So last week we had some pretty significant moves in the market. A relentless up move in the euro currency with the very strong economic improvements/growth seen in recent data releases. We also saw S&P trade above 2600 for the first time ever, setting a new record high and breaking that big figure. At the close of Friday WTI traded a couple of ticks off 59 dollars per barrel. European indices have seen a bit of strength come back into them with Dax moving back above 1.3000. Aussie saw a bid with strength in iron ore and the general dollar weakness.
This dollar weakness really took hold with the FOMC meeting minutes release with more pronounced dovishness around the lag in inflation. With Decembers rate hike being priced in already i think the market is a little worried that the feds rate hike cycle might start to slow next year after this Decembers rate increase. Eurozone recovery has been extremely strong recently and with the weighting on the dollar index has pulled the other majors up with hit significantly weakening the dollar as a whole.
I am long equities (both European and US), the euro and WTI, keeping with the bullish sentiment last week and I am looking for a continuation of the current trend until we hit some big figures that are now in reach. We must be mindful that the market closed in the US on Thursday and Friday so we might see a pullback before participants start adding to their current positioning.
In terms of data, it looks like Monday, Tuesday will be quiet then Wednesday and Thursday will be massive, Friday not as mental. We have french and US GDP on Wednesday then Thursday China manufacturing PMI, germany retail sales, euro CPI and US CORE PCE which the fed are watching closely. Friday looks like a big day for CAD.
So basically will be watching out Monday Tuesday as they are relatively quiet and hold onto the ammo for Wednesday and Thursday. Will be mindful of the US GDP & PCE data as this could change the entire market direction both before and after as participants start to position for next year.
I am looking for euro to trade 1.2000 this week and Crude to hit 60 dollars per barrel if the dollar remains pressured. I am also looking for a full recovery and extension higher in European indices as I see no reason to why they will correct any further to the downside, they have lagged the US counterparts partly because the strength in the euro and dollar weakness. But the euro area is still highly accommodative and is posting very strong growth, I see euro area growth outpacing the US next year which should all be positive for our index futures.
The Euro indices DAX and EuroStoxx trade could be the trade of the weak if we see dollar corrects and things align nicely.
15:00 USD New Home Sales (MoM) (Oct) -6.3% 18.9%
15:00 USD New Home Sales (Oct) 625K 667K
07:00 GBP BoE Financial Stability Report
12:00 EUR GfK German Consumer Climate (Dec) 10.8 10.7
14:00 USD S&P/CS HPI Composite – 20 n.s.a. (YoY) (Sep) 6.1% 5.9%
15:00 USD CB Consumer Confidence (Nov) 124.0 125.9
21:35 USD API Weekly Crude Oil Stock -6.356M
07:45 EUR French Consumer Spending (MoM) (Oct) -0.4% 0.9%
07:45 EUR French GDP (QoQ) (Q3) 0.5% 0.5%
13:00 EUR German CPI (MoM) (Nov) 0.3% 0.0%
13:30 USD GDP (QoQ) (Q3) 3.2% 3.0%
13:30 USD GDP Price Index (QoQ) (Q3) 2.2% 2.2%
15:00 USD Fed Chair Yellen Testifies
15:00 USD Pending Home Sales (MoM) (Oct) 1.0% 0.0%
15:30 USD Crude Oil Inventories -1.545M -1.855M
15:30 USD Cushing Crude Oil Inventories -1.827M
01:00 CNY Manufacturing PMI (Nov) 51.5 51.6
01:00 CNY Non-Manufacturing PMI (Nov) 54.3
06:45 CHF GDP (QoQ) (Q3) 0.6% 0.3%
06:45 CHF GDP (YoY) (Q3) 0.8% 0.3%
07:00 GBP Nationwide HPI (YoY) (Nov) 2.7% 2.5%
07:00 GBP Nationwide HPI (MoM) (Nov) 0.2% 0.2%
07:00 EUR German Retail Sales (MoM) (Oct) 0.3% 0.5%
08:55 EUR German Unemployment Change (Nov) -10K -11K
08:55 EUR German Unemployment Rate (Nov) 5.6% 5.6%
Tentative USD OPEC Meeting
10:00 EUR Italian CPI (MoM) (Nov) -0.2% -0.2%
10:00 EUR Core CPI (YoY) 1.0% 0.9%
10:00 EUR CPI (YoY) (Nov) 1.6% 1.4%
10:00 EUR ECB’s Praet Speaks
10:00 EUR Unemployment Rate (Oct) 8.9% 8.9%
13:30 USD Core PCE Price Index (YoY) (Oct) 1.4% 1.3%
13:30 USD Core PCE Price Index (MoM) (Oct) 0.2% 0.1%
13:30 USD Initial Jobless Claims 240K 239K
13:30 USD Personal Spending (MoM) (Oct) 0.3% 1.0%
14:45 USD Chicago PMI (Nov) 63.0 66.2
23:30 JPY Household Spending (MoM) (Oct) -1.4% 0.4%
23:30 JPY Household Spending (YoY) (Oct) -0.4% -0.3%
23:30 JPY Jobs/applications ratio (Oct) 1.53 1.52
23:30 JPY National Core CPI (YoY) (Oct) 0.8% 0.7%
23:30 JPY Tokyo Core CPI (YoY) (Nov) 0.6% 0.6%
01:45 CNY Caixin Manufacturing PMI (Nov) 50.9 51.0
08:55 EUR German Manufacturing PMI (Nov) 62.5 62.5
09:00 EUR Manufacturing PMI (Nov) 60.0 60.0
09:30 GBP Manufacturing PMI (Nov) 56.5 56.3
13:30 CAD Employment Change (Nov) 10.0K 35.3K
13:30 CAD GDP (QoQ) (Q3) 1.1%
13:30 CAD GDP (MoM) (Sep) 0.1% -0.1%
13:30 CAD GDP Annualized (QoQ) (Q3) 1.6% 4.5%
13:30 CAD Unemployment Rate (Nov) 6.2% 6.3%
14:45 USD Manufacturing PMI (Nov) 53.8 53.8
15:00 USD ISM Manufacturing Employment (Nov) 59.8
15:00 USD ISM Manufacturing PMI (Nov) 58.3 58.7
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