The Day Ahead:
For the EUR, economic data is on the heavier side for the day ahead, with key stats including 1st estimate GDP numbers for the 3rd quarter out of Germany, finalized October inflation numbers out of France and Spain and 2nd estimate GDP numbers for the 3rd quarter and September industrial production numbers out of the Eurozone.
We will expect focus to be on Germany’s GDP numbers, a forecasted quarter-on-quarter contraction likely to weigh on the EUR should the numbers be in line with or worse than forecasted, with any contraction ultimately a negative as concerns over the global economic outlook build.
Outside of the numbers, we can expect more chatter from Italy’s coalition government, which will also influence through the day and could ultimately overshadow much of the stats.
At the time of writing, the EUR was up 0.11% to $1.1302, with Germany’s GDP numbers and noise from Italy the key drivers for the EUR through the day.
For the Pound, its October’s inflation figures that are due out later this morning, with the annual rate of inflation forecasted to pick up to 2.5%, which would be a positive for the Pound, though softer wholesale inflation figures could pin back any major upside.
Outside of the numbers, we can expect more price action over Brexit, with the British PM now needing to sell the reported draft Brexit plan to her cabinet and beyond.
With Theresa May’s cabinet having been given the draft deal on Tuesday night, it’s going to be reaction time today and, if the ducks aren’t aligned, the Pound could be heading back to $1.28 levels in a hurry.
At the time of writing, the Pound was up 0.26% to $1.3011, with Brexit news the key driver through the day.
Across the Pond, October inflation figures are scheduled for release and we can expect some market sensitivity to the numbers, with a forecasted 0.3% rise in core consumer prices, month-on-month a Dollar positive, with the annual rate of core inflation forecasted to hold at 2.2%, supporting the FED’s current stance on monetary policy.
Outside of the numbers, we can expect some movement off the back of a scheduled FED Chair Powell speech, with members Quarles and Daly also due to speak through the day.
On the political front, Brexit, the Eurozone and the Oval Office will influence demand for the safe havens, with the markets likely to be in search of more progress on U.S – China trade talks.
At the time of writing, the Dollar Spot Index was down 0.26% to 97.048, with today’s inflation numbers, Capitol Hill and geo-political risk in Europe remaining in focus through the day.
For the Loonie, with another quiet day on the economic calendar front, crude oil will continue to provide direction, with the IEA’s monthly report scheduled for release in the early afternoon along with both the weekly API and EIA inventory numbers out of the U.S.
The Loonie was down 0.02% to C$1.3236 against the U.S Dollar at the time of writing, with crude oil prices continuing to be the key driver through the day.
