This morning saw the release of New Zealand’s Q3 GDP numbers and produced a mixed performance. On a q/q basis the outcome was a better than expected +0.8 percent and a strong rebound from Q2’s 0.1 percent but on an annualised basis growth was below consensus at +1.9 percent with Q2’s growth revised downwards to 1.1 percent from 1.5 percent. The Rugby World Cup played a major part in the better performance while, once this was stripped away, the rest of the economy continued to show some resilience. The NZD had a minor surge higher but quickly reverted back to pre-data levels.
With Japanese markets closed tomorrow there was little incentive for Asia to get involved in trading today and currencies ambled in tight ranges throughout the rest of the session.
Overnight, the initial reaction to a larger-than-expected take-up of the European Central Bank’s 3-year Long Term Refinancing Operation facility saw the EUR rally to just shy of 1.32 versus the greenback. €489 bln was allotted with 523 banks taking part but subsequently a widening of Spanish and Italian spreads, plus slack rumours of a French downgrade, and an actual downgrade for Hungary by S&P saw the single currency beat a swift retreat with dwindling liquidity a factor in accelerating the decline down to 1.3025. The Bank of England minutes held nothing new with a unanimous decision to keep rates and quantitative easing totals unchanged though some members thought additional QE might be needed amid a deteriorating outlook.
On the data front, a strong Canadian retail sales number went unnoticed while US existing home sales were also firm at +4.0 percent m/m (expectations +2.2%) though past yearly sales were revised lower. Wall St had a mixed session with the DJIA eventually closing up 0.03 percent, the S&P up 0.19 percent and the Nasdaq down 0.99 percent with Oracle the major drag there.
For the rest of today, we can expect Sweden’s PPI, Norway’s unemployment rate and the UK’s final Q3 GDP data in Europe. A busy US session kicks off with Chicago Fed activity followed by the third estimate for Q3 GDP, weekly jobless claims and Bloomberg consumer comfort and economic expectations indices. The session finishes with final Michigan confidence for December, leading indicators for November and October’s house price index.
Data Highlights
CA Oct. Retail Sales out at +1.0% m/m vs. 0.5% expected and 1.0% prior
CA Oct. Teranet/National Bank House Price Index out at flat m/m, +7.0% y/y vs. flat/6.5% prior resp.
EU Euro-zone Dec. Consumer Confidence out at -21.2 vs. -21.0 expected and -20.4 prior
US Nov. Existing Home Sales out at +4.0% m/m vs. 2.2% expected and 1.4% prior
NZ Q3 GDP out at +0.8% q/q, +1.9% y/y vs. 0.6%/2.2% expected and 0.1%/1.1% prior resp.
CPI out at +0.1% m/m, +2.9% y/y, both as expected vs. 0.2%/2.9% prior resp.
Upcoming Economic Calendar Highlights
(All Times GMT)
Sweden PPI (0830)
Norway Unemployment Rate (0900)
UK Final Q3 GDP (0930)
US Chicago Fed Activity Index (1330)
US Third Estimate Q3 GDP (1330)
US Initial Jobless Claims (1330)
US Bloomberg Consumer Comfort (1445)
US Bloomberg Economic Expectations (1445)
US Final Michigan Confidence (1455)
US Leading Indicators (1500)
US House Price Index (1500)
Andrew Robinson
SAXO BANK