12/ 11/ 2019

Donald Trump is making a closely watched speech, U.K. election math has shifted

U.S. President Donald Trump will make a lunchtime speech at the New York Economic Club and the market is on tenterhooks for any comments about trade, taxes, drug prices and everything in between. Trade is the key topic and the question will be whether the president will stick to prepared remarks or go off-script. There have been conflicting signals and stocks took a dip on Monday as the optimism around a possible trade deal started to wane; keep in mind there are consequences for both sides if a deal isn’t reached, in particular for American farmers.

The math has changed a touch in the U.K. election, though quite how much is still a debate. Nigel Farage and his Brexit Party will not contest a few hundred seats against the Conservatives, potentially clearing a path to wins for the Tories but still leaving plenty of marginal seats in the game. Still, the bookmakers now have Boris Johnson on track to win, though whether he will win the majority he needs to push through his Brexit deal is still on a knife edge and one can assume there are plenty more twists and turns to come.

07/ 11/ 2019

Dollar Drifts Lower as Trade Deal Doubts Creep in, Pound Eyes BoE

The euro edged lower against the U.S. dollar on Wednesday, as weak euro zone economic figures weighed on euro. Data showed Germany’s services sector barely grew in October, while euro zone business activity expanded slightly faster than expected last month but remained close to stagnation.

The pound declined against the dollar Wednesday, as investors calculated the risks the upcoming general election poses to Britain’s ability to complete its exit from the European Union before Jan. 31, its latest departure deadline.

The euro edged lower against the U.S. dollar on Wednesday, as weak euro zone economic figures weighed on euro. Data showed Germany’s services sector barely grew in October, while euro zone business activity expanded slightly faster than expected last month but remained close to stagnation.

The pound declined against the dollar Wednesday, as investors calculated the risks the upcoming general election poses to Britain’s ability to complete its exit from the European Union before Jan. 31, its latest departure deadline.

06/ 11/ 2019

Dollar Buoyed as Trade Optimism Lifts Market Sentiment, EUR Data will Need to Impress

The dollar held the upper hand against its rivals on Tuesday second half, particularly versus traditional safe-haven currencies, on rising hopes for a U.S.-China trade deal and a string of solid U.S. economic data. A survey on the vast U.S. service sector published on Tuesday showed that business sentiment had improved in October from a three-year low in September. The rebound is a welcome sign for dollar bulls as a fall in the index would have suggested that malaise in trade war-hit manufacturers was infecting the service sector, too. The data came after strong a U.S. employment report on Friday. “On top of Sino-U.S. trade issues, the market is reacting to signs of U.S. economic strength at the moment stated by Analysts. The yuan continued to rally on rising optimism for a trade truce between Washington and Beijing.

Trade optimism is the main diver in the financial markets today. There are talks that US officials are considering to remove the 15% tariffs on USD 112B worth of Chinese goods, put to effect back on September 1. In return, US would demand stronger intellectual property protections. If realized with the phase one trade deal, that would be the first real de-escalation of tariff war between US and China.

It’s a relatively busy day ahead on the economic calendar. Economic data out of the Eurozone will put the EUR in the spotlight.