Four central banks made their respective rate announcements this week and all of them decided to maintain their respective rates. The Reserve Bank of Australia left its Cash Rate at 2.50 percent; Bank of Canada left its Overnight Rate at 1 percent; Bank of England maintained its Official Bank Rate at 0.50 percent; and the European Central Bank decided to keep its Minimum Bid Rate at 0.05 percent.
The Australian Bureau of Statistics reported mostly rosy data. Company Operating Profits turned out to be surprisingly positive in the third quarter with a gain of 0.5 percent, following a previous reading of -7.5 percent. Building Approvals surged 11.4 percent in October, reversing the previous month’s 11.2 percent decline. Current Account deficit decreased to –AUD12.5 billion, Retail Sales edged up 0.4 percent, and Trade Balance improved to –AUD1.32 billion. Meanwhile, GDP inched up 0.3 percent.
In the United States, Non-Farm Employment Change surged 321,000 in November while Jobless Rate stayed at 5.8 percent. Meanwhile, Jobless Claims came in close to expectations at 297,000, following the previous weeks 314,000 reading. ISM Non-Manufacturing PMI improved to 59.3 in November, while ISM Manufacturing PMI came in at 58.7.
Gold started the week with a very volatile move as it stretched across a $79 range. Price closed the week just below $1,200. We could see more volatile moves in the coming days, so traders should stay alert. Near-term resistance at $1,250.
Following a quick touch of new lows, Oil struggled to make a footing at the $70 during its first attempt this week. Weakness resumed immediately which sent price lower, ending the week in the mid-65s. As mentioned before, $50 to $60 would serve as the next critical area. Avoid fighting the momentum.
EURUSD smashed through recent support this week to achieve new lows and closed nearby. If there are still bulls waiting in line, they should be able to get through the 1.2400-1.2600 zone of sellers to achieve a glimmer of hope in this bearish pair.
USDJPY blasted higher with nearly 400 pips as it hit its seventh consecutive bullish week. The pair is now trading in price levels last seen in July 2007 and it could continue to work its way higher. USDJPY remain a buy potential in dips.
Another tight weekly range was traded in GBPUSD this week as bulls continue to struggle in holding off bearish moves. The pair closed the week into fresh territories and closed it not far away. There is a serious concern for a move toward 1.5000.
The Week Ahead
Monday will be back with a busy Asian session. We will witness the release of Japan’s Current Account, Bank Lending, and Final GDP; Australia’s ANZ Job Advertisements; China’s Trade Balance; Switzerland’s CPI and Retail Sales; Eurogroup Meetings; Germany’s Industrial Production; Canada’s Housing Starts and Building Permits. Italy will observe Immaculate Conception Day.
Tuesday will be news-light as it only has Australia’s NAB Business Confidence; Germany’s Trade Balance; UK Manufacturing Production and NIESR GDP Estimate; ECOFIN Meetings; and US JOLTS Job Openings.
Wednesday will be a very brief but packed news day with Australia’s Westpac Consumer Sentiment and Home Loans; Japan’s BSI Manufacturing Index and Consumer Confidence; China’s New Loans, CPI and PPI; France Industrial Production; UK Trade Balance; and US Federal Budget Balance.
Thursday will be a critical day as New Zealand and Switzerland will announce their respective interest rates announcements and monetary policy statements. Japan will publish its Core Machinery Orders and Tertiary Industry Activity data. Meanwhile, there will be other news releases such as Australia’s MI Inflation Expectations and jobs data; Eurozone Targeted LTRO; Canada’s NHPI; United States Retail Sales, Jobless Claims, and Import Prices.
Friday will cap the week with New Zealand’s Business NZ Manufacturing Index; China’s Industrial Production and Fixed Asset Investment; Eurozone Industrial Production; US PPI and Prelim UoM Consumer Sentiment.