The US$ is mixed but generally weaker today despite some more decent US data although most of the focus has again been on Sterling, which fell steeply after multiple resignations and a letter of no confidence in the government following yesterday’s Brexit draft deal, announced by the UK Theresa May. The UK Government is looking increasingly precarious, as is the Brexit deal, and it looks as though Sterling is in for a tough ride in the days ahead although things are developing rapidly and it is likely to remain highly volatile. Elsewhere the currencies have been choppy, although the Aud$ and the Kiwi are notably firmer following on from yesterday’s strong Australian jobs data.
In terms of data, the US retail sales rose 0.7% last month, above expectations of a 0.5% rise, signalling ongoing strength in consumer spending and doing nothing to alter the general view of a December rate hike. The manufacturing data was more mixed, with the Philadelphia Fed Mfg Survey fell to 12.9 in November, down from 21.1 last month, while the Empire State manufacturing index rose 2.3 points to a reading of 23.3.
In other markets, the US stock indices are closing higher; currently up by around 1%, underpinned by stories that the US/China trade talks are making progress although there has been no form news on this. WTI is up by around 1% also, while the metals are up by around 0.25%.
Friday will be a quieter session in terms of data although Brexit headlines will keep us all on our toes. The NZ Business PMI will be released with a decent number likely to propel the Kiwi higher again, although other than that Asia is devoid of any other figures. Europe will be busier, with the focus being on the EU CPI (exp 0.2%mm, 2.2%yy; Core, exp 1.1%yy) and on Mario Draghi, who will be speaking early in the session. The German Wage Price Index is also due and the Buba’s Weidmann will also be speaking. The US has some secondary data, including the October Capacity Utilisation (exp 78.2%) and Industrial Production (exp 0.2%) as well as the November Kansas Fed Mfg Activity. Have a good weekend.
Economic data highlights will include:
Fri: NZ Business PMI, German Wage Price Index, EU CPI, US Capacity Utilisation, Industrial Production, Kansas Fed Mfg Activity.
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