Traditionally, when the US markets are closed for business, volatility drops across the board, including equities as well as the forex markets. As the US Thanksgiving holiday kicks off, volumes are expected to be thin both today and tomorrow and the lack of any data from the US makes it even slow. Markets with reduced volumes often end up in a ranging price action and traders who want to make some trades, unless they know what they are doing can end up in some confusing price action.
However, while the US celebrates Thanksgiving, the Euro and the Yen are expected to bring some cheer to traders with quite a fair amount of fundamentals due until Friday. Not to forget, the much hyped up OPEC meetings kick off today in Vienna as well, which should be good news for traders whose preference is to trade the Crude Oil CFD’s.
Eurozone Data – Germany & Eurozone CPI
From the Eurozone, there is a lot of data on tap both today and tomorrow.
Latest data shows the Spanish CPI y/y declining -0.4%, below estimates of -0.3%. At the same time, the quarterly GDP in Spain managed to remain stable at 0.5% growth, in line with estimates and posting 1.6% growth y/y.
Data from Germany is next on the tap with unemployment change and CPI and HICP due for release later in the day. Besides the fundamentals, ECB’s Constancio and Mario Draghi are expected to deliver their speeches as well. If one recollects, it was only last Friday that Draghi’s speech highlighting the concerns of deflation saw the Euro decline tremendously across the boarding, with the EURUSD losing close to 1% for the day.
Friday will also see some important data from Eurozone in the likes of the flash estimates which is expected to be soft with the y/y CPI expected to fall to 0.3%, while core CPI is expected to remain unchanged. Any downside deviation from the expectations could possibly trigger a selloff in the Euro crosses.
Japan CPI and Retail Sales
Early Friday, Japan will be releasing its inflation numbers which is expected to be mostly softer than the previous month’s data. A weaker inflation could see the potentially weaken ahead of the key December snap elections. Other data from Japan also includes the retail sales data.
Crude Oil has been closely monitoring the pre-OPEC meeting press conference statements from the members as the commodity showed it was quite susceptible to the downside on failure to make any headway into the negotiations. The primary issue in focus has been production cuts and in the run up to today’s meeting, has been met with quite a bit of drama with the member so far failing to reach a consensus.
But the more important question in regards to the OPEC meetings is the question of demand which hasn’t been addressed much. With the US on path to becoming self sufficient and China showing signs of weakness in their economy and Japan technically in a recession, the question of market demand for Crude oil supplies is something that is yet to be asked. Needless to say, expect some volatility in Crude oil futures including both the international Brent prices as well as the WTI.
So for those traders who do not live in the US, look to the Euro, the Yen, Crude Oil which could offer quite some trading opportunities despite the low volumes from the US this Thanksgiving seaon.