Talking Points:
- US Dollar corrected lower overnight after snapping losing streak
- Mnuchin appointment, OPEC deal, ADP data fueled reflation bets
- Strong ISM manufacturing survey may boost Fed rate hike outlook
The US Dollar corrected broadly lower in overnight trade after snapping a four-day losing streak yesterday, as expected. The benchmark currency found support the return of “Trump trade” dynamics, an OPEC production cut agreement and upbeat economic data encouraged another swell in Fed rate hike speculation.
The appointment of Steve Mnuchin to Treasury secretary seemed to boost hopes that the seasoned financier will ably implement President-elect Trump’s reflationary policies, upbeat ADP data hinted the economy may be running hotter even before a fiscal boost and the prospect of higher oil prices bolstered price growth bets.
The greenback may continue to recover if November’s ISM manufacturing survey continues the recent run of upbeat US economic news-flow. Economists expect a print at 52.5, putting the pace of factory-sector activity growth at the highest in four months.
UK manufacturing PMI data headlines the economic calendar in European hours. A pickup is expected but the release seems unlikely to be a potent driver for the British Pound considering its limited implications for the near-term trajectory of Bank of England monetary policy.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 21:45 | NZD | Terms of Trade Index (QoQ) (3Q) | -1.8% | 0.0% | -2.5% |
| 22:30 | AUD | AiG Perf of Mfg Index (NOV) | 54.2 | - | 50.9 |
| 23:00 | AUD | CoreLogic House Px (MoM) (NOV) | 0.2% | - | 0.5% |
| 23:00 | NZD | QV House Prices (YoY) (NOV) | 12.4% | - | 12.7% |
| 23:50 | JPY | Capital Spending (YoY) (3Q) | -1.3% | -0.4% | 3.1% |
| 23:50 | JPY | Capital Spending Ex Software (3Q) | -1.4% | -0.6% | 3.1% |
| 23:50 | JPY | Company Profits (3Q) | 11.5% | - | -10.0% |
| 23:50 | JPY | Company Sales (3Q) | -1.5% | - | -3.5% |
| 0:30 | JPY | Nikkei Japan PMI Mfg (NOV F) | 51.3 | - | 51.1 |
| 0:30 | AUD | Private Capital Expenditure (3Q) | -4.0% | -3.0% | -5.2% |
| 1:00 | CNY | Mfg PMI (NOV) | 51.7 | 51 | 51.2 |
| 1:00 | CNY | Non-Mfg PMI (NOV) | 54.7 | - | 54 |
| 1:45 | CNY | Caixin China PMI Mfg (NOV) | 50.9 | 51 | 51.2 |
| 5:00 | JPY | Vehicle Sales (YoY) (NOV) | 13.9% | - | 0.8% |
European Session
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
|---|---|---|---|---|---|
| 7:00 | GBP | Nationwide House Px (MoM) (NOV) | 0.1% (A) | 0.0% | Medium |
| 7:00 | GBP | Nationwide House Px NSA (YoY) (NOV) | 4.4% (A) | 4.6% | Medium |
| 8:15 | CHF | Retail Sales Real (YoY) (OCT) | -0.5% (A) | -2.1% | Low |
| 8:30 | CHF | PMI Mfg (NOV) | 56.6 (A) | 54.7 | Medium |
| 8:45 | EUR | Markit/ADACI Italy Mfg PMI (NOV) | 52.2 (A) | 50.9 | Low |
| 8:50 | EUR | Markit France Mfg PMI (NOV F) | 51.7 (A) | 51.5 | Low |
| 8:55 | EUR | Markit/BME Germany Mfg PMI (NOV F) | 54.3 (A) | 54.4 | Medium |
| 9:00 | EUR | Markit Eurozone Mfg PMI (NOV F) | 53.7 (A) | 53.7 | Medium |
| 9:30 | GBP | Markit UK PMI Mfg SA (NOV) | 54.4 | 54.3 | High |
| 10:00 | EUR | Eurozone Unemployment Rate (OCT) | - | 10.0% | Medium |
| 10:00 | EUR | Italy GDP WDA (QoQ) (3Q F) | - | 0.3% | Low |
| 10:00 | EUR | Italy GDP WDA (YoY) (3Q F) | - | 0.9% | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0375 | 1.0489 | 1.0539 | 1.0603 | 1.0653 | 1.0717 | 1.0831 |
| GBP/USD | 1.2277 | 1.238 | 1.2443 | 1.2483 | 1.2546 | 1.2586 | 1.2689 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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