FX Highlights

  • The USD starts the week lower as equity markets rally, crude prices trade higher and gold trades at new record high, strong GDP data from Japan and statements from China downplaying the possibility of Yuan revaluation sparked selling of the USD, ECB's Weber calls for the start of plans to withdraw fiscal and monetary stimulus, GBP underperforms as house prices fall in November, commodity currencies supported by improving risk sentiment and rising commodity prices
  • Focus turns to the US release of US Manufacturing index, retail sales and business inventories and Canada's manufacturing shipments
  • Officials from China downplay potential for Yuan revaluation, APEC communiqué makes no reference to FX rates, US and China fail to agree on Yuan revaluation
  • Japan's Q3 GDP rose 1.2%, CAPEX spending rose 1.6%, JPY higher
  • UK November Rightmove house prices fall 1.6%m/m, and rose 1.6% y/y, GBP higher
  • EU October inflation rose 0.2%, ECB's Weber says that the EU must start preparations to withdraw fiscal and monetary stimulus, EUR higher
  • Saudis plan to double oil production capacity by 2015 to meet demand from Asia
  • WSJ reports that economists expect the Fed to begin raising rates in September
  • Feds Evans says unemployment will continue to rise into mid year and accommodative policy may be needed beyond 2010
  • US equity markets set to open higher, European equities1% higher, Nikkei closed 20 points higher

Upcoming Events

  • US - Monday, November Empire State Manufacturing Index will be released expected at 31 compared to 34.57 last month along with October retail sales expected at 0.4% compared to 0.5% last month and September business inventories expected at -0.6% compared to-1.5% last month
  • CAN - Monday, September manufacturing shipments will be released expected at -1% compared to -2.1% last month