[B]Market Review[/B] - 16/11/2013 [I]03:43GMT [/I]
[B]
Dollar falls broadly on weaker-than-expected U.S. data[/B]
Euro strengthened against the U.S. dollar on Friday after the release of weaker-than-expected U.S. economic data, fanning market speculation the Federal Reserve will maintain its stimulus program for the time being, the Dow Jones Industrial Index and S&P 500 both climbed to record highs on Friday following Fed Chair nominee Janet Yellen’s dovish testimony before the U.S. Senate Banking Committee Thursday.
U.S. Empire State manufacturing index in November came in at -2.21, worse than the forecast of 5.00 whilst U.S. industrial production in October came in at -0.1%, weaker than street forecast of 0.2%, previous month’s reading was revised from 0.6% to 0.7%.
Earlier in quiet Asian session, the single currency move narrowly and then retreated to 1.3433 in European morning, however, buying interest quickly emerged and lifted the pair. Euro later climbed to session highs of 1.3506 in New York morning after the release of weaker-than-expected U.S. economic data before stabilising in New York afternoon.
Versus Japanese yen, the greenback retreated from 100.31 in Asian trading to 99.93 ahead of European open. However, renewed buying interest there lifted price and the pair climbed to intra-day 2-week high of 100.43 in European morning on renewed cross-selling in yen before retreating to 100.10 in New York morning after the release of weaker-than-expected U.S. industrial production and Empire State manufacturing index.
The British pound ratcheted higher from 1.6052 (Australia) to 1.6090 in European morning before retreating briefly to intra-day low at 1.6048 due to active cross-selling sterling versus euro. Cable then quickly rebounded on renewed buying interest and climbed to a session highs of 1.6136 in New York morning after release of weaker-than-expected U.S. data and also comments from Bank of England’s policy maker Martin Weale.
Bank of England’s policy maker Martin Weale said ‘guidance increased importance of CPI expectation; pound strength has lowered inflation; euro-area problems have become more manageable; pound has posted concern about balance of payments; U.K. consumer confidence has improved; BoE can’t look the other way on CPI expectations; U.K. economy may grow faster than BoE has forecast; there has been "an upturn: in CPI expectation.’
In other news, ECB’s executive board member Yves Mersch says 'we have the possibility, have other instruments to flood the economy with liquidity if necessary; we have to option to do outright purchases, but euro area doesn’t have single sovereign signature so no surprise that we chose other instruments; we still reserve the right to do other measures in the futures.
[B]Data to be released next week : [/B]
U.K. Rightmove house prices, EU current account, trade balance, U.S. net LT TIC flows, NAHB housing market index on Monday.
Australia RBA policy meeting minutes, Japan leading indicators, Germany ZEW economic sentiment, ZEW current condition, EU ZEW economic sentiment, U.S. Redbook retail sales on Tuesday.
Japan export, import, trade balance, all industry index, Germany PPI, U.K. BoE releases MPC minutes, Swiss ZEW index, U.S. CPI, retail sales, existing home sales, business inventories, FOMC minutes, Canada wholesale sales on Wednesday.
Japan BOJ rate decision, machine tools orders, China HSBC Manufacturing PMI, Swiss trade balance, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, consumer confidence, U.K. PSNCR, public sector net borrowing, CBI industrial trend, U.S. jobless claims, PPI, PCE, Markit PMI and Philadelphia Fed survey on Thursday.
Japan BoJ monthly economic report, Germany GDP, export, import, Ifo current assessment, Ifo business climate, Canada CPI and retail sales on Friday.