“The breakthrough to a stability union has been achieved”
– Angela Merkel, German Chancellor
All European Union countries except Britain agreed to sign an intergovernmental treaty Friday aimed at stricter budget discipline in the single currency area.
“We’re seeing decent job growth and an improvement in household balance sheets”
– Samuel Coffin, an economist at UBS Securities LLC
U.S. consumer confidence rose to highest level in six months in December as consumers became more optimistic on the outlook of the country’s economy, according to the Thomson Reuters / University of Michigan research.
“The massive reduction in the UK’s trade deficit in October will certainly bring some Christmas cheer to the City and government”
– Kah Chye Tan, head of trade and working capital at Barclays Corporate
U.K. trade deficit narrowed by biggest amount in more than a decade to £7.6 billion in October from £10.2 billion in September, said the Office for National Statistics on Friday.
CHF
“The [EU] leaders have now defined the end point that they want to reach”
– Thomas Mayer, chief economist at Deutsche Bank AG
Swiss stock rose on Friday after 26 EU member countries agreed to sign a new treaty aimed at deeper fiscal union and to provide 200 billion euro to the International Monetary Fund.
JPY
“Every sector is working and growing somewhat, but not up to potential”
– Martin Schulz, a senior economist at Fujitsu Research Institute
Japan’s gross domestic product rose less than expected in the third quarter 2011, said the Cabinet Office on Friday.
“The ECB will have to gear up its purchases should market tension increase, there is simply no other option available“
– Standard Chartered Bank (based on Bloomberg)
While being capped by tough resistances at 1.3460/87 and 1.3600/15, EUR/USD is likely to show further weakness and slide down to 1.3220/18.
“The bailout funds, even with IMF involvement, are unlikely to be enough. Only the ECB has sufficient firepower to stabilise euro zone bond markets“
– AMP Capital (based on CNBC)
The currency pair is unlikely to overcome 106.00 resistance line in the nearest future, on the contrary it has a better chance declining after being unable to breach 104.92 level.
“UK’s key export markets struggle, with the euro zone staggering on without conclusive political action“
– Barclays Corporate (based on Reuters)
Recovery which commenced at 1.5415/06 may extend deeper, up to 1.5883/88, if the current bullish impetus is strong enough.
“The BOJ can provide as much money as it wants, but that won’t help end deflation“
– Mizuho Securities Research & Consulting (based on Reuters)
A cluster of supports at 77.12/16 is formed by 55 and 100 day moving averages and has already proved to be rather reliable.
“Central bank purchases are unlikely to replace conventional interest rate policy in normal times“
– BIS (based on Bloomberg)
USD/CHF currency couple should carry on hovering for now just below a strong resistance area located at 0.9341/99, while being supported by 0.9176.
EU summit may not calm investors for long
Last week’s EU summit went a long way towards forging the closer economic ties needed to prevent future debt crises but markets are likely to judge it as too little and too late to solve the current one.
Firing Fades Without Hiring in U.S. as Obama Pushes Payroll Tax Extension
Joblessness in the U.S. has declined far less than firings since the recession ended in 2009, creating a record divergence that shows companies lack the confidence to hire.
China May Add Stimulus as Exports Weaken
Chinese Premier Wen Jiabao and officials meeting to map out economic policies for 2012 may be encouraged to add more stimulus as a shrinking trade surplus shows Europe’s debt crisis hitting exports.