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Forex News Timeline

Friday, November 15, 2019

The USD/CAD pair reversed an early dip back closer to weekly lows and is currently placed near the top end of its daily trading range, around mid-1.32

Rallying US bond yields underpinned the USD and helped bounce off lows.A pullback in oil prices weighed on the Loonie and remained supportive.Traders now look forward to US retail sales for some short-term impetus.The USD/CAD pair reversed an early dip back closer to weekly lows and is currently placed near the top end of its daily trading range, around mid-1.3200s.
 
The pair extended the previous session's late pullback from the vicinity of the very important 200-day SMA and witnessed some follow-through weakness during the Asian session on Friday. However, a combination of factors that helped find some support just ahead of the weekly lows around the 1.3215 region. Trade optimism, falling oil prices remain supportive The overnight comments by the White House economic adviser Larry Kudlow, saying that there has been “very good progress,” and that a US-China trade agreement was close, revived hopes of an imminent US-China trade deal and provided a strong boost to investors' appetite for perceived riskier assets.
 
The risk-on mood was evident from a goodish pickup in the US Treasury bond yields, which extended some support to the US Dollar. This coupled with a modest intraday pullback in crude oil prices further undermined the commodity-linked currency – Loonie and contributed to the pair's rebound of around 30 pips.
 
It, however, remains to be seen if bulls are able to capitalize on the momentum or the pair continues to face stiff resistance near a technically significant moving average. Moving ahead, Friday's release of the US retail sales data will now be looked upon for some meaningful impetus later during the early North-American session. Technical levels to watch  

In view of analysts at Rabobank, a reversal in lower bond yields seems to be a reflection of market positioning and belief the risks of US-China trade

In view of analysts at Rabobank, a reversal in lower bond yields seems to be a reflection of market positioning and belief the risks of US-China trade war and a Hard Brexit are over Key Quotes “It also backs a firm belief a rate-cutting cycle central banks saw no need for 12 months ago is sufficient to ensure there is no risk of a global economic downturn ahead.” ‘But we beg to differ, as economic indicators do not point to a global recovery ahead despite the recent better-than-expected data in Europe and the US.” “Consequently, the global economic and bond market recovery will need to come from China – just as has been the case several times since the Global Financial Crisis.” “But lower Chinese economic growth and, despite its rhetoric to the contrary, a China importing less and less, are a double negative for overall global growth.” “Together with a potential shift in global policy responses, this likely means a new shift lower in bond yields again soon.”

According to analysts at ANZ, there is considerable debate at present about the efficacy of monetary policy, with people citing the weakness of retail

According to analysts at ANZ, there is considerable debate at present about the efficacy of monetary policy, with people citing the weakness of retail spending in the September quarter as clear evidence that it is not working as usual for the Australian economy. Key Quotes “There are always lags between policy action and economic reaction. The clear turn in the housing market is the most obvious sign that monetary policy is having an impact. We believe that retail spending will respond, albeit with a lag, and possibly dampened by high debt levels.” “This week’s data is a great illustration of how hard it is to be forward looking. Evidence of green shoots appeared in the business conditions data, with forward orders in particular quite positive. ANZ’s Labour Market Indicator (LMI) shows a strengthening uptick. But this evidence was overwhelmed by the soft wage and employment data – even though these are amongst some of the most laggard of indicators.” “To be fair, even if we apply the most positive interpretation of the forward indicators they are a long way from pointing to the sort of turn in the economy that will be required to achieve the RBA’s inflation and full employment objectives. So the somewhat better tone of these indicators is not enough to challenge our expectation that further rate cuts will come in 2020. They do, however, allow the RBA to pause for a period.”

EUR/JPY Overview Today last price 119.66 Today Daily Change 37 Today Daily Change % 0.13 Today daily open 119.5 Trends Daily SMA20 120.62 Daily SMA50

The down move in EUR/JPY appears to have met decent support in the area of 4-week lows near 119.20, where also sits the key 55-day SMA.If this area is cleared, there is no relevant support levels until October lows in the 117.00 neighbourhood ahead of the 2019 low in sub-116.00 levels recorded in early September.Occasional bullish attempts, however, are expected to meet initial resistance in the 120.00 neighbourhood ahead of the 21-day SMA, today at 120.57.EUR/JPY daily chart  

Extending his previous comments at the panel discussion in Sydney, the Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle recently praised th

Extending his previous comments at the panel discussion in Sydney, the Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle recently praised the monetary policy. Key quotes Monetary policy working through many channels, having an impact. Lower rates have an effect through the exchange rate, lower debt payments. Not worried about bank interest margins. Monetary policy works with long and variable lags, not much time has passed yet. Need to give it more time for policy to work.
FX implications While overall trade sentiment seems to the reason behind the AUD/USD pair’s recent pullback to 0.6800, comments like this tame the fears of further monetary policy easing, triggered after the recent downbeat Australian statistics.
 

UOB Group’s Economist Ho Woei Chen, CFA and Senior FX Strategist Peter Chia assessed the recently published Chinese data and the impact on GDP figures

UOB Group’s Economist Ho Woei Chen, CFA and Senior FX Strategist Peter Chia assessed the recently published Chinese data and the impact on GDP figures. Key Quotes “The bulk of China’s macroeconomic data for October have been released and they have broadly pointed to a weakened outlook in 4Q19 in the key areas of manufacturing, private consumption demand and investment”. “Despite signs of growth moderation, we do not expect the People’s Bank of China (PBoC) to adopt a significantly more aggressive monetary easing stance ahead”. “Weighed by trade and economic uncertainties, we maintain our view of a higher USD/CNY, towards 7.30 by 2H next year”.

Global rating agency Moody’s recently rolled out its analysis of risks to the Japanese economy. In doing so the rating giant forecasts that Japan will

Global rating agency Moody’s recently rolled out its analysis of risks to the Japanese economy. In doing so the rating giant forecasts that Japan will miss the primary fiscal balance target if additional consolidation measures are not implemented. Key quotes “Japan will miss the primary fiscal balance target if additional consolidation measures are not implemented.”
“Japan is vulnerable to global trade protectionism and slowdown in the economies of its largest trading partners.”
“Japan is exposed to an escalation in global trade protectionism and a slowdown in its largest trading partners, the US and China.” FX implication Although USD/JPY is currently benefiting from the market’s risk-on mode, while being around 108.60, headlines like this could have added burden on the risk-tone during the otherwise trading conditions.
 

FX option expiries for Nov 16 NY cut at 10:00 Eastern Time, via DTCC, can be found below. EUR/USD: EUR amounts 1.0900 728m 1.1000 1.2bn GBP/USD: GBP a

FX option expiries for Nov 16 NY cut at 10:00 Eastern Time, via DTCC, can be found below. EUR/USD: EUR amounts 1.0900 728m 1.1000 1.2bn GBP/USD: GBP amounts 1.2825 398m   1.2900 671m  1.2940 201m  1.2950 1.4bn  1.3000 212m  USD/JPY: USD amounts 108.50 546m   USD/CAD: USD amounts ·       1.3250 581m

Deutsche Bank analysts note that the German economy avoided a technical recession in Q3, with an unexpectedly positive +0.1% GDP reading (vs. -0.1% co

Deutsche Bank analysts note that the German economy avoided a technical recession in Q3, with an unexpectedly positive +0.1% GDP reading (vs. -0.1% contraction expected), following the -0.2% contraction in Q2. Key Quotes “This echoes some other positive surprises from recent German manufacturing data recently, such as September’s better-than-expected factory orders out last week.” “The fact that the economy didn’t fall into recession means that the pressure for German fiscal stimulus is likely to diminish further for now, and finance minister Olaf Scholz said yesterday at a Bloomberg News event that there wasn’t a reason for doing fiscal stimulus because the German economy wasn’t in a crisis.”

