Daily Market Report 29/11/12

Investors look for fiscal cliff strategy

As the recent struggles to float Greece fade from the markets’ short term memory, eyes are firmly placed on developments in the US at the moment. With the hourglass filling on America’s time to find a fiscal cliff solution, the looming problem is, as yet, unsolved.

In the last couple of days, the first signs of frustration reared themselves. These fears were somewhat extinguished following positive comments from FOMC member John Boehner , who outlined that a deal could be reached capping government spending, without raising taxes.

The main billing for the day will filter through the media as Timothy Geithner meets congressional leaders to discuss the issue. Optimism that the US Treasury Secretary will be able to spark some constructive strategy to tackle the cliff may weaken the dollar.

In the UK today Mervyn King’s press conference may intimate the sentiment towards further easing. As we already know, the Governor of the Bank of England is favourable to buying securities to boost the trundling economy; reinforcement of this could see sterling weakness against its counterparts.

Following days of rupee weakness, which saw the Indian currency almost reach three and a half year highs, the currency has seen a reverse moving back as the initial threat of an Indian ratings downgrade was subdued. If the rupee continues to strengthen to its normal levels, the time to buy could be now.

 

Key Announcements Today:
  • 07.00am – GBP – Nationwide HPI m/m: returned down at parity, 0%
  • 08.55am – EUR – German Unemployment Change: returned lower at just 5k
  • Tentative – EUR – Italian 10y Bond Auction
  • 10.30am – GBP – BOE Gov King Speaks
  • 10.30am – GBP – BOE Financial Stability Report
  • 13.30pm – USD – Prelim GDP q/q: expected to increase to 2.8%
  • 13.30pm – USD – Unemployment Claims: expected to decrease from 410k to 392k
  • 15.00pm – USD – Pending Home Sales m/m: expected to increase to 0.9%
  • 16.20pm – EUR – German Buba President Weidmann Speaks 

 See previous Daily Market Reports