Financial News November 27, 2015
2016 global macro economic outlook
In 2015, global macro economic outlook was mostly dominated by the hike aniticipations from Fed and global growth. There were obstacles in US growth in the beginning of the year, in Q2 and early Q3 there was increase in Euro area's sovereign debt concerns, with August's Chinese currency volatiltiy.
The inflaxion point likely remains in place for the next year.
According to RBC Capital Markets,
Global growth and global headline inflation should stabilize and start picking up,
Fed hikes will highlight central bank policy divergence,
USD has room for further gains, even after the first Fed hike,
RMB is likely to weaken through the year
EM corporate debt/leverage will remain a concern.
Market Review November 27, 2015
The Asian session was busy with economic releases from Japan. More specifically, National CPI core stayed unchanged at -0.1%, while Tokyo CPI core improved more than expected to 0.0. Furthermore, household spending dropped sharply by -2.4% in October. Nonetheless, unemployment rate dropped to 3.1% in October, hitting the lowest level in 20 years. USD/JPY is currently trading near the 122.30 area with the next support seen at the 122.25 level.
Released from the United Kingdom during the session,. Gfk index of consumer confidence fell unexpectedly last month. In a report, GfK NOP said that U.K. Gfk Consumer confidence fell to a seasonally adjusted 1, from 2 in the preceding month.
Released during the early European session, German Import Prices declined -0.3% versus the estimated -0.1% while French Consumer Spending declined by -0.7% versus the estimated rise of 0.2%. Furthermore, Spanish Flash CPI declined by -0.3% versus the estimated -0.5%. EUR/USD rose slightly despite the negative economic data and currently is trading near the 1.0625 area.
The key events for the day would be the United Kingdom Second Estimate GDP, Prelim Business Investment and Index of Services.
Additional economic releases are the Italian 10-y Bond Auction, GfK German Consumer Climate and the Canadian Raw Materials Price Index (RMPI).
Data releases to monitor:
EUR: Italian 10-y Bond Auction, GfK German Consumer Climate.
GBP: Second Estimate GDP, Prelim Business Investment, Index of Services.
CAD: RMPI, IPPI.
Trade Idea of the Day
Currently the pair is trading at 1.3319 Traders must monitor the 1.3435 resistance level and the support level 1.3246 for possible breakouts. A possible scenario would be a movement towards the 1.3340 resistance level, where a break may lead to the 1.3375 area. An alternative scenario could be a movement towards the 1.3291 support level, where a break may lead to the 1.3260 area.