Archive for 2013

In the trading room today: Can a Fed Taper Extend the USD Rally vs JPY? At the start of a relatively quiet on the economic front trading week, we focus on the USD and the JPY, and explore the odds of a Fed taper announcement and its potential to give further impetus to the rally of the greenback against its Japanese counterpart, we analyze the latest trend developments in the USD/JPY currency pair, we continue to monitor the unstoppable rally of the EUR vs USD, we take a look at the GBP/USD pair, we note the double bottom in the USD/JPY pair, we highlight the market’s reaction to the Japanese GDP and the German Industrial Production, we discuss new forecasts from JPMorgan and Bank of Tokyo-Mitsubishi, and prepare for the trading session ahead.


In the trading room today: USD New Trading Week Outlook. Following yet another positive employment report from the United States, we note the inability of the U.S. dollar to manage a sustainable rally against the EUR and other currency majors and explore what the new trading week might have in store for the greenback, we list the Top 10 spotlight economic events that will move the markets in the week ahead, we examine the consensus forecast for the upcoming economic data, we analyze the move toward an important resistance levels for the EUR/USD currency pair, we take a look at the bounce higher in the GBP/USD pair, we keep an eye on the USD/JPY pair, we highlight the market’s reaction to the Swiss CPI and the U.S. Employment Situation report, we discuss new forecasts from Morgan Stanley and UBS, and prepare for the trading session ahead.

December 6, 2013 (Bureau of Labor Statistics) – The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in transportation and warehousing, health care, and manufacturing.

Both the number of unemployed persons, at 10.9 million, and the unemployment rate, at 7.0 percent, declined in November. Among the unemployed, the number who reported being on temporary layoff decreased by 377,000. This largely reflects the return to work of federal employees who were furloughed in October due to the partial government shutdown.

The change in total nonfarm payroll employment for September was revised from +163,000 to +175,000, and the change for October was revised from +204,000 to +200,000. With these revisions, employment gains in September and October combined were 8,000 higher than previously reported.

The Employment Situation for December is scheduled to be released on Friday, January 10, 2014, at 8:30 a.m. (EST).



Both central banks keep rates on hold but investors will look for clues on outlook. U.S. jobless claims drop below 300k to 298k, while the Q3 GDP figures were revised much higher to 3.6% q/a compared with the preliminary estimate of 2.8% q/a…


Powered by article titled “Bank of England and ECB keep rates unchanged – live” was written by Nick Fletcher, for on Thursday 5th December 2013 14.16 UTC

German journalist (sorry didnt catch name) asks about divergence of opinion on council. Asks about options for using extreme measures

Draghi says rarely have a vote, but did last time. The discussion in November was whether to cut rates now or later, and some who disagreed later said it was justified. (NB the Bundesbank for one was not keen on cutting).

On other instruments, it is a hard question to decide which to use (under which circumstances).

Economico from Portugal asks what conditions could see the country exiting bailout programme.

Draghi says progress in Portugal has been significant. Prospects for a return to market financing have improved. Initial weaknesses were very serious, but progress has been made.

Les Echo asks about negative deposit rates. Was there a discussion about cutting rates? On exchange rates, in February these were mentioned as downside risks. Is it not a risk now?

Draghi says again there was a brief discussion on cutting rates.

On exchange rates, the fact there is no statement there today does not mean ECB is not watching exchange rates.

Wall Street Journal goes back to the policy options, and what they are and the discussions which were had. Also ask about the weak growth projections.

Draghi says no specific instruments were identified by the discussion. Level of preparedness is high on all of them. Don’t need any further analysis. Question is, would use of these instruments be justified by medium term outlook.

Markets have responded strongly to forward guidance. But will still closely monitor any developments and are fully aware of downside risks of extended period of low inflation.

On the growth, he says the fundamentals of euro are are strong. Major policy mistakes of previous times are being corrected, the structural imbalances had to be reformed. Low growth is outcome of economies that need to have structural reform. Each country has own specific list of work it has to do.

Neither growth nor equity can be expected from endless debt creation. So have to be careful, the economies have to structually prepared for stimulus to have an effect.

CNBC asks about new LTROs or something like the Bank of England’s funding for lending scheme.

Draghi says forward guidance is there, have not identified one specific instrument. They had a brief discussion about negative interest rates.

On LTRO, when this was introduced level of uncertainty was high, which justified it. LTRO was very successful and avoided credit contractions at time due to lack of funding.

