Alpari UK
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Alpari UK
Experienced member
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UK Opening Call from Alpari UK on 27 November 2013
Today’s UK opening call provides an update on:
• Economic data to breathe new life into the markets on Wednesday;
• Consumer spending in Germany the pick of the bunch from the eurozone;
• First revision of UK GDP expected to remain unchanged at 0.8%;
• Flurry of US data due ahead of Thanksgiving tomorrow when US markets will be closed.
It’s going to be a much busier day in the financial markets on Wednesday, with a flurry of data due out of the UK, eurozone and US that should breathe some fresh life into the financial markets.
It’s been a very slow start to the week so far, with very little economic data being released and no major news stories significantly moving the markets. Even the BoE inflation report hearing on Tuesday was a dull affair, with members of the MPC just reiterating what they had already said at the press conference following the release of the report.
Things should pick up today though, with the focus initially being on the eurozone as we get Spanish retail sales, French consumer spending and German consumer confidence data early in the session. The pick of the bunch will be the Gfk consumer confidence figure for Germany, which is expected to rise to 7.1 following a surprising drop last month.
Consumer spending in Germany has become a big issue for the eurozone recently, with certain figures highlighting Germany’s large trade surplus as something that needs to be reduced as part of the eurozone’s rebalancing. There have been calls for German consumers to save less and spend more, which should be helped with the introduction of a new minimum wage which appears to have been agreed between the potential grand coalition partners. The recent Gfk figures suggest that Germany is responding by spending more, although a lot more will have to be done, as the countries trade surplus is also on the rise.
The focus will then switch to the UK for the first revision of the country’s third quarter GDP figure, which is expected to remain at 0.8%, as per the preliminary release. This is still a very strong figure for the UK and confirms it as one of the fastest growing Western economies. Although, it also shows that the momentum is slowing, with growth in the second quarter being only 0.1% less. It will now be a big test for the UK to maintain these growth rates and set itself on course for a sustainable recovery, even when the eurozone is stagnating and the US constantly tripping itself up.
After this it’s over to the US, where we have a number of pieces of data scheduled for release, including durable goods orders, initial jobless claims and UoM consumer sentiment. Jobless claims have been on the decline in the last month or so, following a spike higher due to a combination of the government shutdown and an IT issue in California that saw a backlog of claims build up. That said, a small increase in the figure is expected today, with claims rising from 323,000 last week to 330,00 this week. It should also be noted that the previous week’s figure has been revised higher in four of the last five weeks, so the same should probably be expected again today.
Durable goods orders are expected to fall by 1.9% in October, although traders tend to pay more attention to the less volatile core durable goods orders, which are expected to rise by 0.5%. Much of the drop in durable goods orders is due to a decline in commercial aircraft orders, which are stripped out of the core figure. These can be very volatile which is why traders pay more attention to the core figure.
Finally we have the revised UoM consumer sentiment figure, which is expected to be revised higher to 73.5, from 72 initially. All things considered, today should be the most interesting day this week, especially given that US markets are closed tomorrow for Thanksgiving, which will see trading volumes drop significantly.
Ahead of the open we expect to see the FTSE flat, the CAC up 4 points and the DAX up 6 points.
Today’s UK opening call provides an update on:
• Economic data to breathe new life into the markets on Wednesday;
• Consumer spending in Germany the pick of the bunch from the eurozone;
• First revision of UK GDP expected to remain unchanged at 0.8%;
• Flurry of US data due ahead of Thanksgiving tomorrow when US markets will be closed.
It’s going to be a much busier day in the financial markets on Wednesday, with a flurry of data due out of the UK, eurozone and US that should breathe some fresh life into the financial markets.
It’s been a very slow start to the week so far, with very little economic data being released and no major news stories significantly moving the markets. Even the BoE inflation report hearing on Tuesday was a dull affair, with members of the MPC just reiterating what they had already said at the press conference following the release of the report.
Things should pick up today though, with the focus initially being on the eurozone as we get Spanish retail sales, French consumer spending and German consumer confidence data early in the session. The pick of the bunch will be the Gfk consumer confidence figure for Germany, which is expected to rise to 7.1 following a surprising drop last month.
Consumer spending in Germany has become a big issue for the eurozone recently, with certain figures highlighting Germany’s large trade surplus as something that needs to be reduced as part of the eurozone’s rebalancing. There have been calls for German consumers to save less and spend more, which should be helped with the introduction of a new minimum wage which appears to have been agreed between the potential grand coalition partners. The recent Gfk figures suggest that Germany is responding by spending more, although a lot more will have to be done, as the countries trade surplus is also on the rise.
The focus will then switch to the UK for the first revision of the country’s third quarter GDP figure, which is expected to remain at 0.8%, as per the preliminary release. This is still a very strong figure for the UK and confirms it as one of the fastest growing Western economies. Although, it also shows that the momentum is slowing, with growth in the second quarter being only 0.1% less. It will now be a big test for the UK to maintain these growth rates and set itself on course for a sustainable recovery, even when the eurozone is stagnating and the US constantly tripping itself up.
After this it’s over to the US, where we have a number of pieces of data scheduled for release, including durable goods orders, initial jobless claims and UoM consumer sentiment. Jobless claims have been on the decline in the last month or so, following a spike higher due to a combination of the government shutdown and an IT issue in California that saw a backlog of claims build up. That said, a small increase in the figure is expected today, with claims rising from 323,000 last week to 330,00 this week. It should also be noted that the previous week’s figure has been revised higher in four of the last five weeks, so the same should probably be expected again today.
Durable goods orders are expected to fall by 1.9% in October, although traders tend to pay more attention to the less volatile core durable goods orders, which are expected to rise by 0.5%. Much of the drop in durable goods orders is due to a decline in commercial aircraft orders, which are stripped out of the core figure. These can be very volatile which is why traders pay more attention to the core figure.
Finally we have the revised UoM consumer sentiment figure, which is expected to be revised higher to 73.5, from 72 initially. All things considered, today should be the most interesting day this week, especially given that US markets are closed tomorrow for Thanksgiving, which will see trading volumes drop significantly.
Ahead of the open we expect to see the FTSE flat, the CAC up 4 points and the DAX up 6 points.
Alpari UK
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US Opening Call from Alpari UK on 27 November 2013
Europe higher on German data and coalition deal
Today’s US opening call provides an update on:
* German grand coalition agreed, awaiting referendum from SPD;
* Consumer confidence highest in six years in Germany;
* Sterling breaks through massive resistance level shortly after GDP release;
* Low US trading volumes expected ahead of Thanksgiving holiday.
European indices are trading higher across the board on Wednesday, following an encouraging morning in Germany that saw a coalition agreed between the two largest parties and consumer confidence hit levels not seen since September 2007.
The two major parties in Germany, Chancellor Merkel’s CDU party and the Social Democrats, finally agreed a deal this morning to form a grand coalition after two months of negotiations that focused on issues such as minimum wage and pensions.
The deal has been expected ever since the election, which is why the response has only been minimal, but the negotiations have really dragged on. The next stage is for the social democrats to hold a referendum on whether to form a coalition, which I imagine will go smoothly after the CDU made certain concessions in order to form the coalition. This should be completed by the middle of December.
Also providing a boost this morning is the surprise spike in the German Gfk consumer confidence figure, which hit six year highs of 7.4, well above expectations of a 0.1 rise to 7.1. A lot of pressure has been put on Germany to encourage people to spend more in order to drive demand for products from other eurozone countries and rebalance the region.
As it stands, Germany has continued to see rising trade surpluses while the debtor countries are working to regain competitiveness. With a new minimum wage expected to come in as part of the coalition agreement, this should only fuel further spending from consumers, prompting further rises in these confidence figures and hopefully, more of a rebalancing in the region. For now though, this is a very good base to start from with consumers clearly planning to spend more before the new minimum wage comes into place.
Also released this morning was the first revision to the UK third quarter GDP figure, which was unchanged at 0.8%. This was in line with expectations so prompted minimal reaction in the markets, although shortly after the release we did see a big spike in sterling which pushed it through a massive resistance level against the dollar.
This should now see the pair hit another big resistance level, around 1.6325, in the coming weeks, with a break above here prompting a significant strengthening of the pound. The only question now is whether this will hurt British exporters at a time when the UK is trying to rebalance the economy.
We’re already seeing evidence that exports are struggling in the UK, with the GDP figure showing that a rise in household spending to the highest level in three years essentially papering over the cracks that are starting to appear. We can’t rely on increases in household spending to solely drive the recovery at a time when incomes are rising much slower than inflation and debt levels remain high. Unless we see a change here, the recovery could prove to be unsustainable, or alternatively, we could find ourselves back in a similar situation at some point in the not too distant future.
There’s also going to be plenty of data being released during the US session on Wednesday, although trading volumes will probably be lower ahead of Thanksgiving tomorrow. First up we have core durable goods orders for October which are expected to rise by 0.5% following a small drop in September. The non-core figure on the other hand is expected to drop by 1.9%, having been heavily distorted by a drop in commercial aircraft orders in October. It’s because of these distortions that traders tend to pay more attention to the core figure.
Also being released today is the weekly jobless claims, which are expected to rise slightly to 330,000 and the revised UoM consumer sentiment figure, which is expected to rise to 73.5, up from 72 when the preliminary figure was released earlier this month.
Ahead of the open we expect to see the S&P up 2 points, Dow up 21 points and the NASDAQ up 5 points.
Europe higher on German data and coalition deal
Today’s US opening call provides an update on:
* German grand coalition agreed, awaiting referendum from SPD;
* Consumer confidence highest in six years in Germany;
* Sterling breaks through massive resistance level shortly after GDP release;
* Low US trading volumes expected ahead of Thanksgiving holiday.
European indices are trading higher across the board on Wednesday, following an encouraging morning in Germany that saw a coalition agreed between the two largest parties and consumer confidence hit levels not seen since September 2007.
The two major parties in Germany, Chancellor Merkel’s CDU party and the Social Democrats, finally agreed a deal this morning to form a grand coalition after two months of negotiations that focused on issues such as minimum wage and pensions.
The deal has been expected ever since the election, which is why the response has only been minimal, but the negotiations have really dragged on. The next stage is for the social democrats to hold a referendum on whether to form a coalition, which I imagine will go smoothly after the CDU made certain concessions in order to form the coalition. This should be completed by the middle of December.
Also providing a boost this morning is the surprise spike in the German Gfk consumer confidence figure, which hit six year highs of 7.4, well above expectations of a 0.1 rise to 7.1. A lot of pressure has been put on Germany to encourage people to spend more in order to drive demand for products from other eurozone countries and rebalance the region.
As it stands, Germany has continued to see rising trade surpluses while the debtor countries are working to regain competitiveness. With a new minimum wage expected to come in as part of the coalition agreement, this should only fuel further spending from consumers, prompting further rises in these confidence figures and hopefully, more of a rebalancing in the region. For now though, this is a very good base to start from with consumers clearly planning to spend more before the new minimum wage comes into place.
Also released this morning was the first revision to the UK third quarter GDP figure, which was unchanged at 0.8%. This was in line with expectations so prompted minimal reaction in the markets, although shortly after the release we did see a big spike in sterling which pushed it through a massive resistance level against the dollar.
