US Open – Weak US data, Lagarde’s ECB debut, Turkey’s Big Rate Cut, Oil, Gold rises

US stocks are slightly softer after softer PPI and jobless claims data suggest some weakness is creeping into the US economy, shrugging off yesterday’s  Fed meeting that signaled rates are on hold for the foreseeable future.  Powell’s presser had a dovish tone and the dollar could remain vulnerable if we start to see any momentum come out of Europe.  The Fed will remain accommodative as the balance sheet will continue to grow as the Fed remains committed to their liquidity operations that have been keeping short-term rates stable. 

Weekly US jobless claims shot up 49,000 to 252,000, the biggest rise since September 2017.  This is the first sign of weakness with the labor market, but one poor reading will not change anyone’s outlook. The final November PPI readings also were sharply revised lower.

The focus shifts back to trade and a key meeting between President Trump and his top trade advisors.  Markets are heavily pricing in a punt on with December 15th tariff threat deadline, but they want some certainty that we will see a phase-one trade deal. 


The ECB monetary policy decision went as expected with no change in rates, also sticking to the strategy to keep buying bonds until just before rates are hiked.  She saved the announcement of a strategy review for her presser.

Christine Lagarde made her ECB debut and came off slightly hawkish.  The euro rose after she announced there are some signs of economic stabilization and that risks are somewhat less pronounced.  The ECB forecasts showed euro-area inflation forecasts were slightly upgraded for 2020 and 2021.  The euro pared some of its earlier gains after the announcement of the strategic review.

Lagarde seems poised to help take the eurozone out of negative rates, with her first move possibly changing her risk assessment in the near future.  She refrained from playing hardball in targeting specific governments need to deliver fiscal stimulus.  The heavily anticipated strategic review was announced to kick-off in January and to last throughout 2020. 


The Turkish Central Bank (CBRT) delivered another larger than expected cut, bring rate cuts for the second half of the year to 1200 bps and that is against expectations of 1000 bps of total consensus estimates.  Turkey’s one-week repo rate now stands at 12.00%, which is half of where it was back in June. 

After initially weakening, the lira maintained most of its earlier gains to both the euro and dollar.  Markets have come to expect deeper cuts as the new CBRT governor Murat Uysal continues to unwind the hikes in 2018 that were fighting inflation and a currency crisis. 


Oil prices initially rose after EIA monthly oil report both confirmed their expectations for global demand to accelerate in 2020 and cut their 2020 forecast for non-OPEC supply by 200k barrels to 2.1 million barrels per day.  US production is not expected to continue its recent pace of rising production. 

The report was overall mixed as the EIA also reminded energy traders that the fresh round OPEC + production cuts will not be able to avoid a 700K barrel surplus in Q1. 

Other notable oil news included Norway’s Petroleum Directorate (NPD) average November production surged to 1.711 million barrels per day, over 13% higher than their forecast.  Norway’s oil lobby also raised their investment forecast for 2020.  Oil prices will start to feel the impact of stronger production from Norway in 2020 and that will likely help overcome any declines in production we may see from the US.


Gold prices rose after weak PPI data and rising US jobless claims suggested some weakness is coming into the US economy.  Gold also saw support from ECB’s Lagarde’s debut as she highlighted the direction of inflation is good, but not at the objective  Gold will get support from the central banks as it  got a dovish tone from Powell, and Lagarde wants to be hawkish, but she can’t just yet. 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya