Confidence among American shoppers rose unexpectedly to its highest level since the recession in September, official data revealed on Tuesday. According to the Conference Board, the Consumer Confidence Index (CCI) jumped to 104.1 in September, whereas market analysts expect it to come in at 98.6 in the reported period. Meanwhile, the preceding month's reading was revised up to 101.8 from the originally reported 101.1 points. The survey is a closelyfollowed barometer of consumer attitudes towards business conditions, personal finances, jobs and short-term outlook. The data showed that 27.9% of respondents stated that jobs were plentiful in the ninth month of the year, following August's 26.8%. Furthermore, only 21.6% claimed that jobs were hard to find, compared to last month's 22.8%. The share of those expecting more jobs to be created in the upcoming months increased to 15.1% from last month's 14.4%, while the share of respondents expecting less jobs declined to 17.0% from August's 17.5%. The proportion of respondents expecting their incomes to worsen fell to 10.3% from 11.0% in the prior month. The US economy is mostly driven by consumer spending, which accounts for about 70% of all economic growth.
According to the official figures, industrial production across the 19-country Euro zone slipped by 1.1% in July, showing a development that could seriously weigh on the region's third-quarter growth. It is worth to point out that industrial production in the single currency region has been highly volatile for the last months, jumping in some and slumping in others. But overall, during the last 12 months it has declined, a key source of weakness for the UK economy that has struggled to create jobs and now are facing strong uncertainties after the UK's June vote to leave the European Union. In the meantime, the production of capital goods decreased by 1.7%, while energy production was 1.4% lower and durable consumer goods production lost 0.7%. The production of intermediate goods, in turn, was down 0.5% while production of non-durable consumer goods was unchanged.
Upcoming fundamentals: US Core Durable Goods orders.
High impact data is bound to shake the markets on Wednesday afternoon, when the US Core Durable Goods Orders, Yellen's and Draghi's speeches, as well as Crude Oil Inventory data comes out. Regarding the Durable goods announcement, -0.5 will be the figure defining a positive or negative surprise at 12:30 GMT, while the combination of Draghi's and Yellen's speeches which take place at 14:00 and 14:30 respectively, could cause the markets to behave unpredictably. Crude Oil Inventory data comes out at 14:30 GMT as well.
EUR/USD fails to retrace
Daily chart: EUR/USD confirmed its change of track, opening bearish for the second consecutive session. The dip is currently stalled by the 20-day SMA, with risk at 1.1201, the weekly Pivot Point. A cluster made up by the 55-day SMA and the monthly Pivot Point at 1.1185/90 could further reduce bearish momentum or cut the losses entirely for Wednesday. In case the pair accumulates some strength to reverse the gloomy themes, 1.1260 will be a level to watch, putting 1.1280/84 into perspective if broken. Aggregate technical indicators as well as the 20-day and 55-day SMA crossover both give out BUY signals, suggesting that the retracement towards the broken channel trend-line could still be in the picture.Market sentiment strongly bearish
The bearish sentiment has remained stable among SWFX traders, as 60% of open positions are short on Wednesday. Pending orders have not shown any change as well, showing that 37% of outstanding commands are long.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 in late December
Meanwhile, traders, who were asked about their longer-term views on EUR/USD between August 28 and September 28 expect, on average, the currency pair to trade around 1.12 by the end of December. Though 49% (+2%) of participants believe the exchange rate will be generally above 1.12 in ninety days, with 20% alone seeing it above 1.18. Alongside, 44% (-1%) of those surveyed reckon the price will trade below 1.10 in three months.