It looks like traders are already on vacation with moderate market activity today. Sterling softens again on reports that the EU has rejected the UK’s latest proposal on fishing rights. The Australian and Zealander dollars also fell slightly. In contrast, Swiss France strengthened with the euro, followed by the dollar and the yen. Gold and Oil are also trading sideways as this week’s consolidations extend.
Technically, eyes will be on EUR / USD 1.2272 resistance ahead of the long weekend. We don’t extend a break there before extending the consolidation with another drop leg. However, the outlook should remain bullish as long as the support at 1.2058 holds. Meanwhile, a breakout of 1.2272 could pave the way for a delayed correction after the holidays.
In Europe, currently, the FTSE is up 0.48%. DAX is up 1.11%. CAC is up 1.13%. Germany’s 10-year yield is down from -0.0051 to -0.584. Earlier in Asia, Nikkei fell -1.04%. Hong Kong HSI fell -0.71%. China’s Shanghai SSE fell -1.86%. The Singapore Strait Times fell -0.67%. Japan’s 10-year JGB yield fell from -0.0037 to 0.010.
Q3 US GDP growth revised to 33.4% annualized
According to the third estimate, US GDP grew at an annualized rate of 33.4% in the third quarter, revised upwards from 33.1%. The upward revision mainly reflected larger increases in personal consumption expenditure (PCE) and non-residential fixed investment.
BoE Haldane: The risks are always with us and the risks are always real
BoE chief economist Andy Haldane said in an interview with the Guardian that the central bank would continue to provide monetary policy support to the economy, because “the risks are always with us and the risks are always with us. real ”. The right time to “signal and execute” the reduction in insurance provided by policies is “when you actually see the risks diminishing for people in terms of their jobs and for businesses in terms of viability”.
“We are still in a hole and the hole is still deep. We must continue to come out of this hole with political measures and the vaccine. But once we are out – and we will – we must not forget about the long-term structural problems: which will give us a good job at a good pay, ”he added.
UK Q3 GDP is estimated to have grown a record 16.0% from Q3 in Q3, revised up from the first estimate of 15.5%. Over the year, GDP fell by -8.6% year-on-year. The level of GDP was still -8.6% lower than at the end of 2019. The current account deficit widened to -15.7B GBP in the third quarter. Net public sector borrowing reached GBP 30.8 billion in November.
Germany Gfk’s consumer climate fell to -7.6, on the verge of entering a very difficult phase
Germany’s Gfk consumer sentiment for January edged down to -7.3 from -6.8. In December, economic expectations stood at 4.4, against -0.2. Income expectations fell to 3.6 from 4.6. The propensity to buy increased to 36.6 from 30.5.
Rolf Bürkl, consumer expert at GfK, said: “There is reason to fear that the consumer climate is about to enter a very difficult phase in the coming weeks. Any loosening or recovery can certainly only come when infection rates have dropped to the point where the strict restrictions can be relaxed once again. “
Retail sales in Australia increased 7% in November, with Victoria leading with a sharp increase
Australian retail sales rose 7% mom in November to AUD 2,072 billion, well above expectations of 2.5% mom. In seasonally adjusted terms, sales increased 13.2% year-on-year.
Ben James, director of quarterly economic surveys, said: “Victoria saw a big increase, up 21%, as retail stores saw a full month of commerce after restrictions on coronavirus in that state. Excluding Victoria, retail sales increased 2.7%.
EUR / USD Mid-Day Outlook
Daily Pivots: (S1) 1.2159; (P) 1.2206; (R1) 1.2282; More….
EUR / USD remains in consolidation from 1.2272 and the intraday bias remains neutral. On the upside, the breakout of 1.2272 will resume a larger rally to 61.8% projected from 1.0635 to 1.2011 from 1.1602 to 1.2452 thereafter. However, given the bearish divergence condition in the 4 hour MACD, a breakout of 1.2058 will instead bring a deeper correction.
Overall, the rise from 1.0635 is considered the third step in the pattern from 1.0339 (2017 low). Another rally could be seen as a resistance group at 1.2555 next, (38.2% retracement from 1.6039 to 1.0339 to 1.2516). This will remain the preferred case as long as support for 1.1602 is maintained. We would be alerted for the upper sign towards 1.2516 / 55. But a sustained pause will have long term bullish implications.
Update of economic indicators
|00:30||AUD||Retail sales M / M Nov P||7.00%||2.50%||1.40%|
|07h00||EUR||Germany Gfk Consumer Confidence Jan||-7.3||-9.5||-6.7||-6.8|
|07h00||GBP||GDP T / T T3 F||16..00%||15.50%||15.50%|
|07h00||GBP||Total business investment T / T T3 F||9.40%||8.80%||8.80%|
|07h00||GBP||Net public sector borrowing (GBP) Nov||30.8 billion||26.3B||21.6B||20.9 billion|
|07h00||GBP||Current account (GBP) Q3||-15.7B||-12.9 billion||-2.8 billion||-11.9B|
|1:30 p.m.||USD||Annualized GDP Q3 F||33.40%||33.10%||33.10%|
|1:30 p.m.||USD||GDP price index T3 F||3.50%||3.60%||3.60%|
|3:00 p.m.||USD||Sales of existing homes Nov||6.73 million||6.85 million|
|3:00 p.m.||USD||Consumer Confidence Dec||97.5||96.1|