- ECB's de Guindos: Risks to growth are balanced
- Dovish hold, or hawkish cut: that is the question
- How have interest rate expectations changed after this week's events?
- UK November flash services PMI 50.5 vs 52.0 expected
- Eurozone November flash services PMI 53.1 vs 52.8 expected
- Germany November flash manufacturing PMI 48.4 vs 49.5 expected
- ECB's Lagarde: Will continue adjust policy as needed to ensure inflation remains at target
- France November flash services PMI 50.8 vs 48.4 expected
- France November business confidence 98 vs 100 expected
- Japan Finance Minister: Will pursue a responsible fiscal policy, not just a proactive one
- UK October retail sales -1.1% vs +0.0% m/m expected
- FX option expiries for 21 November 10am New York cut
- What are the main events for today?
- Takaichi: Japan may issue bonds for stimulus but total JGB supply to stay below last year
The main highlight of the session was the release of the Flash PMIs for the major Eurozone economies and the UK. The Eurozone PMIs were good, but the UK ones were soft. The UK Retail Sales data, released before the PMIs, was also weak across the board.
The data didn't change much in terms of market pricing as the ECB is still seen on hold, while the BoE is expected to cut by 25 bps at the upcoming meeting in December.
Another notable news were the comments from the Japanese Finance Minister Katayama which gave the JPY a boost as she said that they would pursue a responsible fiscal policy and that total bond issuance this fiscal year would be below last fiscal year's.
Lastly, we heard from ECB President Lagarde and the ECB Vice President de Guindos, but both of them just reaffirmed the central bank's neutral stance.
In the markets, the risk sentiment remains on edge with the US equities and bitcoin trading near the lows of the day. The US dollar is higher on the day, while precious metals like gold and silver are down.
In the American session, we get the Canadian Retail Sales data, the Flash US PMIs and the final UMich consumer sentiment. The most market-moving release should be the Flash US PMIs. In fact, the BoC is now on the sidelines and a poor or strong retail sales report is not going to change that. The final UMich data is rarely market-moving as the market likes fresh information i.e. the preliminary figures.
The US Flash PMIs could be market-moving, although I don't see how they could change things materially at this point unless they are very strong or very weak. The market is pricing roughly a 30% chance of a December cut, which makes it unlikely but keeps some hopes alive in case other data shows weakness or Fed members signal a cut before the blackout period starting next Saturday.
