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Probably the most awaited event for the next week is the FOMC statement, and this week is full of important economic data coming from both US and EU ahead of the new year.
This week we had the last EU summit of the year with the main focus on the banking union. Still, this is a long process and currently we have just a draft signed by the EU finance ministers. Also the Market Manufacturing PMI numbers which, measure the business conditions in the manufacturing sector, are about to to increase further in December, from 51.6 to 52.0. Other economic events are the German ZEW indices whihc is expected to increase for the 5th consecutive month, moving up from 54.6 to 57.0 for the economic sentiment index and from 28.7 to 32.0 for the current conditions index, which should be positive for the euro.
From UK we have the CPI numbers and market expectation are that the numbers will stabilize at 2.2%. The ILO unemployment rate is likely to continue to drop further and market expectation is for another 0.1% drop to 7.5%. UK MPC minutes most likely will remin the same in terms of votes regarding the monetary policy and with the unemployment rate dropping faster than expected BOE will adopt a dovish rhetoric. On Friday we have the GDP numbers, which already expanded 0.8% in the 3rd quarter of 2013 and this was mostly driven by strong consumer spending and business investment.
The US calendar is also full of economic data and on the top of the list is the long awaited FOMC statement. Monday the economic calendar starts with the Nonfarm Productivity which is likely to be revised up an 2.9% annual rate. Industrial Production likely rose to 0.6% in November. Market expectation for the CPI numbers are also supportive for the dollar. The CPI is a key indicator to measure inflation and changes in purchasing trends. The consensus is for an increase from a low 0f 1% to 1.3%. Existing home sales likely declined in November to a 5.03 million unit annual rate and the quarter three GDP figures expected to be revised higher, to 3.8%.
Although the recent economic data has raised the odds of a December Taper it's very unlikely to have such scenario. More likely FED officials will wait for additional data before to make any decision.They must implement some strategic tactics before to start tapering otherwise they risk crashing the stock market and I'm sure they don't want to be blamed for causing such a catastrophic event, especially when we are so close to the holiday season.
Although the Forex market has many liquidity providers around the clock but with the major banks being closed during the Christmas day, and we know that banks are the biggest participants in the Forex market. If they are on holiday then the volume of transactions is at low levels. This can lead to either really static markets or on occasion erratic markets, which it doesn't follow the normal market price action, and that's the reason I incline to believe there will be NO Taper announcement.
Best Regards,
Daytrader21.
This week we had the last EU summit of the year with the main focus on the banking union. Still, this is a long process and currently we have just a draft signed by the EU finance ministers. Also the Market Manufacturing PMI numbers which, measure the business conditions in the manufacturing sector, are about to to increase further in December, from 51.6 to 52.0. Other economic events are the German ZEW indices whihc is expected to increase for the 5th consecutive month, moving up from 54.6 to 57.0 for the economic sentiment index and from 28.7 to 32.0 for the current conditions index, which should be positive for the euro.
From UK we have the CPI numbers and market expectation are that the numbers will stabilize at 2.2%. The ILO unemployment rate is likely to continue to drop further and market expectation is for another 0.1% drop to 7.5%. UK MPC minutes most likely will remin the same in terms of votes regarding the monetary policy and with the unemployment rate dropping faster than expected BOE will adopt a dovish rhetoric. On Friday we have the GDP numbers, which already expanded 0.8% in the 3rd quarter of 2013 and this was mostly driven by strong consumer spending and business investment.
The US calendar is also full of economic data and on the top of the list is the long awaited FOMC statement. Monday the economic calendar starts with the Nonfarm Productivity which is likely to be revised up an 2.9% annual rate. Industrial Production likely rose to 0.6% in November. Market expectation for the CPI numbers are also supportive for the dollar. The CPI is a key indicator to measure inflation and changes in purchasing trends. The consensus is for an increase from a low 0f 1% to 1.3%. Existing home sales likely declined in November to a 5.03 million unit annual rate and the quarter three GDP figures expected to be revised higher, to 3.8%.
Although the recent economic data has raised the odds of a December Taper it's very unlikely to have such scenario. More likely FED officials will wait for additional data before to make any decision.They must implement some strategic tactics before to start tapering otherwise they risk crashing the stock market and I'm sure they don't want to be blamed for causing such a catastrophic event, especially when we are so close to the holiday season.
Although the Forex market has many liquidity providers around the clock but with the major banks being closed during the Christmas day, and we know that banks are the biggest participants in the Forex market. If they are on holiday then the volume of transactions is at low levels. This can lead to either really static markets or on occasion erratic markets, which it doesn't follow the normal market price action, and that's the reason I incline to believe there will be NO Taper announcement.
Best Regards,
Daytrader21.