According to the latest trade data published by the Indonesian Statistics Bureau, the country unexpectedly posted a trade surplus in October. Indonesi

According to the latest trade data published by the Indonesian Statistics Bureau, the country unexpectedly posted a trade surplus in October. Indonesia reported a trade surplus of $0.16 billion vs. $-0.28 billion expected and $-0.16 billion previous. The imports and exports came in at -16.39% and -6.13% respectively vs. -16.00% and -8.38% expectations and -2.4% and -5.73% respective priors. The median forecast from economists was for a $0.28 trade deficit last month, the Reuters poll showed last week. The unexpected trade surplus reported rescued the Indonesian Rupiah versus the US dollar, sending the USD/IDR cross to three-day lows of 14,055.

EUR/USD is seen consolidating small gains on the 1.10 handle amid a quiet Asian affair, with the focus now shifting on the Eurozone inflation and US R

.       EUR/USD underpinned by the EUR/JPY cross driven strength.·       US dollar index trades subdued amid US-China trade optimism.·       Eyes on Eurozone/ US data amid all-important trade talks.  EUR/USD is seen consolidating small gains on the 1.10 handle amid a quiet Asian affair, with the focus now shifting on the Eurozone inflation and US Retail Sales data for fresh trading impetus. However, the US-China trade headlines will continue to remain the main market motor.EUR/USD: Bulls eyeing a break above 10-DMA at 1.1043?The main currency pair clung onto its recent recovery gains near 1.1030 levels so far this Friday, as it keeps its range trade intact heading into the European open. Meanwhile, the further upside appears capped by the US-China trade optimism induced rebound in the US Treasury yields as well as by the looming Euro area growth concerns. On the other hand, the bulls remain underpinned by the EUR/JPY cross driven strength amid the risk-recovery. The Yen crosses were sold-off into the renewed optimism on the US-China trade front after the White House Economic Adviser Kudlow’s comments hint at the US-China trade deal progressing. EUR/JPY gains +0.20% to trade near 119.80 region so far. Further, a broadly subdued US dollar, in the wake of reduced safe-haven demand, also adds to buoyant tone seen around the spot. The USD index meanders in four-day lows of 98.11, almost unchanged on the day. Markets now look forward to the Eurozone Final CPI and US Retail Sales data for some near-term trading impetus while key US-China trade talks due later on Friday will determine the next price-move in the pair. In the meantime, the 10-DMA barrier at 1.1043 will continue to cap the recovery gains while the downside could be limited by the monthly lows reached on Thursday at 1.0989.  

Here is what you need to know on Friday, November 15: - Trade: Larry Kudlow, an economic adviser for President Donald Trump, has said that the US and

Here is what you need to know on Friday, November 15:
- Trade: Larry Kudlow, an economic adviser for President Donald Trump, has said that the US and China are getting closer to striking a deal. Moreover, Beijing has provided some stimulus via a liquidity injection. The safe-haven yen and gold are down, while commodity currencies are rising.
- Jerome Powell, Chairman of the Federal Reserve, has sounded upbeat in his second day of testimony on Capitol Hill. He said that the US economy is the "star economy" standing out against peers in the developed world. Powell and other Fed officials have all expressed optimism and have signaled a long pause in raising rates.
- The focus on Friday is the US Retail Sales report for October, which is et to show that the consumer continues carrying the economy on its shoulders. The Control Group is forecast to jump after stagnating in September. See  Retail Sales Preview: Consumers keep faith with the economy
- EUR/USD has been rising above 1.10 after dropping below that level. Germany escaped a recession with meager growth in the third quarter. Final inflation figures for October are set to show the Consumer Price Index slowing to 0.7%, but a pick up in Core CPI to 1.1%.
- UK: The election campaign continues in the UK with the main parties promising spending splurges. The pound is moving higher amid encouraging polls for Prime Minister Boris Johnson's Conservative Party and despite disappointing data. Weak retail sales figures fell in October, joining other statistics that missed expectations.
- Oil prices have been under pressure following a higher than projected build in US inventories. However, the Canadian dollar enjoyed bullish comments from Stephen Poloz, Governor of the Bank of Canada, who said that wage inflation is above 4% by most measures.
- Cryptocurrencies have extended their gradual grind to the downside, with Bitcoin slipping below $8,600. See Trump Impeachment: Markets will not like any replacement

GBP/USD looks for fresh direction amid the UK’s political plays challenging the PM. Brussels launched legal action against the British government, po

GBP/USD looks for fresh direction amid the UK’s political plays challenging the PM.Brussels launched legal action against the British government, polls keep Conservatives on the top, though with a hung parliament.US-China trade sentiment improves ahead of today’s call between the diplomats.With the British politicians gearing up for December 15 election, the GBP/USD pair pulls back from the weekly highs and traded with a mild negative bias during the early European session on Friday. The recent polls showing a hung parliament in the United Kingdom (UK) and the European Union’s (EU) legal action against Britain over the Prime Minister’s (PM) failure to nominate a new EU commissioner to send to Brussels seem to weigh on the British Pound off-late. However, the Conservatives are still not affected by the Labour’s “free broadband” pledge. On the other hand, the market’s risk-tone has been a lighter recently after the White House Economic Adviser said the United States (US) and China are getting closer to a deal. Also increasing the trade optimism are headlines from Fox Business and Politico that suggests the Chinese part is also working towards a deal and both the parties are up for a call sometime in the day. The recent comments from the Federal Reserve (Fed) officials keep praising the current monetary policy with Chairman Jerome Powell accusing trade protectionism to negatively affect the economy’s manufacturing system. Moving on, investors will keep an eye over the US economic calendar, considering no data/events up for publishing from the UK’s side. Though, British politics and the US-China trade headlines could keep entertaining traders. Concerning the US events, October month Retail Sales become the key followed by New York Empire State Manufacturing Index and Industrial production. TD Securities said, “We look for retail sales to register a soft 0.1% gain for October as a decline in auto sales likely kept headline sales subdued. However, we expect a rebound in the control group to be the main driver of headline growth, reflecting still-solid consumer spending. Separately, industrial production likely tumbled -0.4% in October owing to a sharp slide in manufacturing activities, which were impacted by the GM strike. Lastly, the NY Empire manufacturing survey will give us a first indication of the performance of the sector in November. The consensus is looking for a modest increase to 6.0 from 4.0 in October.” Technical Analysis Unless breaking a three-week-old falling trend line, near 1.2930, chances of pair’s run-up to 1.3000 and the previous month top near 1.3016 seem too less. As a result, sellers will be on the lookout for any declines below 1.2770/65 while aiming 1.2700.  

