A couple of light releases to move things along
Fed chair Powell provided the latest curveball to the market yesterday as he called to retire the 'transitory' inflation narrative, paving the way for a quicker pace of tapering.
In the lead up to that, markets were phasing out Fed rate hikes for the middle of the year amid omicron fears but Powell's remarks are warranting a rethink.
The science behind the omicron variant may not be fully understood yet and the uncertainty is keeping markets on edge but so far, the data isn't hinting at anything too drastic and Powell's take suggests that there will be no step backwards for the US at least.
The dollar surged higher only to give back most of its advance on Powell's remarks with the aussie and kiwi notably holding daily closes above key technical support levels before rebounding further today as risk trades are faring better.
Oil was a big loser yesterday but is seeing a light rebound of over 2% to $67.80 as buyers are looking to go bargain hunting. Note Goldman Sachs' view on oil here.
Looking ahead, risk sentiment will continue to be a key driver of trading sentiment but watch out for dollar plays as well following Powell's surprise yesterday.
0700 GMT - UK November Nationwide house prices
Prior release can be found here. UK house price growth is expected to continue into the year-end, highlighting strong demand conditions despite the stamp duty holiday expiring back in September and even with gradually increasing prices.
0700 GMT - Germany October retail sales
Prior release can be found here. After the stutter in September, German retail sales is estimated to improve slightly in October but surging cost pressures will not make it easy in the next few months as the increase in prices is passed on to consumers.
0730 GMT - Switzerland November CPI figures
Prior release can be found here. Swiss inflation is estimated to creep a little higher but still keeping well below 2%, so there isn't much of overshooting price worries for the SNB as compared to the rest of the world for now.
0815 GMT - Spain November manufacturing PMI
0830 GMT - Switzerland November manufacturing PMI
0845 GMT - Italy November manufacturing PMI
0850 GMT - France November final manufacturing PMI
0855 GMT - Germany November final manufacturing PMI
0900 GMT - Eurozone November final manufacturing PMI
As much as manufacturing output held up in November, overall conditions are still largely hampered by supply chain disruptions for the most part. Surging cost pressures will only add to worries about the outlook and renewed COVID-19 concerns certainly won't help to calm the mood heading into year-end.
0930 GMT - UK November final manufacturing PMI
The preliminary release can be found here. Manufacturing output saw a light bounce in November, so the final reading today may reaffirm that but also underscore problems related to supply bottlenecks - something of a mainstay in the region - that will likely persist further in the coming months, adding to surging price pressures.
1200 GMT - US MBA mortgage applications w.e. 26 November
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
