The Asian session saw EUR and AUD trade a tad heavy early on a headline that China would withhold aid until the EU meets certain conditions. But once it was ascertained that the comment came from an academic at Peking University and not a policy-maker the slide halted. Tight ranges ensued thereafter.
Of the data releases, The UK’s RICS house price balance surprised most to the upside with a -17 percent reading after a 3-month pause at -24 percent, and its highest reading in more than one year with surveyors reporting an increase in the number of buyer inquiries. But limited access to housing finance is expected to make any kind of recovery in the housing market a long and protracted one.
There was nothing too exciting from Australia’s NAB business surveys with business confidence unchanged at +2 in November while business conditions showed a slight improvement to +1 from -1 (no doubt the 25bp RBA cut at the start of the month helping sentiment.
The EUR marked its largest move lower this month in the European and US sessions. The EU summit was the major factor in headlines, with all three ratings agencies expressing disappointment at the outcome, with Moody’s announcement of a review of all EU countries in Q1 next year adding to the specter of additional downgrades. The EUR slid to early-October lows as a result. It was interesting that France’s Sarkozy commented that the loss of its AAA rating would be an additional difficulty, but not insurmountable, as if to say he expects it to be inevitable.
There were no data releases to impact trading overnight and Wall St took its cue from the gloomier tone out of Europe and gave back all of Friday’s gains. The DJIA closed down 1.34 percent, S&P down 1.49 percent and the Nasdaq down 1.31 percent, with Asian equities echoing these losses.
Economic Data Highlights
- GE Nov. WPI out at +0.7% m/m, +4.9% y/y vs. -1.0%/+5.0% prior resp.
- US Nov. Budget Statement out at -$137.3b vs. -$139.9b expected and -$150.4b prior
- NZ Nov. Food Prices out at +0.2% m/m vs. -1.3% prior
- JP Oct. Tertiary Industry Index out at +0.6% m/m vs. 0.4% expected and -0.7% prior
- UK Nov. RICS House Price Balance out at -17% vs. -25% expected and -24% prior
- AU Nov. NAB Business Confidence out at +2, unchanged from prior
- AU Nov. NAB Business Conditions out at +1 vs. -1 prior
Upcoming Economic Calendar Highlights
(All Times GMT)
- Swiss SECO Dec. Economic Forecasts (0645)
- Sweden CPI (0830)
- Sweden Unemployment (0900)
- UK BOE’s Dale to speak (0930)
- UK DCLG House Prices (0930)
- UK CPI/RPI (0930)
- GE ZEW Surveys (1000)
- EU ZEW Surveys (1000)
- EU ECB’s Mersch to speak (1200)
- US NFIB Small Business Optimism (1230)
- US Advance Retail Sales (1330)
- US IBD/TIPP Economic Optimism (1500)
- US JOLTs Job Openings (1500)
- US Business Inventories (1500)
- EU ECB’s Weidmann to speak (1730)
- US FOMC Rate Announcement (1915)
Andrew Robinson
SAXO BANK