The signature of the phase one deal between the US and China sent the S&P500 and the Dow to fresh intraday record highs, although the last minute announcement that the tariff cuts on Chinese exports would not happen before the US presidential election left investors wondering if China could ever do enough to please the Trump administration.

US equity futures extended gains in Asia, despite a mixed picture across the Asian equity indices. Nikkei was flat, Shanghai’s Composite (-0.26%) eased, while the ASX 200 (+0.67%) advanced with technology stocks.


Stay on top of the markets with Swissquote’s News & Analysis


Gold traded a touch above the $1550 mark, as WTI consolidated near the $58 a barrel.

FTSE and DAX futures point at a neutral start in Europe. Though an improved global sentiment will not hurt the European equities, investors in this part of the world clearly showed far less enthusiasm on the run up to the phase one deal, therefore the US-China deal per se will unlikely see significant reaction purchases.

Today’s light economic calendar in Europe and US will give investors time to chew and to digest the phase one deal, while keeping an eye on the US December retail sales, which are expected to have grown by 0.3% month-on-month versus 0.2% printed a month earlier.

In Turkey, the central bank is expected to loosen its rates by an additional 50 basis points at today’s monetary policy meeting. The CBRT already halved its one-week repo rate since July, a move that summed up to a sizeable 1200-basis-point-cut within a short five-month period. While the lira showed a surprising resilience to systematically bigger than expected rate cuts over the past four meetings, a fifth dovish surprise could trigger an adverse reaction given that the interest rates are now alarmingly close to the inflation levels with the growing risk that any positive move in consumer prices would easily push the lira investors toward the undesirable negative real interest rate territory. The USDTRY trades a touch below the 5.90 mark. A false move could send the US dollar rallying against the lira.

Finally, in Switzerland, yesterday was the fifth anniversary of the EURCHF’s 1.20 floor removal. But even half a decade after the let go of the floor, the Swiss National Bank (SNB) remains part of the US watchlist of currency manipulators, the one from which China was let free at the beginning of this week. The SNB’s active intervention to prevent the franc from appreciating too much added to the country’s $20 billion worth of trade surplus with the US in 2018 displease the policy makers on the other side of the Atlantic. Americans want the SNB to keep its hands off the market, but the truth is, without intervention, the franc’s safe haven status would strongly hit back at Switzerland with very high prices in multiple categories from exports to tourism. Cornered by a benchmark rate of -0.75% and a clear dovish stance from the European Central Bank, the SNB will likely continue its subtle play by maintaining its interventions at a reasonable level, knowing however that levels above par would inevitably attract a bad attention. With this being said, an accrued mid to long term safe haven demand for franc and the US watching, we maintain a neutral to positive view on the franc and expect that the appreciation versus the greenback should extend toward the 0.95 mark.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD loses 1.1800 amid escalaing US-Sino tensions

EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed. 


GBP/USD resumes decline, weighed by UK concerns, US-China conflict

GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.


XAU/USD drops $50 from record highs to the $2020 area

Gold prices are falling sharply on Friday, trading below $2040/oz at the moment. Earlier on Friday, the yellow metal reached at $2075, a new record high.

Gold News

Bitcoin may extend the recovery once Gold resumes the rally

Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.

Read more

WTI drops 1% to $41.50 ahead of US NFP, rigs data

WTI (futures on Nymex) is on a steady decline so far this Friday, undermined by reduced demand for higher-yielding assets amid the renewed US-China tensions induced risk-aversion.

Oil News

Forex Majors