ECB holds rates steady. Draghi signals QE decision to be taken in December
- UK Retail sales m/m 1.9% vs. 0.4%; Core retail sales m/m 1.7% vs. 0.4%
- ECB holds rates steady at 0.05%
- Canada retail sales m/m 0.5% vs. 0.1%; Core retail sales m/m 0.0% vs. 0.2%
- US Weekly jobless claims 259k vs. 266k
Later
- US HPI m/m
- Existing Home sales
- Leading indicators
The currency markets got off to a slow start with no major news scheduled out of Asia. The Asian markets were relatively quiet but managed to edge some gains on a US Dollar that was trading modestly weaker in the early part of the day. The Asian indices were mixed with the Shanghai Composite gaining 1.47% for the day while the Nikkei225 and the Hang Seng fell -0.64% and -0.63% respectively. The Australian dollar dipped to a session low below 0.719 before stabilizing while the Kiwi continued to post a recovery after prices bottomed out near 0.67.
The European trading session was geared up to the UK retail sales numbers which surprised to the upside. Retail sales for the month increased 1.9% on the headline and 1.7% on the core strongly beating the market estimates. The British Pound initially reacted to the news strong but soon went back to trade sideways. GBPUSD touched a session high of 1.55 before easing back.
The focus was clearly on the European Central bank which left interest rates unchanged at 0.05%. In the press conference, Mario Draghi opened his remarks noting downside macroeconomic risks to the Eurozone and that the ECB was closely monitoring the situation. He noted that the ECB could take a call at its December meeting on whether to expand its QE program. EURUSD was volatile during the press conference but the Single currency eventually gave up the sideways range and dipped to intraday lows of 1.118 at the time of writing.
The European equity markets were relatively stable and strong with the German DAX gaining 0.69% while the FTSE100 was trading near flat.
The US trading session opened with economic releases. The weekly jobless claims increased 259k below estimates of 266k. The US Dollar which opened the day on a weak note managed to recover some of its losses. The US Dollar Index is up 0.90% for the day ahead of further US economic releases which include the housing price index and existing home sales data.
Data from Canada saw the release of retail sales numbers were mixed with the core retail sales staying flat while the headline retail sales increased 0.5%. The USDCAD is trading flat for the day.
