The FP Markets Research Team produces First Light News during the early hours of the European session, a daily Market Briefing that helps ensure traders and investors are up to date in the macro space for the day ahead.
Good morning.
According to the Conference Board on Tuesday, consumer confidence in the US improved in November to 102.0, thanks to a huge downward revision in October’s print: 99.1. The Present Situation Index was largely unchanged (a slight miss), while the Expectations Index jumped to 77.8, up from the downwardly revised reading of 72.7.
Dana Peterson, Chief Economist at The Conference Board, noted: ‘Consumer confidence increased in November, following three consecutive months of decline. This improvement reflected a recovery in the Expectations Index, while the Present Situation Index was largely unchanged. November’s increase in consumer confidence was concentrated primarily among householders aged 55 and up; by contrast, confidence among householders aged 35-54 declined slightly. General improvements were seen across the spectrum of income groups surveyed in November. Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates’.
Overnight witnessed the Reserve Bank of New Zealand (RBNZ) stand pat on rates. As anticipated, the Official Cash Rate (OCR) remained at 5.5%. The accompanying rate statement noted that the OCR will need to remain in restrictive territory for a ‘sustained period of time so that consumer price inflation returns to target and to support maximum sustainable employment’. The statement also noted that inflation remains too high and that the Committee remains wary of ongoing inflationary pressures; additionally, the statement highlighted that ‘If inflationary pressures were to be stronger than anticipated, the OCR would likely need to increase further’. Regarding the RBNZ estimates, the central bank forecasts that the OCR will remain in restrictive territory until mid-2025. The message, therefore, was clear from the RBNZ today: rates need to remain higher for longer, with some risks of another rate increase down the road should inflation increase.
Aussie inflation also hit the wires just before the RBNZ rate decision. The Aussie monthly CPI indicator showed that consumer inflation eased to 4.9% in the twelve months to October, a release strengthening the case for the Reserve Bank of Australia (RBA) to pause at next week’s policy meeting. You will recall the RBA raised the OCR by 25bps in November’s meeting to 4.35% (a 12-year peak).
Day Ahead?
Today’s economic calendar welcomes US GDP data for Q3, with the second estimate (or preliminary estimate) expected to show a marginal increase in economic activity to 5.0%, up from the advance reading of 4.9%. Note that the estimated range is between 5.2% and 4.6%.
Charts to Keep an Eye On
The daily price of BTC/USD has demonstrated solid performance in recent trading. You may recall that the Research Team highlighted a potential daily ascending triangle pattern between $34,758 and $37,999. The Research Team also noted the following (italics):
Although ascending triangles are recognised as continuation chart patterns (traders tend to buy a breakout above its upper limit and project a profit objective using its base value [in this case at $41,252]), there are times when these pattern formations deliver reversal structure (and traders short the breakout lower).
Following the recent BTC/USD post, today’s movement shows the unit attacking the upper boundary, which could be the early stage of a breakout.
G10 FX space as of 09:05 am GMT:
Thanks for reading. Have a great day.
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