Important data this week is sure to move the currencies – 30th November 2015
Despite the media’s best efforts to whip up a spending frenzy on Black Friday, shoppers stayed away from the high street and security guards didn’t have to break up fights over flat-screen TVs. Aside from action surrounding the Swiss Franc, the currency markets didn’t show much enthusiasm either on Friday.
In the past four years the Swiss Franc has surprised markets more than twice. In September 2011 when the Swiss National Bank swore to defend a floor of SFr 1.20 per €1, and then in January this year when the SNB abandoned that promise. The Swiss Franc did the same again on Friday when it lurched lower against the Euro and the US Dollar.
Whilst Friday’s move was much smaller in scale than the previous two it was seen as the result of yet more intervention by the Swiss National Bank. The interpretation is that the central bank could be getting ready to match the ECB blow for blow if, as expected, Mario Draghi and his team announce extra stimulus for the Eurozone on Thursday.
Sterling however matched the high-street shoppers on Friday and hardly budged against the other dozen most actively-traded currencies. At the front of the pack the US Dollar strengthened by two thirds of a cent against Sterling. The Swiss Franc brought up the rear with a half-cent decline and give or take 20 ticks the Euro, Sterling and the Canadian, Australian and NZ dollars were steady against one another.
Economic data on Friday featured the first revision to third quarter economic growth in Britain which was left unchanged at 0.5% while business investment grew by more than expected in Q3. Consumer confidence in the Eurozone was less negative at -5.9 while business confidence diverged: the services sector felt better about things and in industry the mood worsened.
This week’s agenda contains some unusually significant events and data. There are interest rate decisions from Australia, Canada and, of course Euroland. There are purchasing managers’ index readings from around the world and there is employment data from North America.
Not all of these will affect the currency markets but it would be extraordinary if none were to do so. The biggest ones come at the end of the week. On Thursday the ECB policy announcement will be followed by an appearance by the Federal Reserve chairperson; Friday brings the OPEC meeting and the US employment report.
Today’s ecostats look comparatively mundane. From Europe come UK money supply and mortgage approvals, along with inflation figures from Italy and Germany. US pending home sales come out after lunch. Australia gets the PMI ball rolling tonight.