Thin volumes and lower liquidity before holidays

As to be expected, markets today fell victim to holiday-induced thin volumes and lower liquidity as participants begin to wind down for the festive break. As such, a bulk of the price action was dictated by rafts of profit-taking from recent moves with this most pronounced in EUR/GBP as the cross pulled back from yesterday’s notable gains before finding support at 0.7320. This led to a broad recovery in GBP with the currency shrugging off lacklustre data in the form of UK Q3 GDP revisions which fell short of expectations.

Other notable data points included US durables, personal income, PCE and Canadian GDP and retail sales at 1330GMT. All of which failed to garner too much price action with the above expected headline durables reading unable to provide markets with any further traction as participants took their feet off the accelerator heading into the year-end. Thereafter, markets were provided the US new home sales and Univ. of Michigan reports for November and December respectively but once again prices were unfazed by the release. To round off the data highlights for the session, the DoE inventory release saw an unexpected and significant drawdown which led to some upside in WTI crude futures and subsequently granted some reprieve to commodity related currencies but moves were relatively modest in size.