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• Priorr Week initial jobless claims 213K revised to 215K
• Initial jobless claims 213K vs 216K estimate
• 4-week MA 217K vs 218.25K last week
• Continuing Claims 1.907M vs 1.908M estimate. This is the highest level for insured unemployment since November 13, 2021 when it was 1,974,000
• Prior Continuing Claims 1.898M vs 1.908M previously reported
• 4-week MA of continuing claims 1.890M vs 1.877M. This is the highest level for this average since
  November 27, 2021 when it was 1,928,000. The levels suggest that those losing jobs are not getting them back as quickly.

Other details:

• The highest insured unemployment rates in the week ending November 9 were in New Jersey (2.3), California (1.9),
  Washington (1.9), Alaska (1.8), Puerto Rico (1.8), Nevada (1.6), Rhode Island (1.6), Illinois (1.5), Massachusetts (1.5),
  and New York (1.5).
• The largest increases in initial claims for the week ending November 16 were in Utah (+538), Minnesota (+381),
  Missouri (+252), Idaho (+200), and Louisiana (+199),
• The largest decreases were in California (-5,088), Georgia
  (-1,952), New Jersey (-1,423), Texas (-1,160), and Ohio (-1,125).

Although the initial jobless claims remain low, the continuing claims are ticking higher. The continuing claims data is at the highest level since November 2021. That is a cooling off for that measure.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month -0.7%
• Durable goods orders MoM 0.2% vs 0.5% expected
• Ex transportation MoM 0.1% vs 0.2% expected
• Prior month ex transportation 0.5%
• Non-Defense cap ex air MoM -0.2% vs 0.1% expected
• Prior month non-defence cap ex air 0.7%
• Durable goods ex defense MoM 0.4% vs -1.1% prior

This isn’t a market mover as it’s a very volatile data series with frequent revisions.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -0.2%
• Advance retail inventories +0.1%
• Prior +0.8%; revised to +0.6%
• Retail inventories ex-autos +0.1%
• Prior +0.2%; revised to +0.1%

Wholesale inventories are estimated to be higher in October, up slightly to $905.1 billion, while retail inventories are also seen marginally higher on the month up to $824.7 billion. Here is the breakdown by the month:

This article was written by Justin Low at www.forexlive.com.

• Prior -$108.7 billion

The international trade deficit was lower in October as exports were seen down 3.2% to $168.7 billion while imports were down 5.4% to $267.8 billion compared to the month before. Here’s the breakdown:

This article was written by Justin Low at www.forexlive.com.

Headlines:

• USD/JPY falls to three-week lows as dollar slips to start the session
• EURUSD Technical Analysis – The pair looks to be bottoming out
• Potential for dollar selling this month end – Deutsche
• Gold bounce today keeps buyers interested going into month-end
• What is the distribution of forecasts for the US PCE?
• ECB’s Schnabel: Easing too much would use up valuable policy space
• ECB’s Schnabel: I see only limited room for further rate cuts
• Germany December GfK consumer confidence -23.3 vs -18.6 expected
• France November consumer confidence 90 vs 93 expected
• US MBA mortgage applications w.e. 22 November +6.3% vs +1.7% prior

Markets:

• JPY leads, USD lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields down 4.1 bps to 4.261%
• Gold up 0.8% to $2,652.44
• WTI crude up 0.5% to $69.09
• Bitcoin up 1.5% to $93,037

There weren’t any major headlines on the session, with just some light data releases to move things along. However, we got some pretty decent market moves as the dollar slumped ahead of a slew of US economic data later. Month-end shenanigans in play?

The greenback eased alongside bond yields, with USD/JPY being the biggest loser. The pair was already down to around 152.50 at the end of Asia trading before dropping further to hit three-week lows of 151.21 during the session. Meanwhile, EUR/USD is seen up 0.4% to 1.0530 and GBP/USD also up 0.4% to 1.2620 on the day.

The RBNZ had earlier cut interest rates as expected here but some market participants took the details as saying that the central bank might slow down the pace of rate cuts. Even though RBNZ governor Orr refuted that sentiment, the kiwi still jumped higher as it also builds on a technical bounce off 0.5800 this week. NZD/USD is seen up 0.9% to 0.5885 currently.

Besides that, the mood in equities remains fairly subdued despite late buying in Wall Street yesterday. European equities are continuing to be pushed lower while US futures are also holding slightly on the softer side.

In the bond market, 10-year yields in the US are down 4 bps to 4.26% while 10-year yields in Germany are seen down 2 bps to 2.16% – its lowest since the start of October.

As for commodities, gold is pushing back up again as it climbs 0.8% to $2,652 while oil is sitting a little higher just above $69 after some back and forth trading yesterday.

It’s on to the flurry of US data next before markets get engulfed by the Thanksgiving holidays.

This article was written by Justin Low at www.forexlive.com.

• Prior +1.7%
• Market index 208.0 vs 195.6 prior
• Purchase index 152.9 vs 136.0 prior
• Refinance index 501.7 vs 514.9 prior
• 30-year mortgage rate 6.86% vs 6.90% prior

Mortgage applications jumped in the past week, owing to a surge in purchase activity. That more than offset a decline in refinancing activity, with the average rate continuing to hold higher still.

