European Outlook: Asian stock markets mostly headed south, as this week’s central bank meetings come into focus and amid a lack of incentive for investors to push out indices beyond recent highs. U.S. markets still managed to move higher as investors shrugged off the explosion in New York, and while volumes were lacklustre U.S. but also U.K. stock futures are moving higher. The FTSE 100 already outperformed yesterday and ongoing pressure on the Pound is continuing to underpin market interest. Oil prices are higher on the day with the front end WTI future trading at USD 58.39 per barrel. The calendar, which started very slow yesterday, heats up today, with U.K. inflation numbers for November and the German ZEW investor confidence reading for December.
FX Update: Narrow ranges have prevailed so far today as market participants sit on their hands ahead of key data from key economies this week, the first of which arrives later in the form of UK November inflation data and the latest German ZEW investor survey, along with a plethora of central bank policy decisions. EURUSD has settled near 1.1780, lacking direction after the rebound from Friday’s 1.1730 low stalled at levels above 1.1800. USDJPY has plied a narrow 14 pip range so far today, between 113.43 and 113.57, settling toward the lower part of this range, which roughly marks the midway point of yesterday’s range. Cable has settled to a narrow oscillation just above yesterday’s three-session low at 1.3330. The NZ dollar bucked the directionless trend, with the currency having rallied for a second successive session as markets continue to react to yesterday’s announced appointment of Adiran Orr as the new RBNZ governor. NZDUSD logged a two-week high at 0.6937.
Main Macro Events Today
- UK CPI and PPI – Expectations – headline and core CPI readings to remain unchanged at 3.0% y/y and 2.7% y/y, respectively, though producer input and output costs expected to tick higher, to respective rates of 6.8% y/y, from 4.6% y/y in the month prior, and to 3.0% y/y from 2.8% in October.
- German ZEW Sentiment – Expectations – at 18k from 18.7K seen last month
- US PPI and Core – Expectations – forecast to rise 0.4% vs 0.4%; core PPI is set to increase just 0.2% vs 0.4%.
- ECB President Draghi Speech at 19:00 GMT
Charts of the Day
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