UK Bank stress test results

1 December,, Lagos – A new month begins, with interesting fundamentals coming with it. Today will be an activity filled day as we have many key economic data on the calendar from various regions.

The Aussie is already an early mover as the cash rate was left unchanged by the country’s central bank, and a host of China data contributing to the AUD’s jump this morning. For the rest of the day, we still have key releases from the UK to the US as well as Canada and New Zealand.

IMF includes Yuan in SDR

The Yuan has finally been included in the Special Drawing Rights (SDR) basket. The Chinese currency has been voted for inclusion by the International Monetary Fund (IMF), joining the US dollar, Euro, Pound and Yen. This is considered both a political and economic victory for the government of the world’s second largest economy. The currency is now expected to rise in prominence, and we could also expect an increase in the USDCNY trading activities, especially after the official basket launch on Oct. 1, 2016, giving the Chinese government time to make further adjustments and investors and stake holders to also adjust for the new changes.

RBA holds rate

As expected, the Reserve bank of Australia left rates at 2.00 percent, having already cut twice this year, ignoring calls for further cuts. Gov. Stevens has recently sounded upbeat on the country’s economic outlook, clarifying that economic conditions had “firmed a little” in the past few months. Although leaving the door open for further rate cuts, such a decision will be largely dependent on inflation and other key fundamentals.

UK Bank stress test results (7:00 A.M GMT)

The stress test applies synthetic market conditions to the balance sheets of large banks in an effort to determine the banks’ stability and capital reserve adequacy. This result comes with the BOE Financial Stability Report. The tests cover HSBC, Royal Bank of Scotland, Barclays and Lloyds – plus Santander UK, Standard Chartered and Nationwide building society.

None of the banks are expected to fail, so no major impact on the sterling is expected from this report. By 10:30 A.M GMT, the country’s Manufacturing PMI will also be released.

Canada GDP m/m (1:30 A.M GMT)

Forecast to show a 0.1 percent change in the inflation-adjusted value of all goods and services produced by the economy, the Canadian dollar will be closely watched. Considering that the GDP is the first release in a series of high impact reports scheduled this week, we expect the CAD to be up for some interesting moves.

US ISM Manufacturing PMI (3:00 P.M GMT)

Expected to remain in expansionary region, the index is forecast to come at 50.6. The USD remains bullish as we approach major fundamentals.

Think we missed something? Let us know down in the comments section.

Share Your Opinion, Write a Comment