The US House Intelligence Committee has approved US president Trump's impeachment report.

Overnight, the US House Democrats leading the impeachment inquiry into Donald Trump released their report detailing the case against the Republican president, saying he used "the powers of his office to solicit foreign interference on his behalf in the 2020 election."

"The report was prepared for the House Judiciary Committee, which is scheduled to kick off hearings on Wednesday as it begins to consider drafting articles of impeachment to be laid before the full House," Reuters explained.

Key notes

  • House Democrats in impeachment report say they uncovered months-long effort by trump to use the powers of his office to solicit foreign interference in 2020 US election – MSNBC
  • House intelligence committee impeachment report says trump 'solicited the interference of a foreign government, Ukraine, to benefit his reelection'.
  • The report says July 25 call between trump and Ukrainian president Zelenskiy was a 'dramatic crescendo' of a months-long campaign to extract 'personal political benefits'.
  • US House intelligence impeachment report says Trump obstructed impeachment inquiry.
  • Report says Trump obstructed the impeachment inquiry by instructing witnesses and government agencies to ignore subpoenas.
  • Report says Trump chief of staff confirmed aid to Ukraine was conditioned on investigations.
  • Report says Trump conditioned a white house meeting and military aid to Ukraine on a public announcement of investigations that would benefit his re-election campaign.
  • Report: no president in history except trump has issued order directing entire executive branch not to testify before congress.
  • House report says Trump publicly attacked and intimidated witnesses who testified about his misconduct.
  • House report says Trump 'publicly attacked and intimidated' congressional witnesses, says witness intimidation is a 'federal crime'.
  • House report says Trump also repeatedly threatened and attacked a member of the intelligence community who filed an anonymous whistleblower.
  • The Gold price rallied from a low of $1,460 and the 200-hour moving average overnight to a month high of $1,481.74.
  • Trade wars remain a risk for risk which is feeding a bullish case into precious metals again.
  • The outlook for the global economic backdrop could take a knock today on Aussie GDP.

The prices of gold were rising to their best levels in around a month overnight following various headlines over the last few days which leaves the US and Chinese 'phase-one' deal on the brink of collapse, critically and potentially failing to prevent the 15th December fresh tariffs kicking in on Chinese imports. Such an eventuality put trade deals at a serious impasse once again.

In early Asia, the price of the yellow metal is trading around $1,476 and off its overnight highs of $1,481.74 where the price rallied from a low of $1,460 and the 200-hour moving average. The bomb was dropped on markets when President Donald Trump said it might be preferable to hold off on completing a long-awaited US-China trade deal until after the November 2020 presidential election.

Key global economic data on the horizon that could benefit gold

Meanwhile, and for the day ahead, we will be looking to global economic data, especially in light of the potential for serious ramification to global growth in 2020 should the US and China be unable to find a common ground ad secure a trade deal once and for all.

Australian Q3 GDP Preview: Data could cement further rate cuts from RBA and weigh on AUD

We will see Chinese Caixin Services PMI and Australia's Gross Domestic Product for Q3. For the Aussie GDP, expectations are not pointing towards a bullish outcome and could be a catalyst in global markets to put on the breaks once again, which should b a favourable outcome for precious metals. Australia's GDP figures are forecast to show a small slowing in growth from last quarter, with growth printing at 0.3% QoQ and annual growth slowing to 1.5% YoY. For Caixin Services PMI (Nov), expectations are for a drastic improvement from the 51.1 prior to 52.7, an increase in line with prior data where the nation's manufacturing industry picked up – a welcomed, yet, small positive for risk appetite against an otherwise gloomy backdrop.

Gold levels

  • WTI stretches the previous two days’ pullback.
  • Rising odds of supply outage dominate over concerns of demand depletion due to trade war.
  • Today’s EIA stockpiles will be closely observed ahead of OPEC+ meeting.

WTI remains positive while taking rounds to $56.50 during the early Asian trading session on Wednesday. The energy benchmark follows the two-day-old recovery amid rising concerns of deeper production cuts by the global oil suppliers and upbeat private inventory data.