Now the level of uncertainty is lower.

Plus, the banks used this facility to buy government bonds and not much found its way through to the economy.

If do another operation like LTRO, want to make it sure it goes to the economy and not subsidising banking system.

Market Week asks for more news on any release of the minutes. Secondly, no one has mentioned option of foreign exchange intervention, would ECB use it.

Draghi says minutes issue is complicated, with issues including should people be named as to what they say. They are still working on it.

On exchange rates, he says they are not a policy target but they are important for price stability and growth. Forex intervention is not contemplated by current G20 policies.


Reuters (speaking as he says from the cheap seats at the back) asks about the inflation targets, whether there is enough of a buffer against deflation and the fact that the closest to the 2% target is 1.3%.

Draghi starts by saying its decision to cut rates in November is justified, and forward guidance is working.

All in all, we are seeing positive developments after November decision. Inflation expectations remain firmly anchored in medium term. HIPC path is what it is , but inflation excluding food and energy drifts slightly higher.

It would be wrong to think we decide monetary policy on one figure, inflation, but would also be wrong to say effect of monetary policy is instantaneous. The length of time it takes depends on a number of factors, including what is the state of bank and private sector balance sheets.

Draghi sums up:

The economic analysis indicates that we may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below, but close to, 2% later on. A cross-check with the signals from the monetary analysis confirms this picture.

As regards fiscal policies, the Governing Council welcomes the European Commission’s assessment of the 2014 draft budgetary plans which were submitted in October for the first time under the “two-pack” regulations. This new surveillance exercise needs to be fully effective. In order to put high public debt ratios on a downward path, governments should not unravel their efforts to reduce deficits and sustain fiscal adjustment over the medium term.

In particular, consolidation measures should be growth-friendly and have a medium-term perspective, so as both to improve public services and minimise the distortionary effects of taxation. At the same time, there is a need to push ahead with product and labour market reforms, in order to improve competitiveness, raise potential growth, generate employment opportunities and foster the adaptability of our economies.

Now for questions.


Draghi says (as many had expected) more details of the ECB’s forecasts will be released, but says nothing about releasing full minutes. Both the Bank of England and US Federal Reserve routinely release minutes of their monthly meetings, but the ECB has not done so in the past.


On inflation the bank expects HIPC to be 1.4% in 2013 (down 1 percentage point on previous forecasts). For 2014 it expects a figure of 1.1% (down 0.2 percentage points) and 1.3% for 2015.

Draghi says the ECB will continue all available instruments.

Third quarter GDP rose 0.1% quarter on quarter, with a small postive growth rate expected in the fourth quarter.

The ECB’s forecast for GDP in 2013 is unchanged at -0.4%. It has raised the forecast by 0.1 percentage point to a 1.1% rise in 2014. It expects a 1.5% rise in 2015, but warns risks are on the downside.

Draghi is here, slightly late. He begins by wishing everyone a merry Christmas, to chuckles.

He says price pressures will remain subdued in medium term, and inflation expectations are firmly anchored in line with the 2% target.

A prolonged period of low inflation is expected to be followed by rates close to 2% later on.

The council continues to expect key interest rate to be at this or lower level for extended time.

US weekly jobless claims fall and GDP rises

Meanwhile US jobless claims fell unexpectedly to 23,000 to 298,000 last week. Analysts had expected a rise to 325,000.

The US economy grew faster than first forecast in the third quarter. GDP grew by 3.6%, up from the 2.6% previously reported. This is the fastest pace since the first quarter of 2012.

The ECB press conference is about to start.

A leading US central banker has said it is reasonable for investors to expect the Fed to wind down its stimulus programme over the next year.

Atlanta Fed president Dennis Lockhart said in a speech in Miami that when the Fed begins trimming its $85bn a month bond buying programme – a key support for markets over recent months – it should commit to a schedule for ending it completely.

It should consider taking the first steps towards tapering “in the coming meetings” given the overall positive economic data recently. That seems to include this month’s meeting, even though most observers are not expecting any move until the new year.

Lockhart would not say whether he supported tapering, saying he would be “looking for positive evidence of momentum as well as the absence or retreat of factors that could restrain or even torpedo progress.”

Investors are poring over every piece of US data, and central bank comment, for clues as to when tapering might begin.