Analysts at Standard Chartered note that Malaysia’s Q3 GDP growth moderated to 4.4% y/y from 4.9% in Q2. Key Quotes “While the print was in line with

Analysts at Standard Chartered note that Malaysia’s Q3 GDP growth moderated to 4.4% y/y from 4.9% in Q2. Key Quotes “While the print was in line with our expectations, sequential growth slowed below 1% to register 0.9% q/q seasonally adjusted. This is the third consecutive quarter of lacklustre growth. Quarterly expansion has averaged c.1% q/q (seasonally adjusted) so far in 2019, versus an average 1.3% from 2012-18.” “Private consumption remained relatively resilient. Even with a high base effect (due to the consumption tax changes), private spending rose 7% y/y, slightly below the average 7.1% expansion from 2012-18.” “Looking to 2020, a potential bottoming out (but no strong recovery) of global growth may improve onshore growth sentiment. We estimate that the Malaysian economy may run close to zero potential growth in 2020. However, downside risks remain and could turn the output gap negative.”

Italy Global Trade Balance came in at €2.779B, below expectations (€2.892B) in September

Italy Trade Balance EU increased to €1.255B in September from previous €0.259B

In the view of the analysts at Scotiabank, the US October Retail Sales report, due on Friday at 1330 GMT, is expected to rebound from a weak September

In the view of the analysts at Scotiabank, the US October Retail Sales report, due on Friday at 1330 GMT, is expected to rebound from a weak September reading.Key Quotes:“Retail sales figures for October will have to rely upon a bounce-back in core sales ex-autos and gasoline including higher prices in order to return into the black Industrial output ... Notwithstanding recent potential stabilization in ISM-manufacturing and Markit's manufacturing PMI, industrial production is likely to continue to weaken.”

Senior Economist Alvin Liew at UOB Group gave his opinion on the latest Japanese GDP figures for the July-September period. Key Quotes “Japan’s 3Q 201

Senior Economist Alvin Liew at UOB Group gave his opinion on the latest Japanese GDP figures for the July-September period. Key Quotes “Japan’s 3Q 2019 GDP growth slowed visibly to 0.1% q/q (0.2% annualized rate) from 0.4% q/q (1.8% annualized rate) in 2Q as the growth pace of both private and public demand slowed but still managed to offset the drag from net exports and private inventories”. “Despite the underwhelming 3Q GDP outcome, it was still much better than our expectations (-1.1% q/q). As such, we revise our 2019 GDP growth forecast for Japan higher to 0.7% (from 0.5% previously). We still expect trade headwinds and more importantly, a collapse of private spending in 4Q 2019 and extending into 2020, will consequently drive Japan into a recession next year. And notwithstanding the Tokyo Olympics next year, we believe that Japan’s GDP will contract by 0.8% in 2020”. “The next revision of 3Q 2019 GDP (the 2nd preliminary estimate) will be on 9 Dec 2019. This bears watching as a sizeable downward revision to any major GDP component such as business spending, could swing 3Q GDP into a sequential q/q contraction and that may put Japan at risk of a technical recession if 4Q GDP contracts as well”.

Following its failure to remain strong beyond the six-week top, USD/INR trades around 71.70 by the early European session on Friday. Sellers await ent

USD/INR fails to cross a six-week top ahead of October month Indian trade numbers.50-day SMA can please sellers during further declines.An upside break will have multiple challenges for buyers.Following its failure to remain strong beyond the six-week top, USD/INR trades around 71.70 by the early European session on Friday. Sellers await entry below October month high, near 71.55, to take aim at 50-day Simple Moving Average (SMA) level of 71.00 and the monthly bottom close to 70.30. Given the bears' dominance below 70.30, the 70.00 round-figure will hold the gate to pair’s slump towards late-July highs near 69.10/05. On the contrary, September month high around 72.65, followed by 73.00 mark, could keep buyers in check amid overbought conditions of 14-day Relative Strength Index (RSI). On the economic front, October month Trade Balance, prior $-10.86B, from India will be the key to watch.  USD/INR daily chart Trend: Pullback expected
   

Reuters reports the latest comments from the Japanese Economy Minister Yasutoshi Nishimura, as he says that Japan’s industrial production and exports

Reuters reports the latest comments from the Japanese Economy Minister Yasutoshi Nishimura, as he says that Japan’s industrial production and exports are weak. He further said that Japan wants to widen the scope of Trans-Pacific Partnership (TPP). His comments come after Japan’s economy grew an annualized 0.2% in June-September, less than the estimate of a 0.8% expansion and +1.3% seen last.   Meanwhile, USD/JPY keeps its recovery mode intact from weekly lows of 108.25, as the bulls await fresh updates from the upcoming US-China trade call for the next direction. The spot hangs near daily tops of 108.63, up +0.18% daily basis.

The Bank of Canada (BOC) Governor Stephen Poloz released a paper on "Technological Progress and Monetary Policy: Managing the Fourth Industrial Revolu

The Bank of Canada (BOC) Governor Stephen Poloz released a paper on "Technological Progress and Monetary Policy: Managing the Fourth Industrial Revolution" this Friday, with the key points noted below: - “Central banks face considerable uncertainty today. - Although we are understandably focused on the consequences of rising geopolitical risk and the potential consequences of a global trade war, we should not forget that other longer-term structural forces remain at play. - The fourth industrial revolution is underway. - There is a good possibility that we will experience something very similar over the next decade, as the fourth industrial revolution unfolds. - The the situation may be complicated by a trade war and the associated deglobalization, which may offset some of the revolution’s positive effects. - However, setting aside that complication, the prescription for monetary policy over the longer-term is likely to be very much like that of the Greenspan era. - Canadian wage inflation now above 4% in most measures.” The Canadian dollar sees some fresh buying vs. the US dollar over the last hour, mainly driven by higher oil prices amid fresh US-China trade optimism while markets digest the latest comments from the BOC Governor Poloz. At the press time, USD/CAD trade -0.10% lower near 1.3230 region, at two-day lows.

The AUD/USD pair is seen consolidating its recovery from monthly lows of 0.6769 just under the 0.68 handle over the last hours, as the bulls await the

Aussie recovers in tandem with risk appetite, as trade deal hopes rise.White House Kudlow’s comments – the main driver behind risk recovery.Next of relevance remains the US-China trade call, US macro data.The AUD/USD pair is seen consolidating its recovery from monthly lows of 0.6769 just under the 0.68 handle over the last hours, as the bulls await the US-China trade talks later on Friday for the next push higher. WH Adviser Kudlow: US-China to the short strokes on a Phase 1 deal The higher-yielding Aussie extended the overnight rebound and recovered 30-pips from four-week troughs after the risk sentiment was lifted on the back of fresh reports, citing that China lifted restrictions on the US poultry imports. The recovery in the spot gained traction in the Asian trades, as risk appetite got a further boost after White House Economic Adviser Kudlow said that the US is closer to striking a trade deal with China. The pair caught a delayed bid on his comments and went to test the offers at the 0.68 handle. Despite the renewed trade optimism, the 0.68 handle appeared to be a tough nut to crack for the AUD bulls, currently leaving the AUD/USD pair wavering a tight range just below the last. Meanwhile, the latest comments by the RBA Deputy Governor Debelle on the monetary policy also fails to have any impact on the Aussie. Debelle said that RBA needs to give more time for the policy to work while adding that lower rates have an effect on the economy through the exchange and lower debt payments. The major will continue to get influenced by the risk trends, in light of any fresh trade developments, while the focus remains on the US Retail Sales data and trade talks for a fresh direction in the prices.  