The American Petroleum Institute’s (API) Weekly Crude Oil Stock survey for the period ended on November 29 showed that the United States (US) oil inventories dropped -3.72 million barrels versus the previous readouts of 3.64 million barrels.

OPEC+ in the spotlight…

While the depletion of supply extended the black gold’s previous recovery, comments signaling the need for further global production cuts from Iraq’s Oil Minister Thamir Ghadhban offer an additional boost to the run-up. The diplomat said that the members of the OPEC+ group, Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia, prefer wider output cuts. Earlier, Saudi Arabia was also pushing for a broad product cut accord.

Oil markets seem to pay a little heed to the US-China trade worries. Herein, the US continues to dim the prospects of any phase-one deal with China in 2019 while China stands tough and announces sanctions over the Hong Kong Act.

Although OPEC+ meeting on December 05/06 becomes the key event for the oil traders, today’s official oil inventory data from the Energy Information Administration (EIA) will offer intermediate moves. The stockpile report is expected to follow the footsteps of private API numbers while flashing -1.798M figure versus +1.572M prior.

Technical Analysis

Unless bouncing back beyond 200-day Simple Moving Average (SMA) level of $57.65, prices stay vulnerable to revisit November month low surrounding $54.10.

  • AUD/JPY stays positive around three weeks’ high.
  • Nearness to the bearish formation’s support, trading below key resistance confluence push sellers to look for entry.
  • Upside capped by 200-day SMA, 50% Fibonacci retracement.

AUD/JPY takes the bids near 74.40 by the press time of early Wednesday morning in Asia. The quote nears the highest levels in three weeks.

Even so, its proximity to the rising wedge’s support, a bearish chart formation, coupled with the downbeat histogram of the 12-bar Moving Average Convergence and Divergence (MACD), keep sellers hopeful.

In doing so, sellers are looking for a daily closing below 74.00 to take aim at 23.6% Fibonacci retracement of April-August fall, at 72.52, ahead of diverting bears to early August low near 70.75 and 70.00 round-figure.

Meanwhile, Tuesday’s high near 74.85 and 75.00 mark could entertain buyers while a confluence of 200-day Simple Moving Average (SMA) and 50% Fibonacci retracement near 75.35/40 will become a tough nut to crack for the bulls.

It’s worth mentioning that Australia’s third-quarter (Q3) Gross Domestic Product (GDP) data, up for publishing at 00:30 GMT, becomes an immediate key catalyst to watch. Forecasts suggest YoY figure to improve to 1.7% from 1.4% while the QoQ level is less likely to deviate from 0.5%.

AUD/JPY daily chart

Trend: Pullback expected

Australian GDP overview

Global markets are now gearing up for Australia’s third-quarter (Q3) Gross Domestic Product (GDP) figures, up for publishing at 00:30 GMT on Wednesday. The reason being the Reserve Bank of Australia’s (RBA) latest refrain from a clear bearish bias while keeping the statements that suggest the rates to remain low in 2020. Forecasts suggest the annualized pace of economic growth to come in at 1.7%, a slight tick above the previous period's 1.4%, while the quarter-on-quarter numbers are expected to remain unchanged at 0.5%.

Ahead of the outcome, Westpac said:

GDP growth over the year to Q2 was just 1.4%, the slowest pace since 2009 and revealing that the economy was declining in per capita terms. Favorable base effects should ensure that annual growth at least improves – Westpac looks for 0.6%qtr, 1.8%yr. The median forecast is 0.5% but many are on 0.6%. The arithmetic of our Q3 GDP forecast is: domestic demand 0.3% (upgraded from 0.2%); inventories +0.2ppts; and net exports +0.2ppts, as well as statistical discrepancy (-0.1ppt). Growth is lopsided – centered on inventories, exports and public spending – with ongoing weakness in private demand (across the consumer, housing and business investment).

The Australia and New Zealand Banking Group (ANZ) conveys the details with the RBA’s latest statements while saying:

The big event today is Australian Q3 GDP. We expect a rise in GDP of 0.6% q/q, which would see annual growth lift to 1.7% from 1.4%, consistent with the RBA’s characterization of a “gentle turning point”. Once again, private demand looks to have been very weak. The mainstay of economic growth remains public demand. This highlights the difficulty for the government and the RBA in generating measures to support the economy when public spending is already the key driver of growth.

