There is not much to report from today’s Asian session, I’m afraid. A Japanese public holiday coming hot on the heels of the US Thanksgiving holiday severely curtailed any market activity and a blank data slate did not help.
The only newsworthy item was comments during the ongoing European Council meeting on the EU budget. Negotiations between EU leaders over a new seven year budget appear to be tense and long with indecision seemingly the outcome. Germany’s Merkel expressed doubts that a full agreement on the EU Budget will be reached this week (and more likely to come in 2013) while France’s Hollande has also said a deal is unlikely on Friday.
Latest newswire reports suggest a revised proposal keeps overall cuts to around EUR 80 bln, but trims the amount of spending cuts originally proposed for agriculture and cohesion funds. This could represent a minor win for France, who has threatened to use its veto if farming subsidies are reduced. In turn, the changes mean that there will likely be deeper cuts to EU salaries and benefits, and funds for cross border energy and telecommunications infrastructure; the former which could appease UK’s Cameron.
There was slightly positive news for the EU periphery, with Cyprus seen closing in on a bailout deal worth up to EUR 17.5 bln after a reported positive conclusion to long drawn negotiations between Troika and the government. A statement is likely to be made later today.
More cross-JPY buying was the order of the day in the early part of the overnight session. EUR was given an additional boost by better than expected flash manufacturing PMIs from Germany and the Euro-zone (though the service sector was a marginal disappointment). USDJPY paused just shy of 83.0 while EURUSD stalled at the 1.29 mark. A weak European consumer confidence reading late in the session took some of the shine off the pair.
Afternoon markets were quiet and steady in the absence of US markets with Canada’s retail sales gaining 0.1 percent m/m in September, less than the 0.5 percent forecast as increases in auto sales were offset by slower activity at department stores and gas stations.
Have a great weekend.
Data Highlights
CA Retail Sales out at +0.1% m/m vs. +0.5% expected and +0.3% prior
EU Nov. Euro-zone Consumer Confidence out at -26.9 vs. -25.9 expected and -25.7 prior
Upcoming Economic Calendar Highlights (All Times GMT)
SI CPI (0500)
GE Q3 Final GDP (0700)
GE IFO Surveys (0900)
EU ECB’s Draghi to speak (0900)
UK BBA Loans for House Purchase (0930)
EU ECB’s Weidmann to speak (1130)
CA CPI (1330)
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