Analysts at TD Securities point out that the US PPI inflation exceeded expectations yesterday, printing 0.4% MoM and 1.1% YoY (market: 0.3% and 0.9%,

Analysts at TD Securities point out that the US PPI inflation exceeded expectations yesterday, printing 0.4% MoM and 1.1% YoY (market: 0.3% and 0.9%, respectively). Key Quotes “Core price inflation, on the other hand, surprised to the downside at 0.1% vs expectations at 0.2%. PPI goods inflation (ex-food and energy) remained subdued at 0.0% m/m, suggesting no visible signs of pass through from tariffs and no pricing pressures building up in the pipeline.”

According to analysts at ANZ, for the Australian economy, the impact of monetary policy on housing is clear, but its effect on consumption has been li

According to analysts at ANZ, for the Australian economy, the impact of monetary policy on housing is clear, but its effect on consumption has been limited, so far. Key Quotes “The housing market recovery will lift retail. Rising housing prices and turnover tend to support non-food retail sales, and we are already seeing the first signs of that. But the lag between housing strength and a full recovery in retail can be long, and challenges, such as high debt and economic uncertainty, may soften the effect.” “Retail sales volumes fell in the year to September for the first time since 1991. Non-food sales, in particular household goods, have been struggling in the last couple of years, as housing prices fell.” “Improvements in the housing market are boosting non-food retail, which grew 0.5% q/q in September, the best result since mid-2018.” “Households however are using the recent tax and rate cuts to pay down debt, which may delay improvements in household spending.”

UOB Group’s Economist B.Gan reviewed the recent higher-than-expected inflation figures in India. Key Quotes “India’s inflation rose past the Reserve B

UOB Group’s Economist B.Gan reviewed the recent higher-than-expected inflation figures in India. Key Quotes “India’s inflation rose past the Reserve Bank of India’s (RBI) medium-term target of 4.0% for the first time since July 2018, and at its fastest pace in 16 months… Core inflation, which strips away energy and food items, however decelerated further to 3.5% y/y in the same month, the slowest since the present series started in April 2015”. “The uptick in headline inflation was chiefly driven by the surge in food prices, which rose to its fastest pace in over three years at 7.9% y/y in October 2019. Food and beverage prices, which accounts for almost half of the CPI basket, rose 6.9% y/y in the same month”. “The higher inflation print in October was likely driven by supply-driven factors rather than an improvement in consumer demand. Specifically, monsoon conditions have led to lower rainfall and poor harvest in recent months, thus significantly lifting food prices. Moreover, food prices are also recovering from the price collapse in 2018, where prices contracted for five straight months between October 2018 and February 2019. Contrarily, consumption demand in India is expected to remain low given the accelerating unemployment levels (8.5% in October, highest since August 2016) amid a softening manufacturing sector and relatively pallid economic outlook”. “As such, we opine that the rise in inflation pressures is not fuelled by the recent rate cuts by the central bank. This is given the fact that monetary policy is proven by be more effective in influencing demand behavior, rather than supply conditions. With economic growth likely to stay soft in the coming quarter amid limited fiscal policy space to-date, we continue to expect RBI to cut rates further by another 25 basis points in its December MPC meeting. Should that come to pass, this will bring the repurchase and reverse repurchase rate to 4.90% and 4.65%, respectively”.

In light of preliminary data for JPY futures markets from CME Group, open interest rose for the third straight session on Thursday, although by just 3

In light of preliminary data for JPY futures markets from CME Group, open interest rose for the third straight session on Thursday, although by just 353 contracts. Volume, too, went up for yet another session, this time by nearly 7.5K contracts. USD/JPY could extend the leg lower to 108.00 The corrective downside in USD/JPY carries the potential to test lower levels near the 108.00 handle in the short-term horizon, all on the back of rising open interest and volume coupled with the positive price action in the Japanese safe haven.

Lee Sue Ann, Economis at UOB Group, assessed the recent results from the Australian labour market. Key Quotes “Australia’s unemployment rate climbed t

Lee Sue Ann, Economis at UOB Group, assessed the recent results from the Australian labour market. Key Quotes “Australia’s unemployment rate climbed to 5.3% in October, disappointing market expectations for it to hold at 5.2%. Total employment fell by 19,000 in October, from a revised 12,500 gain in September, way below expectations for a 15,000 increase. This was the largest drop in employment since September 2016 and only the second monthly drop since then… The labor force participation rate also unexpectedly declined to 66.0% from 66.1%. Highlighting the labor market slack, the underutilization rate, which combines unemployment and under-employment, rose to 13.8%”. “The latest labour market report clearly does not bode well for the Reserve Bank of Australia (RBA)’s overall assessment of the Australian economy, of which the RBA has made its message clear about how closely it is watching the labour market”. “Concerns about household spending were highlighted by official figures yesterday (13 November) which showed wages growing less than expected in the last quarter. Australia’s wage price index rose 0.5% q/q for 3Q19, down slightly from 0.6% in the three months to March, whilst year-on-year growth moderated to 2.2% from 2.3%. Slack in the labour market has clearly weighed on wage outcomes, and will need to accelerate in order to meet the RBA’s subdued wage forecast. Previously, the RBA highlighted that wage growth of around 3.5% y/y would be needed to sustainably lift inflation back to the middle of their 2%-3% target band”. “It was also in the RBA’s quarterly Statement on Monetary Policy, published on 8 November, that officials argued that it was “increasingly clear” that lower unemployment is needed to generate wages growth consistent with achieving their inflation target. These considerations, they noted, have pointed to the case for further policy easing in recent months and also suggest that the RBA’s bias remains in favour of further policy easing in the months ahead”. “The next and final RBA meeting for the year is on 3 December, a day before 3Q19 GDP data is due for release. Although our forecast is for a steady official cash rate (OCR) of 0.75% for the rest of this year, a rate cut at the December meeting cannot be ruled out now, following the soft wages and employment reports”.

CME Group’s flash readings for GBP futures markets noted investors added around 1.2K contracts to their open interest positions on Thursday, reaching

CME Group’s flash readings for GBP futures markets noted investors added around 1.2K contracts to their open interest positions on Thursday, reaching the second build in a row. In addition volume went up by nearly 18K contracts, adding to the previous build. GBP/USD looks for a test of 1.29 and aboveCable’s recovery on Thursday was accompanied by rising open interest and volume, hinting at the probability that the upside could extend further to, initially, the 1.2900 neighbourhood and beyond in the near term at least.

Open interest in EUR futures markets rose for the third session in a row on Thursday, this time by nearly 3.7K contracts according to advanced data fr

Open interest in EUR futures markets rose for the third session in a row on Thursday, this time by nearly 3.7K contracts according to advanced data from CME Group. On the other hand, volume shrunk by almost 16.6K contracts following two consecutive builds. EUR/USD now targets the 55-day SMAEUR/USD has recovered ground and bounced off recent lows in the sub-1.10 region amidst rising open interest and decreasing volume, leaving the door open for the continuation of the recovery in the near term. That said, the up move could extend to the key 55-day SMA in the 1.1040 region.

