Intraday Market Thoughts

US Consumer Worries Creep In

by Adam Button
Nov 26, 2013 23:11

A soft consumer confidence report stalled the US dollar's momentum on Tuesday. The Swiss franc was the top performer while the Aussie continued to languish. Early data in New Zealand showed a better than expected trade deficit.

Consumer confidence planted a seed of doubt in the minds of traders about the strength of US retail sales heading into the holiday blitz. The reading on confidence was 70.4 compared to 72.9 expected and at the lowest level since April.

Earlier in the session, the US dollar was a solid performer with EUR/USD slipping to 1.3520 and cable down to 1.6140. The dollar rose after strong building permits, house price data and an upbeat Richmond Fed but it was wiped out by consumer confidence and EUR/USD eventually rose to 1.3575 and cable to 1.6218.

The euro was especially volatile after MNI, citing ECB sources, said there is no current consensus for action at the December meeting. The sources said that if the economy and inflation don't respond, the ECB will do more. Those headlines were bullish because they imply a wait-and-see approach but they were coupled with confirmation that negative deposit rates have been discussed.

The hints on the ECB and the Fed's data focus leave the market extremely tied to the whims of statistical releases. With the US headed toward a de facto four-day weekend, Wednesday will be chalk full of data including durable goods, jobless claims and the Chicago PMI.

Asian trading started with surprisingly strong export performance from New Zealand and a trade deficit in October of $168m compared to $350m expected. Data is light for the remainder of the session but BOJ board member Shirai delivers a speech and takes questions. He voted against the BOJ's report at the Oct 31 meeting.

Today's edition of the Premium Insights added 4 new trades; 2 in GBPUSD and 2 in gold, with 5 new charts in the fx pair and the metal. All charts and trades are in the latest Premium Insights. Final target for cable was moved from 1.6270 to 1.6240. 
Act Exp Prev GMT
HPI (m/m)
0.3% 0.5% 0.4% Nov 26 14:00
HPI (m/m)
0.7% 0.7% 1.3% Nov 26 14:00
HPI (y/y)
8.5% 8.5% Nov 26 14:00
HPI (y/y)
13.3% 13.0% 12.8% Nov 26 14:00
Durable Goods Orders (OCT)
-1.5% 3.7% Nov 27 13:30
Durable Goods Orders ex Transportation (OCT)
0.2% -0.1% Nov 27 13:30
Chicago PMI (NOV)
62.0 65.9 Nov 27 14:45
Building Permits
1.03M 0.94M 0.97M Nov 26 13:30
CB Consumer Confidence
70.4 72.9 72.4 Nov 26 15:00
Richmond Manufacturing Index
13 3 1 Nov 26 15:00
Initial Jobless Claims (NOV 23)
331K 323K Nov 27 13:30

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