Short Note for the Day after Thanksgiving

[PocketOption]

Short Note for the Day after Thanksgiving

Price Action:
      Since the North American markets closed Wednesday, the foreign
     exchange market has been subdued.  Most of the major currencies are
     +/- 0.2%.  The Antipodeans and sterling have risen a bit more. 
     The euro is in the middle of this week's range (~$1.0850-$1.0965). 
     The dollar is at the upper end of this week's range against the Japanese
     yen (~JPY147.15-JPY149.75).  Sterling is trading near the high for
     the week set in Europe today near $1.2565.  Recall that the $1.2590
     area is the (50%) retracement of the losses since the March high
     (~$1.3140). The Australian dollar is firm but holding below the week's
     high (~$0.6590) and the 200-day moving average (~$0.6585).  The US
     dollar settled on Wednesday slightly above CAD1.3685.  It has been in
     a range of roughly CAD1.3650-CAD1.3710 but is trading near the Wednesday's
     settlement.  The greenback is consolidating within the range set on
     Wednesday against the Chinese yuan (~CNY7.1365-CNY7.1650).  

Developments

 
1. Reports indicate China is consider new bolder efforts
        to support the property market.  Developer stocks rallied. 

 
2. Far-right won the most seats in the Dutch election, but
        market took in stride as Wilder's Freedom Party may have the more seats
        than any other party, it looks almost impossible for him to cobble
        together a majority coalition.  Still, shows shift in Europe--especially
        anti-immigration. 

 
3. OPEC's meeting was delayed until next week amid reports
        of discord, like in June over quotas. Many had expected an extension of
        Saudi Arabia's cuts and maybe pressure on others to cut.  January WTI
        fell on the news. 

 
4. Preliminary PMIs

•   Australia softened.  Manufacturing and services
       eased, and the         composite fell to 46.4 from 47.6.
• EMU showed improvement but all the readings remain
       below 50 boom/bust.
• German's composite rose to 47.1 from 45.9, it is the
       highest since July.
• France's PMI deteriorated slightly, the opposite of
       Germany, and the composite slipped to 44.5 from 44.6
• The UK's PMI was The surprise.  Its PMI was better
       than expected, and the improvement saw services move above 50 and so did
       the composite, for the first time since July.   Sterling led the
       G10 currencies higher yesterday.  

 
5. Germany's Constitutional Court ruled recently that a
        plan to shift Covid funds in an off-budget facility to climate change was
        unconstitutional.  It has thrown German fiscal policy into disarray
        and the government has been forced to suspend it debt brake again. 
        In effect, the court decision created a 37 bln euro fiscal hole.  The
        market fears it will be filled by new issuance.  This has triggered a
        steep sell-off of European bonds and appears to be pushing US yields
        higher too, and dragging up JGB yields.  Separately, the Bundesbank
        warned in its financial stability report that financial institutions "book
        values are often higher than current market values, so selling securities
        would result in losses."  

 
6. Japan's October national CPI rose slightly less than
        expected, but the report was broadly in line with the Tokyo CPI that was
        released a few weeks ago.  For the nation, October CPI rose to 3.3%
        from 3.0% (median forecast in Bloomberg's survey was for 3.4%).  The
        core measure, which excludes fresh food rose by 2.9% from 2.8% (3.0%
        median forecast), while if energy is also excluded the core-core measure
        eased to 4.0% from 4.2% (4.1% expected).  

 
7. North America today

• The US sees the flash November PMI.  Slightly
          softer readings are expected but the composite is expected to have
          remained above 50.
• Canada reports September retail sales.  The
          median forecast is for a flat report and a small decline excluding
          autos.
• Mexico reports IGAE surveys, which are likely to
          have moderated in September, and Q3 GDP revision (from 3.3%
          year-over-year and 0.9% quarter-over-quarter. 

Disclaimer

Source: Short Note for the Day after Thanksgiving