Fundamental Headlines
• Global Food Prices Hit Record High – Wall Street Journal
• U.S. Jobs Help Asia Sentiment – Wall Street Journal
• Jobs Growth Bolsters Recovery Confidence – Financial Times
• German Factory Orders Surged in November on Export Demand – Bloomberg
• U.K.’s Osborne Calls on EU to Bolster Banks to Aid Recovery – Bloomberg
EURUSD: Euro-Zone economic confidence in December rose to 106.2 from a revised 105.1 the month prior, marking a 38-month high while industrial confidence inched high to post the highest reading since August 2007. Meanwhile, consumer confidence slipped from -9.4 to -11, falling for the first time in approximately 7 months. In all, confidence in the 17 member euro area gained on the back of business sentiment; however, the region has not achieved a self sustaining growth. Thus, euro bulls should caution the upcoming weeks as tough austerity measures remain in the spotlight and are expected to weigh on growth. Not to overlook, Euro-Zone retail sales were also released during the European trade. Figures unexpectedly dropped 0.8 percent, while the annualized rate slowed to 0.1 percent. The reading does not bode well in that thereafter the impact of the Christmas holiday, retail sales will likely push lower in light of higher value added tax measures and other forms of tightening by governments in the bloc. All in all, increased headwinds remain for the single currency. Taking a look at the currency markets, the EURUSD has extended yesterday’s losses and now looks poised to head lower as technical developments point to additional losses in the pair. The parabolic flipped to the downside, calling for additional losses, while our user defined slow stochastic indicator reversed course earlier this week.
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