Market Afternoon Recap – November 20th

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Key Notes for November 20th

  • Japan Flash Manufacturing PMI 52.1 vs. 52.7
  • HSCB Flash Manufacturing PMI, China 50 vs. 50.2
  • German PPI m/m -0.2% vs. -0.1%
  • French flash manufacturing PMI 47.6 vs. 48.9; flash services PMI 48.8 vs. 48.6
  • German flash manufacturing PMI 50 vs. 51.5, flash services PMI 52.1 vs. 54.5
  • Eurozone flash manufacturing PMI 50.4 vs. 50.9, flash services PMI 51.3 vs. 52.3
  • UK Retail sales m/m 0.8% vs. 0.4%
  • Canada Wholesale sales m/m rises 1.8% vs. 0.7%
  • US CPI m/m unchanged vs. -0.1%; Core CPI m/m 0.2% vs. 0.2%
  • US Weekly unemployment claims 291k vs. 284k estimates

The economic calendar was packed today, right from the Asian session with the PMI’s in focus across the globe. Japan’s manufacturing PMI flash came in lower than expected along with China’s flash PMI. While the Yen managed to weaken earlier in the day, the gains eased after China’s soft PMI data.

Analysts see an increase in stimulus from the Chinese in order to stave off the slowdown in the world’s second largest economy. The markets opened on a soft tone after last night’s FOMC meeting minutes failed to support its hawkish statement. The Greenback remained choppy but the Yen pairs managed to reach new yearly highs.

Eurozone PMI’s were disappointing especially after last month’s GDP data was upbeat. The Euro weakened on the news, starting with the German PPI and the overall PMI’s including France and the Eurozone composite. The losses in EURUSD was however limited as the pair quickly managed to trim its losses to push higher for the day, trading above 1.25 handle.

ECB’s Mersch in a speech was reported saying that weakness in the Eurozone should be looked at completely and not focus merely on Germany. He also stressed on the familiar rhetoric from other ECB members that growth in the region can be revived not purely based on monetary policy alone but called for fiscal reforms from the Eurozone countries.

UK’s retail sales data posted robust growth, gaining 0.8% but previous month’s data was revised downwards. While the British Pound managed to rally on the news, the gains were however quickly capped but the Cable continues to show signs of strength since last night’s FOMC driven gains.

Canada’s wholesale prices on a monthly basis rose 1.8%, above 0.5% estimates and the latest data should provide a boost to Canada’s Q3 GDP.

US data showed inflation headline CPI m/m unchanged while Core CPI m/m met estimates, rising 0.2% from 0.1% last month. Weekly jobless claims declined to less than 300k, but were above estimates at 291k. The Greenback saw a minor rally into the news but most of the majors were relatively unchanged for the day. USDJPY reversed intraday after topping out at 118.981 and looks to be declining towards the daily pivot level at 117.5 handle ahead of other key news events.

There is further economic data scheduled which includes Philly Fed manufacturing index which is expected to remain weak along with existing home sales data.

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