The greenback is trading on a weak note at the end of the week, prompting the US Dollar Index (DXY) to remain close to the key support at 98.00 the fi

DXY stays under pressure in the 98.15/10 band.Yields of the US 10-year note approaches the 1.85% area.US Retail Sales, Industrial/Manufacturing Production next of note.The greenback is trading on a weak note at the end of the week, prompting the US Dollar Index (DXY) to remain close to the key support at 98.00 the figure. US Dollar Index now looks to data The index has come under renewed and quite moderate selling pressure in past hours after being rejected once again from the area of weekly tops in the 98.40/50 band. The dollar lost upside traction in the second half of the week in response to the re-emergence of trade concerns amidst the utter absence of fresh developments/news on the US-China ‘Phase One’ deal, the roll over some tariffs or the timing of the Trump-Xi meeting. It will be an interesting day in the docket as Retail Sales are due seconded by the Empire State manufacturing gauge, Industrial and Manufacturing Production, Capacity Utilization and Business Inventories. On the domestic politics, markets’ attention is expected to shift to the Trump’s impeachment issue, as the former ambassador to Ukraine M.Yovanovitch will testify in a public hearing to the House Intelligence Committee. What to look for around USD The index lost the topside near 98.50 on the back of trade effervescence and despite positive CPI data and the firm note from the first testimony by Fed’s Powell. In the meantime, the lack of headlines from the US-China trade war has been supporting the recent inflows into the safe havens, dragging yields and the buck lower. On the broader view, the outlook on the greenback appears constructive on the back of the Fed’s ‘wait-and-see’ mode vs. the dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’. US Dollar Index relevant levels At the moment, the pair is gaining 0.01% at 98.16 and a break above 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the flip side, immediate contention emerges at 97.99 (100-day SMA) seconded by 97.54 (200-day SMA) and finally 97.11 (monthly low Nov.1).

The USD/JPY pair regained some positive traction on Friday and recovered a part of the previous session's downfall to 1-1/2 week lows. The pair stalle

US-China trade deal hopes helped regain some traction on Friday.The technical set-up might have shifted in favour of bearish traders.Investors look forward to the US macro data for a fresh impetus.The USD/JPY pair regained some positive traction on Friday and recovered a part of the previous session's downfall to 1-1/2 week lows.
 
The pair stalled its recent pullback from multi-month lows, around mid-109.00s, and managed to attract some buying interest on the last trading day of the week amid receding demand for traditional safe-haven currencies – including the Japanese Yen. Focus remains on trade developments The overnight comments by the White House economic adviser Larry Kudlow, saying that there has been “very good progress,” and that a US-China trade agreement was close, revived hopes of an imminent US-China trade deal and boosted the global risk sentiment.
 
The risk-on mood was further evident from a strong pickup in the US Treasury bond yields, which extended some support to the US Dollar and further collaborated to the pair's positive move for the first day in the past six trading session, back above mid-108.00s.
 
From a technical perspective, the pair on Thursday failed to defend a support marked by 2-1/2-month-old ascending trend-line. Hence, it remains to be seen if the pair is able to capitalize on the momentum or meets with some fresh supply at higher levels.
 
Moving ahead, Friday's US economic docket – highlighting the release of monthly retail sales and some second-tier manufacturing data – might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session. Technical levels to watch  

Hong Kong SAR Gross Domestic Product (QoQ) above expectations (-3.2%) in 3Q: Actual (-3%)

Hong Kong SAR Gross Domestic Product (QoQ) in line with expectations (-3.2%) in 3Q

Hong Kong SAR Gross Domestic Product (YoY) in line with expectations (-2.9%) in 3Q

Turkey Budget Balance climbed from previous -17.71B to -14.9B in October

Austria HICP (MoM) dipped from previous 1% to 0.3% in October

Austria HICP (YoY) dipped from previous 1.2% to 1% in October

Indonesia Imports came in at -16.39% below forecasts (-16%) in October

Indonesia Trade Balance registered at $0.16B above expectations ($-0.28B) in October

Indonesia Trade Balance below forecasts ($-0.28B) in October: Actual ($-6.13B)

Japan Industrial Production (YoY) registered at 1.3% above expectations (1.1%) in September

Japan Capacity Utilization came in at 1%, above forecasts (-0.6%) in September

Fresh headlines are hitting the wires, via Reuters, citing that the US trade deal is approved by the Japanese Parliament’s lower house committee.

Fresh headlines are hitting the wires, via Reuters, citing that the US trade deal is approved by the Japanese Parliament’s lower house committee.

Reserve Bank of Australia (RBA) Assistant Governor Debelle is on the wires now, via Reuters, making a scheduled speech, with the key comments found be

Reserve Bank of Australia (RBA) Assistant Governor Debelle is on the wires now, via Reuters, making a scheduled speech, with the key comments found below.   mortgage arrears rate at 1%, low by historical, international standards  mortgage arrears rates have been increasing in recent years, highest for around a decade says unlikely that national arrears rate will increase substantially from here says tighter lending standards placed downward pressure on arrears

RBNZ's Hawkesby: February monetary policy meeting is 'live' More to come ...

RBNZ's Hawkesby: February monetary policy meeting is 'live'  More to come ...

South Korea Trade Balance dipped from previous $5.39B to $5.341B in October

Indonesia Exports registered at -6.13% above expectations (-8.38%) in October

EUR/USD buyers look for confirmation, despite recent bounce, as prices still trade below the near-term key moving average, around 1.1025, during early Friday.

The EUR/USD pair’s recent pullback stays below near-term key resistance.A sustained downside break could recall October month lows.1.1180/75 keeps the key to the pair’s rally.EUR/USD buyers look for confirmation, despite recent bounce, as prices still trade below the near-term key moving average, around 1.1025, during early Friday. The 50-day Simple Moving Average (SMA) level of 1.1040 acts as immediate upside barrier to the pair holding gate for a further recovery towards late-October low surrounding 1.1075/80 and then a rise to 1.1130. However, any further upside will have to conquer 1.1175/80 confluence including 200-day SMA and multiple tops since October 21. Meanwhile, pair’s failure to keep the gains and a decline below the recent low of 1.0989 could recall early-October levels close to 1.0940 and 1.0880 to the chart. EUR/USD daily chart Trend: Bearish  

As hinted by traders last hour, the Chinese central bank, the People’s Bank of China (PBOC), conducted the Medium-Term Lending (MLF) operation on Frid

As hinted by traders last hour, the Chinese central bank, the People’s Bank of China (PBOC), conducted the Medium-Term Lending (MLF) operation on Friday.

With the Indonesian geophysics agency lifting tsunami alert after a major earthquake, USD/IDR remains on the back foot while taking rounds to 14,075.

