In the week ended Nov 25, the USD/CHF showed incline for the forth week as the tensions stemming from the euro area enhanced demand on the dollar as a refuge.
The rise in Italian and Spanish short-term bond yields to record high as well as German bund yields triggered concerns the debt contagion is spreading among the euro region’s largest economies amid indecision between European leaders and rejection of German Angel Merkel to issuing euro-area joint debt and the idea that the ECB should play a key role in solving debt crisis.
On the other hand, UBS put the franc under pressure after it said “the Swiss economy slowed significantly in the second half of the year as the strong franc squeezed exporters’ profit margins,” while it predicts growth to slow further to 1% in the fourth quarter.
These reports will more likely put pressure on the SNB to intervene to curb the franc’s appreciation amid the high demand on the dollar as a favorite safe haven due to the turbulences in European markets which may increase forecasts of seeing further rise in the pair.
This week the main focus will be the infamous jobs report in the United States as well as housing, manufacturing and confidence data. On the flip side, the Swiss economy will release important data such as 3q GDP, retail sales and PMI manufacturing.
The release of the data this week will be as follows:
Monday Nov. 28:
While the Swiss economy lacks fundamentals, the U.S. will release new home sales for Oct. at 15:00 GMT with expectations referring to a drop to 310,000 from 313,000 a month earlier.
Tuesday Nov. 29:
As of 07:00 GMT, the Swiss economy will release UBS consumption Indicator for the month of Oct., yet the release is expected to have slight impact on the pair’s movements.
In the U.S., the main focus will be housing data starting with S&P/caseShiller, due at 14:00 GMT, followed by new home sales due at 14:00 GMT. At 15:00 GMT, consumer confidence is expected to soar to 44.4 in Nov. from 39.8.
Wednesday Nov. 30:
KoF Swiss leading indicator which is estimated to retreat to 0.70 in Nov. from the preceding 0.80 will be available at 10:30 GMT.
Thereafter, eyes will be on MBA mortgage applications for Nov. 25 at 12:00 GMT followed by ADP employment change at 13:15 GMT, where it is expected to increase to 130,000 in Nov. from the previous 110,000, then at 15:00 GMT pending homes sales for Oct. will be available. Finally, at 19:00 GMT, Fed’s Beige book will be out.
Thursday Dec. 1:
Eyes will be Swiss GDP for the third quarter at 06:45 GMT; the quarterly reading is predicted to show an ease in growth to 0.2% from 0.4% in the second quarter. Thereafter, PMI manufacturing for Nov., due as of 08:30 GMT, is expected to show further contraction to 46.5 from the previous 46.9 recorded in Oct.
The U.S. economy will release initial jobless claims for the week ending Nov. 26 and continuing claims for the week ending Nov. 18 will be available at 13:30 GMT. At 15:00 GMT, ISM manufacturing for Nov. is expected to show a widening expansion to 51.5 compared with Oct. reading of 50.8, noting that a reading above 50 means expansion and vice versa.
Friday Dec. 2:
The week ends with the release of the awaited non-farm payrolls report from theUnited States, due at 13:30 GMT. Expectations refer that change in non farm payrolls will reach 120,000 in Nov. from the previous 80,000 while unemployment will linger at 9.0%.
However, before the release of the NFP report, the Swiss economy will release retail sales (real) for the year ending Oct. at 08:15 GMT.
Originally posted here
