The US$ and stocks are a little heavy today as political manoeuvres take the focus off the economic data. News that Special Prosecutor Robert Mueller has launched the first charge on Russian interference into the US election and that Paul Manafort, a former campaign manager for Donald Trump, has been indicted on 12 counts including “conspiracy against the United States” did not help affairs. In terms of data, the Euro was initially weighed down by the German CPI which rose by 0.0% mm in October, and by 1.6% yy, down from 1.8% yy, and missed expectation of 1.7% yy. Later on from the US, Personal income rose 0.4% in September, up from 0.2% meeting consensus, while spending jumped solidly by 1.0%, above expectation of 0.9%. The headline PCE accelerated to 1.6% yy while core PCE was unchanged at 1.3% yy. In other currencies the main interest was in the Yen, which took on a bid tone as risk sentiment soured a little due to the political uncertainties, while Sterling was better bid ahead of Thursday’s BOE meeting, with traders pinning hopes on a rate hike. Otherwise it has been a fairly quiet session, with the highlight being seen in WTI, which made a new 7 month high due to ongoing speculation that OPEC will agree to extend output cuts beyond March.
Tuesday will begin with a busy Asian session, including the NZ ANZ Activity Outlook and Business Confidence, the Australian New Home Sales and Private Sector Credit and the China Mfg/Non Mfg PMIs. The main focus will be on the BOJ Interest Rate Decision although no change to policy is expected and most of the interest will lie in the press conference. From Europe comes the Provisional Q3 GDP figure (exp 0.2% qq, 2.4% yy), Unemployment (exp 9.0%) and the October CPI (exp 1.4%, Core; exp 1.2%). The US will be thin, with just the Case Shiller House Price Index and the Chicago Purchasing Managers Index (exp 60.0) to go on. Most traders will be holding fire while waiting on tomorrow’s FOMC Meeting.
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