ECB: Macro Since Last ECB - Growth: Better Than Low Expectations
Dec-17 18:25
- Eurozone real GDP growth was revised higher in the final Q3 release to 0.26% Q/Q non-annualized for further above the 0.0% the ECB forecast for Q3 at its September projection round.
- It continues a favourable set of Q3 GDP results after the initial advance originally surprised higher with a rounded 0.2% on the second day of the two-day ECB meeting in late October.
- Final domestic demand was robust as well at 0.44% Q/Q after an average 0.28% in 1H25 over two volatile quarters of -0.13% in Q2 and 0.69% in Q1.
- The ECB’s September forecast then pencilled in an acceleration to 0.2% Q/Q in Q4.
- For a better sense of trend, real GDP growth has eased a couple tenths to 1.4% Y/Y from the recent peak of 1.6% in 1H25 but it’s still proven surprisingly robust. Final domestic demand paints a similar picture, with 1.5% Y/Y in Q3 after a recent peak of 1.9% in Q2 at what was its highest since 3Q22.
- Quarterly GDP growth may have been resilient in Q3 then, and driven by domestic demand, but retail sales have slowed through Q3 and initially into Q4, with monthly volume flat on average in the four months to October (in a range of -0.1% to 0.1% M/M).
- Industrial production has also disappointed on balance in the latest two months of data with a slow to appear bounce in October after a heavy decline back in August in the latest in a long line of volatile readings. For a slightly longer trend, industrial production was flat in Q3 after a small contraction in Q2 although has at least started Q4 on a stronger note.
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US: FED Reverse Repo Operation: Excess Liquidity Measure Rises Slightly
Nov-17 18:21
RRP usage rises to $3.172B with 7 counterparties this afternoon from last Friday's $1.559B - lowest level since mid-March 2021. Compares to this years highest excess liquidity measure off $460.731B on June 30.
EURUSD TECHS: Monitoring Resistance
Nov-17 18:00
- RES 4: 1.1728 High Oct 17
- RES 3: 1.1694 50.0% retracement of the Sep 17 - Nov 5 bear leg
- RES 2: 1.1669 High Oct 28 and key resistance
- RES 1: 1.1656 High Nov 13
- PRICE: 1.1596 @ 16:06 GMT Nov 17
- SUP 1: 1.1530/1469 Low Nov 7 / 5 and the bear trigger
- SUP 2: 1.1425 1.500 proj of the Oct 17 - 22 - 28 price swing
- SUP 3: 1.1392 Low Aug 1 and bear trigger
- SUP 4: 1.1313 Low May 30
EURUSD is trading below last week’s high. Resistance to watch is 1.1669, the Oct 28 high. A break of this level would strengthen a short-term bull theme and highlight a stronger reversal. Note that moving average studies are in a bear-mode position. This highlights a dominant downtrend and suggests that gains since Nov 5 are corrective. A reversal lower would refocus attention on key support at 1.1469, the Nov 5 low.
OPTIONS: Some Exiting Of Upside Leaning, Though Overall Upside Bias Remains
Nov-17 17:52
Monday's Europe rates/bond options flow included:
- RXZ5 129.50/129/128.50/128p condor (+1/-1.7/+0.4/+0.3), sold at 16.5 in 10
- RXG6 129.50/131.00/131.50/134.50 broken c condor vs 127.50/126.50ps, bought the condor for 4.5 and 5 in 7.5k
- ERM6 98.25/98.43/98.50/98.68 call condor vs 97.87 put. Buys back puts/sells call condor, paying 1.75 and 2 in 10k. Recall this was bought for example for 1.5 (bought condor vs put) in 10k on Oct 22
- ERM6 97.8125/98.3125RR, bought the Call for 0.75 in 8k
- ERM6 98.12/98.37cs, bought for 4 in 5k
- 0RH6 98.00^ bought in 4k vs 0RH6 96.68/98.18^^ sold in 6k Paid 13.25 and 13.5
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