield was up 4 basis points to 0.38%. Japan’s Ten Year JGB yield slipped to 0.02% from 0.03%. The yield on Australia’s Ten Year bond fell 3 basis points to 2.46%, going against the trend.
USD/DXY – ends flat at 93.238 (93.239 yesterday).
EUR/USD – mildly higher to 1.1855 from 1.1838 yesterday.
GBP/USD – rallies to 1.3420 at the NY close (1.3365 yesterday).
USD/JPY – up to 111.85 from 111.55.
AUD/USD – slips to 0.7575 (0.7595 yesterday). Metals extended losses. Copper prices were down 0.9%.
Outlook: The US economy continues to grow on solid footing into the last quarter of this year. In her final Congressional testimony, Janet Yellen said that economic growth was “increasingly broad-based”. The economy has managed to withstand recent major hurricanes with consumer spending the main driver.
Markets will turn their focus on today’s release of the US Core PCE Price Index in October which is the FederalReserve’s favored inflation measure.
Events and economic data releases today:
New Zealand releases it’s ANZ Business Confidence Index: (GMT 12 am, Nov 30/ Local Time 11.00 am , Nov 30): the previous reading was -10.1
Australia Q3 Private Capital Expenditure and October Building Approvals: (GMT 12.30 am, Nov 30/Local Time 11.30 am, Nov 30); forecast for Q3 Private CAPEX: 1.1% from 0.8%; forecast for Building Approvals: -0.9% from 1.5%
China November Manufacturing and Non-manufacturing PMI: (GMT 1 am, Nov 30/Local Time 12 pm, Nov 30) forecast for Manufacturing PMI: 51.5 from 51.6; forecast for Non-manufacturing PMI: previous reading was 54.3
German October Retail Sales (GMT 7 am, Nov 30/Local Time 6 pm) forecast: 0.3% from 0.5%; annual forecast: 2.8% from 4.1%
UK Nationwide House Price Index: (GMT 7 am, Nov 30/Local Time 6 pm, Nov 30); forecast 0.2% from 0.2%
German Unemployment Change and Unemployment Rate: (GMT 9 am, Nov 30/Local Time 8 pm, Nov 30): forecast for Unemployment Change: -10,000 from -11,000; forecast for Unemployment Rate: 5.6% from 5.6%
Euro Zone Flash CPI and Core CPI (GMT 10 am, Nov 30/Local Time 9 pm, Nov 30) forecast CPI: 1.6% from 1.4%; forecast for Core CPI: 1.0% from 0.9%.
US Weekly Jobless Claims, Core PCE, Personal Spending: (GMT 1.30 pm, Nov 30/Local Time 12.30 am, Dec 1) forecast for Jobless Claims: 241,000 from 239,000; forecast for Core PCE: 0.2% from 0.1%; forecast for Personal Spending: 0.2% from 0.1%.
US Chicago PMI: (GMT 2.45 pm, Nov 30/Local Time 1.45 am, Dec 1) forecast: 62.2 from 66.2
Trading View: The economic calendar is full today from a host of countries. The market has all but shrugged off yesterday’s North Korean missile launch. However, another missile firing from “rocket man” would have a different effect and shake things up. The US tax overhaul continues with the start of a full vote in the Senate today. The Dollar’s turnaround from last week’s sell-off continues and we should see consolidation of the Greenback’s gains heading into the data today.
The Dollar Index (USD/DXY) closed flat at 93.238 today. Yesterday’s low traded was 92.992, consolidating its move from this week’s low of 92.50. Overnight high traded was 93.435. We would need to see a decisive move above the 93.20 level and above 93.50 for a more sustained Dollar up move.
EUR/USD – held it's lowed just above 1.1820 (overnight low of 1.18168) after the release of German inflation numbers. EUR/USD rallied to an overnight high of 1.18828 before settling lower at 1.1852 currently. Euro Zone inflation, German Retail Sales and Unemployment data are due out later on. The focus will be on the Euro Zone preliminary inflation readings which are expected to show a modest rise. Anything less than forecast would pressure the Euro lower. There is immediate support for EUR/USD at 1.1840 and then 1.1820. Immediate resistance lies at 1.1870/80. Likely range today 1.1810-1.1870. Look to sell rallies as the speculative community is still long off Euro bets.
GBP/USD – Sterling’s tone turned positive as hopes for a deal between the EU and UK on Brexit’s divorce bill rose. Reports that negotiators agreed to an outline divorce deal brought forward expectations of a trade deal. Which lifted the British Pound. Questions remain as to whether there is enough real progress on a deal to settle the GBP 50 billion Brexit bill. Meantime. Sterling has drifted lower (as this is written) to 1.3405 from 1.3425 NY close. GBP/USD has immediate resistance at 1.3440/50 (overnight high was 1.3448). Immediate support can be found at 1.3400 and then 1.3380. Likely range today 1.3375-1.3435.
USD/JPY – rallied to finish with mild gains at 111.85 (111.55 yesterday). The rise in the Ten Year US yield supported the Dollar, and it should continue to do so. The main risk to further Dollar gains is a speculative community that is short of JPY bets at multi-year highs. USD/JPY has had a strong turnaround from its lows this week at 110.84. Last night’s high was 112.148. Immediate resistance for USD/JPY can be found at 112.00 and 112.15. Likely range today 111.60-112.10.
AUD/USD – The Australian Dollar continues to trade heavy against it’s US counterpart. Metals extended their losses led by Copper. AUD/USD traded to an overnight low of 0.7552 last night. Immediate support lies at the 0.7550 level which is strong. The Aussie has not been able to rally above 0.7650. For today, immediate resistance can be found at 0.7600/10. Australia releases it’s Private Capital Expenditure and Building Approvals data. Chinese Manufacturing and Non-manufacturing PMI’s are also released later on. Both could impact the Aussie. We would need to see some robust data from both to support the slip, sliding Aussie Dollar. Likely range today 0.7560-0.7610. Prefer to sell rallies.
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