What will the regional stories say this month
The Fed will release the so called "Beige Book" at 2 PM ET. The last time the Fed released the Beige book was back on October 19th and these are the headlines from that report:
- Economy continued to expand
- Modest employment and wage growth
- Fed districts noted modest or moderate pace of expansion
- Home price appreciation continued at modest pace
- Uptick in retail spending in most districts
- Demand for consumer and business loans increased
- Commercial real estate activity and construction improved
- Credit quality remained strong or improved
- Election source of economic uncertainty
- Manufacturing a mixed with strong dollar slowing exports
- Wage growth was modest
- Prices rose slightly on net
Now the election is no longer an uncertainty and the market has certainly weathered the storm with the S&P, Dow and Nasdaq all reaching new record highs. Will this report reflect the increased optimism? You can argue that a lot of the fear is gone and that should lead to a more favorable text. Of course with the expectations that the Fed will tighten in December, it also argues for positive headlines from the report. The final question, is does the market really care? Although the dollar can still go higher, a lot is already baked in the cake.
Technical levels to eye:
EURUSD: The 1.0564 was the double bottom from Monday and Tuesday. On the topside the 100 and 200 hour MA come in at 1.0605
USDJPY: The 114.44-54 was the highs from March 2016. The high today stalled 114.53. That is the key level above. ON the downside, a break of 113.95 to 114.09 could see a continued corrective move toward the 113.65 area.
GBPUSD: The GBPUSD is a mess of up and down(see hourly chart below). For it, I would look for a move above the 1.2501-13 on the topside and on the downside a move below 1.2436 (200 hour MA).