How could it affect the AUD/USD?

While the broad risk-off, mainly due to trade war risk between the United States (US) and China, seems to lack strength in disappointing the Aussie buyers, upbeat growth figures could add fuel to the pair’s run-up. On the contrary, prices are already nearing three weeks’ high and a disappointment from the data, which is less expected, could offer sellers an opportunity to enter.

Technically, 100-day Exponential Moving Average (EMA) near 0.6840 acts as immediate support, a break of which could recall 0.6800 mark, while 0.6920/30 area including 200-day EMA and November month’s top stays on the bull’s radar during further upside.

Key notes

AUD/USD holds in bullish territory, awaiting Aussie GDP

AUD/USD Forecast: Bullish ahead of Q3 GDP

About the Aussie GDP release

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.

  • USD/JPY looks for fresh clues while taking rounds to multi-day low.
  • Trade war fears keep the driver’s seat while ignoring news of Japanese stimulus.
  • Japan’s second-tier statistics can entertain traders amid a broad risk aversion wave.

USD/JPY seesaws around 108.65 during early Wednesday morning in Asia. The quote dropped the lowest since November 22 the previous day as an escalation of the trade war fears kept the Japanese yen (JPY) on stronger footage.

Diplomats from the United States (US), including the Trade Secretary Wilbur Ross and Vice President Mike Pence, kept dimming the prospects of the US-China phase-one deal. On top of it, Trade Secretary Wilbur Ross recently suggested introduction of auto tariffs, which might hurt Japan and European Union (EU).

Market players largely ignored Reuters’ news that quotes the Prime Minister (PM) Shinzo Abe. The Japanese PM said that the government is in the final stages of announcing a big stimulus package.

With this, Wall Street registered another day of losses by the end of Tuesday while the US 10-year treasury yields trimmed nearly 12 basis points to 1.72%. Further, the S&P 500 Futures also liquidate near to 0.70% by the press time.

Moving on, Japan’s Jibun Bank Services Purchasing Managers’ Index (PMI) for November, expected 50.4 versus 49.7, is likely to offer immediate direction to the pair during initial Tokyo open. However, major attention will be on this week’s US employment data and trade war headlines.

US employment data in focus…

Given the absence of major catalysts from Japan, Friday’s key monthly jobs report from the US is now gaining more attention. As a result, today’s ADP Employment Change for November, forecast 140K versus 125K earlier, will be observed for intermediate direction. Concerning the Friday’s employment numbers, the headlines Nonfarm Payrolls (NFP) is expected to rise from 128K to 180K while Unemployment Rate and Average Hour Earnings (YoY) could remain unchanged at 3.6% and 3.0% respectively.

Technical Analysis

Unless bouncing back beyond the two-month-old rising trend line, at 108.72 now, USD/JPY drops further towards a 100-day Exponential Moving Average (EMA) level of 108.38.

  • Gold is trading at its highest in the last three weeks.
  • The level to beat for buyers is the 1480 resistance.

Gold daily chart

Gold bounced sharply from the November lows while breaking above the 1465 resistance level. The market is trading below the 50 and 100-day simple moving averages (SMAs).

Gold four-hour chart

The metal is testing the 1480 resistance and the 200 SMA. A break above this level can send gold up towards 1493 and 1520 if the buyers gather enough momentum. Support is seen at the 1465 level.

Additional key levels

Iraq’s Oil Minister Thamir Ghadhban recently crossed wires, via Reuters, while signaling that the upcoming meet between the global oil producers including Russia will debate over deeper production cuts.

Key quotes

The additional cut is required.

The cut proposal will be real.

Additional oil cuts of 400K barrels per day (bpd) not final.

1.2mbpd cut is not enough.

Slower demand is a bigger impact next year than non-OPEC (Organization of Petroleum Exporting Countries) supply.

The deeper cut is needed because of slowing demand.

FX implications

While an upbeat reading of private inventory numbers was already helping the WTI, news like this favored the energy benchmark to ignore trade war fears while taking the bids to $56.40 amid initial Asian trading hours on Wednesday.