Mid-Day Report

Dollar Lower after Headline Durable Miss, FOMC Minutes Next

Typography

Dollar weakens in early US session after mixed economic data. Headline durable goods orders dropped -1.2% in October, much lower than expectation of 0.3% rise. Ex-transport orders rose 0.4%, in line with consensus. Initial jobless claims dropped -13k to 239k in the week ended November 18, slightly better than expectation of 241k. Four week moving average rose 1.25k to 239.75. Continuing claims rose 36k to 1.9m in the week ended November 11. The greenback is so far trading as the weakest major currency today as markets await FOMC minutes. Nonetheless, there is little chance for the minutes to give Dollar a lift. They will most likely just reaffirm the chance for a December Fed hike.

UK cut 2018 growth forecast, add GBP 3b for Brexit preparation

In UK, Chancellor of Exchequer Philip Hammond delivered his Budget speech in Parliament today. The Office for Budget Responsibility lowered 2018 growth forecast to 1.4%, down from March projection at 1.6%. Regarding Brexit, Hammond said that "while we work to achieve this deep and special partnership, we are determined to ensure that the country is prepared for every possible outcome." And, in addition to the GBP 700m invested, Hammond announced to set aide another GBP 3b over the next two years for Brexit.

France, Italy and four others get EC warning on budget

In EU, European commission warned that the 2018 spending plans for France, Italy, Belgium, Austria, Portugal and Slovenia are "at risk of non-compliance" with EU rules. The commission emphasized that the budget plan for these counties "might result in a significant deviation from the adjustment paths towards the respective medium-term objective. The commission also urged a "broadly neutral fiscal stance" for the euro area. And, "member States with current account deficits or high external debt should seek to raise productivity, while Member States with current account surpluses should promote wage growth and foster investment and domestic demand,"

Elsewhere

Australia Westpac leading index rose 0.1% mom in October, construction work done rose 15.7% in Q3.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1714; (P) 1.1736 (R1) 1.1759; More....

EUR/USD recovers after drawing support from 4 hour 55 EMA again. But it's staying below 1.1860 and intraday bias stays neutral first. Near term outlook remains cautiously bullish with 1.1677 support intact. As noted before, corrective fall from 1.2091 has completed at 1.1553 already, ahead of 38.2% retracement of 1.0569 to 1.2091 at 1.1510. Above 1.1860 will turn bias to the upside for retesting 1.2091 high. However, break of 1.1677 will dampen this bullish view and turn focus back to 1.1553 low instead.

In the bigger picture, rise from 1.0339 medium term bottom is seen as a corrective move for the moment. Therefore, in case of another rally, we'd be cautious on 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 to limit upside and bring reversal. Meanwhile, sustained trading below 55 week EMA (now at 1.1373) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

EUR/USD 4 Hours Chart

EUR/USD Daily Chart

Economic Indicators Update

GMT Ccy Events Actual Forecast Previous Revised
23:30 AUD Westpac Leading Index M/M Oct 0.10% 0.10%
00:30 AUD Construction Work Done Q3 15.70% -2.30% 9.30% 9.80%
12:30 GBP U.K. Chancellor Presents Budget to Parliament
13:30 USD Initial Jobless Claims (NOV 18) 239K 241K 249K 252K
13:30 USD Durable Goods Orders Oct P -1.20% 0.30% 2.00%
13:30 USD Durables Ex Transportation Oct P 0.40% 0.40% 0.70%
15:00 EUR Eurozone Consumer Confidence Nov A -0.9 -1
15:00 USD U. of Mich. Sentiment Nov F 98 97.8
15:30 USD Crude Oil Inventories 1.9M
17:00 USD Natural Gas Storage -18B
19:00 USD FOMC Meeting Minutes Nov