Ahead of the ECB press conference, some reaction to the central bank’s statement. Annalisa Piazza at Newedge Strategy said:

We expect a dovish tone [at the meeting] and Draghi is expected to leave door open to further accommodation if needed, with the use of any available tool.

We anticipate the December staff projections to show a slight downward revision for the 2014 inflation forecast (about 0.2% to 1.1%) on the back of lower oil prices and a carry-over effects due to the low inflation rate at the end of 2013. Looking ahead, we expect the projections to show HICP at an average 1.4% in 2015, which would remain well below the ECB 2% preferred level. The profile for growth will remain that of a very gradual recovery, which implies very modest underlying inflationary pressure in the medium term.
In a nutshell, the ECB doesn’t need to act now but we suspect that any undershooting of the current inflation path would be a trigger for further accommodation at any time. A stable inflation outlook at the current levels (or slightly higher) seems to be the pre-condition for no additional policy accommodation in the coming months. That said, the ECB will also look at the development of financial conditions. Should market rates increase sharply and/or the exchange rate appreciate further, the ECB might decide to act with further accommodation even if deflation risks don’t increase.


Here for completeness, is the full ECB statement:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.25%, 0.75% and 0.00% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.


ECB keeps rates unchanged

The European Central Bank, which surprised markets with a rate cut last month, has kept rates unchanged after today’s meeting.

The ECB press conference will be streamed here at 13.30 GMT.


Here’s some reaction to the Bank of England decision to keep rates and QE on hold, which came minutes after George Osborne announced an increased forecast for UK GDP:

Howard Archer at IHS Global Insight:

There was never any doubt that the Bank of England would leave all aspects of monetary policy unchanged at its December MPC meeting and this duly proved to be the case.

Indeed, the odds still favour interest rates staying at 0.50% all through 2014 despite the Bank of England’s more optimistic view of the growth outlook and expectations that the unemployment rate will get down to 7.0% early in 2015, and possibly even in late 2014.

While interest rates will probably start rising in 2015, this may still not happen until well into the year. For what it is worth, our current view is that the Bank of England will start to raise interest rates gradually from the third quarter of 2015.

In contrast to the uncertainty over when interest rates could start to rise, it is blatantly obvious that any further Quantitative Easing is off the agenda barring a major relapse by the economy over the coming months. Significantly, there did not even appear to have been any discussion of the case for more QE at the November MPC meeting.

James Knightley at ING:

This was universally expected given the forward guidance provided by the Bank. In any case the Bank is now going down the route of macro prudential policy by potentially directly intervening in the mortgage market, such as already seen in Canada and New Zealand where the central banks set lending standard boundaries. Such action gives the BoE greater control over the booming property market whilst giving parts of the economy that are lagging behind breathing space to try and catch-up.
The Bank of England’s decision to adopt macro-prudential policy supports our view that the eventual peak in Bank Rate will be significantly lower than the previous cycle high of 5.75%. Nonetheless, with jobs market likely to strengthen through next year there is the clear potential for the unemployment rate to drop below 7%, the threshold the Bank of England has set before it will consider tightening monetary policy, to be breached in the second half of 2014. We therefore remain of the view that the first tentative interest rate rise will be implemented in early 2015.

Philip Shaw at Investec:

 There was no material accompanying announcement. Of course the focus in the UK today is the Chancellor’s Autumn statement. However we expect some attention to be diverted back onto monetary policy next week thanks to data releases on industrial production, construction output, and the RICS survey of the housing market.

David Kern, chief economist at the British Chambers of Commerce:

Once again, the MPC did the right thing by holding interest rates and QE. However as the economy continues to recover, the forward guidance strategy faces challenges due to a change in expectations on interest rates. It is important to remember that most of the doubts around forward guidance are coming from City analysts, whereas most businesses have welcomed its use despite the difficulties of forecasting unemployment.

The MPC can do more to improve its communication on forward guidance. Initially stating in August that the 7% threshold would be reached in 2016 was perhaps too cautious, but the most recent prediction that there is a 40% chance it could be reached by the end of 2014 is too ambitious. The MPC needs to continue its two-pronged approach with forward guidance on interest rates and a firm commitment to lowering inflation. In addition, more emphasis should be placed on improving the flow of finance to SMEs and growing businesses.


Bank of England holds interest rates and QE steady

The Bank of England has held interest rates at 0.50% and its asset purchase programme at £375bn, as expected.

