Falling commodity prices have certainly helped to limit the upside risks for inflation, and easing price pressures would allow the European Central Bank to ease policy further as they carry out their one and only mandate to ensure price stability.
Fundamental Headlines • Goldman Faces Loss of $2 Billion for Quarter – Wall Street Journal • Yuan's Fall Watched Ahead of U.S.-China Summit – Wall Street Journal • GE seeks to calm investor fears – Financial Times • Barclays Dickers on Waiver as Europe Stems Writedowns – Bloomberg • Boeing Engineers Approve Contract, Averting Strike – Bloomberg • GBPUSD –The U.K.’s construction PMI index slipped to 31.8 from 35.1 in October - the lowest reading since recordkeeping began in 1997 as banks remain reluctant to lend. A deeper look into report showed that new orders declined to 31.8 from 35.1 in the previous month, while the employment component plunged to 31.2 from 40.9. The data continues to reflect a dour outlook for the housing sector, and conditions may only get worse as credit conditions remain far from normal. Despite the extraordinary efforts taken on by the Bank of England and the U.K. Treasury, the growth outlook remains bleak as Europe’s second largest economy heads into a recession for the first time since 1991. Discuss the topic and your trade ideas in the GBP/USD Forum. • EURUSD –The Euro-Zone producer price index fell 0.8% following a 0.3% decline in September, which lowered the annual rate to 6.3% from 7.9%. The report showed that energy costs fell 2.0% followed by a 1.0% in the previous month, while prices for intermediate goods slipped 1.0%. Falling commodity prices have certainly helped to limit the upside risks for inflation, and easing price pressures would allow the European Central Bank to ease policy further as they carry out their one and only mandate to ensure price stability. Discuss the topic and your trade ideas in the EUR/USD Forum. • USDCHF – Switzerland’s consumer price index fell 0.7% in November despite expectations for a 0.2% decline, which helped to lower the annual rate of inflation to 1.5% from 2.6% in October. The breakdown of the report showed that energy prices dropped another 8.2% following a 1.5% drop in the previous month, while transportation costs fell 3.5% during the month. Falling oil prices have certainly helped to taper the upside risks for inflation throughout the global economy, and as price pressures alleviate, the Swiss National Bank may have room to ease policy further as they expect economic activity to deteriorate throughout the next year. For more news and resources, visit the new Swiss franc Currency Room.