Market Roundup
• UK Core Retail Sales (MoM) (Oct) -0.9%, -0.3% forecast, 0.1% previous
• UK Retail Sales (MoM) (Oct) -0.7%, -0.3% forecast, 0.1% previous
• UK Retail Sales (YoY) (Oct) 2.4%, 3.4% forecast, 3.2% previous
• German GDP (YoY) (Q3) -0.3%, -0.2% forecast, -0.2% previous
• German GDP (QoQ) (Q3) 0.1%, 0.2% forecast, 0.2% previous
• French S&P Global Composite PMI (Nov) 44.8, 48.1 previous
• French Services PMI (Nov) 45.7, 49.0 forecast, 49.2 previous
• German Composite PMI (Nov) 47.3, 48.6 previous
• German Manufacturing PMI (Nov) 43.2, 43.1 forecast, 43.0 previous
• German Services PMI (Nov) 49.4, 51.8 forecast, 51.6 previous
• EU Manufacturing PMI (Nov) 45.2, 46.0 forecast, 46.0 previous
• EU S&P Global Composite PMI (Nov) 48.1, 50.0 previous
• EU Services PMI (Nov) 49.2, 51.6 forecast, 51.6 previous
• EU Composite PMI (Nov) 49.9, 51.8 previous
• UK Manufacturing PMI (Nov) 48.6, 50.1 forecast, 49.9 previous
• UK Services PMI (Nov) 50.0, 52.3 forecast, 52.0 previous
Looking Ahead Economic Data (GMT)
•13:30 Canada Core Retail Sales (MoM) (Sep) -0.5% forecast, -0.7% previous
•13:30 Canada Manufacturing Sales (MoM) (Oct) -0.8% forecast, -1.3% previous
•13:30 Canada New Housing Price Index (MoM) (Oct) 0.1% forecast, 0.0% previous
•13:30 Canada Retail Sales (MoM) (Sep) 0.3% forecast, 0.4% previous
•13:30 Canada Wholesale Sales (MoM) (Oct) 0.9% forecast, -0.6% previous
•14:45 US Manufacturing PMI (Nov) 48.5 previous
•14:45 US S&P Global Composite PMI (Nov) 54.1 previous
•14:45 US Services PMI (Nov) 55.0 previous
•15:00 USD Michigan 1-Year Inflation Expectations (Nov) 2.6% forecast, 2.7% previous
•15:00 US Michigan 5-Year Inflation Expectations (Nov) 3.1% forecast, 3.0% previous
•15:00 US Michigan Consumer Expectations (Nov) 78.5 forecast, 74.1 previous
•15:00 US Michigan Consumer Sentiment (Nov) 73.0 forecast, 70.5 previous
•15:00 US Michigan Current Conditions (Nov) 64.4 forecast, 64.9 previous
Looking Ahead Events And Other Releases (GMT)
•15:45 ECB's Schnabel Speaks
Currency Forecast
EUR/USD: the euro fell to its lowest level since December 2022 following the release of data that showed a decline in business activity in the euro zone in November. The contraction was driven by a decrease in the dominant services industry and further recession in manufacturing. The initial combined euro zone Purchasing Managers' Index from HCOB, created by S&P Global, dropped to 48.1 in November, hitting a 10-month low and falling below the 50 level that distinguishes between growth and contraction. The latest new business index dropped to 46.6 from 47.9, the lowest so far this year, indicating no immediate signs of improvement. The soft data solidified predictions that the European Central Bank will reduce interest rates in the upcoming month, causing Bund yields to decrease and causing the euro to fall to its lowest level against the dollar since December 2022. Immediate resistance can be seen at 1.0463(38.2%fib), an upside break can trigger rise towards 1.0520(50%fib).On the downside, immediate support is seen at 1.0400`(23.6%fib), a break below could take the pair towards 1.0326(Daily low)
GBP/USD: The pound plummeted dramatically on Friday after data showed that British corporate output contracted in November for the first time in almost a year, while retail sales fell far more than predicted. Sterling fell to its lowest level versus the dollar since May, trading down 0.56% to $1.2517. If future data show continued economic weakness, the Bank of England may be pushed to lower rates more sharply than markets are currently expecting. The preliminary S&P Global Flash Composite PMI for the UK dipped to 49.9 in November, dropping below the neutral 50.0 threshold for the first time in 13 months, from 51.8 in October. Separate data also from Friday showed retail sales volumes dropped by 0.7% in October from September, more than expected and the sharpest drop since June. Immediate resistance can be seen at 1.2612(38.2%fib), an upside break can trigger rise towards 1.2721(50%fib).On the downside, immediate support is seen at 1.2488 (23.6%fib), a break below could take the pair towards 1.2400(Psychological level)
AUD/USD: The Australian dollar fell on Friday as investors digested geopolitical tensions and mixed Australian PMI data . Russia launched a missile at the Ukrainian city of Dnipro on Thursday in reaction to the United States and the United Kingdom's decision to allow Kyiv to target Russian territory with powerful Western weapons. On the statistical front, Australia's manufacturing activity fell for the tenth straight month in November, albeit the rate of decrease eased to its lowest level in six months. Meanwhile, services activity has contracted for the first time in ten months. At GMT 12:47, The Aussie was trading down 0.19% at 0.6489 was set for a weekly gain of 0.80%, well off a three-month low of $0.6441. Immediate resistance can be seen at 0.6555(38.2%fib), an upside break can trigger rise towards 0.6564(SMA 21).On the downside, immediate support is seen at 0.6481(Nov 19th low), a break below could take the pair towards 0.6389(April 16th low).
USD/JPY: The dollar was unchanged against the yen on Friday as investors reacted to Japan's latest inflation data. In October, Japan's core inflation remained over the central bank's target of 2%, with a key measure excluding fuel showing signs of acceleration. The report also showed sustained increases in service pricing, a critical indicator for the Bank of Japan (BOJ) in determining whether businesses are passing on increasing labor expenses. These issues will be extensively examined by the BOJ at its upcoming policy meeting on December 18 and 19. A poll of analysts finds that 56% anticipate the BOJ to boost interest rates again in December. The Japanese yen has fallen a little over 7% against the greenback since October, sliding back below 156 per dollar last week for the first time since July and sparking the possibility Japanese authorities may again take steps to shore up the currency. Immediate resistance can be seen at 155.28(38.2%fib) an upside break can trigger rise towards 156.00(Psychological level). On the downside, immediate support is seen at 153.98(50%fib) a break below could take the pair towards 153.63(21SMA).
Equities Recap
European shares rose on Friday as markets ramped up European Central Bank rate cut bets after data showed a sharp decline in euro area business activity.
At (GMT 12:47)UK's benchmark FTSE 100 was last trading up at 0.48 percent, Germany's Dax was up by 0.42 percent, France’s CAC was last up by 0.09 percent.
Commodities Recap
Gold headed for weekly gain on Friday as the Russia-Ukraine conflict worsened, while the dollar marched higher and bad economic data put pressure on the euro.
Gold was up 1.1% at $2,688 an ounce on Friday and 5.4% higher for the week
Oil prices remained stable on Friday, on track for a 5% weekly increase, as the Ukraine conflict escalated and Chinese imports were expected to grow in November.
Brent crude futures climbed 33 cents, or 0.44%, to $74.56 a barrel by 1008 GMT. U.S. West Texas Intermediate crude futures rose 27 cents, or 0.39%, to $70.37 per barrel.
