ECB/Fed policy divergence pushes EUR/USD down to new 2014 low

•     ECB/Fed policy divergence pushes EUR/USD down to new 2014 low

–    ECB officials concerned over negative inflation, while Fed officials see rise in rates as likely even if inflation doesn’t meet their 2% target

–    EUR/USD hits 2014 low – policy divergence to continue, EUR/USD may fall further

•     Oil soars as Saudis say prices to rise as growth boosts demand

–    Pretty simple statement ignores the fact that growth forecasts are being revised down

–    More likely, market participants just think price fell too far too fast, covering shorts

–    Market likely to be more volatile as traders search for equilibrium price

–    Rebound in oil could boost commodity currencies today

•     Canada core CPI slows, retail sales show impact of lower oil price

–    No reason for Bank of Canada to hike rates any time soon

–    But failure of USD/CAD to rally raises possibility of corrective wave

•     Today:

–    Eurozone: Preliminary consumer confidence for December

–    US: Existing home sales for November

•     This week:

–    Tuesday:  final Q3 GDP figures from several countries

–    Wednesday:  US initial jobless claims released a day early

–    Friday:  Japan CPI as part of usual end-of-month data dump