Friday, December 12, 2014

Oil prices fall further, impacting all financial markets

     •Oil prices fall further, impacting all financial  markets

–   Are lower oil prices good because consumers have more money, or bad because oil companies spend a lot and hire a lot of people?
    –Stocks up on good US retail sales, then fall on lower oil prices. VIX jumps again

•   Commodity currencies hit hardest

–   AUD falls after RBA Gov. Stevens says he now prefers 75¢, down from 85¢
–   USD/CAD hits new high for 2014
–   In EM, oil producers MXN, BRL, RUB and IDR lead the way down. Oil importers also weaken vs USD but nowhere near as much

•    Today:

–   Eurozone: Industrial production expected to have slowed in Oct
–   Sweden:  PES unemployment rate forecast to have declined; could boost SEK
–   US: Headline PPI expected to slow in Nov, core expected to hold steady = not big effect. Preliminary UoM consumer sentiment for Dec seen higher, may boost USD

–   Japan:  Lower House election on Sunday. Ruling LDP expected to win; question is whether it gets 2/3rds majority or needs to remain in coalition. Currently have 294 seats in 475-seat house; a gain in seats but less than 317, or 2/3rds, would be best result for stocks and therefore best for USD/JPY​

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