Talking Points:
- Euro May Decline if 3Q GDP Helps Build a Case for “Sovereign” ECB QE
- US Dollar Looks to Retail Sales, UofM Data to Inform Fed Rate Hike Bets
- See Economic Releases Directly on Your Charts with the DailyFX News App
The preliminary set of third-quarter Eurozone GDP figures headlines the economic calendar in European trading hours. The region-wide metric is expected to show output grew 0.1 percent in the three months through September, matching the second quarter outcome. The year-on-year growth rate is seen dipping to 0.7 percent, marking the third consecutive downtick.
At first blush, it would appear that the release may pass with little fanfare regardless of the outcome considering its limited impact on near-term ECB monetary policy. Indeed, Mario Draghi and company have already unveiled a diverse medley of easing measures this year, some of which have yet to be implemented. Policymakers will no doubt want to assess those efforts’ impact before additional steps are undertaken.
With that said, the central bank can surely imagine the possibility that its actions may prove insufficient and will want to at least set the stage for “sovereign QE” if it proves necessary. A number of key member states (most notably Germany) oppose this but may be swayed in the face of overwhelming evidence. To that end, a particularly weak GDP print may be seen as building a case for more accommodation in 2015, weighing on the Euro. We remain short EURUSD.
Later in the day, the spotlight shifts to the US data docket, where October’s Retail Sales report and preliminary estimate of November’s University of Michigan Consumer Confidence gauge are due to cross the wires. Receipts are seen adding 0.2 percent after falling 0.3 percent in September. Sentiment is forecast to climb to the highest level since July 2007. Rosy outcomes are may feed speculation of a sooner-than-expected Fed rate increase, boosting the US Dollar (and vice versa).
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
2:00 | NZD | Non Resident Bond Holdings (OCT) | 64.8% | - | 65.9% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
6:30 | EUR | French GDP (QoQ) (3Q P) | 0.1% | 0.0% | Medium |
6:30 | EUR | French GDP (YoY) (3Q P) | 0.4% | 0.1% | Medium |
7:00 | EUR | German GDP (QoQ) (3Q P) | 0.1% | -0.2% | High |
7:00 | EUR | German GDP w.d.a. (YoY) (3Q P) | 1.1% | 1.2% | High |
7:00 | EUR | German GDP n.s.a. (YoY) (3Q P) | 1.0% | 0.8% | High |
9:00 | EUR | Italian GDP (QoQ) (3Q P) | -0.1% | -0.2% | Medium |
9:00 | EUR | Italian GDP (YoY) (3Q P) | -0.4% | -0.2% | Medium |
9:30 | EUR | Italian General Government Debt (SEP) | - | 2148.4B | Low |
9:30 | GBP | Construction Output s.a. (MoM) (SEP | 4.0% | -3.9% | Low |
9:30 | GBP | Construction Output s.a. (YoY) (SEP) | 4.3% | -0.3% | Low |
10:00 | EUR | Eurozone CPI (MoM) (OCT) | 0.0% | 0.4% | Medium |
10:00 | EUR | Eurozone CPI (YoY) (OCT F) | 0.4% | 0.4% | Medium |
10:00 | EUR | Eurozone CPI - Core (YoY) (OCT F) | 0.7% | 0.7% | Medium |
10:00 | EUR | Eurozone GDP s.a. (QoQ) (3Q A) | 0.1% | 0.1% | High |
10:00 | EUR | Eurozone GDP s.a. (YoY) (3Q A) | 0.7% | 0.8% | High |
11:00 | EUR | ECB Announces 3-Year LTRO Repayment | - | - | Medium |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EURUSD | 1.2335 | 1.2400 | 1.2439 | 1.2465 | 1.2504 | 1.253 | 1.2595 |
GBPUSD | 1.5555 | 1.5642 | 1.5677 | 1.5729 | 1.5764 | 1.5816 | 1.5903 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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