United States: A feast of economic data ahead of Thanksgiving

Wells Fargo Research Team Wells Fargo

Summary

United States: A feast of economic data ahead of Thanksgiving

The cornucopia of economic indicators stuffed into the first half of the week showed that economic growth is slowing. The Leading Economic Index fell for the 19th consecutive month in October, while durable goods orders and existing home sales both declined more than expected. That said, a drop in initial jobless claims is a sign that the labor market is still holding up. According to the University of Michigan, consumer sentiment improved in November, although inflation expectations ticked up again—an indication that price pressures have not yet been fully extinguished.
Next week: New Home Sales (Mon.), Personal Income & Spending (Thu.), ISM Manufacturing (Fri.)

International: Argentina shifts away from peronism

This week, the presidential candidate representing traditional Peronism in Argentina's election lost in a relative landslide to Javier Milei, the Libertarian candidate looking to implement absolute change in Argentina.
Next week: Bank of Israel (Mon.), Eurozone CPI (Thu.), India GDP (Thu.)

Interest rate watch: FOMC proceeding carefully on policy

The minutes from the Fed's November meeting emphasized that policymakers are proceeding carefully in terms of setting policy. The FOMC is in the fine-tuning stage of its tightening cycle and will adjust policy as needed to guide inflation back to target. We still forecast the FOMC is done hiking rates, though it will be some time before it begins to outright ease policy.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.