Euro bears in charge; European stocks in green; eyes on US PCE inflation index

a-8Here are the latest developments in global markets:

Forex: The euro dived to a one-week low versus the dollar and approached a one-month low against the pound after flash inflation estimates out of the Eurozone inched below expectations in November, whereas the block’s unemployment rate ticked down, hitting fresh multi-year lows. Pound/dollar was on track to post a third straight green daily candle, while the kiwi was the worst performer amid weakening business sentiment.

Stocks: European stocks were posting gains. The STOXX 600 index was 0.57% up, the German Dax jumped by 0.75% while the British FTSE rose by 0.21% around midday. US futures were heading higher – Dow, S&P 500 and Nasdaq 100 contracts traded up by 0.4%, 0.3% and 0.3% respectively.

Commodities: Brent futures broke above $64 per barrel and WTI crude futures recovered more than half of earlier losses, rising to $57.81. Gold retreated by 0.18% on the day to trade at $1,281.20 per ounce.

Day Ahead: US PCE index & consumption in focus; OPEC meeting takes place

Looking at the calendar, readings on the US consumer spending for the month of October, figures on the Fed’s preferred inflation measure, the core PCE (personal consumption expenditures) index, and data on initial jobless claims are likely to shake the dollar later in the day.

Personal spending is expected to narrow to 0.3% m/m in October after it posted its highest growth of 0.9% since 2009 in September when motor vehicles sales surged as households replaced their hurricane-damaged cars.

On the other hand, analysts anticipate the core PCE index to pick up by 0.1 percentage points to 1.4% y/y in October, remaining well below the Fed’s target of 2.0%.

Turning to initial jobless claims, the Department of Labor forecasts 240,000 individuals to have applied for unemployment benefits in the week ending November 24 compared to 239,000 in the preceding week.

However, the greenback is likely to react more fiercely on any updates on the US tax story as markets are widely expecting to see the outcome of the final tax vote in the Senate probably later this week. Positive results would put Trump’s proposed tax overhaul for a vote on a full-Chamber floor, reducing debate periods and raising hopes for taxes turning into law before the year-end.

In oil markets, investors will keep a close eye on the OPEC/non-OPEC meeting in Vienna today, where energy ministers are gathering to decide whether to prolong their output cuts for another nine months. Russia’s saying would be in focus as the country has lately shown some reluctance on the strategy and the duration of the extension. Speaking in Vienna, the Saudi Arabian energy minister, Khalid al-Falih said he would back a nine-month extension while adding that an exit from the program would be very gradual.

Origin: XM


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