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Article / 27 November 2014 at 13:01 GMT

FX Noon: Opec looming large as markets seek direction

Director / Accumen Management
United Kingdom
  • Thanksgiving slows down market activity
  • Encouraging employment figures for Germany
  • Opec conference outcome eagerly anticipated
By Ken Veksler

As was widely expected, today is turning out to be a very quiet market day indeed.
 
With the US off for Thanksgiving and little by way of data out, the market remains thin and rather uninterested.

The standout event was due to be European Central Bank president Mario Draghi speaking in front of the Finnish parliament. However, the text for his speech was released well ahead of the event itself and the Q&A session that followed was a muted affair. 

Despite his apparent break of both rank and silence during the enforced “quiet” period ahead of next week's ECB meeting (by uttering further nonsense regarding the potential for sovereign quatitative easing), the market didn’t pay too much attention and the move lower in EURUSD was only good for around 30 points, half of which has already been given back.
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Germany's unemployment rate touched a record low of 6.6% in November, stressing the gap in labour market conditions between Germany and its Eurozone partners. Photo: Getty
 
Elsewhere, German inflation and unemployment data have been seen, with the latter showing marked improvement and a significant decrease in the numbers of unemployed. The inflation data admittedly hasn’t left anyone particularly elated, but still, at least Germany is ticking along.

The biggest news on the day still awaits us as far as the Opec press conference this afternoon, after the all-day meeting currently being held in Vienna. The market is looking for a binary outcome;  it either announces production cuts or it doesn't. My money is on no change to production and potential for further downside in oil and weakness consequently in the CAD.

The bottom line is, if Opec were not in a rush to do anything until now, I can’t envisage anything prompting it to take action today.

Keep an eye on gold and CAD in the aftermath of the 3pm (London) press conference as they’re going to be the biggest likely movers.

I maintain the short CADCHF position but must admit will be looking for an exit closer into the weekend and the Swiss referendum.

It will remain quiet today, folks and there really isn’t too much to be made of levels in crosses today.

The AUDUSD has potential to run higher once again after initial consolidation of last night’s move, but I wouldn’t expect to see it too much higher than 0.8610/00.

The EURUSD, otherwise, will probably hover around the 1.2500 level simply waiting for someone to push it around but in the absence of market participants.

As such, helmets on and good luck out there today.


-- Edited by Kevin McIndoe

Ken Veksler is director of Accumen Management.

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