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Updates on Trade and UK politics Remain the Main Area of Focus

We can expect economic data to take a back seat once more today as the market focus remains on geopolitics.
Bob Mason
Working on digital tablet with stock market graph

Earlier in the Day:

It was a relatively busy day on the Asian economic calendar in the earlier hours of this morning.

The Aussie Dollar was in action, with China inflation figures for November also in focus.

On the geopolitical front, trade jitters lingered through the session, pinning back the Asian equity markets.

For the Aussie Dollar

House prices were on the rise in the 3rd quarter, with the House Price Index rising by 2.4%, quarter-on-quarter. In the 2nd quarter, house prices had fallen by 0.7%. Economists forecasted a 0.5% rise.

According to the ABS,

  • Sydney and Melbourne’s residential property prices led the strongest quarterly growth since the 4th quarter of 2016.
  • Price in Sydney and in Melbourne both rose by 3.6%.
  • Year-on-year prices were down by 3.7% in the 3rd quarter, improving on a 7.4% annual slide in the 2nd

Business confidence deteriorated in November, however, with the NAB Business Confidence Index falling from 2 to 0.

According to the NAB,

  • Weighing in November was a fall in the forward orders sub-index, which fell from 3 to -2 and the exports sub-index which fell from 1 to 0.
  • On the pricing front, margins remained under pressure, with input cost inflation outpacing output price inflation.
  • The Business Conditions Index held steady at 4 in November.
  • While the trading sub-index eased from 7 to 6 points, the profitability sub-index rose from 0 to 3 points, with the employment sub-index holding steady at 4 points.
  • By sector, the divergence between the manufacturing and services sector widened, pointing to further subdued growth in the 4th

The Aussie Dollar moved from $0.68235 to $0.68273 upon release of the figure. At the time of writing, the Aussie Dollar was up by 0.06% to $0.6827.

Out of China

The annual rate of inflation came in at 4.5% in November, accelerating from 3.8% in October. Economists had forecast a rate of inflation of 4.5%.

While consumer prices were on the rise, wholesale inflationary pressure failed to materialize, with wholesale prices declining by 1.4% in November.  This was better than a forecasted 1.5% fall, however.

In October, wholesale prices had fallen by 1.6%, year-on-year. The continued slide was reflective of conditions within the manufacturing sector.

The Aussie Dollar moved from $0.68241 to $0.68271 upon release of the figures.


At the time of writing, the Japanese Yen was down by 0.05% to ¥108.61 against the U.S Dollar, while the Kiwi Dollar up by 0.14% to $0.6558.


The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited to Germany and the Eurozone’s business sentiment figures for December. While there’s little optimism across the manufacturing sector, we can expect the EUR to react to the numbers.

3rd quarter nonfarm payroll figures out of France will likely have a muted effect early on.

On the geopolitical risk front, chatter on trade and opinion polls from the UK will continue to be in focus.

At the time of writing, the EUR was up by 0.03% to $1.1067.

For the Pound

It’s a particularly busy day on the data front. Key stats include October trade, figures, manufacturing, and industrial production figures and GDP numbers.

We can expect the GDP and manufacturing production figures to have the greatest impact on the Pound.

Late in the day, the BoE Financial Stability Review will also provide direction.

While the stats will garner plenty of attention, ahead of next week’s Bank of England monetary policy decision, much will depend upon the outcome of Thursday’s General Election.

Expect opinion polls and predictions to continue to influence. As we saw through the start of the week, the Pound got a boost off the back of the weekend opinion polls and YouGov’s opinion poll tracker.

At the time of writing, the Pound was up by 0.03% to $1.3151.

Across the Pond

It’s a relatively quiet day on the economic calendar. Finalized 3rd quarter nonfarm productivity and unit labor costs are due out later today.

We will expect the numbers to have a muted impact on the Greenback, with geopolitics in focus on the day.

As the 15th December rapidly approaches, the markets will be looking for progress on talks and a delay to the rollout of fresh tariffs…

At the time of writing, the Dollar Spot Index was down 0.02% at 97.627.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk appetite on the day. 15th December tariffs would be a negative for crude oil prices and the Loonie, making trade updates and crude oil inventories the key driver.

The Loonie was up by 0.04% to C$1.3234, against the U.S Dollar, at the time of writing.

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