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Gold selloff resumes, strong support expected around 1725

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    ActionForex.com
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    Gold’s selloff resumes today by breaking through 1800 handle and hits as low as 1764.31 so far. Further decline is now expected as long as 1818.26 resistance holds. Current decline from 2075.18 is seen as correcting whole up trend from 1160.17. Deeper fall should be seen to 55 week EMA (now at 1749.77) and possibly slightly below.

    But we’d expect strong support from 38.2% retracement of 1160.17 to 2075.18 at 1725.64 to contain downside and bring rebound. However, Sustained break of 1749.77 could bring even deeper correction to 61.8% retracement at 1509.70.

    New Zealand ANZ business confidence jumped to -6.9 in Nov, surge in manufacturing

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      ActionForex.com
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      New Zealand ANZ Business Confidence jumped to -6.9 in November, well above preliminary reading of -15.6 and October’s final of -15.7. Manufacturing confidence surged 14.5 pts and turned positive to 6.7. Retail confidence and services confidence also rose 17.9 pts and 10.2 pts to -3.8 and -6.6 respectively. Agriculture and construction dropped by -2.4 and -15.8 to -52.4 and -3.3.

      Activity Outlook rose to 9.1, versus preliminary reading of 4.6 and October’s 4.7. Manufacturing outlook rose 13.4 to 15.0. Construction rose 14.5 to 23.3. Services rose 3.2 to 9.2. But retail dropped -2.2 to 0 while agriculture dropped -5.1 to -9.1.

      ANZ noted: “Monetary and fiscal policy have undoubtedly done their jobs this year. But it’s worth remembering that both work by bringing forward spending from the future. There’s no free lunch, and they need to be used judiciously. The true underlying momentum of the economy should become clearer over the next few months as the impact of one-offs fade, but the case for further life-support measures is becoming less clear by the day. And that’s certainly something to celebrate.”

      Full release here.

      China PMI manufacturing rose to 52.1 in Nov, highest in three years

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        ActionForex.com
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        The official China PMI Manufacturing rose to 52.1 in November, up from 51.4, above expectation of 51.5. That’s the highest reading in more than three years. It’s also the ninth straight month of growth reading. PMI Services rose to 56.4, up from 56.2, above expectation of 56.0.

        According the Zhao Qinghe, the bureau’s senior statistician. Four factors grove manufacturing activity. Both supply and demand of Chinese manufactured goods continued to improve. Imports and exports steadily recovered. Prices of both raw materials and output rose. Prospect of manufacturers of all sizes also improved.

        Japan industrial production rose 3.8% mom in Oct, 5th straight month of growth

          By
          ActionForex.com
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          Japan industrial production rose 3.8% mom in October, well above expectation of 2.3% mom, and not much slower than September’s 3.9% mom. It’s also the fifth straight month of increase. The Ministry of Economy, Trade and Industry also said manufacturers expected growth to continue with another 2.7% mom in November, but a decline of -2.4% mom in December.

          Retail sales rose 6.4% yoy in October, matched expectations. That’s the first annual rise in eight months., following a -8.7% yoy decline in September.

          EU Barnier: Same significant divergences persist with UK

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            ActionForex.com
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            EU chief Brexit negotiation Michel Barnier confirmed that he’s travelling to London this evening to continue in-person trade talks with the UK over the weekend. but he also noted, “same significant divergences persist”. An unnamed EU official said Barnier told national diplomats that “the gaps on level playing-field, governance and fisheries remain large,”

            On the UK side, Prime Minister Boris Johnson said, “Clearly there are substantial and important differences still to be bridged but we’re getting on with it.” He added, “the likelihood of a deal is very much determined by our friends and partners in the EU — there’s a deal there to be done if they want to do it.”

            ECB Villeroy: Recalibration must focus on quality of monetary policy transmission

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              ActionForex.com
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              ECB Governing Council member Francois Villeroy de Galhau said, in face of “prolonged uncertainty” due to resurgence in coronavirus infections, “our first objective must be keeping very favorable financing conditions as long as necessary”.

              But he also added, “recalibration of instruments must focus in particular not only on the level of monetary support, but also on the duration, flexibility and efficient targeting, in short, the quality of monetary policy transmission.”

              Eurozone economic sentiment dropped to 87.6

                By
                ActionForex.com
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                Eurozone Economic Sentiment Indicate dropped markedly to 87.6 in November, down from 91.1, but beat expectation of 86.5. Employment Expectations Indicator posted the second fall in a row, down -3.3 pts to 86.6. Amongst the largest euro-area economies, the ESI plunged in Italy (-8.7) and France (-4.8), while its losses were more contained in Germany (-2.8) and Spain (-2.0). The Netherlands bucked the trend with a moderate improvement in sentiment (+1.0).