So no upstaging of George Osborne then, who continues to unveil his Autumn statement


In Cyprus:

And ahead of the European Central Bank meeting, here’s one of the key points to watch:

Here’s the first central bank decision of the day: the Norges Bank, as widely expected, left its deposit rate unchanged at 1.50%.

In his statement George Osborne is quoting new forecasts from the Office for Budget Responsibility.

The UK economy is now expected to grow by 1.4% this year, well up on the 0.6% predicted in March’s Budget.

For the Euro area, the OBR expects GDP to shrink by 0.4% in 2013.


Autumn statement begins

UK chancellor George Osborne has begun his Autumn statement. You can follow all the developments in our live blog here and get rolling reaction separately here.

Italy’s top court yesterday ruled the current electoral law was unconstitutional, putting pressure on the country’s political parties to pass a reform of the system. As Reuters reported:

The constitutional court cited two aspects of the system that flouted the constitution, namely a winners’ bonus of seats awarded to the largest coalition without a minimum threshold, and the fact that it does not allow voters to pick an individual candidate.

Economists Chiara Corsa and Dr. Loredana Federic at UniCredit Research looked at the implications:

First of all, we highlight that the Court’s decision has no impact on the current parliament as it applies only to future elections.

Secondly, the Court’s decision implies that the majority premium no longer exists: in case of new elections and absent any legislation change, the new system would be fully proportional.

Third, the Court’s decision forces the parliament to legislate on the preferences issue – there are no alternatives.

It is now up to the parliament to decide whether and how to reform the electoral law amending the current version of the majority premium. We see two possibilities. The first and, in our view, most likely scenario is that the Court’s decision will force the main parties to reach a compromise to reform the electoral law, moving towards a majoritarian system or a mixed one (like the framework that was replaced by the current version of the electoral law). The second possibility is that parties fail once again to find an agreement: this would lead straight to fully proportional system, with potential negative implications in terms of governability.

Ireland is the ‘best country in the world’ to do business, according to Forbes. Henry McDonald in Dublin writes:

The Republic moved up this year from sixth most pro-business state to the top which the country’s Employment Minister Richard Bruton said today was “a testament to the hard work and innovation of our businesses and workers.”

The magazine’s rankings are based on 11 different factors ranging from property rights, innovation, taxes, technology, corruption, freedoms, investor protection and stock market performance.

The Irish are now ahead of countries which have been relatively immune from the global recession such as New Zealand, Hong Kong, Denmark and Sweden.

The highly educated workforce and the Republic’s low 12.5% corporation tax rate are also cited as factors in Forbes as to why Ireland is the best location for business.

Ireland’s Industrial Development Authority – the body that tries to woo foreign direct investment into the Republic – also welcomed Forbes’ global business assessment.

IDA’s Chief Executive Barry O’Leary said: “This Forbes ranking will reach senior business people across the world, making them aware of all the advantages available to those that locate businesses here.”

“Country rankings like this are used by companies across the world when they make initial decisions to investigate the possibility of locating their businesses internationally.”

Despite all the talk of the US Federal Reserve potentially trimming its $85bn a month bond buying programme, the dollar does not seem to be benefiting, unlike US bond yields. Kathleen Brooks at said:

As prospects of Fed tapering gather pace it appears that foreign exchange traders have not got the memo. 10-year Treasury yields rose to their highest level since September on Wednesday, yet the dollar index remains in the doldrums.

While 10-year Treasury yields were buoyed on Thursday by a strong ADP labour market report and better data on the housing market, the foreign exchange market seemed focused on the weaker than expected ISM non-manufacturing survey for November. So which asset class is correct?

That is impossible to answer, but usually the dollar and Treasury yields tend to move in the same direction. For example, they peaked at the same time in the first week of September, and they both reached recent lows on the 25 October. Thus, periods of divergence tend to be rectified.

We think the dollar could play catch up with yields, especially if we get a strong non-farm payroll reading tomorrow (200,000 plus), which could increase the chances of a January taper from the Fed. From a technical perspective, we have seen the dollar claw back some recent losses this morning. A deeper dollar recovery may be dependent on a few factors over the next 24 hours:

1. Dovish commentary from ECB President Draghi.

2. Strong domestic data: the market expects the US to revise upwards its second GDP reading for the third quarter to 3.1% from 2.8%, we will also be watching initial jobless claims. If the fundamental data in the US is strong then we could see a deeper recovery in the dollar.

