FOREX
The US dollar index hedged down during early Tuesday trading, dropping below the 104 level. With US inflation numbers for November due for release later today and tomorrow’s Fed rate decision looming, the greenback’s price action has been subdued as traders await these two sets of important data. However, it is interesting to note that the dollar is losing ground to its peers as traders prepare for these two important moments in the economic calendar. Last week’s unexpectedly strong employment figures look ominous as a precursor for today’s inflation. Should CPI also surprise to the upside, then this morning’s dollar softness is unlikely to last.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Share markets climbed in Europe on Tuesday alongside US futures contracts on the S&P500 as risk appetite grows ahead of inflation data.
Market sentiment is strengthening as traders brace for today’s key CPI print, taking place just a day before the last FOMC meeting of the year, at which many expect to see more clues on the path of monetary policy.
Today’s data is widely expected to show US inflation continuing to cool down with a flat 0.0% projection MoM and a 0.1% drop from 3.2% to 3.1% compared to last year.
With this drop not likely to be the most significant seen this year, many investors expect this to be a non-event, bringing only limited impact to markets if data matches anticipations. On the other hand, any figure higher than expected could significantly impact equity markets and treasuries, boosting appetite for the USD currency, as most investors would prefer their dovish hopes to be confirmed rather than seeing price pressure going up again.
European shares remain well-oriented, with the STOXX-50 index flirting with the 4,550.0pts resistance, the last one before the 4,600.0pts/4,610.0pts zone.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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