USD/IDR extends previous losses amid receding geopolitical risks in Indonesia.Trade positive headlines also favor the Indonesian rupiah (IDR) ahead of October month statistics.With the Indonesian geophysics agency lifting tsunami alert after a major earthquake, USD/IDR remains on the back foot while taking rounds to 14,075 during early Friday. Indonesian trade balance numbers are of immediate concern to the pair traders. The pair behaved violently on Thursday as traders struggled to justify a 7.1 magnitude earthquake near Indonesia’s Moluccas islands and then a lift to tsunami alert releasing some tension. The daily closing, however, turned on red with the US dollar’s (USD) broad weakness and renewed optimism surrounding the US-China trade deal. Comments from the White House Economic Adviser Larry Kudlow, as well as an anonymous Chinese trade source cited by the Fox reporter, signal trade positive sentiment surrounding the US-China phase one deal. The United States (US) shows readiness to extend waivers for doing business with China’s Huawei while the dragon nation welcomes US poultry. Dody Budi Waluyo, Bank Indonesia’s (BI) Deputy Governor, believes current economic data still allows for an accommodative monetary policy, as said by Reuters on Monday, whereas the Jakarta Post recently cited inflation, trade and investment to be the reasons behind the BI’s four consecutive rate cuts. While optimism in Asia, mainly due to the trade risk reset, is likely exerting downside pressure on the pair, October month trade statistics from Indonesia will be the key to watch for fresh direction. The forecast suggests $-0.28B Trade Balance versus $-0.16B prior. Further, Exports could decline further to -8.38% from -5.74% while Imports could also follow the suit with a whooping -16% drop from -2.41% prior. Technical Analysis Lows marked July and September, around 13,880, contrast a three-month-old falling trend line, now at 14,210, to limit the pair’s near-term moves.  

China House Price Index dipped from previous 8.4% to 7.8% in October

Former US Secretary of State Kissinger was on the wires last minutes, via Reuters, expressing his take on the US-China trade deal. Expects a US-China

Former US Secretary of State Kissinger was on the wires last minutes, via Reuters, expressing his take on the US-China trade deal. Expects a US-China trade deal. Expects trade deal to be concluded in a positive way. US and China should become accustomed to the fact they are rivals. WH Adviser Kudlow: US-China to the short strokes on a Phase 1 deal USD/JPY: Recovery gathers steam on US-China trade deal hopes

On Friday, China’s central bank, the People's Bank of China (PBOC), set the Yuan reference rate at 7.0091 versus Thursday’s fix at 7.0083.

On Friday, China’s central bank, the People's Bank of China (PBOC), set the Yuan reference rate at 7.0091 versus Thursday’s fix at 7.0083.

According to the latest Reuters poll, a majority of economists believe that the new European Central Bank (ECB) President Lagarde will follow policies

According to the latest Reuters poll, a majority of economists believe that the new European Central Bank (ECB) President Lagarde will follow policies adopted by former President Draghi. However, they opine that the quantitative easing (QE) program will do little to revive Eurozone’s dwindling economic growth prospects. Key Findings: “Forward-looking indicators suggest a slowdown in the eurozone, but the chances of a recession over the coming year fell to 25% from 30% in the last poll. For the coming two years, it was down to 30% from 35%. Despite monetary stimulus, eurozone inflation languishes at less than half the ECB’s target of just below 2%. The Nov. 11-14 poll suggested it would not be anywhere near that until at least July 2021. Inflation was predicted to average 1.2% next year, unchanged from October’s survey. The median forecast for 2021 was 1.4%, the lowest since polling started for this period in January. The eurozone economy expanded 0.2% last quarter and the regular poll of over 80 economists predicted GDP growth would average 0.2% to 0.3% per quarter from now to mid-2021, largely unchanged from the last poll. When asked if Lagarde would be successful in helping facilitate a “synchronized fiscal response” to the slowdown over the coming year, 60% of 43 economists said no. Despite expectations for lacklustre growth over coming quarters, the timing of the ECB’s next deposit rate cut, to -0.6% from -0.5%, was moved to the second quarter of next year from the first quarter predicted a month ago.”

Although 38.2% Fibonacci retracement level of October month advances recently triggered the NZD/USD pair’s U-turn, buyers still doubt the recovery.

NZD/USD bounces off 38.2% Fibonacci retracement of October month upside.A nine-day-old falling resistance line holds the key to 0.6425/30 resistance confluence.Multiple support lines to limit the pair’s declines ahead of 0.6300 round-figure.Although 38.2% Fibonacci retracement level of October month advances recently triggered the NZD/USD pair’s U-turn, buyers still doubt the recovery as the pair trades near 0.6390 amid Friday’s Asian session. 23.6% Fibonacci retracement level of 0.6405 can offer an immediate resistance ahead of highlighting near-term descending trend line, at 0.6415 now, which holds the key to the further upside towards 0.6425/30 confluence including 100-day Exponential Moving Average (EMA) and 38.2% Fibonacci retracement of July-October declines. Also challenging the pair’s upside is the bearish signal from the 12-bar Moving Average Convergence and Divergence (MACD) indicator. If at all bulls manage to conquer 0.6430 on a daily closing basis, 0.6500 will return to the charts. Alternatively, an ascending trend line from mid-October, around 0.6330 and a four-week-old support line, at 0.6308, could keep the pair’s declines under check. In a case where prices dip below 0.6308, also conquer 0.6300 mark, sellers can take aim at 0.6240 and 0.6200 rest-points. NZD/USD 4-hour chart Trend: Pullback expected  

China Securities Journal (CSJ) recently crossed wires while citing further RRR cut. The watchdog also cited the need for liquidity adjustments.

China Securities Journal (CSJ) recently crossed wires while citing further RRR cut. The watchdog also cited the need for liquidity adjustments. Key quotes China's latest RRR cut not enough to offset tax payment. China may need to provide `marginal' liquidity adjustment. FX implications Despite witnessing a lack of response to the news by the press time of early Friday, support to further easy money from the official source indicates further recovery of the Antipodeans, especially the AUD/USD pair that currently takes rounds to 0.6800.

WH Adviser Kudlow: US-China to the short strokes on a Phase 1 deal

WH Adviser Kudlow: US-China to the short strokes on a Phase 1 deal

While speaking before media at Brazil, Russia, India, China and South Africa (BRICS) Summit in Brazil late-Thursday, Russian President Vladimir Putin

While speaking before media at Brazil, Russia, India, China and South Africa (BRICS) Summit in Brazil late-Thursday, Russian President Vladimir Putin said that Russia should continue to work with OPEC, adding that cooperation should not only be on oil production cuts, per Reuters. Additional Comments: “We have really constructive dialogue with OPEC.” “We understand that the tough stance, including from our friends from Saudi Arabia, is linked to the Saudi Aramco IPO. Everybody understands this. It’s an open secret.” Meanwhile, both crude benchmarks trade modestly flat, with WTI flirting with the 57 handle. Brent trades below 62.50 levels. WTI testing offers near $ 57 amid trade optimism, ahead of US data

With the latest media releases portraying progress in the US-China trade deal, not to forget optimism conveyed from the US-side, AUD/JPY recovers.

AUD/JPY bounces off four-week low amid risk reset.US-China getting closer to the phase one trade deal, the US meddling in Hong Kong questions the optimists.Speech from RBA’s Debelle, Japan’s Industrial Production and trade/political headlines will be observed for fresh clues.With the latest media releases portraying progress in the US-China trade deal, not to forget optimism conveyed from the US-side, AUD/JPY recovers from a monthly low to 73.65 by the press time of Asian session on Friday. In addition to the early-day anticipation of the US likely extending waivers to do business with Huawei, upbeat comments from the White House Economic Adviser Larry Kudlow and trade positive tweet from the Fox reporter also help improve market’s risk tone off-late. The White House Adviser recently said that the two sides are “getting close” to the trade deal whereas Fox’s Edward Lawrance cited anonymous Chinese source to confirm upbeat sentiment at the negotiators’ desk ahead of today’s talks. Also brightening the mood were comments from the US Department of Agriculture (USDA) Secretary McKenny who assigned a 50% chance of a successful trade deal. On the contrary, the US expedition of a bill to support Hong Kong protesters, by way of renewing special trading status, as said by Bloomberg, exerts downside pressure on the risk sentiment as China is strongly against any such moves. As a result, the US 10-year treasury yields gain nearly two basis points (bps) to 1.83% while S&P 500 Futures stays modestly positive around 3,097 by the press time. While comments from the Reserve Bank of Australia’s (RBA) Deputy Governor Guy Debelle and Japan’s September month Industrial Production numbers, expected to remain unchaged at 1.1% YoY and 1.4% MoM, occupy immediate watch-list, trade/political headlines will keep the driver’s seat. Technical Analysis Unless breaking an ascending trend line since August 26, at 73.30, prices are less likely to revisit October low surrounding 71.70. On the contrary, the pair’s sustained rise above 100-day Simple Moving Average (SMA) level of 73.70 can recall month-start levels around 74.30/35. 

