Developed macro
1. The OECD called for urgent action to boost the ailing global economy in its latest Economic Outlook.
2. Eurogroup and EcoFin meetings starting today for two days should advance on several topics, including the EFSF, before the European summit on 9 Dec.
3. In the UK, the Office for Budget Responsibility will likely announce that the fiscal mandate will be met in 2016-17, two years later than projected in March
4. Swedish GDP growth to slow down significantly in Q3. We look for 0.2%QoQ expansion after 0.9% QoQ.
5. US: November Consumer Confidence likely rebounded to 45.0 from 39.8 in line with a gain in the November University of Michigan consumer sentiment index
6. Japan’s unemployment rate went up to 4.5% in October.
Interest rate strategy
1. Bunds are too cheap on fundamentals, but are not technically oversold, yet
2. Expect the UK’s OBR to weigh on gilts
3. BTP supply should be better than feared last week, particularly if front end demand remains strong
FX strategy
1. USD softer as risk appetite improved overnight but speculative sentiment remains solid
2. Upside potential for EUR/USD is likely to be restricted to resistance around 1.3415
3. GBP will likely struggle against both the USD and EUR although we expect weakness versus EUR to be short lived
Emerging markets
1. Investors to turn cautious despite rallying global markets, ahead of EcoFin and European bond supply
2. Disappointing Philippine Q3 GDP adds to the case for policy easing/stimulus
3. Hungary: central bank to stay put though an increasing tightening bias is likely
4. South Africa: Q3 GDP to recover but remain slow, not supporting the ZAR
Commodity markets
1. Two consecutive closes above the 100-day ma is required to turn gold positive.
2. Base metals: A little bit more upside is likely.
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2011/11/WMT_2011-11-29.pdf
CREDIT AGRICOLE
CORPORATE AND INVESTMENT BANK