LIGHT RELEASE SCHEDULE ON MONDAY
Investors can expect a very light release schedule on Monday, giving them more time to assess the outcome of Japan’s election result. There’s actually nothing much to assess as Shinzo Abe won in an absolute landslide.
The European calendar sees its first release at 08:00 GMT when the Greek government reports on the current account balance for the month of August.
About two hours later, the Confederation of British Industry (CBI) will release its latest industrial trends survey for the month of October. The release is expected to show a reading of 13, which is a near doubling of last month’s 7.
In North America, the Chicago Federal Reserve Bank will release the National Activity Index at 12:30 GMT.
North of the border, the Canadian government will report on wholesale sales at 12:30.
A short while later, the European Commission will deliver its preliminary consumer confidence index for the month of October.
Prime Minister Shinzo Abe’s ruling coalition scored a big victory in Sunday’s election, boosting his chance of becoming Japan’s longest-serving premier. Abe’s Liberal Democratic-led coalition secured a combined 31.2% seats, maintaining its two-thirds “super majority” in the lower house.
Abe first took office in 2012 and pursued an aggressive growth policy predicated on fiscal stimulus, monetary easing and structural reforms. After struggling for many years under Abe, the Japanese economy appears to have turned a corner in 2017. Gross domestic product (GDP) has now expanded in six consecutive quarters, the longest streak of uninterrupted growth in over a decade.
The calendar heats up later this week with policy decisions from the Bank of Canada and European Central Bank, not to mention a slew of economic data.
The Japanese yen declined sharply on Monday following Abe’s victory, with the USD/JPY exchange rate touching a session high of 114.10. That’s the highest level in over three months. The pair was last up 0.2% at 113.74. Immediate resistance is located at the psychological 114.00 handle. A clean break above this level would expose 114.50 as the next target. On the opposite side of the ledger, immediate support is located at 113.10.
The EUR/USD edged lower on Monday, as the greenback strengthened against a basket of world currencies. The pair reached a session low of 1.1750 before rebounding back toward the 1.175 region. Current support levels include 1.1760 and 1.1720. On the flip side, immediate resistance is located at 1.1835, followed by 1.1865.
The Canadian dollar is coming off one of its worst sessions in recent memory after retail sales and inflation data missed the mark. The USD/CAD soared to its highest level since August. The pair was last seen trading at 1.2621, little changed from the previous close.