This should now see the pair hit another big resistance level, around 1.6325, in the coming weeks, with a break above here prompting a significant strengthening of the pound. The only question now is whether this will hurt British exporters at a time when the UK is trying to rebalance the economy.
We’re already seeing evidence that exports are struggling in the UK, with the GDP figure showing that a rise in household spending to the highest level in three years essentially papering over the cracks that are starting to appear. We can’t rely on increases in household spending to solely drive the recovery at a time when incomes are rising much slower than inflation and debt levels remain high. Unless we see a change here, the recovery could prove to be unsustainable, or alternatively, we could find ourselves back in a similar situation at some point in the not too distant future.
There’s also going to be plenty of data being released during the US session on Wednesday, although trading volumes will probably be lower ahead of Thanksgiving tomorrow. First up we have core durable goods orders for October which are expected to rise by 0.5% following a small drop in September. The non-core figure on the other hand is expected to drop by 1.9%, having been heavily distorted by a drop in commercial aircraft orders in October. It’s because of these distortions that traders tend to pay more attention to the core figure.
Also being released today is the weekly jobless claims, which are expected to rise slightly to 330,000 and the revised UoM consumer sentiment figure, which is expected to rise to 73.5, up from 72 when the preliminary figure was released earlier this month.
Ahead of the open we expect to see the S&P up 2 points, Dow up 21 points and the NASDAQ up 5 points.
Alpari UK
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UK Opening Call from Alpari UK on 29 November 2013
Europe lower ahead of eurozone CPI and unemployment
Today’s UK opening call provides an update on:
• Thin trading volumes as US traders opt for long weekend following Thanksgiving holiday;
• Retailers in focus as Black Friday gets underway;
• Eurozone CPI and unemployment followed very closely this morning;
• UK consumers feeling less confident for a second consecutive month;
• S&P been very busy this morning, Netherlands loses AAA rating.
European indices are expected to open slightly lower on Friday, ahead of what is likely to be a relatively quiet end to the week.
Trading volumes are expected to recovery slightly today, after US markets closed on Thursday for Thanksgiving. They’re still likely to be lower than normal though, with many traders in the US opting to turn the Thanksgiving holiday into a long weekend and take full advantage of the Black Friday sales.
Black Friday should bring retailers to the fore today. Any indication that the recent drop in consumer sentiment in the US is encouraging them to avoid these sales could be seen as a sign that Christmas sales as a whole will be disappointing. Given the popularity of Black Friday in the past, this seems unlikely, but investors will certainly be watching this with interest throughout the day.
In Europe we have a large number of economic releases scheduled for Friday, although many of them are low or medium impact releases, so are unlikely to have any significant impact on the markets. The key release this morning will be the eurozone CPI and unemployment figures, although some will argue that the importance of the former has been reduced by the ECBs decision to cut interest rates earlier this month.
However, should we see another significant dip, it would raise the possibility of the ECB adopting negative deposit rates in the coming months, which would be very negative for the euro but positive for European stocks. As for the unemployment rate, this is expected to remain at record high levels of 12.2%, although given the recent volatility in this figure I wouldn’t be surprised to see some movement here.
Aside from these figures, we also have German retail sales, French consumer sentiment, UK Nationwide house prices and UK net lending to individuals figures being released. These should all be of interest to investors, although the impact on the markets will probably be minimal.
The UK has already been in the spotlight this morning, with the release of the Gfk consumer confidence for November. The figure dipped for a second month, to -12 from -11, which may raise early alarms about the sustainable of the recovery being seen in the UK. The consumer has been an extremely important part of the recovery so far and any sign that this is set to change could raise some serious doubts among investors.
S&P, the ratings agency, has been very busy so far this morning. The Netherlands became the latest country to be stripped of its AAA rating, with S&P downgrading it to AA+, outlook stable. Spain on the other hand had its outlook raised to stable, following improvements in the country this year, while its rating was affirmed at BBB-. Cyprus was also on the receiving hand of an upgrade, with its rating being changed to B- from CCC+, outlook stable.
Ahead of the open we expect to see the FTSE down 6 points, the CAC down 8 points and the DAX down 2 points.
Europe lower ahead of eurozone CPI and unemployment
Today’s UK opening call provides an update on:
• Thin trading volumes as US traders opt for long weekend following Thanksgiving holiday;
• Retailers in focus as Black Friday gets underway;
• Eurozone CPI and unemployment followed very closely this morning;
• UK consumers feeling less confident for a second consecutive month;
• S&P been very busy this morning, Netherlands loses AAA rating.
European indices are expected to open slightly lower on Friday, ahead of what is likely to be a relatively quiet end to the week.
Trading volumes are expected to recovery slightly today, after US markets closed on Thursday for Thanksgiving. They’re still likely to be lower than normal though, with many traders in the US opting to turn the Thanksgiving holiday into a long weekend and take full advantage of the Black Friday sales.
Black Friday should bring retailers to the fore today. Any indication that the recent drop in consumer sentiment in the US is encouraging them to avoid these sales could be seen as a sign that Christmas sales as a whole will be disappointing. Given the popularity of Black Friday in the past, this seems unlikely, but investors will certainly be watching this with interest throughout the day.
In Europe we have a large number of economic releases scheduled for Friday, although many of them are low or medium impact releases, so are unlikely to have any significant impact on the markets. The key release this morning will be the eurozone CPI and unemployment figures, although some will argue that the importance of the former has been reduced by the ECBs decision to cut interest rates earlier this month.
However, should we see another significant dip, it would raise the possibility of the ECB adopting negative deposit rates in the coming months, which would be very negative for the euro but positive for European stocks. As for the unemployment rate, this is expected to remain at record high levels of 12.2%, although given the recent volatility in this figure I wouldn’t be surprised to see some movement here.
Aside from these figures, we also have German retail sales, French consumer sentiment, UK Nationwide house prices and UK net lending to individuals figures being released. These should all be of interest to investors, although the impact on the markets will probably be minimal.
The UK has already been in the spotlight this morning, with the release of the Gfk consumer confidence for November. The figure dipped for a second month, to -12 from -11, which may raise early alarms about the sustainable of the recovery being seen in the UK. The consumer has been an extremely important part of the recovery so far and any sign that this is set to change could raise some serious doubts among investors.
S&P, the ratings agency, has been very busy so far this morning. The Netherlands became the latest country to be stripped of its AAA rating, with S&P downgrading it to AA+, outlook stable. Spain on the other hand had its outlook raised to stable, following improvements in the country this year, while its rating was affirmed at BBB-. Cyprus was also on the receiving hand of an upgrade, with its rating being changed to B- from CCC+, outlook stable.
Ahead of the open we expect to see the FTSE down 6 points, the CAC down 8 points and the DAX down 2 points.
Alpari UK
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US Opening Call from Alpari UK on 29 November 2013
Calm before the storm expected this afternoon
Today’s US opening call provides an update on:
* S&P busy early on in Friday’s session;
* Eurozone inflation rises, but deflation fears linger;
* Upward momentum in eurozone unemployment gone;
* Quiet US session expected.
It’s been quite a busy start to the European session on Friday, with a whole host of economic releases and ratings upgrades boosting investor sentiment.
S&P were quick off the mark this morning, raising Spain’s outlook to stable, from negative, while affirming its credit rating at BBB-, the lowest investment grade rating. Shortly after, the ratings agency upgraded Cyprus from CCC+ to B-, outlook stable, while the only bad news came from the Netherlands, which became the latest country to lose its AAA rating.
Following a positive start to the session, we had a number of economic releases in Europe, although most of them were low impact releases. The most notable releases were the eurozone CPI and unemployment figures, following the ECB rate cut earlier this month.
Now, it’s probably too early to suggest that the rate cut has had any real impact on the inflation figure, but the release could have been important in showing the disinflationary pressures have eased, or worse, they’re accelerating. As it turned out, it was the former, which shouldn’t be too much of a surprise given the size of the drop last month.
This should now make it very unlikely that the ECB will cut the deposit rate in the coming months, despite recent rumours which suggested they might. That said, with the euro grinding higher again and efforts continuing in peripheral countries to regain competitiveness through austerity, the disinflationary pressures are likely to continue into 2014, so a rate cut in the first half of the year cannot be ruled out.
The unemployment figure was also encouraging, although this does tend to fluctuate quite a bit. One thing looks clear though, the upward momentum on the figure has almost grinded to a halt. While stagnation in the euro area is expected for the next 18 months or so, keeping the figure at elevated levels, it looks unlikely to rise much further.
Today’s US session is likely to be extremely quiet, with volumes being hit as a number of traders turn the Thanksgiving holiday into a long weekend. There’s also a significant lack of economic data being released between now and the end of the day. In fact, no data is scheduled for release from the US, while in Canada we only have the third quarter GDP figure being released, which is expected to rise to 2.5% on an annualised basis.
This could also be seen as the calm before the storm, with a huge amount of data being released next week, including the big daddy itself, the non-farm payrolls figure. This could potentially be difference between a Fed taper in December or the first quarter of 2014. We also have a few central bank meetings, making next week a massive one for the markets.
Ahead of the open we expect to see the S&P flat, Dow up 2 points and the NASDAQ up 2 points.
Calm before the storm expected this afternoon
Today’s US opening call provides an update on:
* S&P busy early on in Friday’s session;
* Eurozone inflation rises, but deflation fears linger;
* Upward momentum in eurozone unemployment gone;
* Quiet US session expected.
It’s been quite a busy start to the European session on Friday, with a whole host of economic releases and ratings upgrades boosting investor sentiment.
S&P were quick off the mark this morning, raising Spain’s outlook to stable, from negative, while affirming its credit rating at BBB-, the lowest investment grade rating. Shortly after, the ratings agency upgraded Cyprus from CCC+ to B-, outlook stable, while the only bad news came from the Netherlands, which became the latest country to lose its AAA rating.
Following a positive start to the session, we had a number of economic releases in Europe, although most of them were low impact releases. The most notable releases were the eurozone CPI and unemployment figures, following the ECB rate cut earlier this month.
Now, it’s probably too early to suggest that the rate cut has had any real impact on the inflation figure, but the release could have been important in showing the disinflationary pressures have eased, or worse, they’re accelerating. As it turned out, it was the former, which shouldn’t be too much of a surprise given the size of the drop last month.
This should now make it very unlikely that the ECB will cut the deposit rate in the coming months, despite recent rumours which suggested they might. That said, with the euro grinding higher again and efforts continuing in peripheral countries to regain competitiveness through austerity, the disinflationary pressures are likely to continue into 2014, so a rate cut in the first half of the year cannot be ruled out.
The unemployment figure was also encouraging, although this does tend to fluctuate quite a bit. One thing looks clear though, the upward momentum on the figure has almost grinded to a halt. While stagnation in the euro area is expected for the next 18 months or so, keeping the figure at elevated levels, it looks unlikely to rise much further.