This article was written by Justin Low at www.forexlive.com.

On the month itself, gold is still down around 3.5% and poised for its first monthly loss since June. And if this holds, it would be the biggest monthly loss for the precious metal this year. That says a lot about how bullish sentiment has been for gold during the last twelve to fourteen months, that only a 3% drop sounds “bad”.

The rebound last week week helped to limit the post-election stumble in gold. But buyers were dealt a setback earlier this week. I would argue some added profit-taking also had something to do with it. In any case, it dragged gold down to test the 38.2 Fib retracement level of the rebound last week before buyers stepped in. Here’s a look at the near-term chart:

The bounce today builds on the hold yesterday at the technical level above, before buyers moved on to keep price above its 200-hour moving average (blue line). But as price action is still below the 100-hour moving average (red line), the near-term bias stays more neutral for now.

As much as the pullback in gold prices this month might have been timely, the depth of the correction is hardly anything material. It’s not even putting a scratch on the armor to the gold rally this year, let alone a dent of any sorts.

The outlook for gold remains bullish and we’re moving towards a more seasonally favoured period as well for the precious metal. While positive on paper, the one-sidedness of the moves this year is the only gripe I still have with gold heading into December and January. That despite still retaining a more bullish outlook in the big picture.

Going back to today’s action, the latest bounce doesn’t mean much from a technical perspective yet. But it shows that buyers are still staying in the game and are keen to step in to maintain the bullish momentum this year. The test of the 100-day moving average earlier this month also reaffirms that.

So, we’ll see if buyers can keep this up with month-end in focus and the dollar also seeing some softer flows today.

A push back above the 100-hour moving average near $2,660 will be a key near-term test to watch. If so, buyers may look towards another run at the $2,700 mark once more going into December.

This article was written by Justin Low at www.forexlive.com.

• Prior -18.3; revised to -18.4

That’s the weakest reading since May and it reaffirms the gloomier outlook surrounding the German economy as we look towards next year.

This article was written by Justin Low at www.forexlive.com.

Why it’s important?

The ranges of estimates are
important in terms of market reaction because when the actual data deviates from the
expectations, it creates a surprise effect. Another
important input in market’s reaction is the distribution of forecasts.

In fact, although we can have a range of
estimates, most forecasts might be clustered on the upper bound of the
range, so even if the data comes out inside the range of estimates but
on the lower bound of the range, it can still create a surprise effect.

Distribution of forecasts for PCE

PCE Y/Y

• 2.4% (3%)
• 2.3% (86%) – consensus
• 2.2% (11%)

PCE M/M

• 0.4% (3%)
• 0.3% (16%)
• 0.2% (81%) – consensus

Core PCE Y/Y

• 2.8% (88%) – consensus
• 2.7% (12%)

Core PCE M/M

• 0.3% (87%) – consensus
• 0.2% (13%)

Analysis

We
can ignore the headline PCE as the market will focus on the Core
figures. We can see that there’s a pretty strong consensus for 2.8% Y/Y and 0.3% M/M readings. This shouldn’t be surprising given that forecasters can
reliably estimate the PCE once the CPI and PPI are out, so the market already
knows what to expect.

Therefore, unless we see an upside surprise, it shouldn’t affect the current market’s pricing of roughly three rate cuts by the end of 2025, and even then, it’s unlikely that we will see a big change as we will likely need a hot CPI in December to price out another rate cut.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -7.7

That’s the lowest reading since January and it reaffirms the worsening sentiment surrounding the Swiss economy, and the euro area in general, heading into next year.

This article was written by Justin Low at www.forexlive.com.

• I see only limited room for further rate cuts.
• The impact of past ECB tightening is fading visibly.
• I need to see services inflation come down.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The pair is down nearly 1% on the day to 151.50 levels, with price now at its lowest levels since 6 November. What is more notable though is that sellers are looking to push for a break below the 200-day moving average (blue line). The key level is seen at 151.97 and that will be a big blow to the post-election upside momentum.

In turn, that now draws in the early November lows around 151.27-33 as the next key support level. A break of that will then free up room for the pair to roam towards the downside to 150.00 potentially.

The latest drop here comes as we see bond yields also retreat further on the week. 10-year yields in the US are now down nearly 4 bps to 4.265%. After the US election, the high for yields touched 4.505% so we’re down roughly 24 bps from that.

Besides that, the dollar is also down across the board with EUR/USD up 0.4% to 1.0525 and GBP/USD up 0.3% to 1.2610. Even AUD/USD is up 0.3% to 0.6495 and NZD/USD is now up 1.0% to 0.5895 back near the highs for the day.

There’s no major trigger for the moves we’re seeing on the session thus far. So, is this perhaps all tied to some month-end shenanigans before the Thanksgiving holidays kick in? From yesterday: Potential for dollar selling this month end – Deutsche

This article was written by Justin Low at www.forexlive.com.