It has been a volatile session on all fronts on Wednesday, with much of the focus being on Brexit which produced new headlines throughout the session, but with plenty of important data elsewhere also having an effect on the price action. At the end of the day, US stockmarkets are down by around 0.75%/0.8%, while the US$ is also a little weaker after making some gains earlier in the session following some soft EU data. Cable is actually pretty much unchanged at the time of writing, mainly because no-one knows what to do in the face of the contradictory headlines. In other news, the Italian government has refused to bow to EU demands to change its big-spending budget for next year, having today presented a similar set of proposals to the previous one, which the EU rejected. Expect this story to continue and to further cap gains in the Euro.
The metals are mildly firmer and WTI has made a partial recovery from its lows although it still looks precarious in the longer term.
Data today showed that German Q3 flash GDP fell by -0.2% vs -0.1% q/q expected, while the US$ then came under some pressure of its own when the core CPI rose 2.1%, less than expected (2.2%) but is unlikely to change the course of the Fed in raising rates in December. As far as Brexit goes, an official statement is due shortly.
Thursday will be another busy session, kicking off with the Australian Unemployment (exp 5.1%, +20K), the Consumer Inflation Expectation and a speech from the RBA’s Debelle. Later on Europe will look to clarification on the Brexit terms, while the UK Retail Sales will also be released (exp 0.2%mm, 3.0%yy). The ECB’s Praet/Coeure will be speaking and the EU Trade Balance is due. From the US, the focus will be on the Retail Sales (exp 0.5%mm), while the New York State Empire Mfg Index, Philadelphia Fed Mfg Survey, Business Inventories, Jobless Claims and Import/Export Index are also due. Fed speakers will include Powell, Quarles and Bostic.
Economic data highlights will include:
Thu: Australian Unemployment, China House Price Index, UK Retail Sales , EU Trade Balance, New York State Empire Mfg Index, US Retail Sales, Jobless Claims, Philadelphia Fed Mfg Survey, Import/Export Index, Business Inventories
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