Today’s US session is likely to be extremely quiet, with volumes being hit as a number of traders turn the Thanksgiving holiday into a long weekend. There’s also a significant lack of economic data being released between now and the end of the day. In fact, no data is scheduled for release from the US, while in Canada we only have the third quarter GDP figure being released, which is expected to rise to 2.5% on an annualised basis.
This could also be seen as the calm before the storm, with a huge amount of data being released next week, including the big daddy itself, the non-farm payrolls figure. This could potentially be difference between a Fed taper in December or the first quarter of 2014. We also have a few central bank meetings, making next week a massive one for the markets.
Ahead of the open we expect to see the S&P flat, Dow up 2 points and the NASDAQ up 2 points.
Alpari UK
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Daily Market Update - 29 November 2013 - Alpari UK
0:24 S&P busy before the European open
1:46 Eurozone unemployment falls in Ocotber
2:57 Inflation rises in November following ECB rate cut
5:18 Quiet US session expected after Thanksgiving holiday.
http://www.youtube.com/watch?v=PZJu38babyE
0:24 S&P busy before the European open
1:46 Eurozone unemployment falls in Ocotber
2:57 Inflation rises in November following ECB rate cut
5:18 Quiet US session expected after Thanksgiving holiday.
http://www.youtube.com/watch?v=PZJu38babyE
Gordonsbin
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Great resources.. Learning how to trade on Forex is as much about forgetting the useless as remembering the useful. You should always know your good from bad when it comes to Forex education. Soaking up the good stuff is a priority...
Alpari UK
Experienced member
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UK Opening Call from Alpari UK on 2 December 2013
Consumers in focus on Monday, massive data-week ahead
Today’s UK opening call provides an update on:
• Busy week ahead with a focus on Friday’s jobs report;
• Four major central bank meetings also key this week;
• Chinese manufacturing PMIs get things off to a positive start;
• Investors turn to Eurozone PMIs this morning;
• US data and Cyber Monday in focus this afternoon.
It’s going to be a very busy week for the financial markets, with particular focus being paid to the large number of economic releases ahead of the FOMC meeting in a couple of weeks.
As it stands, I think it’s very unlikely that the Fed will scale back its asset purchases in a couple of weeks time. While some areas of the economy have improved and the impact of the October government shutdown has been non-existent, the majority of the data has been fairly mixed. The headline jobs figures have looked pretty good the last few months, until you look at where the hiring is taking place and why the unemployment rate is falling.
That said, the Fed is coming under increasing pressure to reduce its asset purchases and start deflating the bubbles that are forming in the financial markets as a result of its loose monetary policy. Perhaps another batch of strong economic reports will encourage them to do just that, although I’m not convinced at this stage. The only person on the FOMC that looks more reluctant than Chairman Ben Bernanke to taper is his likely successor Janet Yellen.
Aside from all these economic reports this week, we also have four major central banks meeting this week including the Bank of England, European Central Bank, Reserve Bank of Australia and the Bank of Canada. We should therefore seeing plenty of movement in the markets this week as traders attempt to use all of these releases and statements to predict what the central banks will do next.
The week has already got off to a positive start, with the two manufacturing PMIs from China both coming in ahead of expectations and comfortably in growth territory. The HSBC figure is the one most people pay attention to the data isn’t skewed by the large state owned businesses and therefore gives a much better indication of how the industry is performing as a whole and whether the improvements are sustainable. Despite falling slightly to 50.8, the figure still looks very good and suggests the recent improvement is sustainable despite the fact that the government is attempting to transition towards a more consumer-led economy and the central bank is looking to tighten monetary policy.
Next we have a number of manufacturing PMIs for the eurozone and some of its member states. It is worth noting that these are revised figures and therefore any reactions in the markets are likely to be minimal. The UK manufacturing PMI will be released shortly after these and is expected to remain the best performing of the lot, at 56.3.
While we have a lot of US data being released this week, Monday is expected to be a little quieter, with the manufacturing PMI being the only noteworthy release. This is expected to remain comfortably in growth territory at 55.2, down slightly from October’s 56.4.
Finally today there will be a focus on the online retailers, as investors look for clues about how consumers will spend this holiday season. Black Friday appeared to be a success overall, with consumers spending roughly the same, if not slightly more than last year. Today is Cyber Monday, which will bring the likes of Amazon and eBay into focus as we get an indication about what consumers online spending habits will be like this year. If the figures suggest that consumers are holding back at all, having been potentially knocked by one of the many fiscal horror shows this year, it would not bode well for retailers going into the holiday season, not to mention the US economy as a whole given its reliance on consumer spending.
Ahead of the open we expect to see the FTSE down 17 points, the CAC down 2 points and the DAX down 7 points.
Consumers in focus on Monday, massive data-week ahead
Today’s UK opening call provides an update on:
• Busy week ahead with a focus on Friday’s jobs report;
• Four major central bank meetings also key this week;
• Chinese manufacturing PMIs get things off to a positive start;
• Investors turn to Eurozone PMIs this morning;
• US data and Cyber Monday in focus this afternoon.
It’s going to be a very busy week for the financial markets, with particular focus being paid to the large number of economic releases ahead of the FOMC meeting in a couple of weeks.
As it stands, I think it’s very unlikely that the Fed will scale back its asset purchases in a couple of weeks time. While some areas of the economy have improved and the impact of the October government shutdown has been non-existent, the majority of the data has been fairly mixed. The headline jobs figures have looked pretty good the last few months, until you look at where the hiring is taking place and why the unemployment rate is falling.
That said, the Fed is coming under increasing pressure to reduce its asset purchases and start deflating the bubbles that are forming in the financial markets as a result of its loose monetary policy. Perhaps another batch of strong economic reports will encourage them to do just that, although I’m not convinced at this stage. The only person on the FOMC that looks more reluctant than Chairman Ben Bernanke to taper is his likely successor Janet Yellen.
Aside from all these economic reports this week, we also have four major central banks meeting this week including the Bank of England, European Central Bank, Reserve Bank of Australia and the Bank of Canada. We should therefore seeing plenty of movement in the markets this week as traders attempt to use all of these releases and statements to predict what the central banks will do next.
The week has already got off to a positive start, with the two manufacturing PMIs from China both coming in ahead of expectations and comfortably in growth territory. The HSBC figure is the one most people pay attention to the data isn’t skewed by the large state owned businesses and therefore gives a much better indication of how the industry is performing as a whole and whether the improvements are sustainable. Despite falling slightly to 50.8, the figure still looks very good and suggests the recent improvement is sustainable despite the fact that the government is attempting to transition towards a more consumer-led economy and the central bank is looking to tighten monetary policy.
Next we have a number of manufacturing PMIs for the eurozone and some of its member states. It is worth noting that these are revised figures and therefore any reactions in the markets are likely to be minimal. The UK manufacturing PMI will be released shortly after these and is expected to remain the best performing of the lot, at 56.3.
While we have a lot of US data being released this week, Monday is expected to be a little quieter, with the manufacturing PMI being the only noteworthy release. This is expected to remain comfortably in growth territory at 55.2, down slightly from October’s 56.4.
Finally today there will be a focus on the online retailers, as investors look for clues about how consumers will spend this holiday season. Black Friday appeared to be a success overall, with consumers spending roughly the same, if not slightly more than last year. Today is Cyber Monday, which will bring the likes of Amazon and eBay into focus as we get an indication about what consumers online spending habits will be like this year. If the figures suggest that consumers are holding back at all, having been potentially knocked by one of the many fiscal horror shows this year, it would not bode well for retailers going into the holiday season, not to mention the US economy as a whole given its reliance on consumer spending.
Ahead of the open we expect to see the FTSE down 17 points, the CAC down 2 points and the DAX down 7 points.
Alpari UK
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US Opening Call from Alpari UK on 2 December 2013
Investors risk averse ahead of very important week
Today’s US opening call provides an update on:
* Investors risk averse ahead of very important week;
* Central bank meetings adding to cautious tone in the markets;
* Manufacturing PMIs improve in most countries;
*US data and Bernanke speech up next.
European indices are trading lower on Monday and US futures are pointing in the same direction in the run up to the opening bell on Wall Street.
This is probably largely due to investors being a little more risk averse at the start of a very big week for the markets, rather than a negative response to the data we’ve seen this morning, which has actually been largely positive.
This week could be massive for the financial markets. We have a lot of US data being released this week, including the all important US jobs report on Friday, which could be the deciding factor in whether the FOMC reduces its asset purchases in December.
The October figures were surprisingly strong in the US, which suggested that not only did the government shutdown have no impact, but the economic recovery gathered pace. If the November figures support this, the FOMC may be tempted to test the water as early as this month. At the moment this looks like a long shot, but that won’t stop it being priced into the markets if we see more good figures.
The negative impact that this would have on equity markets is probably what’s making investors a little cautious this morning, and it’s likely to continue as the week goes on. We also have four major central bank meetings which will only add to the cautious tone.
As for today, the data we’ve seen has actually been largely positive. Both the official and the HSBC Chinese PMIs were comfortably in growth territory, at 51.4 and 50.8, respectively, while many of the eurozone and the UK PMIs beat estimates.
The only real disappointment came from the Spanish manufacturing PMI, which fell heavily to 48.6 from 50.9. This number is likely to fluctuate a lot over the course of the next year though as the country moves towards a sustainable recovery.
France is actually becoming the bigger concern, having failed to record a figure above 50, the number that separates growth from contraction, since July 2011. It is also at risk of falling into recession yet again after contracting by 0.1% in the third quarter.
The rest of the day may prove to be a little quieter, especially compared to the rest of the week. We have two manufacturing PMIs being released from the US, the Markit PMI and the ISM PMI, which are expected at 54.3 and 55, respectively.
We will hear from Fed Chairman Ben Bernanke before the opening bell, which may provide some insight into what we need to see today in order for tapering to begin in December. I don’t think he’ll give too much away though as opinions at the Fed differ so much and his term is due to come to an end in less than two months, which will surely lessen his influence on the outcome.
Ahead of the open we expect to see the S&P flat, Dow down 17 points and the NASDAQ up 7 points.
Investors risk averse ahead of very important week
Today’s US opening call provides an update on:
* Investors risk averse ahead of very important week;
* Central bank meetings adding to cautious tone in the markets;
* Manufacturing PMIs improve in most countries;
*US data and Bernanke speech up next.
European indices are trading lower on Monday and US futures are pointing in the same direction in the run up to the opening bell on Wall Street.
This is probably largely due to investors being a little more risk averse at the start of a very big week for the markets, rather than a negative response to the data we’ve seen this morning, which has actually been largely positive.
This week could be massive for the financial markets. We have a lot of US data being released this week, including the all important US jobs report on Friday, which could be the deciding factor in whether the FOMC reduces its asset purchases in December.
The October figures were surprisingly strong in the US, which suggested that not only did the government shutdown have no impact, but the economic recovery gathered pace. If the November figures support this, the FOMC may be tempted to test the water as early as this month. At the moment this looks like a long shot, but that won’t stop it being priced into the markets if we see more good figures.
The negative impact that this would have on equity markets is probably what’s making investors a little cautious this morning, and it’s likely to continue as the week goes on. We also have four major central bank meetings which will only add to the cautious tone.
