The US Dollar may rise on haven demand amid fears that a deal to avoid the “fiscal cliff” remains elusive as US President Obama pitches his proposal.
Talking Points
Dollar May Rise on “Fiscal Cliff” Deadlock Fears as Obama Speaks in Detroit
Yen Gains on Haven Flows as Japanese GDP, Chinese Export Data Disappoint
Euro Underperforms After Italian PM Monti Pledges to Resign Over the Weekend
The economic calendar is quiet through the remainder of the trading day, putting the spotlight on US President Obama as he delivers a speech in Detroit to promote his plan to avoid the “fiscal cliff”, a set of spending cuts and tax hikes due to trigger at the turn of the calendar year. The Congressional Budget Office (CBO) estimates the burst of austerity – if left to trigger as scheduled – is likely to tip the US back into recession in the first six months of 2013. Republicans and Democrats have been at loggerheads on a compromise plan to avoid the “cliff” and more of the same is likely to weigh on risk appetite, boosting haven demand for the US Dollar. Obama’s plan features $1.6 trillion in tax increases and $600 billion in spending cuts.
The Japanese Yen advanced in overnight trade on the back of safe-haven demand as the final revision of third-quarter Gross Domestic Product data showed the economy shrank -0.9 percent compared with 0.8 percent expected. A worrisome set of Chinese trade figures reinforced regional growth concerns, showing exports added a meager 2.9 percent year-on-year in November. This marked the lowest reading in three months and a sharp deviation from forecasts calling for a 9.0 percent increase. The Euro underperformed after Italian Prime Minister Mario Monti announced he would resign after the 2013 budget is passed this month, feeding uncertainty about future policy in the largest of the so-called “PIIGS” countries.
Asia Session: What Happened
GMT
CCY
EVENT
ACT
EXP
PREV
1:30
CNY
Consumer Price Index (YoY) (NOV)
2.0%
2.1%
1.7%
1:30
CNY
Producer Price Index (YoY) (NOV)
-2.2%
-2.0%
-2.8%
5:30
CNY
Industrial Production (YoY) (NOV)
10.1%
9.8%
9.6%
5:30
CNY
Industrial Production YTD (YoY) (NOV)
10.0%
10.0%
10.0%
5:30
CNY
Fixed Assets Inv Excl. Rural YTD (YoY) (NOV)
20.7%
20.9%
20.7%
5:30
CNY
Retail Sales (YoY) (NOV)
14.9%
14.6%
14.5%
5:30
CNY
Retail Sales YTD (YoY) (NOV)
14.2%
14.1%
14.1%
21:45
NZD
Manufacturing Activity (3Q)
1.6%
–
-0.8% (R+)
23:50
JPY
BSI Large All Industry (QoQ) (4Q)
-5.5
–
2.2
23:50
JPY
BSI Large Manufacturing (QoQ) (4Q)
-10.3
–
2.5
23:50
JPY
Nominal GDP (QoQ) (3Q F)
-0.9%
-0.9%
-0.9%
23:50
JPY
GDP (QoQ) (3Q F)
-0.9%
-0.8%
-0.9%
23:50
JPY
GDP (Annualized) (3Q F)
-3.5%
-3.3%
-3.5%
23:50
JPY
GDP Deflator (YoY) (3Q F)
-0.8%
-0.7%
-0.7%
23:50
JPY
Current Account Total (¥) (OCT)
376.9B
230.9B
503.6B
23:50
JPY
Adjusted Current Account Total (¥) (OCT)
414.1B
247.0B
-142.0B
23:50
JPY
Current Account Balance (YoY) (OCT)
-29.4%
-59.0%
-68.7%
23:50
JPY
Trade Balance – BOP Basis (¥) (OCT)
-450.3B
-450.0B
-471.3B
23:50
JPY
Bank Lending Banks ex-Trust (NOV)
1.3%
–
1.1%
23:50
JPY
Bank Lending incl Trusts (YoY) (NOV)
1.0%
–
0.8%
0:01
GBP
Lloyds Employment Confidence (NOV)
-42
–
-35
0:30
AUD
Home Loans (OCT)
0.1%
3.0%
1.1% (R+)
0:30
AUD
Investment Lending (OCT)
5.5%
–
8.8% (R+)
0:30
AUD
Value of Loans (MoM) (OCT)
-0.2
–
1.4% (R-)
2:13
CNY
Trade Balance ($) (NOV)
19.63B
26.85B
31.99B (R+)
2:13
CNY
Exports (YoY) (NOV)
2.9%
9.0%
11.6%
2:13
CNY
Imports (YoY) (NOV)
0.0%
2.0%
2.4%
4:30
JPY
Bankruptcies (YoY) (NOV)
-12.0%
–
6.0%
5:00
JPY
Consumer Confidence (NOV)
39.4
–
39.7
6:00
JPY
Eco Watchers Survey: Outlook (NOV)
41.9
–
41.7
6:00
JPY
Eco Watchers Survey: Current (NOV)
40.0
–
39.0
Euro Session: What to Expect
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
EUR
German Imports s.a. (MoM) (OCT)
0.4% (A)
-1.6%
Low
7:00
EUR
German Exports s.a. (MoM) (OCT)
-0.3% (A)
-2.4%
Low
7:00
EUR
German Trade Balance (€) (OCT)
15.5B (A)
16.9B
Medium
7:00
EUR
German Current Account (€) (OCT)
13.5B (A)
16.3B
Medium
9:30
EUR
Euro-zone Sentix Investor Confidence (DEC)
-16.9
-18.8
Low
10:00
EUR
Italian GDP s.a. and w.d.a. (QoQ) (3Q F)
-0.2%
-0.2%
Low
10:00
EUR
Italian GDP s.a. and w.d.a. (YoY) (3Q F)
-2.4%
-2.4%
Low
Critical Levels
CCY
SUPPORT
RESISTANCE
EURUSD
1.2830
1.2975
GBPUSD
1.5976
1.6092
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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