What Drove the Market the Week Nov 21 – 25

U.S. dollar’s rally, since Trump’s victory in U.S. elections, calmed down this week as traders were closing their winning USD-long positions ahead of the thanksgiving day. However, on Wednesday, the FOMC minutes bolstered bucks’ price as Fed policymakers were planning to raise rates in December’s meeting, even before U.S. elections that made Donald Trump the next U.S. President.

On the other hand, the sterling picked up significantly versus most of its major peers since Monday on the back of U.K.’s Autumn Statement for the economy. The Chancellor Philip Hammond spoke about increasing productivity in order to raise workers’ living standards and announced new spending plans for the infrastructure of the economy. Moreover, they plan to push the productivity, is a weak sector of the U.K. Though, the uncertainty over Brexit discussion for when and how they will trigger Article 50, weigh down on the sterling and in combination with the U.S. economic outlook, the GBP/USD pair remained subdued.

In the Euro area, not much data drove the market rather than the ECB financial stability review for the Eurozone. The 19-nation central bank warned that political uncertainty is putting Eurozone’s financial stability at risk, driving the EUR/USD pair below 1.0520 recording a fresh eight-month low.



U.S. Dollar – Unites States

· Markit PMIs: The manufacturing sector expanded on a faster than expected pace in November, according to the flash Markit index that ticked up at 53.9 from 53.4 before while the market expects the services sector to keep the same pace of growth at 54.8 – figures above 50.0 indicate expansion while below 50.0 indicate contraction.
· Consumer Sentiment: The consumer sentiment surprisingly lifted to 93.8 in November, the month of U.S. presidential elections with Trump’s the big winner from 87.2 before according to the Michigan sentiment index. Market consensus was just to pick up at 91.6.
· Housing Market: Existing home sales rose for the second straight month in October by 2.0% or 5.60M compared to last month that rose 3.6% or 5.49M up while the single-family home sales surprisingly dropped 1.9% at 563M, seasonally adjusted figure for the same month, and September’s sales revised down to 574M units from 593M before triggering mixed emotions for the housing market.
· Durable Goods Orders: Durable goods orders picked up 4.8% in October versus a rise of 0.4% before, while the durable goods orders ex-transportation beat market expectations increasing 1.0% against 0.2% expected. The indicator shows measures the cost of orders received my manufacturers for products planned to last three or more years, potentially large investments sensitive to the U.S. economic situation.

British Pound – United Kingdom

· Economic Growth: GDP second estimate for Q3 released confirmed the first estimate of 0.5% qoq and 2.3% yoy.
· Markit PMIs: The manufacturing sector expanded more than initially forecasted in November, according to the flash Markit PMI that ticked up at 53.9 from 53.4 the previous reading.

Euro - Eurozone
· Markit PMIs: Factory activity expanded at 54.1 in November according to the flash manufacturing PMI, surpassing market’s prediction of 53.3 while the services sector also expanded at a sufficient pace at 54.1 from 52.8 before. Though, the stronger Markit PMIs failed to stimulate the euro.
· Consumer Confidence: Consumer confidence increased sharply to -6.1 in November, the best reading since for this year according to the first estimate.