Recap 2014-12-03

Commentary:

2015 Trade Ideas is in a separate update.

Notable:

  • BoC kept policy unchanged as exp:
  1. Inflation has risen by more than expected. The increase in inflation over the past year is largely due to the temporary effects of a lower Canadian dollar and some sector-specific factors, notably telecommunications and meat prices.
  2. The net effect of these recent developments, together with upward revisions to historical data, is that the output gap appears to be smaller than the Bank had projected in the October Monetary Policy Report (MPR). However, the labour market continues to indicate significant slack in the economy.
  3. Overall, the balance of risks remains within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent.

US ADP declined to 208k vs 222k exp and 230k prev

Services PMI :

  1. US Services PMI was stable at 56.2 vs 56.5 exp and 56.3
  2. ISM Non-Mfg improved to 59.3 vs 57.5 vs 57.1
  3. EU Services PMI was revised down to 51.1 vs 51.3 exp and prev
  4. Italy Services PMI improved to 51.8 vs 50.2 exp and 50.8 prev
  5. UK Services PMI declined to 58.6 vs 55 exp and 56.2 prev
  6. AU Services PMI was stable at 43.8. vs 43.6 prev
  7. China Services PMI was stable at 53.9 vs 53.8 prev. The HSBC measure was also stable at 53.0 vs 52.9 prev
  8. Japan Services PMI improved to 50.6 vs 48.7 prev

Australia GDP declined to 0.3% QoQ vs 0.7% exp and 0.5% prev

Russia cancelled the $50bn South Stream project, the pipeline across the Black Sea into Europe. Bulgaria, Serbia and Hungary said they had received no advance warning it was to be scrapped and all of them have substantial financial and political capital invested. h/t Jordan

US crude output – the number of new well permits issued across the US plunged ~37% M/M in Nov in response to sinking crude prices. For the first time this year new permits showed steep declines across the top three onshore fields. Reuters

Upcoming:

  • Wed : Australia Retail Sales, Trade Balance
  • Thu : BoE, ECB, US Jobless Claims,
  • Fri : EU 3Q GDP, US Employment, Canada Employment,
  • Mon: Japan Current Account, China Trade Balance, Japan Eco Watchers Survey, Canada Housing Starts, Australia NAB Business Confidence
  • Tue: US NFIB, Australia Home Loans, China CPI
  • Wed: RBNZ, Japan Machine Orders, UK RICS House Price Balance, AU Employment
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