Key Notes for the 23rd December
- French consumer spending m/m 0.4% vs. 0.2%
- Italy retail sales m/m 0% vs. 0.2%
- UK Current account deficit -27.0Bn
- UK Final GDP 0.7% vs. 0.7%; GDP y/y 2.6% vs. 3%
- Canada GDP m/m 0.3% vs. 0.1%; GDP y/y 2.3% vs. 2.1%
- US Durable goods orders m/m -0.7% vs. 3%; Core durable goods orders m/m -0.4% vs. 1%
- US Q3 GDP 3rd estimate 5% vs. 4.3%; PCE annualized q/q 3.2% vs. 2.5%
The flow of economic data out of Europe and US kept the markets alive. The Asian session was broadly quiet with the Yen easing early into the trading session while the Aussie and the Kiwi were relatively lower against the Greenback.
The European trading session saw French consumer spending rise 0.4% vs. 0.2% while Italy retail sales remained flat. The UK’s final third quarter estimate remained unchanged but GDP on an annualized basis declined 2.6% vs. 3% expectations. The Cable was relatively weak on the data as the British Sterling eased across the board as data showed that the growth in the UK is recovering at a very slow pace.
The Euro was mixed but weaker as news from Greece weighed in on the single currency. The Greek presidential elections saw voters reject Stavros Dimas, which now puts the elections into the third round. A failure to reach consensus could potentially pave way for early Greek elections with the general view that the anti-austerity party, Syriza most likely to win under the current political conditions.
The markets were awaiting the data from the US which makes for the last major economic release for the year. The GDP m/m managed to beat estimates, rising 5%, well above expectations of 4.3%. The rise in the GDP marks one of the fastest pace of growth in the US in recent quarters. However, there were a few other fundamentals which came out below estimates.
US durable goods orders continued to decline for the 4th straight month, despite a pickup in new aircraft orders from Boeing. Personal spending was a major contributor as it rose 3.2% for the quarter, the fastest pace in the last three quarters.
The US Dollar was notable lifted on the better than expected US data, with EURUSD declining to new lows of 1.2181, while GBPUSD was down to 1.551. USDJPY rallied towards 120.45 but still remains well short of the yearly highs at 121.8 levels.
Canada’s GDP was also another release of importance, which beat estimates as the GDP grew 0.3%, above estimates of 0.1%. The Canadian dollar was stronger against most of the weaker currencies including the British Pound, Euro and the Yen.
There is more economic data from the US scheduled for later today which includes the UoM consumer sentiment reading as well as New Home sales data and core PCE index, all of which could have a notable impact on the Greenback heading into a quiet trading session for the rest of the week.
