The U.S. Dollar is trading in mostly familiar ranges as we open Thanksgiving week with a few developments in the geopolitical front and chances of Fed action remain up in the air.
Overview
After last week was characterized by lowered odds of Fed members voting to cut interest rates by 25 basis points, we start off Monday with renewed hopes of stimulus with increased bets of looser policy now standing at 69.2%. New York’s Fed President John Williams spoke on Friday and explained that in his view there is room to slash borrowing costs at the December 10th meeting. As far as data releases from October, chances are very low that we will get eyes on that data.
When it comes to labor figures for November, that payrolls report is now scheduled to be available on December 16th. With a lack of clarity on the overall economic picture, headlines will continue to affect markets. Over the weekend, talk on the news focused on the chances that this time there will be a workable deal towards a ceasefire and potential peace for the Russia-Ukraine war. There are various drafts now, the one announced at the end of last week with a framework led by Russian and American negotiators while the European Union has also come up with its own proposal. Throughout the week, we will get indicators gauging inflation for suppliers in the form of Producers Price Index as well as Retail Sales and Confidence gauges.
What to Watch This Week…
- Retail Sales Tomorrow at 8:30AM
- Monex USA Online is always open
GBP ⇑
Pound Sterling has been on a roller-coaster ride recently without much guidance as the U.K. gets ready to execute its spending plans. The Chancellor of the Exchequer, Rachel Reeves, will be revealing the U.K. Autumn Budget on Wednesday, which will certainly affect GBP direction one way or the other. Economists will watch for the details on a 35.0-billion-pounds fiscal consolidation that marks the second tax-raising budget for Reeves. Market reaction is predicted to be positive so Sterling may have some room to gain value as we head for dinner Thursday on this side of the pond. The Bank of England will meet on December 18th.
JPY ⇑
The Japanese Yen is recovering after having a terrible week of depreciation that took it down to its weakest point against the Buck since January. Japan is currently on holiday, which will calm markets down a bit in combination with Thanksgiving being observes in America. Yields and speculation over the Bank of Japan’s willingness to raise interest rates have been all over the place as the newly sat Prime Minister is looking to shake things up by looking to spend more and deregulate in order to boost business activity and get growth going after contractions.
