16 Nov: Gbp collapses as Brexit deal seems increasingly precarious. . Otherwise choppy. EU CPI, US IP/CU today.

By | November 16, 2018

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.

CURRENCIES
EURUSD: 1.1352
Res  1.1370  1.1400  1.1425
Sup  1.1325  1.1300  1.1275
USDJPY: 113.64
Res  113.70  114.00  114.20
Sup  113.30  113.10  112.95
GBPUSD: 1.2788
Res  1.2850  1.2920  1.2990
Sup  1.2725  1.2660  1.2590
USDCHF: 1.0057
Res  1.0090  1.0130  1.0170
Sup  1.0015  0.9980  0.9950
AUDUSD: 0.7292
Res  0.7300  0.7315  0.7330
Sup  0.7275  0.7260  0.7240
NZDUSD: 0.6837
Res  0.6860  0.6900  0.6925
Sup  0.6810  0.6785  0.6755
INDICES / COMMODITIES
S&P.fs: 2721
Res  2735  2745  2760
Sup  2710  2690  2670
DJ30.fs: 25198
Res  25260  25350  25440
Sup  25135  25070  24960
SPI200.fs: 5755
Res  5770  5780  5800
Sup  5745  5730  5715
XAUUSD: 1213
Res  1215  1220.00  1225
Sup  1210  1205.00  1200
XAGUSD: 14.32
Res  14.35  14.45  14.60
Sup  14.25  14.10  13.95
WTI.fs: 56.43
Res  57.30  58.80  60.70
Sup  54.70  53.50  52.30