Forex Signals Brief November 29: Attention on US Q3 GDP and European Inflation Today
The economic calendar was light yesterday again, with the US CB Consumer Confidence being the main event for the day. The numbers were mixed, with a big revision lower for last month and a decent jump this month. Oil was in the spotlight once again and it initially fell on comments saying that OPEC was struggling to find consensus and the meeting could be delayed again.
However, later in the US session, we saw a comeback and crude Oil finished the day more than $1.50 higher, reaching a high of $77, where we decided to open a sell Oil signal. We continue to await any real news around OPEC+ but the disputes seem to be centered around African production, which could hardly be a deal-breaker. CAD was boosted by the bullish reversal in Oil and the softer USD, and USD/CAD hit a 2-month high.
The USD was the weakest currency after resuming the decline following the comments by FED’s Chris Waller who is a hawk usually, stating there are “good arguments that if inflation continues to fall for several months, it would be feasible to lower the interest rate.” This was the first time a FED official has mentioned rate cuts. Treasury yields fell, dragging the USD down. while EUR/USD broke above 1.1000.
Today starts with the Australian Monthly CPI is predicted to dip to 5.2% from 5.6% previously. Following higher-than-expected CPI figures, the RBA raised the cash rate by 25 basis points at its most recent meeting. The latest hardline RBA Meeting Minutes and statements from RBA Governor Bullock show that the central bank is losing patience in the face of persistent inflation. The RBA will not be pleased with a higher-than-expected release.
The RBNZ is widely likely to maintain the OCR at 5.50%, despite the fact that the central bank stated that, notwithstanding some near-term volatility in the statistics, inflation is expected to fall to the target zone by the second half of 2024. New Zealand’s economic statistics has been clearly dismal, with PMIs in contraction and the jobless rate continuously climbing.
Today we got the CPI (consumer price index) inflation reports for Spain and Germany for this month, with German consumer inflation projected to be lower, while Spanish CPI is expected to rise to 3.6% from 3.5% earlier. Later on, we have the second reading of the GDP report for Q3 from the US, which is expected to tick higher to 5.0% from 4.9%, although with little impact on the USD.
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