IronFX Daily Commentary by Sakis Paraskevov | 23/12/2015
December 23, 2015 9:59 am
• Early accidental release shows US consumption accelerated • Personal spending picked up in November, indicating that consumers boosted the largest part of the US economy heading into the holiday season. • Spending rose by 0.3% from 0.0% (revised down) in October, according to an accidental data release, approximately 12 hours ahead of the scheduled release time. • Following a downward revision of the final US Q3 GDP data yesterday, the solid consumption figure suggests that household expenditure is being powered by improvements in the labour market and lower energy prices. • Overall, USD reaction was limited on the news. However, as the Fed has stressed that the pace of the tightening cycle will be ‘data driven’, an accelerating consumption provides signs of upward inflationary pressure. This is positive news overall for the US. • Today: • US: Personal income and durable goods orders, all for November. Personal income is expected to have slowed, while durable goods are expected to have fallen and durable goods excluding transportation to have stagnated. Since the personal spending figure was released earlier, and was expected to offset the negative impact on the dollar by the other releases, strong data are now needed to prevent a tumble of USD. The U of M consumer sentiment for December and new homes sales for November are both expected to have increased. Also, the core PCE rate for November is due for release. • France & UK: Final estimates of Q3 GDP for the two countries. Both are expected to confirm their preliminary estimates, thus the market reaction could be muted at these releases. • Norway: The AKU unemployment rate for October is expected to have remained unchanged and given that the official unemployment rate also remained unchanged in the same month, the likelihood for another flat reading is high. Therefore, the reaction on NOK could be minimal. • Canada: GDP rate and retail sales data, both for October. These indicators are expected to show a rebound from previously, which could ease some of the downward pressure on the Loonie, at least temporarily.
• Early accidental release shows US consumption accelerated
• Personal spending picked up in November, indicating that consumers boosted the largest part of the US economy heading into the holiday season.
• Spending rose by 0.3% from 0.0% (revised down) in October, according to an accidental data release, approximately 12 hours ahead of the scheduled release time.
• Following a downward revision of the final US Q3 GDP data yesterday, the solid consumption figure suggests that household expenditure is being powered by improvements in the labour market and lower energy prices.
• Overall, USD reaction was limited on the news. However, as the Fed has stressed that the pace of the tightening cycle will be ‘data driven’, an accelerating consumption provides signs of upward inflationary pressure. This is positive news overall for the US.
• Today:
• US: Personal income and durable goods orders, all for November. Personal income is expected to have slowed, while durable goods are expected to have fallen and durable goods excluding transportation to have stagnated. Since the personal spending figure was released earlier, and was expected to offset the negative impact on the dollar by the other releases, strong data are now needed to prevent a tumble of USD. The U of M consumer sentiment for December and new homes sales for November are both expected to have increased. Also, the core PCE rate for November is due for release.
• France & UK: Final estimates of Q3 GDP for the two countries. Both are expected to confirm their preliminary estimates, thus the market reaction could be muted at these releases.
• Norway: The AKU unemployment rate for October is expected to have remained unchanged and given that the official unemployment rate also remained unchanged in the same month, the likelihood for another flat reading is high. Therefore, the reaction on NOK could be minimal.
• Canada: GDP rate and retail sales data, both for October. These indicators are expected to show a rebound from previously, which could ease some of the downward pressure on the Loonie, at least temporarily.
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