Intraday Market Thoughts

USD Firms on Repubs Standoff ahead of Busy US Session

by Patrik Urban
Dec 21, 2012 12:48

UK public sector net borrowing rose; UK GDP revisions mixed; German GfK consumer climate fell; Gold consolidates losses. A busy session brings durable goods orders; core PCE; personal spending and income; UoM consumer confidence. Both gold shorts & the single silver short in Premium trades hit all targets, while the lone silver long is in progress. 1 of EURUSD stopped out, the other in progress.

Bundesbank president and the ECB governing council member Jens Weidmann reiterated today his criticism of the ECB's OMT program and warned against the tendency to share risks among the EZ countries. He said that the conditions attached to the OMT are not credible and added that the ECB put itself on a slippery slope.

In the UK, public sector net borrowing rose sharply in November and reached GBP 15.3 bln from previous GBP 6.0 bln and the final result of Q3 GDP was mixed. The sharp increase was revised lower to 0.9% q/q but higher to a flat reading from -0.1% y/y. A downward revision was seen in the production as well as the service sector. GBPUSD trades around 1.6240.

German GfK consumer climate worsened for January to 5.6 from December's 5.8 while analysts expected an improvement to 5.9. EURUSD trades around 1.32.

Spot gold consolidates sharp losses that it incurred over the past three days but it continues to trade near lows around 1647. Short term support is seen at 1627 ahead of a key support at 1530.

The US session begins at 8:30 am ET with durable goods orders that are anticipated to rise 0.2% in November while core orders are expected to decline 0.2%. Core PCE price index is seen steady in November at 0.1% and personal spending is seen rising 0.4% while personal income only 0.3%. University of Michigan consumer confidence at 9:55 am ET is expected to be revised to 74.9 from initial estimate 74.5.

Canadian statistics office will release October GDP at 8:30 ET that is expected to rise 0.1% m/m and 1.2% y/y. Consumer inflation is seen easing in November to 1.1% from previous 1.2%.

Act Exp Prev GMT
Final GDP (q/q) [F]
3.1% 2.8% 2.7% Dec 20 13:30
Final GDP Price Index (q/q) [F]
2.7% 2.7% 2.7% Dec 20 13:30
GfK German Consumer Climate
5.6 5.9 5.8 Dec 21 7:00
Final GDP (q/q) [F]
0.9% 1.0% 1.0% Dec 21 9:30
Public Sector Net Borrowing
15.3B 14.3B 6.0B Dec 21 9:30
GDP (m/m)
0.1% 0.0% Dec 21 13:30
Core Durable Goods Orders (m/m)
-0.2% 1.8% Dec 21 13:30
Durable Goods Orders (m/m)
0.2% 0.5% Dec 21 13:30
Personal Income (m/m)
0.3% 0.0% Dec 21 13:30
Personal Spending (m/m)
0.4% -0.2% Dec 21 13:30
Michigan Consumer Sentiment
74.9 74.5 Dec 21 14:55

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