Market Comment: November 22, 2024
Today, we’ve already seen UK retail sales data which disappointed with a 0.7% month-over-month decline missing forecasts. Eurozone PMI figures were mixed, with both France and Germany reporting weaker-than-expected manufacturing activity. Japan’s PMI remained in contraction territory at 49.0, while Singapore’s GDP growth beat expectations, rising by 5.4% year-over-year. Looking ahead, ECB President Lagarde’s speech is scheduled for later. And the US Consumer Sentiment Index final reading will follow.
Key Data Out Today
- UK Retail Sales: Fell 0.7% MoM, missing the forecast of -0.3%, and dropped 0.9% excluding fuel sales.
- Eurozone PMI:
- France’s Manufacturing PMI: 43.0 (below expectations).
- Germany’s Manufacturing PMI: 44.5 (slightly weak).
- Japan Manufacturing PMI: Held steady at 49.0, signaling ongoing contraction.
- Singapore GDP: Beat forecasts with a 5.4% YoY increase.
- US and Canadian Data: US Consumer Sentiment Index and Canadian retail sales are due later.
Energy & Precious Metals
- Crude oil prices are stable, with WTI at $70.13 and Brent at $74.20. Both have gained over 4% this week due to tighter inventories.
- Gold is up 0.82% at $2,691.01, supported by a softer dollar and safe-haven buying.
- Silver gained 1.09%, trading at $31.08, mirroring gold’s strength.
Currency Movements
EUR/USD
- The euro edged slightly higher to 1.0465, recovering marginally after earlier weakness. Mixed Eurozone PMI data, particularly weak manufacturing figures from France (43.0) and Germany (44.5), capped any significant gains. The pair remains down 0.66% for the week, as concerns about sluggish growth in the Eurozone weigh on sentiment.
GBP/USD
- The pound declined 0.26%, trading at 1.2552, following disappointing UK retail sales data. Sales fell 0.7% month-over-month, worse than the forecasted 0.3% drop. However, the pound remains one of the better-performing currencies year-over-year, up 0.3%, as earlier resilience in the UK economy provided support.
AUD/USD and NZD/USD
- Commodity-linked currencies like the Australian dollar and New Zealand dollar are under pressure. AUD/USD slipped 0.31% to 0.6489, while NZD/USD fell 0.42% to 0.5832. These declines reflect a cautious tone in markets. There are lingering concerns about global growth. This comes despite a slight recovery in risk assets earlier this month.
USD/JPY
- The yen weakened further, with USD/JPY climbing 0.44% to 154.84. The divergence between Japan’s ultra-loose monetary policy and the Federal Reserve’s relatively hawkish stance continues to drive this pair. Japan’s PMI remaining in contraction territory only adds to the yen’s struggles.
USD/CNY
- The Chinese yuan traded slightly weaker, with USD/CNY ticking up 0.03% to 7.2569. Concerns over China’s slowing economic recovery and recent government intervention in markets have kept the yuan on the back foot.
USD/CHF
- The Swiss franc remained relatively stable, with USD/CHF inching up 0.03% to 0.8870. The currency has struggled to find direction recently, with little local data driving movement.
USD/CAD
- USD/CAD held steady at 1.3986, as the Canadian dollar was supported by rising oil prices. Crude oil’s weekly gain of over 4% has cushioned CAD from further losses against the stronger US dollar.
USD/MXN
- The Mexican peso dipped 0.05% to 20.4511 as the dollar strengthened globally. The peso has faced sustained pressure recently, driven by concerns over external market conditions and risk-off sentiment.
USD/INR
- The Indian rupee hit a record low, with USD/INR trading at 84.4955, up 0.01% for the day. Persistent capital outflows, rising US Treasury yields, and a strong dollar have all contributed to the rupee’s ongoing weakness.
Things to Keep a Watch On:
- ECB President Lagarde’s Speech: Scheduled for later today, it may offer clues on future monetary policy.
- US Consumer Sentiment Index: The final reading will provide insight into consumer confidence and economic resilience.
- Canadian Retail Sales: Data at 13:30 GMT will show how consumer spending is holding up in Canada.
- Natural Gas Prices: Continuing their sharp rally, these are worth monitoring for further winter-driven increases.
- Eurozone Market Sentiment: Reactions to weak PMI readings could impact euro movements later today.
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