U.S. Data Under Spotlight in the Next Holiday-shortened Week

The greenback weakened while Wall Street finished the week on a positive note in a holiday-shortened session on Friday. The Dow Jones Industrial Average, which had experienced a marginal loss for much of the day, ended Friday 0.07% higher, contributing to a 0.5% advance for the week. The S&P 500 index added 0.13% on the day to send its weekly gain 0.2% higher. The Nasdaq Composite also recorded a 0.5% advance on a weekly basis after closing Friday 0.28% higher.

On the contrary, the U.S. dollar retreated against a basket of its peers, which caused the dollar index to fall 0.1% to 103.00 by late Friday. The index had soared to the strongest level since December 2002 at 103.62 on Tuesday.

U.S. market will remain closed on Monday, to make up for Christmas Day falling on a Sunday. Therefore, data of U.S. economic will not be published until Tuesday when the Conference Board reports data on December consumer confidence. Economists expect the figure to rise to 108.5 from 107.1 a month earlier. If confirmed the index would reach the strongest reading since July 2007.

On Wednesday, the National Association of Realtors is due to release data on November pending home sales which is forecast to show an increase of 0.5% last month, following a rise of 0.1% in October. Weekly report on initial jobless claims will be published by the Department of Labor on Thursday as usual. The number of individuals who filed for unemployment insurance for the first time last week is expected to rise by 2,000 to 277,000.

In the week ahead which is shortened due to Christmas holiday (stock markets in Australia, New Zealand, Europe, the U.K., Switzerland, Canada and the U.S. will all be close on Monday, while Australia, New Zealand, the U.K and Canada’s markets remain closed until Tuesday for Boxing Day), trading volumes are anticipated to be extremely light. As liquidity in the market will be reduced, volatility may be increased.

Besides the U.S., Japan will draw market’s attention with inflation data published by the Statistics Bureau on Tuesday. Prices of goods and services in the world’s third’s largest economy’s which has been struggling to hit its 2% consumer price target are expected to remain negative last month. If confirmed, it would be the 12th straight month of declines.

Crude prices ticked lower last week even after closing Friday higher. Oilfield services provider Baker Hughes late Friday reported that the number of rigs drilling for oil in the U.S. last week increased by 13 to 523. The rally extended to the eighth straight week, sending the headline figure to a level not seen in almost a year.

Market participants will keep a close eye on fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to assess the supply-demand balance in the world’s largest oil consumer. This week’s reports are due to be released one day later than usual.

Gold for February delivery on the New York Mercantile Exchange finished Friday at $1,133.60 a troy ounce, almost unchanged compared to the week’s open price.

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