US markets started off the week with a sluggish tone. General reports from Black Friday Weekend suggest that sales were okay overall with online retailers doing very well (especially Amazon (O:AMZN) who appears to have put up 25%+ growth) while traditional retailers seem to have struggled a bit and could find margins crimped by deep discounts. US data was mixed with Chicago PMI, which has been really volatile lately, taking another dive, while Dallas Fed was not as bad as feared.
Trading action has the potential to really pick up from here through the rest of the week. AUD AND NZD have been climbing ahead of today’s RBA meeting where the central bank is expected to stay neutral in both the decision and tone, with the RBI expected to do the same later in the day.
The Fed has been signalling for several weeks now that it is considering raising rates at its next meeting, ringing last call for any other banks who want to get in any more stimulus before the Fed starts to lead the monetary trend back the other way. So far it appears the ECB is the only central bank likely to go back to the bar this week for a final round from the stimulus punchbowl.
Based on recent trading, a neutral to hawkish RBA has likely already been priced in and anything dovish would be a surprise that could knock the dollar back. It will be interesting to see also if Governor Stevens mentions metal prices or takes any more swipes at the dollar.
A ton of manufacturing reports could give traders an idea of how economies around the world have been doing in November. China and Japan reports could attract particular attention from traders trying to figure out if their economies are bouncing back and if recent stock market gains are justified or not.
In addition to PMI, tomorrow morning brings employment reports for Germany and Italy but these may be too little too late to have an influence on the ECB decision. CAD could be active around Canada GDP, the last major economic report before Wednesday’s Bank of Canada meeting.
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