Talking Points:
- Euro Unlikely to Find Lasting Strength in Upbeat 3Q Eurozone GDP Data
- US Dollar May Rise if Upbeat Retail Sales Data Bolsters Fed Rate Hike Bets
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The preliminary set of third-quarter Eurozone GDP figures headlines the economic calendar in European trading hours. The year-on-year growth rate is expected to edge higher to 1.7 percent, the highest in four years. An upbeat outcome seems unlikely to offer meaningful support to the Euro however considering the figures’ limited impact for near-term monetary policy bets.
ECB President Mario Draghi struck a firmly dovish tone as he testified to the EU Parliament yesterday, telegraphing a strong possibility for stimulus expansion at next month’s policy meeting. The central bank chief said that “normalization of inflation could take longer than anticipated,” adding that downside risks are “clearly visible” and warning that a “signs of a turnaround in core inflation have weakened”. This means that – absent a dramatically strong upside deviation from consensus forecasts – the data probably won’t offer lasting support to the single currency.
Later in the day, the spotlight will turn to October’s USRetail Sales report is in the spotlight. Expectations call for an increase of 0.3 percent, marking a narrow improvement from September’s 0.1 percent increase. Economists have steadily downgraded expectations for US economic data outcomes even as realized results have broadly outperformed since early October (according to data from Citigroup). This opens the door for an upside surprise, which may bolster the likelihood of a December Fed rate hike in the minds of investors and send the US Dollar higher.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
---|---|---|---|---|---|
02:00 | NZD | Non Resident Bond Holdings (OCT) | 68.8% | - | 68.7% |
04:30 | JPY | Industrial Production (MoM) (SEP F) | 1.1% | - | 1.0% |
04:30 | JPY | Industrial Production (YoY) (SEP F) | -0.8% | - | -0.9% |
04:30 | JPY | Capacity Utilization (MoM) (SEP) | 1.5% | - | -0.9% |
04:30 | JPY | Tertiary Industry Index (MoM) (SEP) | -0.4% | 0.1% | 0.1% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
---|---|---|---|---|---|
06:30 | EUR | France GDP (YoY) (3Q P) | 1.1% | 1.1% | Medium |
06:30 | EUR | France GDP (QoQ) (3Q P) | 0.3% | 0.0% | Medium |
07:00 | EUR | German GDP SA (QoQ) (3Q P) | 0.3% | 0.4% | High |
07:00 | EUR | German GDP WDA (YoY) (3Q P) | 1.8% | 1.6% | High |
07:00 | EUR | German GDP NSA (YoY) (3Q P) | 1.8% | 1.6% | High |
08:15 | CHF | Producer & Import Prices (MoM) (OCT) | -0.2% | -0.1% | Medium |
08:15 | CHF | Producer & Import Prices (YoY) (OCT) | -6.8% | -6.8% | Medium |
09:30 | GBP | Construction Output SA (MoM) (SEP) | 1.5% | -4.3% | Low |
09:30 | GBP | Construction Output SA (YoY) (SEP) | -0.4% | -1.3% | Low |
10:00 | EUR | Eurozone Trade Balance SA (SEP) | 19.3B | 19.8B | Low |
10:00 | EUR | Eurozone Trade Balance NSA (SEP) | 16.0B | 11.2B | Low |
10:00 | EUR | Eurozone GDP SA (QoQ) (3Q A) | 0.4% | 0.4% | High |
10:00 | EUR | Eurozone GDP SA (YoY) (3Q A) | 1.7% | 1.5% | High |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
---|---|---|---|---|---|---|---|
EURUSD | 1.0500 | 1.0639 | 1.0727 | 1.0778 | 1.0866 | 1.0917 | 1.1056 |
GBPUSD | 1.5072 | 1.5145 | 1.5189 | 1.5218 | 1.5262 | 1.5291 | 1.5364 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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