(CercleFinance.com) – This is probably a pivotal day for the Dollar which is breaking through new resistance (the ‘$-Index’ has recrossed the 107.00 mark), pushed upwards by the economic context (it’s getting better in the United States than in Europe) then geopolitical… the Dollar regaining its role as a safe haven asset since this weekend with the escalation of the Russian-Ukrainian conflict (which is unleashed on our soil).
After crossing the ‘red line’ consisting of firing missiles supplied (and guided) by NATO on Russian soil, Moscow targeted the Ukrainian town of Dnipro (it is 1,300 km from Berlin) with missiles hypersonic, not equipped with military or nuclear charges – a sort of ‘dry run’ test – which demonstrated the impossibility of intercepting these ‘munitions’.
But each protagonist in the Russo-Ukrainian war seems to want to stay at the stage of intimidation and technical demonstration… until something goes wrong?
The other ‘highlight’ of the day is the widening of the ‘spread’ between OATs and Bunds (+3Pts, from 75 to more than 78Pts base), which contributes to weakening the Euro (which tests its floors from early October 2023 against the $).
Because the Euro is losing ground against all currencies: -0.6% against the $ at 1.0475, -0.35% against the Swiss Franc, and -1.3% against the Yen, the big winner of the day’.
Without the strength of the Yen which regains 0.6% against the Dollar, the ‘$-Index’ could have progressed towards 107.2 or beyond.
The weakness of the Euro is explained by a business climate in France which darkened again in November, according to INSEE, whose synthetic indicator, calculated from the responses of business leaders, lost one point to settle at 96.
And the political climate is not much more favorable since the survival of the Barnier government in the face of a motion of censure is not guaranteed.
Across the Atlantic, there were many figures on the menu this Thursday in the United States with some good and some not so good.
On the robust figures side, there were sales of existing homes in the United States: they increased by 3.4% in October 2024 compared to the previous month, to settle at a seasonally adjusted annual rate of 3.96 million, according to the National Federation of Realtors (NAR).
The latter also highlights that sales increased by 2.9% compared to the same month of last year, the first increase from one year to the next in more than three years (+1.8% in July 2021).
The median sales price of existing homes increased 4% from October 2023 to $407,200 (record!), and the inventory of unsold existing homes stood at 1.37 million, representing 4.2 months of stocks at the flow rate.
The figures pointing to a slowdown, however, were the most numerous: manufacturing activity in the Philadelphia region contracted in November, according to the local Fed survey, the diffusion index of current general activity (Philly Fed ) having gone from +10.3 in October to -5.5 for the current month.
Nearly 18% of businesses reported an increase in general activity this month (up from 24% last month), while 23% reported a decline (up from 14%) and 58% reported no change.
The new orders and deliveries indices also fell but remained positive, losing five points to +8.9 and three points to +4.5 respectively, while the employment index returned to positive territory, at +8. ,6.
The index of leading indicators, supposed to foreshadow the evolution of economic activity in the United States, fell a little more markedly than expected in October (-0.4% to 99.5), announced Thursday the Conference Board, which sees in particular the effect of recent hurricanes.
The sluggishness of industrial orders was the main contributor to the drop in the indicator, specifies the ConfBoard, even if the drop in the number of hours worked in the manufacturing sector, the rise in unemployment registrations and the decline in building permits also weighed.
Beyond the temporary impact linked to the passage of recent hurricanes, the professional body believes that the indicator still indicates ‘future difficulties for economic activity’.
Finally, the Department of Labor announces having recorded a drop of -6,000 new registrations for unemployment benefits in the United States (to 213,000) at the end of the week of November 11.
The four-week moving average – more representative of the underlying trend – stood at 217,750, down 3750 compared to that of the previous week. and Conference Board leading indicators.
