The dollar was hit after Doug Jones, a Democrat, won the special election on Tuesday to fill the United States Senate seat. What other market drivers do traders need to pay attention to? Get an overview here with 13 December Moving Market Fundamental Events.
13 December, HotForex – Asian stock markets traded mixed, with Japan underperforming as the yen strengthened amid a wider dip in the dollar. The Hang Seng meanwhile outperformed and bounced back 1.3% with Air China Ltd rallying but casinos leading the gains on the benchmark index.
U.K. and U.S. futures are in the read, however, ahead of the expected Fed hike today and as the dollar was hit by the Democrats win in the Alabama vote, which cast further doubt on Trump’s legislative agenda.
European Market Outlook
Treasury yields declined overnight and Bund futures moved up from lows, suggesting fresh safe-haven demand. The Fed announcement will overshadow the European calendar, which has German inflation at the start of the session as well as U.K. labour market data and Eurozone production and employment numbers.
German Nov HICP inflation was confirmed at 1.8% y/y, as expected and up from 1.5% y/y in the previous month. The breakdown confirmed that the main driver behind the uptick was a rebound in energy price inflation, with petrol prices rising 2.6% m/m, bringing the annual rate up to 5.9^ from 1.2%. Heating oil prices also surged and while the German headline rate now is pretty much in line with the ECB’s objective, Draghi can still refer to the transitory impact of energy prices and still wage growth when he defends his very expansionary policy.
More importantly, perhaps, the German rate is above the Eurozone rate and as there hasn’t been much progress with regard to economic convergence since the crisis, stronger countries such as Germany may have to be forced to live with a period of above-target inflation to give the weaker countries more time to catch up.
Either way, with wage growth still weak Draghi still has something to argue with as he defends his ongoing asset purchases, although with companies running into capacity constraints today’s numbers will add to pressure from Germany to commit to an end date for QE.
Main Macro 13 December Moving Market Fundamental Events
- UK ILO Unemployment & Average Earnings – Expectations – ILO unemployment rate expected to tick lower to a new 40-year low of 4.2%, from 4.3%, while the BoE-watched average household earnings to tick up to a cycle of 2.5% y/y from 2.2% y/y.
- US CPI – Expectations – 0.4% in November from 0.1%; with a 0.2% core rise forecast.
- FED Rate Decision and FOMC Press Conference at 19:00 GMT
This article about 13 December Moving Market Fundamental Events was written by Andria Pichidi, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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