Yesterday due to holidays in France, Canada and the US, the market volatility was low. The euro was growing in terms of technical correction and followed the stock market indices; the British pound dropped, probably, waiting for data on inflation, which is published today at 13:30 UTC+4 and the inflation is expected to drop.
PPI Input in the UK in October is expected to be -0.3% vs. -1.2% in September. PPI Output is forecast to be 0.0% vs. -0.1% in the previous month. Consumer Price Index (y/y) is estimated to be 2.0% vs. 2.2%. Retail price Index (y/y) is forecast to be 3.0% vs. 3.2%. Finally, House price Index (y/y) is expected to grow 4.1% vs. 3.8%.
If data is in line with forecasts we expect further decline of the price to the nearest lines 1.5955, 1.5900, and 1.5880. If the inflation firms up, then the bullish targets are the levels of 1.6005 and 1.6065.
In the Eurozone data on CPI in Germany in October is published; the figures are expected to be the same as previous readings, -0.2%. In the US Small Business Optimism Index in October is published (93.5 vs. 83.9).
Before publications of relevant information on Wednesday (Industrial production in the Eurozone and Bank of England Inflation report) and on Thursday data on Eurozone GDP is issued, the movement may be speculative and the pair may swing in either side. The major local scenario for the euro is the growth to the area 1.3445/60.
USD/CHF.
Due to the uncertainty on the euro market, the investors may switch their attention to the Swiss Franck which is simpler to buy against the US dollar, i.e. to sell USD/CHF. The nearest bearish target is the high of October 9-11, 0.9130.
AUD/USD.
On Monday, the Australian dollar dropped 27 points, as the result of strong Nonfarm Payrolls published on Friday, i.e. the Aussie reacted “correctly” on the improvement of the labour situation in the US and the drop of the price of non-ferrous metals index, from 260.1 to 256.4 9from November 6). Oil is growing moderately, only in terms of technical correction (+1.5% for the week). The oil growth is restrained by the lack of progress during the talks between Iran and six powers.
Today NAB Business Confidence in Australia was revealed, the figure was 5 against 12 in September.
We expect the continuation of the decline to the levels of 0.9280, 0.9220.
