The US$ was under pressure heading in to the weekend, particularly against the Euro, which broke up though important technical resistance to finish the week above 1.1900 for the first time since September. US Stock Indices and Oil also had a strong Friday session, both making good gains, with the S+P and Nasdaq both reaching new all time highs. The Euro reacted to some positive political headlines and even better economic data. Firstly, news from Germany suggested that the SPD party has returned to the negotiating table, which may allow Merkel to form a minority government if headway can be made in new bargaining talks. Secondly, the German IFO easily beat expectations, with the headline number (Business Climate) reaching another record, at 117.5 (exp116.7) while the IFO’s Expectations component also registered a good result, coming in at 111.0 (vs. 108.8 expected). Together, this adds up to suggest that even though the EU economy is currently picking up speed, the future expectations also look solid. Elsewhere, US stocks finished strongly, after a big turnout on Black Friday, while WTI is still pricing in an extension of the OPEC production cut deal ahead of the upcoming OPEC meeting on Nov 30. The metals were surprisingly steady, unable to take advantage of the soft dollar.
The coming week will be a busy one again with plenty of data although much of it will be of a secondary nature. It will actually be fairly quiet until Wednesday, when the OPEC/Non-OPEC Meeting takes place and the German CPI and the US Q3 GDP and Personal Consumption/Expenditure figures will be released. Thursday will then have the China Mfg/non-Mfg PMIs, the German Retail Sales and Unemployment figures for October as well as the EU CPI, while from the US we get the Personal Consumption/Expenditure Index. Friday sees the Japan CPI, the Caixin China Manufacturing PMI and the German Mfg PMI while from the US we get the ISM Mfg PMI/Prices paid. Most traders though will be looking for clue as to what to expect from the FOMC meeting in December and also to developments in the US tax plan, with various Fed speakers also to come this week – Tuesday – Dudley, Wednesday – Dudley, Yellen, Williams
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