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Euro gains on PMI beats; Retail sales weigh on CAD

Summary:

  • EUR rises after PMI beats
  • EURUSD near 6-week high and key resistance
  • ECB minutes have little impact
  • CAD falls back after retail sales miss
  • Ethereum closes in on record peak
  • How do stocks react to Black Friday?

The recovery seen in the Eurozone continues to gather momentum with a string of PMI readings form the continent this morning exceeding forecasts. Flash PMIs from France and Germany as well as the Eurozone wide reading all came in strongly and provided a boost to the single currency. 

Speaking in London this afternoon ECB member Villeroy declared his pleasure at the latest data. Some slightly dovish comments surrounding the inflationary environment in the Eurozone have seen the single currency pause near its daily highs for much of the afternoon and the EURUSD is currently trading close to a potentially major resistance level at 1.1860.

 ECB has published its account of the October 25-26 monetary policy meeting today, when the bank decided to extend in slower pace the QE programme until September 2018. The minutes revealed that some official worried that a setting a detailed data for the end of the QE programme may cause expectations for tightening in the euro area. There was little market reaction to this news however.

The focus of the afternoon session from a data point of view was on Canada with a smaller than expected increase in retail sales seeing the Canadian dollar dip lower. There has been a strong rise observed in retail sales data since early 2015 but the latest disappointment is threatening to end the uptrend.

The stand out performer in the crypto space today is Ethereum, with the market rallying by around 8% and moving back above the 400 level to trade within striking distance of its all-time high whihc was set back in June. Mike Novogratz, a hedge fund manager specialising in cryptocurrencies has a year-end target of 500.  

The day’s trade in indices has been fairly subdued with the US celebrating a bank holiday for thanksgiving. Tomorrow is Black Friday which begins a Christmas sales season which is crucial for the retailers and shows economic strength. Given that US indices are at all-time highs we inspect previous years to see if Black Friday has any meaningful impact.

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