• U.S. Thanksgiving brings about less liquidity and volatility in the market
• China’s October industrial profits growth rate has reached the highest level since 2017 at 28.2% YoY
• Euro-zone will be tested by consumer confidence releasing today and will wait for more determined actions from ECB next month
U.S. Thanksgiving has brought less liquidity and volatility. At a quite conservative stance, USD is not showing much upside movement and continues to lose against major FX currencies, including CAD and EUR. GBPUSD has shown a calm market with slight declines, and the root cause of this volatility is likely still the uncertain nature on the Brexit deal. At this moment, the deadline in December seems not to be a major concern but rather the keys are those details in future trade agreements between the U.K and EU.
In the APAC market, China has released its October industrial profits at 28.2%, a historic high since 2017. China’s recovery has set a strong contrast with other regions around the globe where COVID cases are still climbing. Along with this positive news from China, AUD and NZD largely outperformed. Japan’s Nikkei 225 also continued its push to fresh 30-year highs, rising 0.4% where China’s CSI 300 jumped 0.95%.
Looking ahead, Euro-zone will be further tested by its consumer confidence and industrial sentiment, which will soon be released today. ECB’s November meeting minutes have agreed that, “given the sharper slowdown in growth momentum and the weakening of underlying inflation dynamics compared with what had previously been expected… it would be warranted to recalibrate the monetary policy instruments in December”, but policy-makers have not determined on a specific timeframe for the recalibration.
More is to be expected in the coming December for the FX market, including FOMC minutes on the stimulus, Brexit deal closure, and ECB’s determination.