Market Insight: 14 November 2023

Samer Hasn Market Analyst and part of the Research Team at XS.com gives his market analysis report:

"Euro rose to its highest levels since Monday of last week against the US dollar, reaching the level of 1.07305 at approximately 10:25 a.m. GMT. While the euro is trying to reduce its losses extended since the end of last week against the British pound today, by reaching the level of 0.87262, which is the highest since the beginning of this week’s session. Against the Japanese yen, the euro recorded more record levels that we have not seen since 2008, at the level of 162.758.

"While the euro's gains today came with more positive data that indicated more confidence from institutional investors in the euro zone economy. The German ZEW Economic Sentiment Index for the current month recorded its first positive reading since last April, at 9.8 points, which is higher than expectations of 5 points and significantly higher than the previous reading of -1.1 points.

"As for the entire euro zone, the ZEW Economic Sentiment Index also recorded a reading of 13.8 points for the month of November, which is also the highest since last February, and it is a positive reading for the second month in a row after five consecutive months of lack of confidence.

"This confidence comes despite the timid growth figures for the Eurozone economy. Today we also witnessed the preliminary figures for the gross domestic product (GDP) for the third quarter. While the region's economy contracted by 0.1% during the third quarter compared to the second quarter of this year, also in the same period, the GDP recorded a slight growth of 0.1% compared to the same period last year. These two readings were in line with analysts' consensus expectation.

"In the labour market as well, the region's economy was able to add about 500,000 jobs during the third quarter, which represents a growth of 1.4% during the third quarter compared to the same period last year, according to preliminary data.

"While it seems that these data today have enabled the euro to resist the pressures it was exposed to from the pound sterling, with more British economic data indicating the possibility of inflation remaining high for a longer period than expected, and this time with labour market data."

The U.K. Average Earnings Index +Bonus, exceeded analysts’ average expectations again in the latest reading for the three months ending last September. Wages witnessed a remarkable growth of 7.9% during that period compared to the same period last year, which was higher than the expected 7.4% but lower than the previous revised reading of 8.2%.

In addition, the labor market continued to return some positive signs. About 54K jobs were added during the three months ending last September compared to the same period last year, which is largely far from expectations of losing about 200K jo