US Jobless Claims, Turkish Lira Turmoil

Rising Inflation Continues To Be Monitored

Yesterday, countries like UK and Canada delivered their inflation figures for the month of October. In the UK, the core and headline MoM figures rose from +0.4% to +0.7% and from +0.3% to 1.1% respectively. The YoY core reading went from +2.9% to +3.4% and the headline YoY one jumped from +3.1% to +4.2%. The latter one has not been at that level since December 2011. The increase came from a rise in utilities, mainly fuel like gas and electricity.

US Initial And Continuous Claims

Today, the economic calendar seems to be a bit on the light side, as a few of the only worthwhile news on the economic calendar are the US initial and continuing jobless claims and the Turkish one-week repo rate announcement. The initial ones are expected to fall, going from 267k to 260k. The market hopes for that to happen, as the previous one came out as a slight disappointment. Although last week the number came out lower than the previous, it was higher than the initial forecast suggested. Similar story is with the continuous claims, as they are expected to come out on the lower side than the previous or the forecasted numbers. If we look at last week’s figure, the number was also expected to come out lower, at 2095k, but showed up at 2160k. We do not expect both initial and continuous claim figures to be far from their forecasts, but it will be interesting to see if the actual numbers show up higher. If so, this could put a negative spin on the US dollar, but indices may still rise, as it could mean that this might be another reason for the Fed to hold off from raising rates.

USD/CHF — Technical Outlook

Despite the recent decline, USD/CHF continues to trade above a short-term tentative upside support line taken from the low of November 9th. That said, in order to get a bit more comfortable with further advances, we would first like to see a clear pop above the current highest point of November, at 0.9330.

Turkish Lira In Turmoil

Another event that might not be on everyone’s agenda today but is definitely worthwhile to be mentioned, that’s the current currency crisis in Turkey, where inflation continues rise, due to an exponential devaluation of the Turkish lira. This is mainly caused by the unconventional economic policy approach of Turkey’s President, as he continues to pressure the country’s Central Bank to lower the interest rate. After a surprising 200 bps cut in Turkey’s one-week repo rate back in October, it is expected that another one may follow today. If so, the Turkish lira could continue depreciating against all of its major counterparts.

EUR/TRY — Technical Outlook

EUR/Try continues to run higher, while trading high above a short-term upside support line taken from the low of October 7th. Although we are seeing some occasional retracements, it seems that the pair might stay under some buying interest, at least for now.

As For The Rest Of Today’s Events

The US Philadelphia Fed will release its manufacturing index for November. The current expectation is for a rise from the previous 23.8 to 24.0.



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