Markets are generally mixed today, with the main action having been in Sterling and Oil. Cable soared on the back of news that a Brexit agreement, including the Irish Border issue, will be ready soon, while WTI fell by another 8%, to the lowest level in 11 months, due to ongoing worries about weakening global demand, oversupply and selloffs across other asset classes, including equities.
Elsewhere the FX markets are generally unchanged, while the stock markets have been choppy but are closing the day pretty much where they opened. The metals too are unchanged but look heavy, with Gold and Silver both having briefly broken psychological support ($1200/$14.00).
In terms of data on Tuesday, the UK unemployment rate rose 0.1% to 4.1% in the three months ended September, above expectation of 4.0%, while wage growth showed clear acceleration. Weekly earnings excluding bonus rose 3.2% 3yy, up from 3.1%, beating expectation of 3.1%.
Things do not look quite so special in the EU, where the German ZEW Economic Sentiment improved to -24.1 in November, up from -24.7, beating expectation of -24.2. The Current Situation index, however, dropped sharply to 58.2, down from 70.1 and missed expectation of 65.0. EU ZEW Economic Sentiment dropped to -22.0, down from -19.4 and missed expectation of -17.3. The EU Current Situation dropped sharply by -13.8 to 18.2. Importantly, ZEW noted that “the outlook for the EU has deteriorated even more than it has for Germany.”
Wednesday will begin with a busy Asian session, including the WBC November Australian Consumer Confidence, Australian Q3 Wage Price Index (exp 0.6%qq, 2.3%yy), China Retail Sales (exp 9.1 yy%), Industrial Production(exp 5.7%yy), Fixed Asset Investment (exp 5.5%yy), the Japan Preliminary Q3 GDP (exp -0.2%qq, -1.0%yy), Industrial Production, Capacity Utilisation. The Fed’s Daly will also be speaking early in the Asian session. Europe will also be busy, with the focus on the German Q3 GDP (exp -0.1%qq, +1.2%yy), UK CPI (exp 2.5%), PPI, RPI, EU Preliminary Q3 GDP(exp 0.2%qq, 1.7%yy), Industrial Production and Employment Change (exp 0.4%qq, 1,5%yy%). Not to be left out, the US will see the October CPI (exp 0.3%mm, 2.5%yy, Ex F/E 0.2%mm, 2.2%yy) and then the Fed Chair, Jerome Powell will be speaking and may well cement the fact that we are looking at a December rate hike.
Economic data highlights will include:
Wed: WBC Australian Consumer Confidence, Wage Price Index, China Retail Sales, Industrial Production, Capacity Utilisation, Japan Preliminary Q3 GDP, Industrial Production, Fixed Asset Investment, German Q3 GDP, UK CPI, PPI, RPI, EU Preliminary Q3 GDP, Industrial Production, Employment Change, US CPI, API Weekly Crude Oil Stock Inventory , EIA Crude Oil Stocks Weekly Change
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