It was a week with massive volatility with unexpected fundamental developments. The US dollar index broke its own records making a high of 89.56 however failed to push towards much anticipated 90.000 level and closed the week at 88.30 level.

The week started with the Japanese data on Monday. Japan's current account surplus increased more than twice October, while the final GDP for Q3 contracted a slightly more than its initial estimates.

Oil and commodity block currencies were on stage as well, with the new US shale oil production projections. As per the projections of the top three US shale oils producers are to continue their production and increase to over 100K barrels per day by January 2015. OPEC decision being unchanged from the last OPEC meeting, with the continuous increase in US shale oil production, oversupply concerns have been increasing which puts Oil and Commodity block currencies under pressure.

On Tuesday, the UK's October industrial production was announced where the figure fell to 0.1% MoM, from its +0.7% MoM previously revised figure. The disappointing Industrial production figures raises uncertainty especially over the UK's overall growth path for Q4, keeping open doors for further weak data announcements which could result in rate cuts, leaving GBP vulnerable.

In China, Shanghai stock index fell by 5.4% biggest fall since 2009, meanwhile in Europe the Greek stocks fell by over 13% over the concerns on the Greek elections. However, it is worth mentioning that, the world is in a better situation now than few years ago. Hence the Greek concern does not any more create panic in the market. This is due to the fact that the ECB has set sustainable measures to the banking sector.

On Wednesday Chinese November PPI and CPI data were released. Both of the announcements were lower than expected, the PPI index further deflating and the CPI index rising lower than expected. These disappointing announcements indicate that more easing may be expected from China.

In Europe, Norway's October CPI rate dropped to +1.9% YoY in November from 2.0% YoY in line with the previous expectations.

During the US session the Crude-oil prices fell furthermore, losing more ground as US Energy Information Administration reported a surprise increase in U.S. supplies. With the announcement CAD lost ground against USD as well.  Furthermore, the Saudi Oil Minister was cut on commenting about production cuts where he rejected cutbacks.

On Thursday NZD was the most volatile G10 currency due to the RBNZ Press Conference. Governor Wheeler commented that "Risks to the growth outlook include dairy prices, which are expected to recover in 2015" and  "With output projected to grow at or above capacity, CPI inflation is expected to approach the 2 percent midpoint of the Reserve Bank's target range in the latter part of the forecast period." . With the optimistic statement, NZD soared against all of its counterparts.

In Australia the Employment change figures were announced better than expected however the Australia unemployment levels hitting its 12-year highs did not help Ausie much with the better than expected Employment figures.

Oil Rig by Solange Gagnebin

By Solange Gagnebin

In Switzerland the SNB left the rate target range at 0.0% to 0.25% and the EUR/CHF floor unchanged at 1.20 level.

Later on, the ECB announced the second TLTRO at EUR 129.8bn a little below the expectations; however the main surprise came from Norway where Norges Bank cut the interest rates to 1.25% from its previous 1.5% levels. The Norges rate cut came as unexpected as it was not expected as per the previous surveys. With the news USD/NOK moved by massive 1600 pips from 7.12 level to 7.29 levels.

In Russia though, with the falling Oil prices, the Central Bank of Russia announced its rate hike which was expected as the Russian economy struggles due to the Oil market turbulence and the western sanctions.  The Bank of Russia increased its key rate to 10.5 percent from 9.5 percent, which marked the fifth Russian interest rate hike in 2014.

In the US the November retail sales figure rose to 0.7% mom, from +0.5% MoM in October and the Initial jobless claims for the first week of December came at 294k, better than the 297k of the previous week

On Friday, the Chinese National Bureau of Statistics announced the Factory production rising 7.2 % year on year against 7.5% initial expectations, the data was the lowest figure of the last three months.

In Europe October Industrial production figures at a slower phase by +0.1% MoM from +0.5% in September, slower than +0.2% expectations

Meanwhile the US PPI rate also increased at a slower rate to +1.4% YoY in November against October's +1.5% YoY figure, in line with the expectations.

There are three highly important developments which investors are going to be watching carefully for the upcoming week:

1. The UK Bank Stress Test Results  to be announced on Tuesday the 16th of December where BOE Gov Carney is going to speak afterwards

2. The FOMC Statement and the FOMC Press Conference on Wednesday the 17th of December

3. BOJ Press Conference on Friday the 19th of December

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