Summary:
- USD and Wall Street could react to CB consumer confidence data today
- API estimates on inventories could be a market mover for oil prices
- Pending home sales data may impact the dollar
With just three trading days remaining until year-end, trading volumes remain light but market participants look to a few interesting market events this week. Investors should in particular focus on the US consumer confidence data and API report on crude oil stocks today. Beyond Wednesday, the preliminary inflation data from European countries come into play on Friday.
3:00 pm BST – US, CB Consumer confidence for December. Investors are interested primarily in inflation data now but everything counts at the time when the Fed is tightening at a full speed.The consumer confidence indicators hoover around highs from the beginning of the previous decade. That reflects hopes connected with approved tax reform. However, it has not translated into significantly larger consumption yet, and only time will tell if this optimism has been justified. The gauge is expected to decline slightly to 1281. from 129.5 pts.
3:00 pm BST – US, pending home sales for November. This report is one of the measures reflecting the shape of the US housing market which has been resilient recently despite a few interest rate hikes. It’s definitely not the most important data but given a lack of other readings from the US, it could lead to some reactions on Wall Street and USD,
9:45 pm BST – US, API oil stock data. Investors look to crude oil inventory data from the American Petroleum Institute for hints ahead of DoE report releases on Wednesday. API reported crude oil stockpiles declining by 6.5mm barrels last week. Declining US oil stocks have helped prices recover but with rising US output this trend could reverse.
What to look beyond Wednesday
Inflation in Europe (Friday)
Euro has fared well in December despite the fact that the ECB took a dovish stance at the previous meeting. Inflation is the key metric now that the economic environment is strong. Flash data from Spain and Germany is the last hint on inflation front this year. Affected markets: EURUSD, DE30.
Oil inventory data (Thursday)
Oil has had a very strong year. Its price has been bolstered by strong economic environment and OPEC’s effort to limit supply. Looking forward there are some very conflicting view and factors. While the OPEC is very optimistic for 2018 the IEA warned that supply growth will outpace demand at the time when speculative positioning is at the all-time highs. Declining US inventories were among the most bullish news recently so the report on Thursday is a must to watch for oil traders. Affected markets: OIL, OIL.WTI.