It has been a choppy day for the dollar, which has recovered from a minor selloff after Donald Trump continued with his verbal intervention on Fed policy, ahead of the Interest Rate Decision due later today. At the end of the session, the currencies are largely unchanged although Cable has firmed up a little.
In terms of data, capping the Euro, the German IFO Business Climate dropped for the fourth straight month to 101.0 in December, down from 102.0 and missed expectation of 101.7. The Current Assessment gauge dropped to 104.5, down from 105.5 and missed expectation of 104.9. The Expectations gauge dropped to 97.3, down from 98.7 and missed consensus of 98.2. In the US, the Building permits and Housing Starts both beat expectations.
Elsewhere, US stocks have given up an early rally that saw gains of 1.0%/1.5% and are currently +0.1/0.3%. WTI has been the big loser again though, down another 7%, currently at 46.25 and looking headed towards major Fibo support at 45.50.
Wednesday will be another busy session although conditions are likely to stay choppy and rangebound until late in the day when the FOMC decision is released, at which a rate hike is widely expected, and possibly more importantly, what the Fed thinks about the growth path/dot-plot for 2019. Assuming a rate hike, traders will therefore spend most of their energy on the words of the Chair, Jerome Powell in his Q/A at the press conference. Before then the session will begin with the NZ Q3 Current Account and Q4 Consumer Confidence figures, while Australia will have the November Leading Economic Index. Europe will look to the German PPI (exp 3.2%yy) and to the UK CPI, PPI, RPI (exp CPI ; 0.2%mm, 2.3%yy, Core;1.8%yy) while the US, aside from the Fed, will also have the November Existing Home Sales (exp 5.2 mio,-0.6%). Have a good day.
Economic data highlights will include:
Wed: NZ Current Account, Consumer Survey, Australian WBC Leading Economic Index, Japan Merchandise Trade Balance Imports/Exports, German PPI, UK CPI, PPI, RPI, EU Construction Orders, UK CBI Distributive Trends Survey – Realised, US Existing Home Sales, EIA Crude Oil Stocks Weekly Change, FOMC Meeting/IR Decision, Press Conference, Fed’s Powell Speech
|INDICES / COMMODITIES|