- German CPI (MoM) (Ger, 13:00 GMT)
- New Home Sales (U.S, 15:00 GMT)
- Beige Book (U.S, 19:00 GMT)
Senate Majority Leader Harry Reid said Democrats and Republicans have made little headway in negotiations over how to avoid a year-end fiscal cliff. Reid said that following a November 16 White House meeting, Republicans backed away from earlier openness to considering new tax revenue as part of a year-end deal to avert the so-called cliff, $607 billion in tax increases and spending reductions set to begin in January.
The OECD released its twice-yearly Economic Outlook on Tuesday in which it cut the global growth forecast and warned that the eurozone debt crisis is a greater threat to the world economy than the looming US fiscal cliff. The OECD urged governments not to cut spending too much, as it hurts growth. Central banks in the eurozone, Japan, China and India were advised to boost stimulus to prop up their ailing economies. The organization also allowed for the possibility of Greece not being able to strictly adhere to its reform plan, should recession deepen more than expected.
Mark Carney may be more willing to look further into the future than Mervyn King. As Carney prepares to take control of the Bank of England, former central bank economists say his five years atop the Bank of Canada suggest he will be more inventive and open than the current governor in outlining plans to spur the U.K. recovery.
EUR/USD: The EUR/USD was trading lower at 1.29348 at the time of writing after consumer confidence in the U.S. showed a continued improvement in the month of November, according to a report released by the Conference Board on Tuesday, with the consumer confidence index rising to its highest level in over four years.
In addition, the Senate Majority Leader Harry Reid said he is “disappointed” in the lack of progress in discussions to avoid the so-called fiscal cliff, boosted haven demand. Concerns a deal for Greece to buy back its bonds may falter also weighed on the EUR. Market sentiments remain fragile and are very sensitive to news.
No major economic events are expected in the eurozone apart from the German CPI (MoM), which is expected to fall to -0.1% from 0.0%. Other soft data which will come on market in the eurozone are; the Spanish Retail Sales (YoY), the Private Loans (YoY) and the M3 Money Supply (YoY) in the eurozone, the Italian 6-Month BOT Auction and the German 5-Year Bobl Auction. The key risk event for the pair will come later in the day, when the U.S will release its New Home Sales data, which is expected to increase to 390K from 389K.
Investors should monitor these data and news on the U.S fiscal cliffs to better assess the trend of the pair. A wait and see approach will be a good strategy on the pair. The resistance level is 1.30103 and the support level is at 1.28684.
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AUD/USD: The AUD/USD was trading at 1.04490 at the time of writing on slight market corrections. Yet again sentiments remain fragile on risky assets as concerns mounted that a deal for Greece to buy back its bonds may falter. Moreover, U.S. Senate Majority Leader Harry Reid said he is “disappointed” in the lack of progress to avoid the so-called fiscal cliff of tax increases and spending cuts scheduled to take effect in 2013 unless lawmakers act. Today, no major events are expected in Australia.
The next key risk event for the aussie, the Private Capital Expenditure 3Q will come on the market early tomorrow morning. The key risk event for the USD will come on the market later today, when the U.S will release its New Home Sales data, which is expected to increase to 390K from 389K. Investors should monitor all news on the U.S fiscal cliffs and the Greece bond purchase to better assess the trend of the pair. The resistance level is at 1.05154 and the support level is at 1.03844.
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Oil (WTI): Oil was trading lower at 87.085 at the time of writing after U.S. Senate Majority Leader Harry Reid said he is “disappointed” in the lack of progress to avoid the so-called fiscal cliff of tax increases and spending cuts scheduled to take effect in 2013 unless lawmakers act.
In addition, an industry-funded report showed rising stockpiles in the U.S., the world’s biggest crude consumer. The commodity is likely to continue its downward trend as an Energy Department report today may show supplies increased by 350,000 barrels to 374.8 million, according to the median estimate of 11 analysts in a Bloomberg News survey.
Other events likely to bring volatility on the commodity are German CPI (MoM) which is expected to fall to -0.1% from 0.0% and the New Home Sales data in the U.S, which is expected to increase to 390K from 389K. The resistance level is at 88.571 and the support level is at 86.142.