As for today, the data we’ve seen has actually been largely positive. Both the official and the HSBC Chinese PMIs were comfortably in growth territory, at 51.4 and 50.8, respectively, while many of the eurozone and the UK PMIs beat estimates.
The only real disappointment came from the Spanish manufacturing PMI, which fell heavily to 48.6 from 50.9. This number is likely to fluctuate a lot over the course of the next year though as the country moves towards a sustainable recovery.
France is actually becoming the bigger concern, having failed to record a figure above 50, the number that separates growth from contraction, since July 2011. It is also at risk of falling into recession yet again after contracting by 0.1% in the third quarter.
The rest of the day may prove to be a little quieter, especially compared to the rest of the week. We have two manufacturing PMIs being released from the US, the Markit PMI and the ISM PMI, which are expected at 54.3 and 55, respectively.
We will hear from Fed Chairman Ben Bernanke before the opening bell, which may provide some insight into what we need to see today in order for tapering to begin in December. I don’t think he’ll give too much away though as opinions at the Fed differ so much and his term is due to come to an end in less than two months, which will surely lessen his influence on the outcome.
Ahead of the open we expect to see the S&P flat, Dow down 17 points and the NASDAQ up 7 points.
Alpari UK
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Weekly market preview – 2 December 2013 - Alpari UK
The first week of the month means one thing, and that is the return of a raft of high importance events for the markets to sink their teeth into. Within the US in particular, the likes of the jobs report means we are set for a highly volatile week in the markets. In the UK, the main release of the week arrives on Wednesday with the services PMI figure. Meanwhile in the eurozone it is a little quieter, where the ECB rate decision on Thursday is the major event of note.
In Asia, the Chinese manufacturing PMI figure is likely to dominate the week’s affairs when released on Sunday. Meanwhile the Australian week looks alot more busy where the major event looks to be the GDP release.
US
A big week for the US, where almost every day sees a top tier release which has the potential to shake up the markets. Among these, the major events to look out for are the various jobs releases, the GDP figure, and the consumer sentiment index on Friday.
The most important of all these releases is no doubt Friday’s non-farm payroll figure, coupled with the unemployment rate. The non-farm payroll release is widely seen as the most consistent provider of market volatility and this week is no different. Given the question marks surrounding the possible tapering of asset purchases by the Fed, the jobs data is more relevant than ever in deciding how the markets will move. The FOMC will have their final meeting of 2013 later this month and should these releases come in negatively it would bring substantial doubts to the possibility of a taper. The non-farm payroll figure is expected to fall somewhat to 184k from last months strong figure of 204k. Should we see that figure, it would not be particularly poor, but I doubt it would suffice for a taper later in the month. Thus I would be hoping for a number over 200k to take the markets by surprise. On the other hand, a number below 170k or so would probably push towards a more bullish outlook for equity markets owing to the association with a possible non-taper scenario.
The unemployment rate is a similar story in terms of how it can affect the markets. On this occasion we are expecting to see a fall to 7.2%, following last months rise to 7.3%. The key number to follow should this occur is the participation rate, which currently lies at 62.8% of the population. The continued deterioration in the proportion of participants in the labour market shows that a fall in the unemployment rate can be explained by negative labour force factors, reducing the chance of a taper later in the month. Thus should we see a fall in this figure, check the participation rate and only if that has risen should we take it as a positive sign for the economy.
Earlier in the week there are some of the lesser employment figures which can still provide notable volatility in the markets. On Wednesday, the ADP non-farm payroll figure is released, which acts as a precursor to the headline number on Friday. These two figures have proved to be anything other than correlated down the years, which is in part due to the ADP focus upon the private sector, thus failing to include public employment. That being said, this is still a key release and will provide yet another indication of the job market health for the FOMC to pick over. Market expectations point towards an improvement in the figure towards 165k, following a particularly poor October where the number was closer to 130k. Dont forget to also keep an eye out for the weekly initial jobless claims figure on Thursday, which expected to rise from 316k to 322k.
On Thursday, the preliminary US GDP figure is released. Of course the GDP measure is one of the most wide-ranging methods of gauging the strength and growth of an economy. However, this is the second estimate for Q3 and thus typically has a somewhat lessened degree of change than when we are comparing to a different quarter. On this occasion, the market forecasters are expecting to see a figure around 2.9%, a marginal increase from the 2.8% seen last month.
Finally on Friday, the University of Michigan consumer sentiment index is released, providing the latest insight into the mindset of the US consumers. Following the deadlock in congress in October, we are hoping to see a further pickup after the considerable shock to this figure over the past two months. The expectation is that we will see a rise to around 76.2 from 75.1, however I believe this could be somewhat undershot and I am hoping for a somewhat higher figure around 78.0. That being said, there are high expectations of a positive move in this figure, especially after the November number was revised by 1.6. Thus should we see a fall below 75.1, we could see a big shock in the markets.
UK
Another big week in the UK economy, where the PMI releases in the early part of the week give way to the BoE monetary policy decision on Thursday. The first release comes on Monday, with the manufacturing PMI figure due in the morning. The importance of the manufacturing sector is becoming increasingly clear, where the over-reliance upon the services sector means that diversification of exports and business within the UK is required for future stability of the economy. Market expectations point towards a rise from 56.0 to 56.3, yet given the weaknesses shown in this measure over the last two months there is alot less confidence of a strong reading.
On Tuesday, the construction PMI figure comes to the fore. The strength of housing brings a positive feeling to demand within the construction industry. That being said, the market forecasts point towards a fall in this figure from 59.4 to 59.0 this month. Given the perceived strength of the housing market, I believe there is a possibility we could see this confound the markets, yet with the current level being the highest reading since April 2007, it may be one step too far.
Finally, the most important of the three is the services PMI release, due on Wednesday. The services sector is the dominant driver of the UK economy and for that reason, a strong services sector is paramount to a strong UK economy. Unlike the other two PMI releases, this figure has barely suffered a setback, beating expectations on 9 out of the last 10 occasions. The markets are looking to see a drop back towards the 62.1 level after a reading of 62.5 last month. However I am hoping to see a rise in this figure to confound forecasters, yet given this is currently higher than pre-recession levels, it too may be time for the services sector PMI figure to give some of its ground away.
Another major event of note in the UK comes on Thursday when the BoE release their latest monetary policy decision. There is not much expected in terms of change given that the forward guidance standpoint taken by Mark Carney and co is centered around stability in the market. Generally this is seen as stability in the provision of accommodative policy for an extended period, ruling out any reductions. However, given that the UK economy has been performing well and potential bubbles such as the housing market have been arising, there will a very low possibility of a rise in either the interest rates or asset purchases. That being said, this is a major release and as such traders will be keeping an eye on it.
Eurozone
A somewhat quieter week in the eurozone, however we still have a few events to look out for, with a raft of PMI data due out in the early half of the week, followed by the latest ECB monetary policy decision on Thursday.
On Monday we see the manufacturing PMI figures released for all the major economies of the eurozone. Given that these will be provided within very close proximity (5 countries within 30 minutes), much of the emphasis will be upon a general sentiment associated with the figures. The two major numbers to watch out for are the Germany and eurozone, both of which are expected to rise to some extent. The German figure in particular is forecast to rise by 0.8 to 52.5. I would say that generally, keep an eye on those two figures as the major possible market movers. If neither of these particularly move far from estimates then people will be looking for an overall movement of the five releases. Wednesday’s services PMI figures will be a similar story. Only difference is that the eurozone figure is widely expected to fall, with the German figure forecast to spike higher.
On Thursday, the ECB comes back into view, with the latest monetary interest rate decision due from Mario Draghi. Last month saw a shock reduction in the headline rate from 0.5% to 0.25% in response to a deterioration in the rate of inflation. Given that we are yet to see the full effect of this change, there is very little chance we will see back to back cuts from the ECB. Furthermore, we have recently seen an above expectation rise in the eurozone CPI figure, further reducing the likeliness that there will be any change. Despite the fact that this seems highly unlikely to change, the markets will still be paying close attention to the press conference from Mario Draghi following the announcement, which has the possibility to lay out where the ECB sees policy heading in the coming months. Bear in mind that Draghi often tries to talk down the value of the euro and for that reason we could hear further talk of negative interest rates in the future and alike. Whether the markets continue to fall for the same trick time and again is yet to be seen, but the statement is certainly likely to be the most volatile part of this event.
Asia & Oceania
In Asia, there are few major releases to note, all of which occur within China. The major release comes in the form of the Chinese manufacturing PMI figure on Sunday. The fact that it will be released early on Sunday means it cannot move markets instantaneously, thus taking the edge off it somewhat. Therefore we are looking for a significant miss from expectations to carry the sentiment into traders mindsets. The importance of the manufacturing sector to the Chinese economy is well publicised. However, it is worth noting that the figure has greater implications for the global economy, which has been driven to a large extent by the Chinese economy. Forecasts point to a fall from 51.4 to 51.2, which would be the first reduction in this figure for five months. That being said, it is unlikely to really take any headlines as such given the size of the move. Look out for a big shift in this figure for a possible impact to markets on Monday morning.
In Australia, a busy week sees a raft to top tier data releases. The most notable of which is likely to be the latest monetary policy announcement from the RBA on Tuesday along with the GDP figure later in the week.
On Tuesday, the RBA comes into focus with the latest interest rate decision for the Australian economy. The question marks have been looming over this decision in recent months given the resurgence of the Australian dollar. However this appears to have been quelled somewhat with the substantial losses seen within the last fortnight for their currency. For this reason I do not see any likely change in the measure for the moment as the RBA will most likely save a rate cut for reversing an upward trajectory should it return.
Lastly on Wednesday, the latest GDP figure is due to be released for Q3. There have been series of changes in the Australian economy including interest rates, Chinese growth and a new Prime Minister. And with this there has been a growing feeling of uncertainty with regards to how the economy will fare going forward. The GDP is one key measure as to where the economy currently stands and thus we will be following the release closely to gauge whether the newly invigorated economy can stand on its own feet. Markets point towards a rise to 0.7% on a MoM basis, yet given the inability to break higher from the 0.6% level on the last five attempts, I am not too hopeful for this figure. Should the release fall short, this could bring a heightened likeliness of a interest rate cut next month to bring the economy back into line.
The first week of the month means one thing, and that is the return of a raft of high importance events for the markets to sink their teeth into. Within the US in particular, the likes of the jobs report means we are set for a highly volatile week in the markets. In the UK, the main release of the week arrives on Wednesday with the services PMI figure. Meanwhile in the eurozone it is a little quieter, where the ECB rate decision on Thursday is the major event of note.
In Asia, the Chinese manufacturing PMI figure is likely to dominate the week’s affairs when released on Sunday. Meanwhile the Australian week looks alot more busy where the major event looks to be the GDP release.
US
A big week for the US, where almost every day sees a top tier release which has the potential to shake up the markets. Among these, the major events to look out for are the various jobs releases, the GDP figure, and the consumer sentiment index on Friday.
