Analysis

2018-12-10
04:19 pmKey releases
02:42 pmGBP/USDGBP/USD: the pound stays in the downtrend
02:17 pmBrentBrent Crude Oil: general review
02:15 pmUSD/CADHousing Starts. Canada, 15:15 (GMT+2)
01:54 pmEUR/USDEUR/USD: general review
11:32 amGoldXAU/USD: technical analysis
10:30 amGBP/USDTrade Balance. United Kingdom, 11:30 (GMT+2)
10:30 amGBP/USDIndustrial Production. United Kingdom, 11:30 (GMT+2)
10:30 amGBP/USDGDP. United Kingdom, 11:30 (GMT+2)
10:29 amNZD/USDNZD/USD: the instrument shows ambiguous dynamics
09:50 amUSD/JPYUSD/JPY: the dollar is dropping
09:33 amUSD/CHFUSD/CHF: wave analysis
09:31 amAUD/USDAUD/USD: wave analysis
09:23 amUSD/CADUSD/CAD: USD remains under pressure
09:02 amMorning Market Review
08:37 amSPXSPX: general review
08:00 amEUR/USDTrade Balance. Germany, 09:00 (GMT+2)
07:45 amUSD/CHFUnemployment Rate s. a. Switzerland, 08:45 (GMT+2)
07:05 amEUR/JPYEUR/JPY: Ichimoku clouds
01:30 amAUD/USDHome Loans. Australia, 02:30 (GMT+2)

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11-12-2018 04:19 pm
Key releases

USA

The US currency today had a mixed trend against the euro and the Japanese yen and was strengthening against the pound.

In the first half of the day, Friday comments by the head of the Federal Reserve Bank of St. Louis, James Bullard, continued to pressurize the US dollar. He said that the Fed may refuse to raise interest rates at the December meeting due to the inverted yield curve. Such a curve occurs when the yield on 2-year Treasury bonds exceeds the yield on 5-year Treasury bonds, and may indicate a near economic recession. According to Bullard, the increase can be postponed until January 2019. Note that earlier hints of a slower increase of interest rates have already been made, but it was believed that this could happen only next year.

Also investors are following trade relations between United States and China. Contrary to the concerns of the market, there were no hard reaction to the arrest of Huawei’s chief financial officer Meng Wanzhou, although the US ambassador was summoned to the Chinese Foreign Ministry, and the official media of China criticized the actions of Canadian authorities. However, both sides continued to negotiate. In addition, US Trade Representative Robert Lighthizer, citing President Donald Trump, said that the agreement with Beijing should be concluded before March 1, otherwise a new increase in US export duties is likely.

Eurozone

The European currency is strengthening today against the pound and the yen, and has mixed dynamics in the pair with the US dollar.

The data on Germany’s foreign trade published today supported the European currency. The volume of German exports, after a decline in October, rose by 0.7%, while imports rose by 1.3%. The overall trade balance exceeded market expectations and amounted to 17.3 billion euros. In general, investors are preparing for tomorrow’s vote on a deal with the EU in the British Parliament. The probability of rejection of the contract remains very significant. Under these conditions, there is a possibility that Teresa May will use the right confirmed by the EU Supreme Court and will withdraw the statement of withdrawal in order to avoid harsh Brexit.

On Tuesday the index of economic sentiment from ZEW is going to be published. Probably, in December, the indicator will continue to decline to -23.2 points. The implementation of the forecast may put pressure on the euro.

Great Britain

The British currency today is weakening towards its main competitors – the euro, the yen and the US dollar.

The currency is still under pressure due to the situation around Brexit. Tomorrow night, the Commons should vote for or against approval of a deal with the EU. However, since there is little chance of approval of the treaty, Prime Minister Theresa May can postpone the date of the vote in order to get time for new negotiations with deputies or for obtaining new concessions from the European Union. According to Bloomberg, May has already decided to postpone the vote, but there is no official confirmation yet. In addition, the European Union’s Supreme Court in Luxembourg confirmed today that the UK may withdraw its request for withdrawal at any time before it should leave the EU on March 29 of next year. Perhaps Teresa May will want to exercise this right in order to avoid "divorce without a deal."

Today weak economic data is putting additional pressure on the pound. The GDP index in the third quarter remained at the same level of 1.5% instead of the expected growth (1.6%). Moreover, for the first time since 2017, the volume of industrial production decreased by 0.8%.

Japan

Today, the Japanese currency is weakening against the euro, has mixed dynamics in tandem with the US dollar and is strengthening against the pound.

Today, weak data on the country's GDP in the third quarter put pressure on the yen. The Japanese economy contracted more than the market expected: quarterly – by 0.6%, and in annual terms – by 2.5%. According to experts, the decline in indicators was associated with natural disasters that have befallen the country, as well as international trade instability. Note that the decline in GDP in the third quarter of this year is common for large south-eastern economies, such as China and Australia.

Australia

The Australian dollar today is moderately strengthening against its main competitors – the euro, the yen, the pound and the US dollar.

In the absence of significant economic releases, the movement of the Australian currency is of a technical nature. Among notable news is the comment of the Deputy Head of the RBA, Christopher Kent. He said that the next action of the regulator is likely to be a rate increase, but this does not mean that the Bank will not be able to lower it. Experts believe that the RBA officials are thinking about lowering the rate in the event of a further decrease in national GDP and deterioration in the housing market.

Oil

During the day, oil quotes adjusted downwards.

On Friday, the OPEC countries and their allies were able to agree on the volume of cuts in oil production under the OPEC+ treaty. The total reduction should amount to 1.2 million barrels per day, of which the cartel’s share is 800 thousand barrels per day, and the production of non-OPEC countries should be reduced by 400 barrels. At the same time, Iran was freed from the reduction due to the pressure of US sanctions. The conclusion of the agreement pushed the quotes up, but then the correction began, which continues today. In general, investors fear a decline in global demand for petroleum products due to trade conflicts.