The Week in Finance: Key Highlights
United States Employment Data and NFP Release
- US employment-related data in focus before NFP release.
Inflation Data in the Eurozone
- Positive inflation data in Eurozone amidst concerning outlook.
EUR/USD Movement
- EUR/USD sees recovery towards 1.0600 but faces selling pressure.
The EUR/USD pair saw a rebound after a three-week decline, reaching 1.0600 before encountering selling interest. The US Dollar weakened at the start of the week after hitting new highs against the Euro, with EUR/USD hitting a low of 1.0332 on November 22.
Trump, Tariffs, and Inflation
The week began with news of President-elect Donald Trump appointing Scott Bessent as the next Treasury Secretary. Bessent’s stance on tariffs provided relief, but concerns arose mid-week as Trump threatened tariffs on Mexican, Canadian, and Chinese goods. These tariffs could impact inflation at a time when the Fed is transitioning from a tightening to an easing monetary policy cycle.
Positive developments included a temporary cease-fire agreement between Israel and Hezbollah, but concerns over rearmament lingered.
European Central Bank’s Growth Concerns
ECB’s Isabel Schnabel’s hawkish stance supported the Euro in the short term. Schnabel highlighted risks from US tariffs under the new administration and urged caution in interest rate cuts. The ECB’s Financial Stability Review warned of a potential debt crisis in the Eurozone without growth and policy improvements.
Encouraging inflation data in Germany and the Eurozone provided some relief, although consumer confidence deteriorated in the EU.
US Economic Indicators
US GDP for Q3 remained at 2.8%, while jobless claims improved. Durable goods orders and PCE Price Index data showed mixed results. Financial markets were quiet on Thursday due to the Thanksgiving holiday.
Upcoming Economic Data
Key figures to watch in the upcoming week include US ISM Manufacturing PMI, ADP Employment Change, and Nonfarm Payrolls. Eurozone will release Retail Sales data, while the US will publish the Michigan Consumer Sentiment Index.
US Employment Outlook
Attention will be on US employment figures, crucial for managing inflation and addressing weaknesses in the labor market.
EUR/USD Technical Analysis
The EUR/USD pair remains around 1.0550, with technical indicators suggesting a cautious outlook. A break below 1.0500 could lead to further downside, while a move above 1.0610 might signal an upward trend.