Spain has sold €3.53bn of bonds in its penultimate auction of the year, at yields broadly unchanged from recent sales and has now reached its 2013 target.

It sold €1.28bn worth of April 2017 bonds at an average yield of 2.182%. The yield at November’s auction was 2.101%. The bond was 3.6 times subscribed, up from 2.5 times last month.

It also raised €2.25bn with an October 2018 bond with a 2.722% yield, compared to 2.871% last month. Newedge Strategy said:

The relative spread widening versus Italy (and also core EMU countries) supported demand at today’s auction.

Economists at RBC have issued a quick rundown on the three central bank meetings today (we neglected to mention Norges Bank earlier):

  •  For the ECB, the macro news since the previous policy meeting is fairly limited and, therefore, we see relatively little chance that there will be a consensus for any further easing at this stage. That said, we expect President Draghi to reiterate that there are still many options open, any combination of which could be taken if there is material downside news in the months ahead.
  • For the Bank of England, with the MPC continuing in forward guidance mode, there is little risk of anything exciting happening today, and we see no impetus for policy change.
  • For the Norges Bank, we expect that it will leave its key policy rate unchanged at 1.50%. We look for the accompanying Monetary Policy Report to show a modest downward revision to the baseline profile for policy rates, indicating that a rate cut still remains possible in the near term (particularly if there are further signs of a weakening in the housing market).

On the corporate front, shares in AZ Electronic Materials – which makes specialty chemicals used in the manufacture of Apple’s iPad – have soared more than 50%. The company has agreed a £1.57bn bid from German drugs and chemicals group Merck.


Howard Archer, chief European and UK economist at IHG Global Insight welcomed the UK car sales but warned consumers were still being squeezed. He said:

Car manufacturers are justifiably very happy with the way sales have gone in the UK in 2013 and they will be encouraged by the markedly improved UK economic environment and the substantial overall strengthening in consumer and business confidence.

Even so, car manufacturers will be very aware that it is not all plain driving ahead with consumers’ purchasing power squeezed by inflation persistently running markedly higher than earnings growth while businesses generally remain keen to contain costs.

The motor industry will be hoping that the recent improvement in UK economic activity is sustained and extended, and that this underpins consumer and business confidence, and their willingness to splash out on new cars.

UK new car sales accelerate in November

Car makers have already sold more vehicles in the UK so far this year than in the whole of 2012, with one month to go.

A total of 159,581 new cars were registered in November, up 7% on the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).

So far this year, some 2,111,819 cars have been sold, well above the total of 2.04m for 2012. The total for this year is expected to reach around 2.25m, which would make this the best year for new registrations since 2007, when sales reached 2.4 million. SMMT chief executive Mike Hawes said

[This is] a tremendous success for the industry on the back of buoyant consumer confidence and innovative new products.

With the UK economy looking increasingly positive, we can expect strong underlying demand for new cars to continue into 2014, with volumes set to match or surpass those seen this year.

Alternatively-fuelled vehicle sales rose 16.4% this year but still make up just 1.4% of the new-car market. The best selling models in November were:

1. Ford Fiesta
2. Ford Focus
3. Vauxhall Astra
4. Vauxhall Corsa
5. Volkswagen Golf
6. Vauxhall Insignia
7. Nissan Qashqai
8. Fiat 500
9. BMW 3 Series
10. Nissan Juke 


Here’s an early look at the markets:


Good news for Spain last night, as Moody’s raised its outlook for the country’s government bonds. It kep its rating at Baa3 but moved the outlook to stable from negative. It gave three reasons for the move:

1) The evidence of a sustained rebalancing of the Spanish economy and improving medium-term economic prospects, which supports Moody’s view that Spain’s public finances are on a slowly improving trend. The external accounts continue to improve, the situation on the labour market has stabilized and the private non-financial sector continues to deleverage. Moody’s expects moderate but positive growth from 2014 onward.

2) The material decrease in market access risks for the Spanish sovereign and the lower risk of contagion from negative events elsewhere in the euro area than at the time of Moody’s last rating action in October 2012. This is reflected in the Spanish Treasury’s relative ease in securing sizeable amounts of market funding at significantly lower interest rates than in 2012.

3) The significant reduction in contingent liabilities for the sovereign emanating from the Spanish banking sector over the past year. Following several rounds of capital injections and the transfer of real-estate assets to the so-called bad bank Sareb, Moody’s now believes that any further potential recapitalization needs of the Spanish banking system would be limited in size and would be unlikely to derail the slowly improving trend in the country’s public finances.

