ing_logoOur economists see modest risks for an upward revision to the US Q3 GDP (to 3%), but larger focus should be on the Nov consumer confidence as the reading will reflect the post US election environment.

Given President-elect Trump’s more conciliatory post-election tone, we may see some modest improvement in the confidence reading. However, given the market’s already high reflation hopes and the move higher in UST yields, today’s readings should not be enough to spark a strong USD rally. At best, it should help USD to consolidate.chart

The focus is in the German Nov CPI. While our economists are modestly below consensus, they don’t expect softer German CPI today to effect flash EZ CPI tomorrow (which should turn higher due to base effects) with EZ core inflation likely to increase as well. Modestly below consensus German CPI should thus be discounted by the market.

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While there should be a lack of a profound EUR/USD downside today, we nonetheless see modest downside risks to the cross over the remainder of week given the upcoming Italian constitutional referendum. The market caution around the event can be clearly seen in 1-week EUR/USD implied volatility, which spiked materially and exert non-negligible degree of volatility premia. EUR/USD to hover around the 1.0600 level

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