Boris Schlossberg
BK Asset Management
Market Drivers December 3, 2018
Euro pops on double dose of good news
UK PMI beats
Nikkei 1.00% Dax 2.67%
Oil $53/bbl
Gold $1231/oz.
Bitcoin $4041
Europe and Asia:
GBP UK PMI 53.1 vs. 52.0
North America:
USD ISM Manufcaturing 10:00
FX Markets saw a pop in risk appetite at the start of week’s trade, but the rally in the majors faded by London morning dealing with both euro and cable well off the session highs, while Aussie and kiwi held on to most of their gains.
The gap opening was sparked by news that US and China reached a temporary truce in their trade war with both sides agreeing to halt any additional tariffs for the time being as they continue to negotiate. Still, after the initial euphoria sentiment settled down a bit as many analysts pointed out that both parties merely pushed the issue off on the calendar and remained far apart on substantive matters. The best that can be said about the G-20 summit was that it did not exacerbate the tensions further, but it remains to be seen if global trade will pick up at start of 2019.
In Europe, the EC and Italy appeared to be moving towards a more conciliatory position on the budget with some headlines suggesting that Italian would scale back their deficit plans closer to the 2% target allowed by EU. Yet nothing substantive has yet been announced so EURUSD gave back its early gains and traded back below the 1.1350 level by morning session.
In UK, the early buying also dissipated in cable with the pair dropping towards 1.2750 after trading as high as 1.2825. UK PMI Manufacturing was a bright spot coming in at 53.1 but traders ignored the news as Brexit woes continued to dog the pair on reports that as many as one-third of PM May’s party may vote against her deal on December 11.
In North America today the market will get a look at ISM Manufacturing data which could surprise to the upside given the beat in Chicago PMI on Friday, but the true focus will be on FedSpeak with a slew of members making remarks in a variety of venues. Most important of all will be Vice Chair Clarida who is scheduled to be interviewed by Bloomberg at 11:30 GMT. If he continues to suggest that Fed is close to the neutral rate then anti dollars could see another boost in demand as the day proceeds
Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.