The most important of all these releases is no doubt Friday’s non-farm payroll figure, coupled with the unemployment rate. The non-farm payroll release is widely seen as the most consistent provider of market volatility and this week is no different. Given the question marks surrounding the possible tapering of asset purchases by the Fed, the jobs data is more relevant than ever in deciding how the markets will move. The FOMC will have their final meeting of 2013 later this month and should these releases come in negatively it would bring substantial doubts to the possibility of a taper. The non-farm payroll figure is expected to fall somewhat to 184k from last months strong figure of 204k. Should we see that figure, it would not be particularly poor, but I doubt it would suffice for a taper later in the month. Thus I would be hoping for a number over 200k to take the markets by surprise. On the other hand, a number below 170k or so would probably push towards a more bullish outlook for equity markets owing to the association with a possible non-taper scenario.
The unemployment rate is a similar story in terms of how it can affect the markets. On this occasion we are expecting to see a fall to 7.2%, following last months rise to 7.3%. The key number to follow should this occur is the participation rate, which currently lies at 62.8% of the population. The continued deterioration in the proportion of participants in the labour market shows that a fall in the unemployment rate can be explained by negative labour force factors, reducing the chance of a taper later in the month. Thus should we see a fall in this figure, check the participation rate and only if that has risen should we take it as a positive sign for the economy.
Earlier in the week there are some of the lesser employment figures which can still provide notable volatility in the markets. On Wednesday, the ADP non-farm payroll figure is released, which acts as a precursor to the headline number on Friday. These two figures have proved to be anything other than correlated down the years, which is in part due to the ADP focus upon the private sector, thus failing to include public employment. That being said, this is still a key release and will provide yet another indication of the job market health for the FOMC to pick over. Market expectations point towards an improvement in the figure towards 165k, following a particularly poor October where the number was closer to 130k. Dont forget to also keep an eye out for the weekly initial jobless claims figure on Thursday, which expected to rise from 316k to 322k.
On Thursday, the preliminary US GDP figure is released. Of course the GDP measure is one of the most wide-ranging methods of gauging the strength and growth of an economy. However, this is the second estimate for Q3 and thus typically has a somewhat lessened degree of change than when we are comparing to a different quarter. On this occasion, the market forecasters are expecting to see a figure around 2.9%, a marginal increase from the 2.8% seen last month.
Finally on Friday, the University of Michigan consumer sentiment index is released, providing the latest insight into the mindset of the US consumers. Following the deadlock in congress in October, we are hoping to see a further pickup after the considerable shock to this figure over the past two months. The expectation is that we will see a rise to around 76.2 from 75.1, however I believe this could be somewhat undershot and I am hoping for a somewhat higher figure around 78.0. That being said, there are high expectations of a positive move in this figure, especially after the November number was revised by 1.6. Thus should we see a fall below 75.1, we could see a big shock in the markets.
UK
Another big week in the UK economy, where the PMI releases in the early part of the week give way to the BoE monetary policy decision on Thursday. The first release comes on Monday, with the manufacturing PMI figure due in the morning. The importance of the manufacturing sector is becoming increasingly clear, where the over-reliance upon the services sector means that diversification of exports and business within the UK is required for future stability of the economy. Market expectations point towards a rise from 56.0 to 56.3, yet given the weaknesses shown in this measure over the last two months there is alot less confidence of a strong reading.
On Tuesday, the construction PMI figure comes to the fore. The strength of housing brings a positive feeling to demand within the construction industry. That being said, the market forecasts point towards a fall in this figure from 59.4 to 59.0 this month. Given the perceived strength of the housing market, I believe there is a possibility we could see this confound the markets, yet with the current level being the highest reading since April 2007, it may be one step too far.
Finally, the most important of the three is the services PMI release, due on Wednesday. The services sector is the dominant driver of the UK economy and for that reason, a strong services sector is paramount to a strong UK economy. Unlike the other two PMI releases, this figure has barely suffered a setback, beating expectations on 9 out of the last 10 occasions. The markets are looking to see a drop back towards the 62.1 level after a reading of 62.5 last month. However I am hoping to see a rise in this figure to confound forecasters, yet given this is currently higher than pre-recession levels, it too may be time for the services sector PMI figure to give some of its ground away.
Another major event of note in the UK comes on Thursday when the BoE release their latest monetary policy decision. There is not much expected in terms of change given that the forward guidance standpoint taken by Mark Carney and co is centered around stability in the market. Generally this is seen as stability in the provision of accommodative policy for an extended period, ruling out any reductions. However, given that the UK economy has been performing well and potential bubbles such as the housing market have been arising, there will a very low possibility of a rise in either the interest rates or asset purchases. That being said, this is a major release and as such traders will be keeping an eye on it.
Eurozone
A somewhat quieter week in the eurozone, however we still have a few events to look out for, with a raft of PMI data due out in the early half of the week, followed by the latest ECB monetary policy decision on Thursday.
On Monday we see the manufacturing PMI figures released for all the major economies of the eurozone. Given that these will be provided within very close proximity (5 countries within 30 minutes), much of the emphasis will be upon a general sentiment associated with the figures. The two major numbers to watch out for are the Germany and eurozone, both of which are expected to rise to some extent. The German figure in particular is forecast to rise by 0.8 to 52.5. I would say that generally, keep an eye on those two figures as the major possible market movers. If neither of these particularly move far from estimates then people will be looking for an overall movement of the five releases. Wednesday’s services PMI figures will be a similar story. Only difference is that the eurozone figure is widely expected to fall, with the German figure forecast to spike higher.
On Thursday, the ECB comes back into view, with the latest monetary interest rate decision due from Mario Draghi. Last month saw a shock reduction in the headline rate from 0.5% to 0.25% in response to a deterioration in the rate of inflation. Given that we are yet to see the full effect of this change, there is very little chance we will see back to back cuts from the ECB. Furthermore, we have recently seen an above expectation rise in the eurozone CPI figure, further reducing the likeliness that there will be any change. Despite the fact that this seems highly unlikely to change, the markets will still be paying close attention to the press conference from Mario Draghi following the announcement, which has the possibility to lay out where the ECB sees policy heading in the coming months. Bear in mind that Draghi often tries to talk down the value of the euro and for that reason we could hear further talk of negative interest rates in the future and alike. Whether the markets continue to fall for the same trick time and again is yet to be seen, but the statement is certainly likely to be the most volatile part of this event.
Asia & Oceania
In Asia, there are few major releases to note, all of which occur within China. The major release comes in the form of the Chinese manufacturing PMI figure on Sunday. The fact that it will be released early on Sunday means it cannot move markets instantaneously, thus taking the edge off it somewhat. Therefore we are looking for a significant miss from expectations to carry the sentiment into traders mindsets. The importance of the manufacturing sector to the Chinese economy is well publicised. However, it is worth noting that the figure has greater implications for the global economy, which has been driven to a large extent by the Chinese economy. Forecasts point to a fall from 51.4 to 51.2, which would be the first reduction in this figure for five months. That being said, it is unlikely to really take any headlines as such given the size of the move. Look out for a big shift in this figure for a possible impact to markets on Monday morning.
In Australia, a busy week sees a raft to top tier data releases. The most notable of which is likely to be the latest monetary policy announcement from the RBA on Tuesday along with the GDP figure later in the week.
On Tuesday, the RBA comes into focus with the latest interest rate decision for the Australian economy. The question marks have been looming over this decision in recent months given the resurgence of the Australian dollar. However this appears to have been quelled somewhat with the substantial losses seen within the last fortnight for their currency. For this reason I do not see any likely change in the measure for the moment as the RBA will most likely save a rate cut for reversing an upward trajectory should it return.
Lastly on Wednesday, the latest GDP figure is due to be released for Q3. There have been series of changes in the Australian economy including interest rates, Chinese growth and a new Prime Minister. And with this there has been a growing feeling of uncertainty with regards to how the economy will fare going forward. The GDP is one key measure as to where the economy currently stands and thus we will be following the release closely to gauge whether the newly invigorated economy can stand on its own feet. Markets point towards a rise to 0.7% on a MoM basis, yet given the inability to break higher from the 0.6% level on the last five attempts, I am not too hopeful for this figure. Should the release fall short, this could bring a heightened likeliness of a interest rate cut next month to bring the economy back into line.
Alpari UK
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Daily Market Update - 2 December 2013 - Alpari UK
http://www.youtube.com/watch?v=R4zh0nYu4L8&feature=c4-overview-vl&list=PL9AE6BFC876359986
0:10 Markets pull back ahead of key week
0:23 Manufacturing PMIs dominate
0:27 China PMI remained steady at 51.4 on sunday
0:45 Eurozone PMI largely better than expected
1:17 UK PMI well above expectations
2:06 A look ahead to the rest of a busy week
http://www.youtube.com/watch?v=R4zh0nYu4L8&feature=c4-overview-vl&list=PL9AE6BFC876359986
0:10 Markets pull back ahead of key week
0:23 Manufacturing PMIs dominate
0:27 China PMI remained steady at 51.4 on sunday
0:45 Eurozone PMI largely better than expected
1:17 UK PMI well above expectations
2:06 A look ahead to the rest of a busy week
Alpari UK
Experienced member
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- 1,502
- Likes
- 5
UK Opening Call from Alpari UK on 3 December 2013
Rising taper expectations weigh on European futures
Today’s UK opening call provides an update on:
• Rising taper expectations weigh on European futures;
• Sell-off in Gold and US Treasuries highlights investors taper concerns;
• RBA again raises concerns about the strength of the aussie, while keeping rates on hold at 2.5%;
• UK construction PMI and Spanish unemployment data released this morning.
Investors are becoming increasingly concerned about the prospect of a December taper from the Federal Reserve, as more strong US data suggests the country is recovering faster than expected despite the government shutdown in October.
The shutdown actually appears to have had absolutely no impact on the data that we’ve seen so far, which is good for the economy but bad for stock markets. This is the problem with the current situation in the US. A deterioration in the data sends US indices to record highs while signs of improving economic conditions sends investors rushing for the exit.
Monday’s improvement in both the Markit and ISM manufacturing PMIs prompted exactly this kind of response. If we see more good figures later this week when the services, housing and jobs data is released, I expect we’ll see a similar response. Everyone wants to be one step ahead of the Fed because when it does decide to reduce its asset purchases, the sell-off in risk assets will be significant.
It wasn’t just equities that investors decided to dump in response to the data, Gold also sold off aggressively, falling more than $30 to a five month low, as did US Treasuries, with yields rising 4 basis points to hit 2.79%. While the majority still don’t see the Fed scaling back its asset purchases until next year, unless the data takes another turn for the worse, we are likely to see investors hedging their bets a lot more as the December meeting approaches.
Overnight we also saw some selling in the Australian dollar, following the monthly meeting of the Reserve Bank of Australia. The central bank left interest rates unchanged at record lows of 2.5%, which came as no surprise, but in the statement that followed they once again raised concerns over the strength of the Australian dollar. The sell-off in the dollar in response to this wasn’t huge but it was big enough to suggest that traders are anticipating a move by the central bank soon to address these concerns as the markets repeatedly ignore its attempts at verbally weakening the currency.
