Summary:
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Will UK labour market report help pound recover?
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Markets expect API data to show drop in oil stockpiles
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WASDE report to be released in the afternoon
The UK Prime Minister Theresa May shocked markets yesterday when she cancelled the Brexit vote in the UK Parliament that was scheduled for today. Having said that, the uncertainty surrounding this event will persist into 2019. GBP will have a chance to recover today as the labour market report will be released in the morning. Apart from that, investors will focus on the ZEW economic sentiment indices from Europe and weekly API oil inventory estimates. Last but not least, one may expect increased volatility on the grain market today as the WASDE report is scheduled for release at 5:00 pm GMT.
9:30 am GMT - UK, Labour market report for October. The British pound has a hard time as new Brexit developments continue to weigh down on the currency. It was expected that vote in the UK parliament will make things more clearer today but eventually it was called off and the uncertainty is set to linger into 2019. Meanwhile, investors will be served the UK labour market report for October and it is expected to show wage growth unchanged from the previous month. Unemployment rate is forecasted to remain at 4.1% and the UK economy is expected to have added 25k jobs in the past 3 months.
10:00 am GMT - Germany, ZEW economic sentiment index for December. Just as if PMIs were not enough European investors have another issue to worry about - ZEW indices. From late-2012 to early-2018 the German gauge showed just 2 negative readings while the European one only once came in below 0 pts. However, investors were served 8 negative German readings and 6 negative European prints so far this year. Combining this downbeat outlook among institutional investors with lacklustre moods painted by PMIs one has reasons to question condition of the European economy.
9:40 pm GMT - API weekly crude oil stocks. OPEC+ decided on the production cuts of 1.2 mbd during a meeting in Vienna last week. However, it seems it was not enough to fend off concerns over the commodity surplus. Short speculative positioning on Brent increased for the 10th straight week while long positions on WTI dropped to the lowest level in six years. Markets remain jitter and the regular inventory data may prove to be a chance to trade short-term price swings. Market consensus expects API to signal 2.9 mb drop in the oil inventories.
Central bank speakers scheduled for today:
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8:30 am GMT - ECB’s de Guindos
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7:15 pm GMT - RBNZ’s Orr
WHEAT has been trading within the consolidation ranging 503-531 USD since early-September. The price reversed from the vicinity of the upper bound of the trading range recently and may be set to revisit the lower limit now. However, one should keep in mind that today’s WASDE report may change outlook on this commodity. Source: xStation5
