On balance, there was a raft of negative economic news this week, particularly from the United States.
On Monday, the Australian Bureau of Statistics said Home Loans surprised to the upside with a 4.4 percent growth in September, beating its median expectation of 3.6 percent. Westpac Banking Corporation reported on Wednesday that the Westpac Consumer index crawled back into positive territory this November, up by 1.9 percent after sliding 2.1 percent in October.
In the UK, Claimant Count Change surprised again last October with a -41,700 reading, its 12th straight monthly decline. The Unemployment Rate declined slightly to 7.6 percent in October. Meanwhile, October Retail Sales slipped 0.7 percent, the Office for National Statistics said on Thursday.
The United States reported plenty of negative news this week. US Jobless Claims increased to 339,000 in the prior week, and the previous week’s reading was revised higher to 341,000 from 336,000. The Empire State manufacturing Index shocked the market with a -2.2 reading for November, when analysts were expecting a growth of 5.2. Import prices slipped more than anticipated, -0.7 percent. Industrial Production for October was also weaker than expected, -0.1 percent.
Meanwhile, Janet Yellen swiftly went through her nomination as the next head of the US Federal Reserve in the Senate Banking Committee’s hearing last Thursday.
Gold buyers’ mid-week upside attempt was good enough that they were able to push price back to the weekly open – and this is where it ended the week. The brief plunge toward the $1,260s could be just that – fleeting. Or, we could see another downside test next week.
It was yet another tough week for Oil as sellers continue to put pressure on price. Bulls made an effort early Monday to bring price close to $96; however, sellers were apparently lurking just above $95, and they dominated after pulling price down on Tuesday. Buyers had a very tough time preserving their position above $94 for the rest of the week. Bulls must recapture the $95-$98 area next week.
EURUSD closed the week with an inside trading range that spanned a mere 160 pips. Although the 1.3500 level has been breached in late-Friday, price closed the week at 1.3495. We need to see a strong move above 1.3500 this coming week, so that bulls can tackle 1.3600-50.
GBPUSD displayed a much better performance than EURUSD this week, as the former easily cut through and subsequently close above last week’s high. Bulls are undeniably aiming for another fight around 1.6250.
The question in all USDJPY traders’ mind was whether 100 can be hit again, and this was answered with a confident “Yes!” this Friday. The pair reached and broke the 100 level for the first time since September 11, and USDJPY bulls are surely ecstatic about it! Before they celebrate, they need to make sure 100 holds in the coming weeks.
The Week Ahead
Asia will be quiet this Monday. The European session will start off with the Eurozone’s Current Account data, followed by Canada’s Foreign Securities Purchases, US TIC Long-term Purchases, and US NAHB Housing Market Index.
Australia will welcome Tuesday with its CB Leading Index and RBA’s Monetary Policy Meeting Minutes. Next up are ZEW Economic Sentiment for Germany and the Eurozone, and the US Employment Cost Index. US Treasury Secretary Lew and FOMC members Dudley and Evans will give their respective speeches.
Wednesday will start very early with New Zealand’s PPI Output and PPI Input. Then there will be Japan’s Trade Balance; Germany’s PPI; UK’s MPC Asset Purchase Facility and Official Bank Rate Votes; Switzerland’s Economic Expectations; Canada’s Wholesale Sales; US Retail Sales, Existing Home Sales, CPI, and FOMC Meeting Minutes.
On Thursday, we’ll have China’s HSBC Flash Manufacturing PMI; BOJ Monetary Policy Statement and Press conference; Flash Manufacturing PMI and Flash Services PMI for Germany, France, and the Eurozone; UK CBI Industrial Order Expectations and Public Sector Net Borrowing; US PPI, Flash Manufacturing PMI, Jobless Claims, and Philly Fed Manufacturing Index.
Finally, Friday will end the week with the release of Germany’s Ifo Business Climate, Canada’s CPI and Retail Sales, and US JOLTS Job Openings.