The rest of the day is actually looking pretty quiet as we head into a manic end to the week, that includes central bank meetings, GDP data and the all-important, US jobs report on Friday. As for today, we have the UK construction PMI being released this morning, which is expected to fall slightly to 59, as well as the Spanish unemployment change, which is expected to show another 43,000 increase. This will worryingly be a third month where we’ll have seen an increase in the unemployment figure following five months of declines before that. We all knew that it would be a bumpy road to a recovery but it is a little concerning that it appears to have run into trouble already.
Ahead of the open we expect to see the FTSE down 17 points, the CAC down 13 points and the DAX down 21 points.
Rising taper expectations weigh on European futures
Today’s UK opening call provides an update on:
• Rising taper expectations weigh on European futures;
• Sell-off in Gold and US Treasuries highlights investors taper concerns;
• RBA again raises concerns about the strength of the aussie, while keeping rates on hold at 2.5%;
• UK construction PMI and Spanish unemployment data released this morning.
Investors are becoming increasingly concerned about the prospect of a December taper from the Federal Reserve, as more strong US data suggests the country is recovering faster than expected despite the government shutdown in October.
The shutdown actually appears to have had absolutely no impact on the data that we’ve seen so far, which is good for the economy but bad for stock markets. This is the problem with the current situation in the US. A deterioration in the data sends US indices to record highs while signs of improving economic conditions sends investors rushing for the exit.
Monday’s improvement in both the Markit and ISM manufacturing PMIs prompted exactly this kind of response. If we see more good figures later this week when the services, housing and jobs data is released, I expect we’ll see a similar response. Everyone wants to be one step ahead of the Fed because when it does decide to reduce its asset purchases, the sell-off in risk assets will be significant.
It wasn’t just equities that investors decided to dump in response to the data, Gold also sold off aggressively, falling more than $30 to a five month low, as did US Treasuries, with yields rising 4 basis points to hit 2.79%. While the majority still don’t see the Fed scaling back its asset purchases until next year, unless the data takes another turn for the worse, we are likely to see investors hedging their bets a lot more as the December meeting approaches.
Overnight we also saw some selling in the Australian dollar, following the monthly meeting of the Reserve Bank of Australia. The central bank left interest rates unchanged at record lows of 2.5%, which came as no surprise, but in the statement that followed they once again raised concerns over the strength of the Australian dollar. The sell-off in the dollar in response to this wasn’t huge but it was big enough to suggest that traders are anticipating a move by the central bank soon to address these concerns as the markets repeatedly ignore its attempts at verbally weakening the currency.
The rest of the day is actually looking pretty quiet as we head into a manic end to the week, that includes central bank meetings, GDP data and the all-important, US jobs report on Friday. As for today, we have the UK construction PMI being released this morning, which is expected to fall slightly to 59, as well as the Spanish unemployment change, which is expected to show another 43,000 increase. This will worryingly be a third month where we’ll have seen an increase in the unemployment figure following five months of declines before that. We all knew that it would be a bumpy road to a recovery but it is a little concerning that it appears to have run into trouble already.
Ahead of the open we expect to see the FTSE down 17 points, the CAC down 13 points and the DAX down 21 points.
Alpari UK
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US Opening Call from Alpari UK on 3 December 2013
US futures lower as tapering fears weigh on sentiment
Today’s US opening call provides an update on:
* Tapering fears driving equity markets lower this morning;
* QE infinity hangover could be severe;
* Hedging against December taper on the rise;
* Quiet US session expected, with no economic releases due.
It’s been a relatively quiet morning so far in the markets, ahead of what is going to be an extremely busy end to the week.
Continuing to drive sentiment this morning has been growing fears that the Fed will scale back its asset purchases when it meets in a couple of weeks time. Until recently, this had looked unlikely due to the unknown impacts of the US government shutdown on the economy and the mixed data seen in the months leading up to it, but now it looks well and truly back on the table.
The data we’ve seen for September recently has been surprisingly strong. If we see similar figures from the rest of the November figures, the FOMC may be tempted to test the water with a small reduction of around $10 billion. That would still mean that $75 billion per month is being pumped into the financial system, but to traders it would symbolise the beginning of the end, and that is what is concerning to them.
This is the problem with unlimited quantitative easing, or QE infinity as it has been called. Investors have become hooked on it like a drug over the last 12 months. As soon as the Fed starts to withdraw it, the hangover will be felt in the markets. The faster the rate of withdrawal, the worse the hangover will be.
Yesterday’s strong manufacturing PMIs did nothing to ease concerns that the drug is about to be withdrawn. If the rest of the data this week is similarly strong, in particular the US jobs report on Friday, the hangover could set in early.
We’re already seeing signs of this in Gold and US Treasuries, both of which tumbled yesterday following the release of those PMIs. This is probably the clearest sign that investors are beginning to price in a December taper, although at this stage it’s probably more a case of hedging themselves, as opposed to actually buying into the idea, as they did in September.
The rest of the day is likely to continue to be quiet, with no notable economic releases due out of the US. Instead the focus will remain on tapering, which is likely to continue to weigh on indices, as we’re seeing in US futures already this morning.
Ahead of the open we expect to see the S&P down 6 points, Dow down 62 points and the NASDAQ down 5 points.
US futures lower as tapering fears weigh on sentiment
Today’s US opening call provides an update on:
* Tapering fears driving equity markets lower this morning;
* QE infinity hangover could be severe;
* Hedging against December taper on the rise;
* Quiet US session expected, with no economic releases due.
It’s been a relatively quiet morning so far in the markets, ahead of what is going to be an extremely busy end to the week.
Continuing to drive sentiment this morning has been growing fears that the Fed will scale back its asset purchases when it meets in a couple of weeks time. Until recently, this had looked unlikely due to the unknown impacts of the US government shutdown on the economy and the mixed data seen in the months leading up to it, but now it looks well and truly back on the table.
The data we’ve seen for September recently has been surprisingly strong. If we see similar figures from the rest of the November figures, the FOMC may be tempted to test the water with a small reduction of around $10 billion. That would still mean that $75 billion per month is being pumped into the financial system, but to traders it would symbolise the beginning of the end, and that is what is concerning to them.
This is the problem with unlimited quantitative easing, or QE infinity as it has been called. Investors have become hooked on it like a drug over the last 12 months. As soon as the Fed starts to withdraw it, the hangover will be felt in the markets. The faster the rate of withdrawal, the worse the hangover will be.
Yesterday’s strong manufacturing PMIs did nothing to ease concerns that the drug is about to be withdrawn. If the rest of the data this week is similarly strong, in particular the US jobs report on Friday, the hangover could set in early.
We’re already seeing signs of this in Gold and US Treasuries, both of which tumbled yesterday following the release of those PMIs. This is probably the clearest sign that investors are beginning to price in a December taper, although at this stage it’s probably more a case of hedging themselves, as opposed to actually buying into the idea, as they did in September.
The rest of the day is likely to continue to be quiet, with no notable economic releases due out of the US. Instead the focus will remain on tapering, which is likely to continue to weigh on indices, as we’re seeing in US futures already this morning.
Ahead of the open we expect to see the S&P down 6 points, Dow down 62 points and the NASDAQ down 5 points.
Alpari UK
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Alpari UK
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UK Opening Call from Alpari UK on 4 December 2013
Market jitters continue ahead of services PMI and ADP
Today’s UK opening call provides an update on:
• Markets indecision continues heading into key economic data releases
• Australian GDP falls short prompting calls for RBA rate cut
• Services PMI figures in focus across Europe and US
• ADP payroll release first of key US job figures
• BoC unlikely to move rates in the afternoon
European markets are expected open in a somewhat mixed fashion this morning following on from the clear indecision and heightened risk aversion that has been creeping into the markets so far this week. Coming off the back of some 8 week gains in the likes of the DAX in particular, there is no surprise that we are seeing a greater degree of weariness given that there are a number of high impact economic data points due out as the week goes on. The culmination of these comes in the form of Friday's jobs data out of the US which has the potential to determine whether a December taper from the Fed is feasible or not given labour market strength (of lack of).
Corporate resurgence throughout recent earnings seasons have to a large extent been driven by cost cutting and streamlining measures, which means hiring has become alot more of a luxury than was previously the case. Thus whilst recent non-farm payroll figures have been even higher than pre-recession levels, they need to be to counterbalance the clear weaknesses inherent in the US labour force throughout recent years.
Overnight the Australian GDP figure put a dampener on the regions growth prospects, falling to 0.6%, from a revised figure of 0.7% last time around. The Australian economy has been in the limelight throughout 2013 given the changes from both an economic and political standpoint. Today's blow marks yet another sign that despite the clear pickup in output within the Chinese region, this is having a lessened effect upon Australia than expected. Given that we have just seen the RBA decide against any further interest rate cuts yesterday, we will have to wait another month to see if they believe today's figure is worthy of a cut. However, given the clear focus upon reducing the value of the Australian dollar as stipulated by Glenn Stevens on a monthly basis, I would not be surprised to see such a move next time around should data continue to disappoint.
Today marks the one day of the month where the services PMI figures come into focus, following on from Monday’s strong manufacturing releases. The provision of UK, eurozone and US services PMI figures represents a collection of key data points, what with the likes of the UK in particular being almost entirely dependent upon the services sector as a driver of growth.
The UK has often been criticised for over-reliance upon the likes of the insurance and financial sector which has seen the industry makeup over 75% of the GDP output seen in 2012. That being said, the sector has performed admirably throughout 2013, with the PMI measure rising out of contraction in January to the current level of 62.5. That is the highest level seen throughout the recession and even above the level seen prior to the initiation of the crisis in late 2007. The market expectations point towards a less impressive showing today, falling back to 62.0. However, given the surprises seen within the manufacturing and construction PMI readings earlier this week there is a high likeliness of a substantially improved reading. Should this occur, we could see the GBPUSD pair finally push clear of the 1.642 resistance level which has been the major sticking point throughout the beginning of the week.
In the US, the services PMI is also key going forward, due out later this afternoon. The FOMC’s decision with respect to a possible December taper is likely to account for the wider economic picture and for that reason, there has been a a heightened focus upon such economic releases this week. This could be seen on Monday when the US ISM manufacturing PMI reaches multi-year highs, pushing markets lower as tapering became a greater possibility. For that reason, markets will be look carefully for a similar upside shock in this release to encourage a pullback of stimulus from Bernanke and co as a sign that the week’s weaknesses in the indices could have further legs. The market estimates point towards a fall to 55.0 in the November figure, from 55.4 seen in October.
In the US, the markets will be keeping an eye out for the relase of the ADP non-farm payroll figure, due out in the early afternoon. This represents the key precursor to the headline number on Friday within the markets. That being said, the correlation between the ADP and official non-farm payroll figures have proved to be anything but. This is in part due to the ADP focus upon the private sector, thus failing to include public employment which is also reflected within the headline figure on Friday. That being said, given the importance of the decision making process from the FOMC, it is likely that the ADP figure will be taken on face value as another key indicator of recent job market health for the Fed to pick over. Market expectations point towards a greatly improved figure of 173k from 130k last month, showing the substantially distinct nature of the two measures (NFP came out at 204k last month).