The USD/JPY overnight rebound extends in Friday’s Asian trades, as the bulls regain the 108.50 after the risk-recovery gathered steam on renewed optim

USD/JPY rises 10-pips and regains 108.50 on US’ Kudlow’s trade optimism. US Treasury yields, S&P 500 futures rebound alongside positive Asian stocks.Focus on US-China trade talks, US Retail Sales data for fresh impetus.The USD/JPY overnight rebound extends in Friday’s Asian trades, as the bulls regain the 108.50 after the risk-recovery gathered steam on renewed optimism surrounding the US-China trade deal. Fresh hopes of a US-China trade deal returned to markets following the goodwill gestures by China, as it announced lifting the restrictions on the US poultry imports. Further, the news of the restart of the US-China trade talks later on Friday also added to improved risk appetite. However, the latest comments from the White House Economic Adviser Kudlow, citing that “we're getting close” to trade deal with China, acted as the main catalyst behind the latest pop in the risk sentiment, as reflected by the bounce-back in the US Treasury yields and S&P 500 futures. On Thursday, the spot fell to its lowest level in eight days at 108.25 after global stocks and US Treasury yields tumbled on souring risk sentiment, in response to fresh China slowdown fears and Germany’s narrow escape to a recession. The focus will likely remain on the primary level phone call between the US and Chinese trade teams for fresh cues on the risk trends that will eventually impact anti-risk Yen in the day ahead. Also, of relevance remains the US Retail Sales data due later in the NA session at 1330 GMT. USD/JPY Technical levels to consider    

Following its one-month-old trading formation, GBP/JPY recovers to 139.80 by the press time of Friday’s Asian session.

GBP/JPY bounces off the short-term triangle support.An upside break of the formation can recall October highs while 137.50 could lure sellers below pattern’s support.Following its one-month-old trading formation, GBP/JPY recovers to 139.80 by the press time of Friday’s Asian session. The symmetrical triangle formation keeps prices under check between 139.50/45 and 140.35. Pair’s recent pullback could push the quote towards pattern’s resistance, at 140.35 now, a break of which is likely a trigger for the fresh run-up to October high of 141.51. However, late-May high near 141.75 could question the pair’s further rise. On the downside break of 139.45, October 16 low near 137.50 and 137.00 could stop sellers from targeting the September month top nearing 135.75. GBP/JPY 4-hour chart Trend: Sideways  

More comments are flowing in from the RBNZ Governor Orr, as he continues to speak on the monetary policy outlook. Forward guidance as to future policy

More comments are flowing in from the RBNZ Governor Orr, as he continues to speak on the monetary policy outlook. Forward guidance as to future policy is important.

WH Adviser: "We're getting close" to trade deal with China

White House Economic Adviser Larry Kudlow is on the wires now, via Reuters, delivering some trade-positive comments and popping the risk sentiment up across Asia. Key Quotes: "We're getting close" to trade deal with China. 'The mood music is pretty good,' talks with China have been very constructive.

WTI (oil futures on NYMEX) is looking to extend the overnight bounce above the 57 handle, as the bulls find some solace from the renewed US-China trad

Oil awaits fresh catalyst to extend the bounce above $ 57Bulls are relieved from renewed US-China trade deal hopes. But oil gains may be capped by rising oil supply concerns ahead of US data. WTI (oil futures on NYMEX) is looking to extend the overnight bounce above the 57 handle, as the bulls find some solace from the renewed US-China trade optimism after both trade teams agreed to meet over trade talks later on Friday. Further, the goodwill gestures by China on Thursday, lifting the ban on the US poultry meat imports, also added to the fresh trade-positive environment. However, the black gold failed to benefit from it, as the risk-off tone overshadowed amid re-emergence of global slowdown fears, in the wake of downbeat Chinese activity numbers and Germany narrowly averting a recession. The broader market risk-aversion sent the US Treasury yields tumbling alongside the Wall Street stocks and oil prices. Moreover, the US crude inventory build further exacerbated the pain in the barrel of WTI. The official weekly US Energy Information Administration (EIA) Crude Stocks data showed that the US crude stockpiles rose last week by 2.2 million barrels, versus expectations for a 1.649 million-barrel rise. Despite the downside, the bulls managed to draw some support from the OPEC’s smaller-than-forecast oil surplus going into 2020. In the day ahead, the US-China trade talks will be closely eyed for the next direction in the prices. Meanwhile, the commodity will take cues from the Baker and Hughes US Retail Sales and Rigs Count data due later in the NA session. WTI Levels to watch    

The United States (US) forwards in its support to the Hong Kong protesters as Bloomberg headlines say the US Senate is preparing for quick passage of HK law.

The United States (US) forwards in its support to the Hong Kong protesters as Bloomberg headlines say the US Senate is preparing for quick passage of legislation that places the city’s special trading status with the US under annual review. Key quotes "The Senate is set to bring the bill to the floor under an expedited process that would allow for quick passage unless there is an objection, according to Republican Senator Marco Rubio, the lead sponsor." "The bill could pass as early as next week, according to a Senate aide." FX implication Given China’s tough opposition to the US meddling in “one country, two systems”, news like this could negatively affect the market’s risk sentiment. In doing so, USD/JPY could extend the recent downside, currently around 108.40.

With the fresh optimism surrounding the US-China trade accord, Gold prices struggle to extend the previous recovery while taking rounds to $1,471.

The latest trade positive headlines keep a check on Gold’s recovery.US-China trade discord, Hong Kong unrest and the USD weakness helped the bullion the previous day.Trade/political news will keep the driver’s seat amid a light economic calendar.With the fresh optimism surrounding the US-China trade accord, Gold prices struggle to extend the previous recovery while taking rounds to $1,471 amid Friday’s initial Asian trading session. In addition to the Politico and South China Morning Post’s (SCMP) updates on a likely extension to the Huawei sanction waiver, comments from the US Department of Agriculture’s (USDA) McKenny, signaling further talks on Friday and a 50% chance to the deal, brightened the risk sentiment off-late. The yellow metal rose to one week high on Thursday as trade/political catalysts keep risk tone heavier while the broad weakness of the US dollar (USD) added strength to the momentum. Trade negotiators between the United States and China keep juggling after China denied mentioning the number for the US farm imports. Also weighing the talks were political tensions surrounding Hong Kong protests and China’s objection to the US transit in Taiwan waters. Additionally, disappointing data from Australia and China further pleased the bullion buyers on Thursday. The USD weakness could be attributed to the Federal Reserve officials’ inability to provide any clear direction to the future monetary policy while the US Jobless Claims’ surge to the highest since June strengthened the greenback bears. Moving on, a light economic calendar until the US will keep the market’s focus on trade/political headlines for fresh impulse whereas the United States (US) Retail Sales and Industrial Production could entertain traders afterward. Technical Analysis 100-day Simple Moving Average (SMA) around $1,479/80 acts as an immediate upside barrier ahead of $1,500 round-figure while the recent low around $1,445 and an early-July high around $1,436/35 could please sellers during the pullback.  

