Good morning,
We start today off with some dramatic moves overnight. The EURUSD has opened below 1.10 amidst pricing in of dollar data and tariff anticipation. Contrary to ample market belief, the New Zealand central bank opted to maintain its interest rate rather than follow the global cutting trend, boosting the New Zealand Dollar by as much as 1.4% against the USD – its biggest move in nine months.
Meanwhile, the Chilean Peso gapped out 5% to its lowest level in history against the USD, with its stock market following suit following intensifying protests against the Government.
With a view ahead today, there are a lot of data points under close review providing markets with a running update on how policies and politics are faring across the globe. Inflation data is at the forefront as a direct indicator of country demand and thus symbiotic to the interest rate policy necessary.
The early European and Nordic figures have posted close to their estimates this morning, with Germany coming in at 1.1% year on year, whilst Sweden was 1.6%. These are likely to provide supportive feedback to the markets, with Riksbank all but priced in for a December rate hike.
At the time of writing, the UK is up next at 09:30, with investment levels and recent employment expecting to pull the number down slightly here.
The US will follow at 13:30 GMT, having posted a recent surge in inflation above expectations the past few months markets will be keen to digest the October results in the wake of this.
On the Trump radar, the European markets will be eagerly awaiting the decision on whether car tariffs will be postponed or applied. The manufacturing sector in Europe is already on weak knees, so an implementation here may provide a substantial enough knock to put European growth in trouble.
Have a great day ahead.
Author: Ross Hammond, Senior Corporate Account Manager.