Elsewhere in the markets, the central bank focus today will be upon the Bank of Canada, where governor Stephen Poloz is widely expected to refrain from any changes to the current 1% headline interest rate implemented in mid 2010. Poloz utilised a distinct change in language in the BoC rate statement in late October which has since brought about a substantial sell-off in the Canadian dollar. There is a clear likeliness that the newly revised statement which stripped the content with respect to near term rate rises will be utilised again. However, this time it will be expected and thus the market effect is likely to be minimal in comparison.
It is also keeping an eye out for the likes of the Canadian and US trade balance data released in the afternoon, followed by the pre-FOMC beige book at 7pm GMT.
European markets are expected to open mixed, with the FTSE100 -2, CAC +1 and DAX -3 points.
Market jitters continue ahead of services PMI and ADP
Today’s UK opening call provides an update on:
• Markets indecision continues heading into key economic data releases
• Australian GDP falls short prompting calls for RBA rate cut
• Services PMI figures in focus across Europe and US
• ADP payroll release first of key US job figures
• BoC unlikely to move rates in the afternoon
European markets are expected open in a somewhat mixed fashion this morning following on from the clear indecision and heightened risk aversion that has been creeping into the markets so far this week. Coming off the back of some 8 week gains in the likes of the DAX in particular, there is no surprise that we are seeing a greater degree of weariness given that there are a number of high impact economic data points due out as the week goes on. The culmination of these comes in the form of Friday's jobs data out of the US which has the potential to determine whether a December taper from the Fed is feasible or not given labour market strength (of lack of).
Corporate resurgence throughout recent earnings seasons have to a large extent been driven by cost cutting and streamlining measures, which means hiring has become alot more of a luxury than was previously the case. Thus whilst recent non-farm payroll figures have been even higher than pre-recession levels, they need to be to counterbalance the clear weaknesses inherent in the US labour force throughout recent years.
Overnight the Australian GDP figure put a dampener on the regions growth prospects, falling to 0.6%, from a revised figure of 0.7% last time around. The Australian economy has been in the limelight throughout 2013 given the changes from both an economic and political standpoint. Today's blow marks yet another sign that despite the clear pickup in output within the Chinese region, this is having a lessened effect upon Australia than expected. Given that we have just seen the RBA decide against any further interest rate cuts yesterday, we will have to wait another month to see if they believe today's figure is worthy of a cut. However, given the clear focus upon reducing the value of the Australian dollar as stipulated by Glenn Stevens on a monthly basis, I would not be surprised to see such a move next time around should data continue to disappoint.
Today marks the one day of the month where the services PMI figures come into focus, following on from Monday’s strong manufacturing releases. The provision of UK, eurozone and US services PMI figures represents a collection of key data points, what with the likes of the UK in particular being almost entirely dependent upon the services sector as a driver of growth.
The UK has often been criticised for over-reliance upon the likes of the insurance and financial sector which has seen the industry makeup over 75% of the GDP output seen in 2012. That being said, the sector has performed admirably throughout 2013, with the PMI measure rising out of contraction in January to the current level of 62.5. That is the highest level seen throughout the recession and even above the level seen prior to the initiation of the crisis in late 2007. The market expectations point towards a less impressive showing today, falling back to 62.0. However, given the surprises seen within the manufacturing and construction PMI readings earlier this week there is a high likeliness of a substantially improved reading. Should this occur, we could see the GBPUSD pair finally push clear of the 1.642 resistance level which has been the major sticking point throughout the beginning of the week.
In the US, the services PMI is also key going forward, due out later this afternoon. The FOMC’s decision with respect to a possible December taper is likely to account for the wider economic picture and for that reason, there has been a a heightened focus upon such economic releases this week. This could be seen on Monday when the US ISM manufacturing PMI reaches multi-year highs, pushing markets lower as tapering became a greater possibility. For that reason, markets will be look carefully for a similar upside shock in this release to encourage a pullback of stimulus from Bernanke and co as a sign that the week’s weaknesses in the indices could have further legs. The market estimates point towards a fall to 55.0 in the November figure, from 55.4 seen in October.
In the US, the markets will be keeping an eye out for the relase of the ADP non-farm payroll figure, due out in the early afternoon. This represents the key precursor to the headline number on Friday within the markets. That being said, the correlation between the ADP and official non-farm payroll figures have proved to be anything but. This is in part due to the ADP focus upon the private sector, thus failing to include public employment which is also reflected within the headline figure on Friday. That being said, given the importance of the decision making process from the FOMC, it is likely that the ADP figure will be taken on face value as another key indicator of recent job market health for the Fed to pick over. Market expectations point towards a greatly improved figure of 173k from 130k last month, showing the substantially distinct nature of the two measures (NFP came out at 204k last month).
Elsewhere in the markets, the central bank focus today will be upon the Bank of Canada, where governor Stephen Poloz is widely expected to refrain from any changes to the current 1% headline interest rate implemented in mid 2010. Poloz utilised a distinct change in language in the BoC rate statement in late October which has since brought about a substantial sell-off in the Canadian dollar. There is a clear likeliness that the newly revised statement which stripped the content with respect to near term rate rises will be utilised again. However, this time it will be expected and thus the market effect is likely to be minimal in comparison.
It is also keeping an eye out for the likes of the Canadian and US trade balance data released in the afternoon, followed by the pre-FOMC beige book at 7pm GMT.
European markets are expected to open mixed, with the FTSE100 -2, CAC +1 and DAX -3 points.
Alpari UK
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US Opening Call from Alpari UK on 4 December 2013
US data in focus ahead of the December FOMC meeting
Today’s US opening call provides an update on:
* US data in focus ahead of the December FOMC meeting;
* ADP watched closely ahead of Friday’s NFP release;
* Beige Book also followed closely with FOMC meeting fast approaching;
* European data mixed this morning.
US futures are treading water ahead of the open on Wednesday, as the busy end to the week kicks off with ADP, services and housing data.
The US data is going to be followed very closely over the next couple of week, in the lead up to the December FOMC meeting. Investors had all but written off the chance of a December taper after the Fed opted against it in September and the US government then shutdown in October.
However, the recent improvement in the data, which included surprisingly strong figures for October, has forced investors to reconsider a small reduction in asset purchases this month. I still think this unlikely as we haven’t really seen evidence that the improvement is sustainable, but that won’t stop investors hedging their bets and reducing their exposure to risk assets, Gold and US Treasuries, as we’ve seen this week.
We have a whole host of key data being released on Wednesday, starting with the ADP employment change figure before the opening bell. In a week when the non-farm payrolls figure is seen to play a huge part in the FOMC decision, the ADP release will carry some extra weight with investors, despite previously being viewed as a relatively unreliable estimate. If we see another strong figure here it could prompt another round of selling in risk assets, as well as Gold and US Treasuries, while a weak figure will lower people’s expectations for Friday’s figure.
After the open we have the release of the services PMI for November, which is expected to fall slightly to 55. This is a significant figure again given the importance of the services industry to the US. Confidence in the economy going forward is crucial for the recovery to be sustained. We also have new home sales figures being released, which again given the importance of the housing sector to the recovery so far will be closely followed.
The Beige Book will also be of interest to investors as they look for insight into how the Fed view the economy right now. With all these being released, it should be a very interesting afternoon in the markets, as traders attempt to put all the pieces together and successfully predict whether the Fed will taper in two weeks or not.
This morning has already been quite eventful, as far as economic data is concerned. The services PMIs from the eurozone were quite mixed with the biggest concern coming from France. The country contracted slightly in the third quarter and now both the manufacturing and services PMIs are in contraction territory. That doesn’t bode well for them in attempting to avoid another recession in the current quarter.
The UK services PMI also fell more than expected in November to 60 from 62.5 in October. I don’t think this is too much to be concerned about at the moment, given that it’s a one-off figure and both the construction and manufacturing PMIs rose more than expected in the same month. That said, it did still prompt quite a significant reaction in sterling, with the pound falling almost half a cent against the dollar before recovering.
Ahead of the open we expect to see the S&P down 1 point, Dow down 1 point and the NASDAQ flat.
US data in focus ahead of the December FOMC meeting
Today’s US opening call provides an update on:
* US data in focus ahead of the December FOMC meeting;
* ADP watched closely ahead of Friday’s NFP release;
* Beige Book also followed closely with FOMC meeting fast approaching;
* European data mixed this morning.
US futures are treading water ahead of the open on Wednesday, as the busy end to the week kicks off with ADP, services and housing data.
The US data is going to be followed very closely over the next couple of week, in the lead up to the December FOMC meeting. Investors had all but written off the chance of a December taper after the Fed opted against it in September and the US government then shutdown in October.
However, the recent improvement in the data, which included surprisingly strong figures for October, has forced investors to reconsider a small reduction in asset purchases this month. I still think this unlikely as we haven’t really seen evidence that the improvement is sustainable, but that won’t stop investors hedging their bets and reducing their exposure to risk assets, Gold and US Treasuries, as we’ve seen this week.
We have a whole host of key data being released on Wednesday, starting with the ADP employment change figure before the opening bell. In a week when the non-farm payrolls figure is seen to play a huge part in the FOMC decision, the ADP release will carry some extra weight with investors, despite previously being viewed as a relatively unreliable estimate. If we see another strong figure here it could prompt another round of selling in risk assets, as well as Gold and US Treasuries, while a weak figure will lower people’s expectations for Friday’s figure.
After the open we have the release of the services PMI for November, which is expected to fall slightly to 55. This is a significant figure again given the importance of the services industry to the US. Confidence in the economy going forward is crucial for the recovery to be sustained. We also have new home sales figures being released, which again given the importance of the housing sector to the recovery so far will be closely followed.
The Beige Book will also be of interest to investors as they look for insight into how the Fed view the economy right now. With all these being released, it should be a very interesting afternoon in the markets, as traders attempt to put all the pieces together and successfully predict whether the Fed will taper in two weeks or not.
This morning has already been quite eventful, as far as economic data is concerned. The services PMIs from the eurozone were quite mixed with the biggest concern coming from France. The country contracted slightly in the third quarter and now both the manufacturing and services PMIs are in contraction territory. That doesn’t bode well for them in attempting to avoid another recession in the current quarter.
The UK services PMI also fell more than expected in November to 60 from 62.5 in October. I don’t think this is too much to be concerned about at the moment, given that it’s a one-off figure and both the construction and manufacturing PMIs rose more than expected in the same month. That said, it did still prompt quite a significant reaction in sterling, with the pound falling almost half a cent against the dollar before recovering.
Ahead of the open we expect to see the S&P down 1 point, Dow down 1 point and the NASDAQ flat.
