It’s been a quirky week as last Friday’s fireworks have fizzled out and left markets in a new state of malaise. A light trading session on Wednesday bled into Thursday as markets eagerly anticipated more remarks from ECB Chairman Draghi and a slew of speeches from Fed members. Mr. Draghi did not present any new challenges to markets but the euro did make brand new lows on renewed promises to act should conditions warrant. The continued pressure from central bankers in Europe and the United States is keeping a downward tilt on the EUR/USD rate. Meanwhile in Asia, it was Australian employment figures which paced markets. A surprise uptick in October saw the Aussie dollar bounce, which had been under a little pressure on oil’s latest slide. Australia amazingly added 58k new jobs, 40k of which were considered full-time. The participation ticked up to 65.0% and to put this into perspective, the US equivalent would have been an increase of 900k new jobs. Tomorrow, Japanese industrial production is on the docket and should cap an otherwise quiet week on the other side of the globe.
Mr. Draghi was making comments for the second straight day overnight. And for the second straight day, Mr. Draghi promised his committee would be ready to enact new liquidity measures should conditions worsen. Addressing the European parliament’s Economic and Monetary Affairs Committee Thursday, Mr. Draghi said that “downside risks stemming from global growth and trade are clearly visible†and this caution again touched EUR negatively again. On the data side, Eurozone industrial productions for the month of October missed expectations a bit, which cemented that EUR/USD achieved brand new lows. The single currency has experienced heavy losses over the last week against the dollar, as policy differences really begin to take shape. Today, multiple Fed speakers will get their chance to weigh in on markets.Tomorrow, a rash of GDP figures is on deck for the European session, headlined by Germany, France and Euro-zone figures. These numbers are heavily scrutinized so we should not be surprised to see a little extra volatility in the event they miss badly on the top or bottom of expectations.
It was an extremely quiet North American session as most of the US was closed for Veterans Day and Canada was on public holiday in observance of Remembrance Day. Sideways trade in equities and the greenback has defined trade this week for the most part, as investors around the world have begun to price in a rate hike at the Federal Reserve’s December meeting. The dollar was largely unsuccessful in its bid to make ground against most major currencies. This morning, there is important data on the docket coinciding with speeches from six Fed members. Jobless claims come in at 830am EST and it is expected that 270k Americans filed first time claims for the week ending November 6th. This is the first piece of top tier data since last week’s payrolls figure and could ignite markets in the event we see an especially strong or weak number. Chairman Yellen headlines a busy day of Fed-speak with comments at 930am. Ms. Yellen will be speaking one day after the Fed’s Williams all but promised the Fed will be raising rates at the December 17th meeting.
A bit of stale housing data is the only bit of news standing between Canada and its weekend. Housing prices for the month of September are released this morning and should largely be ignored. The Loonie gained a touch on Thursday despite oil prices hitting 2 ½ month lows on the news that US crude inventories have begun to stack up again. Outside market events should continue to impact the Canadian dollar as next week’s calendar remains light with nothing ahead of key inflation data next Friday to look forward to.
Further reading:
What Stands In The Way Of A Relentless Fall In EUR/USD? – Credit Suisse
Elliott Wave Analysis: EURUSD, USDJPY and USDCAD
