US stocks are rallying on COVID relief bill optimism and hopes that a post-Brexit trade deal will be reached by Sunday. Wall Street is completely focused on stimulus talks and ignored deteriorating US economic data, except for the robust housing market.
US data mixed
US weekly jobless claims continue to head in the wrong direction. The labor market outlook is bleak as the winter wave of the virus is going to lead to more shutdowns. Jobless claims climbed by 23,000 to 885,000, a three-month high, much worse than the consensus estimate of 815,000. Continuing claims remain elevated but improved from 5.75 million to 5.50 million, but that might be mainly due to the expiring of benefits. The total number of Americans participating in any of the unemployment insurance programs rose 1.6 million to 20.6 million.
The Philly Fed index plummeted from 26.3 to 11.1, the lowest level since May, with all the components showing significant declines. The current indicators are positive but the loss of momentum in the region is worrisome.
The housing market remains robust after the November reading for housing starts and building permits rose more than expected. Low-interest rates and a mass exodus from large cities continue to drive demand for the construction of new homes.
BOE remains on the sidelines
The BOE kept interest rates steady, maintained their total asset purchases at 895 billion pounds, and extended the loan program for businesses by six months. The BOE remains ready to act depending on how Brexit goes and how long the country remains on lockdown. The British pound was unfazed following the BOE rate decision that delivered no surprises.
SNB holds course on monetary policy
The SNB kept rates on hold and reiterated their willingness to intervene in the FX market. The last rate decision of the year took a backseat to the US decision to add Switzerland to a watchlist for currency manipulation. The franc is highly valued and inflation is nowhere to be found, which should mean the SNB is not changing its approach to monetary policy.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
Latest posts by Ed Moya (see all)
- Market Insights Podcast – Powell struggles to deliver a hawkish hold - 1 November 2023
- Fed React: USD/JPY softer after Fed fails to deliver hawkish hold - 1 November 2023
- EUR/USD: Dollar wavers on slower pace of Treasury Refunding Sales and mixed labor data - 1 November 2023