                Looking at some details, industry confidence dropped from -9.2 to -10.1. Services confidence dropped from -12.1 to -17.3. Consumer confidence dropped from -15.5 to -17.6. Retail trade confidence dropped from -6.9 to -12.7. Construction confidence dropped from -8.3 to 9.3.

                Full release here.

                France GDP grew 18.7% in Q3, consumer spending rose 3.7% mom in Oct

                  By
                  ActionForex.com
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                  According to the second estimate, France GDP grew 18.7% in Q3, after the -13.8% decline back in Q2. Despite the strong bounce, GDP remained well below the level it had before the pandemic. In volume terms, GDP was down -3.9% yoy.

                  In October, consumer spending rose 3.7% mom, much better than expectation of -1.0% mom decline. It’s 2.7% yoy higher than the level a year ago. This increase was driven by a sharp rise in food consumption (+7.1%) and energy expenditure (+6.4%). Manufactured good purchases were almost stable (-0.1%). In November CPI rose 0.2% yoy, up from 0.0% yoy in October.

                  In-person Brexit trade talks to resume this weekend

                    By
                    ActionForex.com
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                    It’s reported that in-person Brexit trade talks are to resume in London this weekend. But firstly, it’s unsure if EU chief negotiator Michel Barnier would attend. Secondly, a UK government spokesman also said “it’s for the EU to decide when and if they come.”

                    UK Chancellor of the Exchequer Rishi Sunak reiterated that “it is preferable” to get a deal. But, again, “we absolutely should not be stretching for a deal at any cost, that is not the right thing to do.”

                    Barnier said earlier that further further negotiations would be pointless if the UK was not willing to compromise on the outstanding issues.

                    ECB Panetta open to case-by-case resumption of bank dividend payouts

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                      ActionForex.com
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                      Executive Board member Fabio Panetta told Portuguese newspaper Expresso that he’s open to allowing some banks to resume paying dividends. Nevertheless, “if they don’t distribute dividends this year, they can distribute more next year and in the meantime they will be in a better position to face a situation of serious crisis”.

                      “If I had to choose between the two approaches, I would opt to be more prudent, but that could imply a cost for banks,” he said. “I consider that a reasonable solution, as economic conditions improve, would be a case-by-case approach by banking supervision authorities.”

                      BoC Macklem: The very rapid growth of reopening is over

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                        ActionForex.com
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                        BoC Governor Tiff Macklem told a parliamentary committee that “the very rapid growth of the reopening phase is now over”. The economy has “has entered in the slower-growth recuperation phase”. GDP would have shrunk around -5.5% in 2020 and it’s expected to grow around 4% in 2021 and 2022.

                        Growth is anticipated to be “uneven across sectors and choppy over time”. Business investment will “remain subdued” and exports to “grow only slowly”. The economy will still be operating its potential into 2023. Inflation is expected to stay below the 1-3% target range “until early next year”, and remain less than 2% “into 2023”.

                        Interest rate will remain at 0.25%, the effective lower bound “for an extended period”. BoC has committed to keep it there “until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved”. In the current outlook “this takes us into 2023”. The QE program all also “continue until the recovery is well underway”.

                        Full remarks here.

                        ECB accounts: Warranted to recalibrate the monetary policy instruments in Dec

                          By
                          ActionForex.com
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                          In the account of October 28-29 ECB meeting, it’s noted that “risks surrounding the growth outlook to be clearly tilted to the downside”. The assessment “largely reflected the recent resurgence in COVID-19 infections, the associated intensification of containment measures and the high uncertainty surrounding the timeline of the pandemic and the implications for economic and financial conditions.”

                          “Given the sharper slowdown in growth momentum and the weakening of underlying inflation dynamics compared with what had previously been expected, as well as the deterioration in the balance of risks, it would be warranted to recalibrate the monetary policy instruments in December.”

                          However, it’s noted that more than half of the PEPP envelope was still available in case of “renewed market turbulence”. “By the time of the December meeting, updated staff projections would be available and a clearer picture of the dynamics of the pandemic and prospects of a vaccine might have emerged, together with more information on the fiscal policy responses in the euro area.”

                          Full accounts here.

                          BoE Bailey: It’s right to smooth the pandemic economic over a number of years to come

                            By
                            ActionForex.com
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                            BoE Governor Andrew Bailey supported Chancellor of Exchequer Rishi Sunak’s latest spending plans. He told BBC Radio, “it is absolutely sensible that public resources, resources of the state, are being used to cushion the huge impact of this absolutely unprecedented shock.” “We are smoothing the impact over a number of years to come, and that is the right thing to do,” he added.