The full announcement is here:

Moody’s changes outlook on Spain’s Baa3 government bond rating to stable from negative


Central banks expected to keep policy unchanged

Good morning, and welcome to our rolling coverage of events across the financial markets, the world economy, the eurozone and the business world.

In another busy day, the main focus will be on the UK’s autumn statement, due to be unveiled by chancellor George Osborne at 11.15 GMT, as well as the latest meetings of the Bank of England and European Central Bank. In the US, there are weekly jobless claims data, and GDP figures.

The autumn statement is being covered in a live blog by my colleagues Andrew Sparrow and Graeme Wearden, leaving me to concentrate on the central banks and the economic figures here.

The Bank of England is expected to keep interest rates and its QE programme unchanged. Nor do analysts expect any change for the ECB, especially given its surprise rate cut last time round. But the press conference after the meeting will be scoured for clues on the bank’s thinking about the outlook. Michael Hewson, chief market analyst at CMC Markets UK, said:

The latest economic data that markets had to digest yesterday starkly illustrated the problems facing the ECB when trying to set policy for an economic area that is diverging quite sharply.

The perennial problem has always been how you set a policy that addresses economies that appear to be going in opposite directions, and it has been no better illustrated this week by the data coming from Germany which continues to surge ahead, contrasting sharply with that of France which appears to be heading back to recession, while occupying the middle ground of stagnation we have Italy.

Given the sharp drop in inflationary pressures seen in the past six weeks the ECB caught the markets off-guard with the timing of last months rate cut, which on the face of it had all the hallmarks of a bank acting so that they could be seen to be doing something, rather than a bank that actually had the tools to resolve this economic riddle given to them by politicians to try and resolve.

And therein lies the rub, under the rules of this dysfunctional monetary union the ECB’s mandate prevents it from implementing the very fiscal stabilisers that have bought time for UK and US politicians, and yet we still see the same political stubbornness and reluctance to implement reforms and policy changes in France and Italy that are absolutely necessary for the monetary union to at least have a chance of working.

Given that we only saw a rate cut last month it is highly unlikely that we will see another move on rates this month, and given the resistance from Germany to the last rate move, policymakers at the Bundesbank will be even more resistant after the positive economic data seen this week. Under normal circumstances, excluding all else, rates in Germany would probably need to be nudged higher, not lower.

It will be at the press conference where we will see what the ECB’s thoughts are on inflation and growth forecasts and whether we will see any changes to them in 2014, as well as the first glimpses of ECB thinking about the prospects for 2015.

Meanwhile investors are still nervous about the prospect of the US Federal Reserve starting to trim its $85bn a month bond buying programme, which has been a key support for the markets.

Recent US data has been mixed, but good enough to prompt fears the Fed could “taper” its buying sooner than expected. Today jobless claims – expected to rise from 316,000 to 328,000 – and GDP could give further clues, but Friday’s non-farm payroll numbers could be the key piece of data.

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In the trading room today: What’s Next for the EUR and the GBP? In the aftermath of the European Central Bank and the Bank of England monetary policy decisions, we focus on the EUR and the GBP and explore what might be the future direction of these two currency majors against each other and the U.S. dollar, we analyze the bullish momentum in the EUR/USD currency pair, we keep an eye on the price correction in the GBP/USD pair, we note the double bottom in the USD/JPY pair, we highlight the market’s reaction to the European Central Bank and the Bank of England interest rate announcements, the U.S. GDP and Jobless Claims, we discuss new forecasts from BNP Paribas and Credit Suisse, and prepare for the trading session ahead.

In the trading room today: Will the GBP Manage to Finish the Year Strong? With the GBP correcting some of its recent gains against the USD and the EUR ahead of tomorrow’s Bank of England meeting and the Chancellor of the Exchequer Autumn Statement, we explore the potential for the sterling to register a strong finish to the current trading year, we analyze the pullback in the GBP/USD currency pair, we continue to monitor the resilience of the EUR vs USD, we keep an eye on the USD/JPY pair, we highlight the market’s reaction to the Bank of Canada interest rate announcement, the U.K. Services PMI, the Euro-zone GDP and Retail Sales, and the U.S. ADP Employment Report, we discuss new forecasts from Bank of New York-Mellon and Commerzbank, and prepare for the trading session ahead.