The South China Morning Post (SCMP) carries a story on Friday, citing the latest comments from the Chinese Commerce Ministry Spokesman Gao Feng delive

The South China Morning Post (SCMP) carries a story on Friday, citing the latest comments from the Chinese Commerce Ministry Spokesman Gao Feng delivered late-Thursday. Key Quotes: The trade war between the two nations started with the imposition of tariffs and it should end with their removals. That is an important condition for reaching the deal. The significance of phase one deal should reflect the scale of the tariff rollback. China is willing to work together with the US, resolving each other’s core concerns properly on the basis of equality and mutual respect and creating conditions for the phase one deal. Gao responded to Tuesday’s speech by US President Donald Trump’s, in which he warned: “if we don’t make a deal, we will substantially raise those tariffs”. Earlier today, Global Times also reported Gao’s comments on the tariff rollback. China’s CommerceMin Spokesman Gao: Tariffs “should' be rolled back as part of deal – Global Times

GBP/USD holds on to recovery gains from 50% Fibonacci retracement level while taking the bids to 1.2885 during the early Asian session on Friday.

GBP/USD extends recovery from 50% Fibonacci retracement level.Bullish MACD indicates pair’s another run-up to the short-term key resistance line.GBP/USD holds on to recovery gains from 50% Fibonacci retracement level while taking the bids to 1.2885 during the early Asian session on Friday. The pair’s bounce from 50% Fibonacci retracement of late-October advances gains supports from bullish MACD, which in turn favors pair’s another attempt to clear three-week-old falling trend line, near 1.2930. However, the pair’s successful break of 1.2930 is less likely to stop unless meeting the 1.3000 mark. In a case where sellers ignore a bullish signal from the 12-bar Moving Average Convergence and Divergence (MACD) indicator, 100-bar Simple Moving Average (SMA) near 1.2865 could act as immediate support ahead of 38.2% and 50% Fibonacci retracement levels of 1.2823 and 1.2764 respectively. It should also be noted that pair’s declines below 1.2764 could strength bears to target 61.8% Fibonacci retracement level of 1.2707 and mid-October highs near 1.2650. GBP/USD 4-hour chart Trend: Further recovery looks likely  

RBNZ’s Orr: Interest rates need to remain low for a long time - Kiwi off the highs MOre to come ...

Reuters is out with the latest comments from the Reserve Bank of New Zealand (RBNZ) Governor Orr, as he makes some dovish comments on the monetary policy. Key Quotes: Door is open for a rate cut if needed. Starting to see signs of a pick up in activity. We are in a nice position to observe data. Lower exchange rate is adding stimulus. Monetary policy is already very stimulatory.

The Japanese daily, The Mainichi, carries the latest headlines, citing that the Japanese government is likely to issue more deficit-covering bonds due

The Japanese daily, The Mainichi, carries the latest headlines, citing that the Japanese government is likely to issue more deficit-covering bonds due to the downward revision in the current fiscal year's tax revenues. No further details are available on the same. Meanwhile, the USD/JPY pair attempts recovery from eight-day lows of 108.25 on trade-positive updates that flipped the S&P 500 futures back into the green territory. At the press time, the spot trades around 108.40 levels, almost neutral on the day. China’s CommerceMin Spokesman Gao: Tariffs “should' be rolled back as part of deal – Global Times

Given the recent trade positive headlines form the US, AUD/USD stops further declines below the four-week low while taking rounds to 0.6785.

AUD/USD takes rounds to mid-October lows after being disappointed by the economic calendar the previous day.Trade headlines have recently been positive from the US side, China holds its head high.Market sentiment recovers ahead of a light economic calendar.Given the recent trade positive headlines form the US, AUD/USD stops further declines below the four-week low while taking rounds to 0.6785 during early Friday morning in Asia. Be it the US Department of Agriculture’s Under Secretary Ted McKinney or the Politico’s news, trade optimism crossed wires from the United States (US) off-late. The same offers recovery in the market’s risk sentiment with S&P 500 Futures staying mildly positive with 0.10% gains. The Aussie pair dropped to the lowest since October 17 the previous day after Australia’s employment data and China’s Industrial Production/Retail Sales increased risk of the Reserve Bank of Australia’s (RBA) further rate cuts in 2020. Disagreements between the US and Chinese trade negotiators as well as tension surrounding Hong Kong and Taiwan kept the risk-tone under pressure on Thursday. Also, the Fedspeak failed to provide any clear direction of the next policy move as Chairman Powel blamed trade war for manufacturing weakness while some others at the Fed seem undecided on the need/space for more stimulus. Though, all of them were united on praising the current monetary policy. As a result, the US 10-year Treasury yields slipped nearly seven basis points (bps) to 1.82% while Wall Street stays sluggish with major indices marking no more than 0.10% moves. Markets are now gearing up for RBA Deputy Governor Guy Debelle’s speech about mortgage arrears at a panel discussion hosted in Sydney. It should also be noted that a lack of major data/events keep investor focus on trade/political headlines for fresh direction. Technical Analysis Pair’s break of an upward sloping trend line since October start indicates further weakness towards 0.6700 round-figure unless prices recover back beyond 100-day Exponential Moving Average (EMA) level of 0.6855.

The Euro, on the daily chart, is trading in a downtrend below the main daily simple moving averages (DMAs). This Thursday, the market traded mainly sideways wi

EUR/USD remains trapped in tiny ranges in the second part of the week. The level to beat for sellers is the 1.0995 support level.Resistance is seen at the 1.1024 and 1.1052 levels.  EUR/USD daily chart   The Euro, on the daily chart, is trading in a downtrend below the main daily simple moving averages (DMAs). This Thursday, the market traded mainly sideways with a spike at the end of the London session.     EUR/USD four-hour chart   The market is trading below the main SMAs, suggesting a bearish bias in the medium term. The spot is likely to stay under bearish pressure below the 1.1024 resistance level as EUR/USD remains predominantly weak and could see an extension of the down move towards the 1.0995, 1.0966 and 1.0920 support levels, according to the Technical Confluences Indicator.      EUR/USD 30-minute chart   The Euro rose above its main SMAs on the 30-minute chart, suggesting a potential correction up in the near term. Resistances can be seen at the 1.1024, 1.1052 and 1.1075 price levels, according to the Technical Confluences Indicator.   Additional key levels  

China's Global Times was out with the latest comments from the Chinese Commerce Ministry Spokesman Gao Feng, as he noted that tariffs "should' be roll

China's Global Times was out with the latest comments from the Chinese Commerce Ministry Spokesman Gao Feng, as he noted that tariffs "should' be rolled back as part of the deal. Gao said: "The trade war began with tariffs and should end with removing them," Gao said. "The size of the tariff cuts should reflect the importance of phase one deal. It should be decided by the two sides."   More to come …
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