                            Sunak admitted that borrowing and debt are at “record peacetime highs”. Also, the UK government is “on a path where that continues to be at a very elevated level, so that’s not a sustainable position,” “Once we get through this and we have more certainty about the economic outlook, we’ll need to look at how we can make sure we have a strong set of public finances,” he added.

                            German Gfk consumer sentiment dropped to -6.7, significantly dampened by partial lockdown

                              By
                              ActionForex.com
                              -

                              Germany Gfk Consumer Sentiment for December dropped to -6.7, down from -3.2, as sentiment was “significantly dampened by the partial lockdown”. November’s economic expectations dropped from 7.1 to -0.2, lowest since May. Income expectations dropped from 9.8 to 4.6. Propensity to buy also dropped from 37.0 to 30.5.

                              “Though stores will remain open, the renewed shutdown of the hotel, restaurant and events industry – as well as the already struggling tourism industry – has had a serious impact on the consumer climate,” explains Rolf Bürkl, consumer expert at GfK. “As a result, any hope we still had in early summer of a rapid recovery is now lost. Growing uncertainty has once again led to an increase in propensity to save, another factor which has contributed to the decline in the consumer climate.”

                              Full release here.

                              Australia total private capital expenditure dropped -3% in Q3

                                By
                                ActionForex.com
                                -

                                Australia total new capital expenditure dropped -3.0% in Q3 to AUD 25.85B, hitting the lowest level since 2007. Buildings and structures expenditure dropped -3.7% to AUD 13.76B. Equipment, plant and machinery expenditure dropped -2.2% to AUD 12.09B.

                                Full release here.

                                New Zealand trade deficit at NZD 501m as imports and exports plunged

                                  By
                                  ActionForex.com
                                  -

                                  New Zealand goods exports dropped -4.4% yoy to NZD 4.8B in October. Exports to China, Australian Japan declined, and rose to US and EU. Imports dropped -13.0% yoy to NZD 503B. Imports from all major partners declined, including China, EU, Australia, USA and Japan. Monthly trade deficit came in at NZD -501m, in line with expectations.

                                  Annual trade surplus reached a 28-year high of NZD 2.2B in the year ended October. “This is the largest annual surplus since the July 1992 year, driven mainly by much lower imports after the global COVID-19 pandemic hit, while New Zealand’s exports have held up,” international trade manager Alasdair Allen said.

                                  Full release here.

                                  Fed discussed updating guidance on asset purchases

                                    By
                                    ActionForex.com
                                    -

                                    Minutes of November FOMC minutes noted that the asset purchases will continue “over coming months”. At the same time, “most participants judged that the Committee should update this guidance at some point and implement qualitative outcome-based guidance that links the horizon over which the Committee anticipates it would be conducting asset purchases to economic conditions. ”

                                    However, “a few participants were hesitant to make changes in the near term to the guidance for asset purchases and pointed to considerable uncertainty about the economic outlook and the appropriate use of balance sheet policies given that uncertainty.”

                                    On adjusting the asset purchases to provide more accommodation if needed, it could be done by increasing the pace of purchases or by shifting its Treasury purchases to those with a longer maturity without increasing the size of its purchases.” Or alternative, more accommodation could be done “by conducting purchases of the same pace and composition over a longer horizon.”

                                    Full minutes here.

                                    US GDP grew 33.1% annualized in Q3

                                      By
                                      ActionForex.com
                                      -

                                      US GDP grew 33.1% annualized in Q3, according to the second estimate, comparing to Q2’s -31.4% annualized contraction. With the second estimate, upward revisions to nonresidential fixed investment, residential investment, and exports were offset by downward revisions to state and local government spending, private inventory investment, and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up.

                                      Full release here.

                                      US durable goods orders rose 1.3%, six straight months of increase

                                        By
                                        ActionForex.com
                                        -

                                        US durable goods orders rose 1.3% mom to USD 240.8B in October. That’s the six consecutive months of increase. Ex-transport orders rose 1.3% mom. Ex-defense orders rose 0.2% mom. Transportation equipment, up five of the last six months, rose 1.2% mom.

                                        Full release here.

                                        US initial jobless claims rose to 778k, continuing claims dropped to 6.1m

                                          By
                                          ActionForex.com
                                          -

                                          US initial jobless claims rose 30k to 778k in the week ending November 21. Four-week moving average of initial claims rose 5k to 748.5k. Continuing claims dropped -229k to 6071k in the week ending November 14. Four-week moving average of continuing claims dropped -438k to 6165k.

                                          Full release here.

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