EUR / USD, GBP / USD
Unfortunately, the desire of investors to see the large-scale aggressiveness of the monetary policy of the Federal Reserve in the coming year has played a cruel joke with them. Speaking at the University of New York, former Bank of England Governor Mervyn King said that a rapid rate of rate hikes could dampen inflation to a 2% target. The dollar began to steadily decline before the publication of the FOMC Fed's minutes. Their output was confirmed by the words of Yellen. The consensus forecast of FOMC members was at a rate of 2.75%. The market valuation of the March rate dropped from 1.445% to 1.435%. The Fed, therefore, did not support, at least explicitly, the game to strengthen the dollar. As a result, the euro and gold returned to local weekly highs.
In the UK, Finance Minister Philip Hammond, at the presentation of the autumn forecast of the Treasury, said that the negotiation process is in a critical phase and he had to reserve 3 billion pounds for the next 2 years for the Brexit procedure. In the first half of the day, the pound lost 40 points but then sharply increased along with the euro.
Yesterday, economic data was summed up. The volume of orders for durable goods in the US in the October estimate decreased by 1.2% against the forecast of growth of 0.4%. Basic orders added the expected 0.4%. Inflationary expectations in the consumer confidence index fell from 2.6% to 2.5%. The final estimate of consumer confidence from the University of Michigan in November was raised to 98.5 from 97.8. Consumer confidence in the eurozone for the current month was better than the forecast which was 0 against -1. The stock market was down by 0.07%.
Today, investors are shifting their attention from the US to Europe. At 10:00 Moscow time, the final estimate of Germany's GDP for the third quarter will be released. The forecast is at 0.8% or in other words, unchanged. The index of business activity in the manufacturing sector for November is expected to decrease from 58.5 to 58.3 while activity in the service sector could grow from 55.0 to 55.3.
The UK's GDP in the second estimate for the 3rd quarter is expected to be unchanged at 0.4%. The balance of retail sales from CBI for November is expected to increase from -36 to 5.
At 15:30 Moscow time, the main event of the day which is the the publication of the minutes from the last meeting of the ECB, will happen. We expect a neutral tone of the protocol. In this case, the markets will continue yesterday's trend but it will be a speculative game in the thin market with the US in a holiday today. The growth of the euro is possible up to 1.1875 until 1.1930. For the pound, we expect growth in the range of 1.3380-1.3400.
USD / JPY
The Japanese yen collapsed on Wednesday by 122 points, caught off guard by the depreciation of the dollar and the stock market. The decline occurred in the technical range of demand in spring-summer of the current year. The breakthrough below this level can trigger a fall to 109, which, of course, investors can not allow. The Japanese stock market yesterday added 0.56% on good corporate reports. However, today is a holiday in Japan and markets are closed. Meanwhile, the indices of Australia and China are declining. The index of business activity in all sectors of industry and services in Japan in the October estimate yesterday showed a decrease of 0.5% against the forecast of -0.4%. Tomorrow, the Manufacturing PMI for the current month could show a decline from 52.8 to 52.6. The situation, therefore, is complicated for the yen. Yesterday, Agency Reuters published a version of the earlier curtailment of the quantitative easing program that is different from what is currently anticipated. Bonds have grown over the entire spectrum.
We will see the further development of events tomorrow or early next week but for now, we adhere to the main scenario for a positive resolution of the situation and wait for the yen at 112.50.