Alpari UK
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Daily Market Update - 4 December 2013 - Alpari UK
00:15 Markets lower ahead of key releases
01:00 Australia GDP disappoints
02:11 Services PMI misses expectations for first time in 10 months
03:01 Looking ahead to ADP Non-farm payroll
04:06 BoC interest rates expected to remain at 1%
http://www.youtube.com/watch?v=B-BSLmVqrhM
00:15 Markets lower ahead of key releases
01:00 Australia GDP disappoints
02:11 Services PMI misses expectations for first time in 10 months
03:01 Looking ahead to ADP Non-farm payroll
04:06 BoC interest rates expected to remain at 1%
http://www.youtube.com/watch?v=B-BSLmVqrhM
Alpari UK
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UK Opening Call from Alpari UK on 5 December 2013
Busy day ahead with BoE, ECB, Autumn statement and US data
Today’s UK opening call provides an update on:
• BoE rate decision to be a non-event today;
• Investors more focused on the Chancellors Autumn statement;
• ECB rate decision and press conference also likely to be a dull affair;
• US GDP expected to be revised higher ahead of this month’s FOMC meeting.
It's going to be another busy day in the financial markets on Thursday, with two central bank rate decisions, the UK Autumn statement and a number of US economic releases shaking things up.
Things get underway today with the Bank of England rate and asset purchase decision, although like last month, it is expected to be a bit of a non-event. We're very aware of the BoEs stance in relation to interest rates and asset purchases, following the quarterly inflation report hearing and Mark Carney's testimony in front of the Treasury Committee in November. Therefore any change on interest rates or asset purchases is extremely unlikely.
With the Bank of England being very clear on monetary policy, the only potential issue now is future fiscal policy, something we should find out more on this afternoon when the Autumn forecast statement is released. Chancellor George Osborne is likely to first use today as an opportunity to laud the performance of the UK economy at the moment, while warning that more needs to be done to protect the recovery going forward.
He is then expected to announce a number of changes to spending and taxes for the years ahead, including business rates and the pension age, among other things. He will probably also touch on a couple of very unpopular topics at the moment, particularly the rises in energy bills, in which he is expected to announce a cut in green levies that will see bills cut by around £50 a year.
In terms of market reaction to the autumn statement, there probably won't be much of one, unless Osborne announces something significant that the markets are not expecting. We may see some volatility in sterling, for example, during the statement but I don't envisage any significant moves.
Next up is the ECB rate decision and press conference, and this is never a dull affair, even though today's may be somewhat more tedious than normal. We saw a cut in the main refi rate last month to 0.25%, following the significant drop in the inflation rate, from 1.1% to 0.7%. Later on in November, the inflation rate rose to 0.9%, which probably had very little, if anything, to do with the rate cut the month before. Therefore, with disinflation not likely to be an issue for another few months at least, the ECB is very unlikely to act again today.
The press conference which starts 45 minutes after the rate decision may be a little more interesting, as is always the case, although compared to recent press conferences even this will be a little dull. One thing that could significantly shift the markets is if ECB President Mario Draghi confirms the rumours from earlier this month than any further cuts in rates would come from the Deposit rate, which currently sits at 0% and would therefore send it into negative territory. Rumours last month suggested that this would be cut in increments of 0.1%.
After this it's over to the US, where we'll get some more data releases that could highly influence the FOMCs decision when it meets in a couple of weeks time. The weekly jobless claims figure is expected to rise slightly to 325,000 from 316,000 last month, which again shows that businesses are not letting as many people go, compared to the last few years.
The key release though will be the preliminary third quarter GDP figure, which is expected to be revised higher from the advanced reading last month, to 3%, on an annualised basis. This is quite encouraging for the US and could again encourage the Fed to reduce its asset purchases in a couple of weeks and test the water to see whether the economy can continue the recovery without its support.
Ahead of the open we expect to see the FTSE down 12 points, the CAC down 7 points and the DAX down 10 points.
Busy day ahead with BoE, ECB, Autumn statement and US data
Today’s UK opening call provides an update on:
• BoE rate decision to be a non-event today;
• Investors more focused on the Chancellors Autumn statement;
• ECB rate decision and press conference also likely to be a dull affair;
• US GDP expected to be revised higher ahead of this month’s FOMC meeting.
It's going to be another busy day in the financial markets on Thursday, with two central bank rate decisions, the UK Autumn statement and a number of US economic releases shaking things up.
Things get underway today with the Bank of England rate and asset purchase decision, although like last month, it is expected to be a bit of a non-event. We're very aware of the BoEs stance in relation to interest rates and asset purchases, following the quarterly inflation report hearing and Mark Carney's testimony in front of the Treasury Committee in November. Therefore any change on interest rates or asset purchases is extremely unlikely.
With the Bank of England being very clear on monetary policy, the only potential issue now is future fiscal policy, something we should find out more on this afternoon when the Autumn forecast statement is released. Chancellor George Osborne is likely to first use today as an opportunity to laud the performance of the UK economy at the moment, while warning that more needs to be done to protect the recovery going forward.
He is then expected to announce a number of changes to spending and taxes for the years ahead, including business rates and the pension age, among other things. He will probably also touch on a couple of very unpopular topics at the moment, particularly the rises in energy bills, in which he is expected to announce a cut in green levies that will see bills cut by around £50 a year.
In terms of market reaction to the autumn statement, there probably won't be much of one, unless Osborne announces something significant that the markets are not expecting. We may see some volatility in sterling, for example, during the statement but I don't envisage any significant moves.
Next up is the ECB rate decision and press conference, and this is never a dull affair, even though today's may be somewhat more tedious than normal. We saw a cut in the main refi rate last month to 0.25%, following the significant drop in the inflation rate, from 1.1% to 0.7%. Later on in November, the inflation rate rose to 0.9%, which probably had very little, if anything, to do with the rate cut the month before. Therefore, with disinflation not likely to be an issue for another few months at least, the ECB is very unlikely to act again today.
The press conference which starts 45 minutes after the rate decision may be a little more interesting, as is always the case, although compared to recent press conferences even this will be a little dull. One thing that could significantly shift the markets is if ECB President Mario Draghi confirms the rumours from earlier this month than any further cuts in rates would come from the Deposit rate, which currently sits at 0% and would therefore send it into negative territory. Rumours last month suggested that this would be cut in increments of 0.1%.
After this it's over to the US, where we'll get some more data releases that could highly influence the FOMCs decision when it meets in a couple of weeks time. The weekly jobless claims figure is expected to rise slightly to 325,000 from 316,000 last month, which again shows that businesses are not letting as many people go, compared to the last few years.
The key release though will be the preliminary third quarter GDP figure, which is expected to be revised higher from the advanced reading last month, to 3%, on an annualised basis. This is quite encouraging for the US and could again encourage the Fed to reduce its asset purchases in a couple of weeks and test the water to see whether the economy can continue the recovery without its support.
Ahead of the open we expect to see the FTSE down 12 points, the CAC down 7 points and the DAX down 10 points.
Alpari UK
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US Opening Call from Alpari UK on 5 Dicember 2013
US data key ahead of December FOMC meeting
Today’s US opening call provides an update on:
* US data in focus ahead of the December FOMC meeting;
* ECB press conference should provide some market volatility as always;
* UK Autumn statement overshadows today’s BoE rate decision.
It’s been a relatively quiet start to the European session on Thursday, ahead of a very busy afternoon that includes two central bank rate decisions, the UK Autumn statement and a number of US economic releases.
Of the above, the thing investors are most concerned with at the moment is the US data. The Bank of England and the European Central Bank are both unlikely to loosen further or tighten in the coming months, while tapering of the Fed’s asset purchase program could come as early as this month.
We’ve seen a significant improvement in the US data in the last couple of months, which is very surprising when you consider that the government shut down for almost three weeks in October and the US came very close to defaulting on its debt. At the very least this was expected to have a short term impact, but according to the data this is not the case.
The key release as far as the Fed is concerned will be tomorrow’s jobs report, but that doesn’t mean today’s GDP revision, jobless claims and factory orders data won’t also play a part. If these are all seen to be improving, like the majority of the data we’ve had in the last couple of months, and we get another strong jobs report tomorrow, the FOMC may struggle to justify not tapering in December.
As we’ve seen on numerous occasions this week, the markets are likely to be very reactive to the US data releases today, with, as we’ve seen repeatedly this year, good news being seen as bad news in the markets, and vice versa.
Also likely to cause a stir in the markets today, particularly the currency markets, will be the ECB press conference. The rate decision is due 45 minutes before the press conference and is expected to remain unchanged at record lows of 0.25%, following last month’s rate cut.
The press conference though could be a little more lively, with ECB President Mario Draghi’s comments tending to have a significant impact on the markets. This may be less the case today, given that any further rate cuts are unlikely in the coming months. Although, any discussion around negative deposit rates could prompt a reaction in the markets, following rumours last month that the next rate cut from the ECB would be to the deposit rate, and it would come in increments of 0.1%.
In the UK, the main event today will be the delivery of the Autumn statement by Chancellor George Osborne. Ordinarily we’ve be looking at the Bank of England rate decision, but with monetary policy likely to remain unchanged for the next 18 months, it’s fiscal policy that’s going to be key to the sustainability of the UK recovery.
Ahead of the open we expect to see the S&P flat, Dow down 6 point and the NASDAQ up 4 points.
US data key ahead of December FOMC meeting
Today’s US opening call provides an update on:
* US data in focus ahead of the December FOMC meeting;
* ECB press conference should provide some market volatility as always;
* UK Autumn statement overshadows today’s BoE rate decision.
It’s been a relatively quiet start to the European session on Thursday, ahead of a very busy afternoon that includes two central bank rate decisions, the UK Autumn statement and a number of US economic releases.
Of the above, the thing investors are most concerned with at the moment is the US data. The Bank of England and the European Central Bank are both unlikely to loosen further or tighten in the coming months, while tapering of the Fed’s asset purchase program could come as early as this month.
We’ve seen a significant improvement in the US data in the last couple of months, which is very surprising when you consider that the government shut down for almost three weeks in October and the US came very close to defaulting on its debt. At the very least this was expected to have a short term impact, but according to the data this is not the case.
The key release as far as the Fed is concerned will be tomorrow’s jobs report, but that doesn’t mean today’s GDP revision, jobless claims and factory orders data won’t also play a part. If these are all seen to be improving, like the majority of the data we’ve had in the last couple of months, and we get another strong jobs report tomorrow, the FOMC may struggle to justify not tapering in December.
As we’ve seen on numerous occasions this week, the markets are likely to be very reactive to the US data releases today, with, as we’ve seen repeatedly this year, good news being seen as bad news in the markets, and vice versa.
Also likely to cause a stir in the markets today, particularly the currency markets, will be the ECB press conference. The rate decision is due 45 minutes before the press conference and is expected to remain unchanged at record lows of 0.25%, following last month’s rate cut.
The press conference though could be a little more lively, with ECB President Mario Draghi’s comments tending to have a significant impact on the markets. This may be less the case today, given that any further rate cuts are unlikely in the coming months. Although, any discussion around negative deposit rates could prompt a reaction in the markets, following rumours last month that the next rate cut from the ECB would be to the deposit rate, and it would come in increments of 0.1%.
In the UK, the main event today will be the delivery of the Autumn statement by Chancellor George Osborne. Ordinarily we’ve be looking at the Bank of England rate decision, but with monetary policy likely to remain unchanged for the next 18 months, it’s fiscal policy that’s going to be key to the sustainability of the UK recovery.
Ahead of the open we expect to see the S&P flat, Dow down 6 point and the NASDAQ up 4 points.