Price pressures in Canada weakened further as the annual rate of inflation slipped to 2.6% from 3.4% in September. In addition, the core measure for inflation continued to hold steady at 1.7% despite expectations for a 0.2% increase to 1.9%.
Fundamental Headlines • Fannie, Freddie to Suspend Foreclosures During Holidays – Wall Street Journal • Citi Weighs Its Options, Including Firm's Sale – Wall Street Journal • FDIC’s plan for home loans gains support – Financial Times • Lukoil May Buy $6.3 Billion Repsol Stake in Refining Expansion – Bloomberg • BNP Paribas May Cut Bonuses at Investment Bank Unit – Bloomberg • USDCAD – Price pressures in Canada weakened further as the annual rate of inflation slipped to 2.6% from 3.4% in September. In addition, the core measure for inflation continued to hold steady at 1.7% despite expectations for a 0.2% increase to 1.9%. Meanwhile, alleviating price pressures will allow the Bank of Canada to ease policy further over the coming months as they expected inflation to fall to 1% next year. Discuss the topic and your trade ideas in the USD/CAD Forum. • EURUSD – Service-based activity in Euro-Zone contracted for the sixth consecutive month in November as the advanced PMI reading slipped to 43.3 from 45.8. In addition, the manufacturing PMI plunged to 36.2 from 41.1, and led the PMI composite to reach its lowest level since recordkeeping began in 1998 as the index slipped to 39.7 from 43.6 in the previous month. A deeper look into the report showed that new orders declined to 29.7 from 36.2, while the employment component weakened to 41.3 from 44.4. Furthermore, the advanced services PMI reading for Germany contracted for the second consecutive month as the index slipped to 46.2 from 48.3 in October. Meanwhile, manufacturing activity contracted for the fourth straight month as the PMI reading slipped to 36.7 from 42.9. The breakdown of the report showed that new orders plunged to 30.9 from 39.2 in the previous month, while the employment component slipped to 44.3 from 47.1. The data suggests that Europe’s largest economy is slowing at an even faster pace in the fourth quarter, and conditions may only get worse over the coming months as demands from home and abroad deteriorate. The dour outlook for Germany has certainly raised expectations that the European Central Bank will ease policy further at the December 4th policy meeting. Discuss the topic and your trade ideas in the EUR/USD Forum. • USDJPY – The Bank of Japan voted unanimously to hold the benchmark interest rate steady at 0.30% as expected, and went onto say that the policy board may increase their efforts to pump liquidity back into the credit market as conditions remain far from normal. In addition, the central bank noted that economic growth has ‘been increasingly sluggish’ as demands from the global economy falter, and said that economic activity is likely to remain subdued for ‘some time’ as the growth outlook remains bleak. For more news and resources, visit the new Japanese Yen Currency Room.