Confidence lower in France and US ahead of Thanksgiving break

• US consumers remain concerned over wages and jobs

• German coalition finally formed between CDU/CSU and SPD

• UK GDP due at 09.30, expected at 0.8%

Consumer confidence in the United States remains poor as we head into the Thanksgiving holidays, it was shown yesterday. Confidence fell in November to 70.4 from 72.4 in October as consumers remained fearful about jobs and earning prospects moving into 2014 with the expectations component falling to 69.3 vs. 80.9 this time last year.

The key passage from the release in our eyes is “when looking ahead six months, consumers expressed greater concern about future job and earning prospects”, with the internal indices that measure the ease of acquiring a job in the United States ticking slightly higher.

This is hardly the knock-out stuff of an argument to taper asset purchases to be honest, although we must wait for next week’s run of jobs data including Friday’s payrolls announcement. Given tomorrow is Thanksgiving in the United States, this week’s initial jobless claims numbers will be released today. The quick return to where jobs markets were pre-shutdown is an encouraging sign for the United States moving forward and we will see at 13.30 whether the 21k improvement last week has been improved upon. Most analysts expect a reversion to trend and an increase of 7,000 claims.

US durable goods are also due this afternoon and are expected to slip by 2%, given tightening of orders in civilian aircraft markets; without these volatile components we should see a rise of 0.5% on the month.

Before that we have the 2nd reading of UK GDP for Q3. Analysts are looking at a 1% decrease in exports following the recent increase in sterling and the flaring up of European issues once again; they rose by 3% in Q2’s number. Elsewhere, it is expected that consumer spending will once again make up the large majority of the 0.8% overall rise – so much for the rebalancing of the economy.

Another contributing factor will be business investment, a figure that Mark Carney laid into during his testimony to the Treasury Select Committee yesterday. The overall hearing was rather fractious with very little news from the Governor or other members of the MPC, with Carney starting to realise maybe why King patronised MPs so much as time went on.

Carney did take a swipe at the ONS for the reliability of its data, particularly that of business investment, saying that he was more comfortable with the data he was provided with back in Canada. GBP was relatively unaffected by the session with most of the chatter around the 7% unemployment threshold for rate rises and the relationship between jobs and productivity.

Euro has pushed higher overnight following a decision in Germany to finally form a new coalition government. The CDU/CSU has formed a “grand coalition” with the SPD and hopes now turn to dealing with any number of issues such as the banking union, the Greek debt relief programme or Germany’s own pernicious fiscal position.

The euro gains have been clipped a tad following an unexpected fall in consumer confidence in France. The index fell to 84 from 85 previously, eliminating the short term bump higher seen in October. The German version is due at 9am GMT.

Have a great day.

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