- The US dollar is little changed as we head towards month end, with the dollar index treading water after falling at the end of last week. EURUSD is consolidating in the mid 1.09-1.10 range and GBPUSD starts the week holding steady above 1.26, with USDJPY falling below 149.
- Month end activity is likely to influence markets in the coming days with very little on the European data calendar. Inflation data across the euro area is released towards the middle of the week with Spain and Germany releasing the November HICP data Wednesday, ahead of the same for France and Italy on Thursday. The CPI inflation print for the euro area is also released on Thursday, with markets expecting November’s print to fall to 2.6% from the previous 2.9%. A broad-based deceleration in inflation during November is expected, which will likely further boost market confidence of a further hold from the ECB at the final policy meeting of the year on December 14.
- We will look for fresh clues on the strength of the US outlook this week as markets price a soft landing for the economy. Data due in the coming days includes consumer confidence on Tuesday and third quarter GDP on Wednesday where a small upward revision is expected. Thursday sees the release of the Fed’s preferred price gauge with the release of Personal Income and Spending data. The week is wrapped up with ISM Manufacturing survey which is out on Friday.
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