Market news update for 12/8/14 thru 12/12/14
The major news releases to focus on, that will have the biggest impact on your currency pairings for the week, will be what happens with ECB’s Q.E. and the USD.
THE EURO – Will the Euro zone economies buy in to what the ECB is selling? Through its targeted LTRO (Long Term Refinancing Option) the European Central Bank, oddly enough, will be selling their bond buying program to the banks.
Will the banks take the bait? By making terms lucrative for Euro zone banks, the ECB is hoping to flush out money that will stimulate substantive growth and put them back on track. Even if the idea makes the German’s uncomfortable, this appears to be the initial approach to triggering optimism and getting the Euro zone “off the schneid”.
If Euro zone tax reform is off the table for now (which is one of the best tools in combating the high unemployment plague) then President Draghi and the ECB will need to look elsewhere if the bond buying program does a “belly flop” heading in 2015.
THE USD – The data releases heading into the week look to reveal if momentum is rolling solid or if their are still some rough patches of mud that slog at the wheels of the U.S. economy.
The release of Core Retail Sales, Retail Sales, Unemployment Claims, month over month PPI and Preliminary Consumer Sentiment are going to firm up the Fed’s approach to interest rate hikes. If the numbers look solid, we can expect that the Fed’s may hint on leaning towards a hike by the middle of next year…or possibly sooner?
We can anticipate that some guidance verbiage will be altered to either change, or eliminate, the “considerable time” directive. The guidance had previously triggered the unlikeliness of any action taking place any sooner than the third quarter of 2015. Things look to be moving towards a rate hike sooner rather than later.
As the data is released, expect to see a “hustle and bustle” of activity on your USD pairings over the next couple of weeks.
Major news releases for your other currency pairings are as follows:
CNY – Trade Balance, year over year CPI and year over year Industrial Production
Aussie – Employment change and Unemployment Rate
Kiwi – RBNZ Rate Statement, Press Conference and Governor Wheeler speaks
Franc – LIBOR Rate, SNB Monetary Policy Assessment and Press Conference
GBP – Month over month Manufacturing Production
Loonie – Month over month Building Permits, and BOC Governor Poloz speaks
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