The main event of last week was the ECB’s press conference, where Draghi disappointed the markets, with no further clues on QE, postponing the discussion to Q1 of 2015. The monthly jobs data saw the NFP numbers post a record job growth of 312k beating estimates, while unemployment rate remained unchanged at 5.8%. With the major decision as far as the Eurozone is concerned is done with, markets look forward to a relatively quiet week ahead.
Fundamentals for the Week 8 – 12 December
| Date | Event | Estimates |
| 8 December | Japan final GDP q/q | -0.1% |
| BoE quarterly bulletin | – | |
| China trade balance | 44.3bn | |
| German industrial production m/m | 0.2% | |
| Switzerland CPI m/m | 0% | |
| Switzerland retail sales y/y | 0.9% | |
| Eurozone Sentix investor confidence | -9.9 | |
| Canada housing starts | 201k | |
| Canada Building permits m/m | 2.1% | |
| US LMCI | – | |
| 9 December | Switzerland unemployment rate | 3.2% |
| UK manufacturing production m/m | 0.2% | |
| UK industrial production m/m | 0.3% | |
| UK NIESR GDP estimates | 0.7% | |
| US Wholesale inventors m/m | 0.1% | |
| 10 December | Japan PPI y/y | 2.7% |
| Australia home loans m/m | 0.2% | |
| China CPI y/y | 1.6% | |
| China PPI y/y | -2.3% | |
| Japan consumer confidence | 39.6 | |
| French industrial production m/m | 0.2% | |
| RBNZ Cash rate | 3.5% | |
| RBNZ press conference | – | |
| 11 December | Core machinery orders m/m | -1.7% |
| Australia employment change | 15.2k | |
| Australia unemployment rate | 6.3% | |
| German final CPI m/m | 0% | |
| French CPI m/m | 0.2% | |
| Switzerland LIBOR Rate | 0% | |
| SNB Press conference | – | |
| Eurozone TLTRO | – | |
| US Core retail sales m/m | 0.1% | |
| US retail sales m/m | 0.3% | |
| 12 December | China industrial production y/y | 7.6% |
| Eurozone industrial production m/m | 0.2% | |
| US PPI m/m | -0.1% | |
| US Core PPI m/m | 0.1% | |
| US Prelim UoM consumer sentiment | 89.6 | |
| US Prelim UoM inflation expectations | 2.8% |
Currencies/Events to Watch this Week
- The ECB’s TLTRO auction is on the tap this week and will be closely watched as the TLTRO is being seen as one of the reasons for the ECB from holding off its QE announcement last week. While the previous TLTRO auction saw a weak take up of just 86.2 billion Euros, expectations are for a take up of between 150 – 200 billion Euro during this second auction. A weaker than expected auction results could bring to the forefront the ECB’s QE discussions to as early as January 2015. The German and French CPI data are also due this week.
- RBNZ is expected to leave its interest rates unchanged and could possibly continue to talk down the Kiwi Dollar, which has remained subdued for most of last week. Considering the circumstances and given the USD’s strength, markets will be looking for any change of language in the RBNZ’s monetary policy statement
- The SNB will be meeting for its quarterly monetary policy review. Given the fact that there haven’t been any changes from the ECB’s end, the SNB is likely to adopt a ‘wait and watch’ approach. Therefore, in this context, the SNB’s meeting could be a non-event. Markets will be particularly interested to know if the SNB has in anyway intervened in the Fx markets and also the central bank’s opinion on the recently concluded Gold referendum.
- US data is relatively light with the UoM consumer sentiment and inflation expectations being the sole events this week, likely to move the markets in the event of any significant shifts from the usual path. Retail sales will also be of particular interest considering the annual Thanksgiving holiday last month which often sees a rise in sales.
- Australia’s employment data is on the tap this week but expectations are for an increase in the unemployment rate, which will be the only major event affecting the Aussie dollar.
FX Majors Weekly Pivots
| R3 | R2 | R1 | Pivot | S1 | S2 | S3 | |
| EURUSD | 1.2672 | 1.2589 | 1.2437 | 1.2353 | 1.2202 | 1.2118 | 1.1966 |
| GBPUSD | 1.5898 | 1.5831 | 1.5704 | 1.5637 | 1.551 | 1.5443 | 1.5316 |
| USDCAD | 1.1662 | 1.1568 | 1.1501 | 1.1406 | 1.1338 | 1.1244 | 1.1176 |
| USDJPY | 126.561 | 124.138 | 122.773 | 120.311 | 118.944 | 116.482 | 115.114 |
| USDCHF | 1.0033 | 0.9915 | 0.985 | 0.9732 | 0.9666 | 0.9548 | 0.9482 |