Tuesday has seen a strong reversal higher by the Euro, dragging the Chf along with it, after solid economic data from the EU, particularly Germany, which supports the ECB’s tapering plan for next year. EU GDP grew 0.6% qq in Q3, in line with consensus, and maintained the same pace as Q2. The German GDP grew more than expected, by an impressive 0.8% qq, up from 0.6% in Q2, beating expectation of 0.6% qq. In other data, EU industrial production dropped -0.6% mm in September while the German CPI was finalised at 1.6% yy in October, in line with expectations. In terms of US data, the PPI was strong, coming in at 0.4%/2.8% mm/yy as opposed to expectations of 0.1%/2.4%. Other markets were more stable although Sterling under-performed after the UK CPI came in at 0.1%mm, as opposed to the expected 0.2% mm for October. The commodity bloc remained soggy, weighed down by yesterday’s China data. US Stocks had another choppy session and finished a little lower while the metals were firm due to the softer US$. Oil had a tough day, with WTI down by around 2%, a third straight daily decline, on forecasts for rising US crude output and a gloomier outlook for global demand growth in a report from the International Energy Agency (IEA). The API figure will be released shortly.
Wednesday will begin with the Japan Preliminary Q3 GDP figure and the Australian Wage Price Index although this should have only a minor effect, if any. Europe will follow up with the UK Unemployment, the EU Trade Balance and a speech from the ECB’s Praet. The US will be busy, with the release of the October Retail Sales (exp+0.1%mm), CPI (exp+0.1%mm, 2.0%yy, Ex-Food/Energy +1.7% yy) and Business Inventories (+0.2%mm). The EIA Crude Oil Stocks Weekly Change are also due.
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