November 16, 2018
Pulse of the Market
· U.S retail sales rebounded with a gain of 0.7% in October, after a decline of -0.1% a month earlier
· Japan’s economy contracted in the Q3, as GDP fell 0.3%, which was in line with expectations
· The sterling tumbled after British ministers resigned in protest against a draft Brexit agreement
· Australia’s economy created 32.8k new jobs during October, up from 7.8k in September
|The U.S Dollar was higher yesterday as jobless claims data remained in line with a strong economy, supporting a Federal Reserve rate increase. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.32% to 96.97. The number of people who filed for unemployment assistance in the U.S. rose by 2,000 to a seasonally adjusted 216,000 from the previous week’s total of 214,000. The numbers give support to the Federal Reserve gradually increasing interest rates. Investors are also looking ahead to comments from Federal Reserve Chair Jerome Powell in Houston, Texas. On Wednesday, Powell said the U.S economy was strong and indicated that the central bank will continue to raise rates in 2019, albeit at a gradual pace. The sterling tumbled yesterday after British ministers resigned in protest against a draft Brexit agreement, rekindling fears of a chaotic departure for Britain from the European Union in 4-1/2 months. Traders flocked into the perceived safety of the dollar and yen as the pound swung wildly this week over Brexit. On Thursday, British Prime Minister Theresa May said she won the backing of her senior ministers for a draft divorce deal, but many in her government are unconvinced and on Friday her Brexit minister Dominic Raab, and other ministers, resigned. Heightened political uncertainty in the UK kept the pound on volatile ground. Japanese Yen gained yesterday despite Japan’s economy contracted in the third quarter, as GDP fell 0.3%, which was in line with expectations. This marked the second decline in the past three quarters, raising alarm bells about the health of the Japanese economy. The contraction can be attributed to natural disasters which hit Japan, including an earthquake, as well as the toll from the escalating global trade war. This has taken a bite out of Japanese exports, as the U.S-China tariff battle has hurt the export-reliant Japanese economy. The Australian Dollar swept higher against all rivals after official data showed the Antipodean labor market going from strength-to-strength in October, but some analysts are warning that things might already be about as good as they are likely to get for the Aussie.|
|07:00||German Wholesale Price Index (YoY) (OCT)||Low||3.5%|
|08:30||ECB President Draghi Speaks in Frankfurt||High|
|10:00||Euro-Zone Consumer Price Index Core (YoY) (OCT)||Medium||1.1%||1.1%|
|10:00||Euro-Zone Consumer Price Index (YoY) (OCT)||Medium||2.2%||2.1%|
|13:00||Bundesbank President Weidmann Speaks in Frankfurt||Low|
|13:30||Canada International Securities Transactions (Canadian dollar) (SEP)||Low||2.82b|
|13:30||Canada Manufacturing Sales (MoM) (SEP)||Low||0.1%||-0.4%|
|14:15||U.S Industrial Production (MoM) (OCT)||Medium||0.2%||0.3%|
|14:15||U.S Capacity Utilization (OCT)||Low||78.2%||78.1%|
|14:15||U.S Manufacturing (SIC) Production (OCT)||Medium||0.2%||0.2%|
|16:00||U.S Kansas City Fed Manf. Activity (NOV)||Low||10||8|
|18:00||U.S Baker Hughes U.S. Rig Count (NOV 16)||Medium||1081|
|21:00||U.S Net Long-term TIC Flows (SEP)||Medium||$131.8b|
The single currency gained earlier in the session but closed almost unchanged. Reports out of Italy that Prime Minister Giuseppe Conte was looking to work with the EU over his government’s 2019 budget, which has been rejected by Brussels, to avert massive fines had earlier helped support Italian government bond markets and the euro. Overall, the EUR/USD traded with a low of 1.1269 and a high of 1.1361 before closing the day around 1.1326 in the New York session.
The Japanese Yen gained yesterday. On the release front, it was a busy day in the US. Retail sales rebounded with a strong gain of 0.7% in October, after a decline of -0.1% a month earlier. Core retail sales jumped 0.8%, after a gain of 0.1% in September. Elsewhere, the Philly Fed Manufacturing Index fell sharply to 12.9, shy of the estimate of 20.1 points. Overall, the USD/JPY traded with a low of 113.07 and a high of 113.68 before closing the day around 113.62 in the U.S session.
The British Pound tumbled yesterday after British ministers resigned in protest against a draft Brexit agreement, rekindling fears of a chaotic departure for Britain from the European Union in 4-1/2 months. Traders flocked into the perceived safety of the dollar and yen as the pound swung wildly this week over Brexit. Overall, the GBP/USD traded with a low of 1.2722 and a high of 1.3028 before closing the day at 1.2772 in the New York session.
The Canadian Dollar edged higher against the U.S Dollar, extending its recovery from a nearly four-month low the day before as oil prices rebounded. The price of oil, one of Canada’s major exports, recouped some of the previous session’s slide on the growing prospect of OPEC and allied producers cutting output at a meeting next month. Overall, USD/CAD traded with a low of 1.3153 and a high of 1.3246 before closing the day at 1.3175 in the New York session.
The Australian Dollar climbed higher in yesterday’s trading session. The local currency yesterday clung to gains after signs of a possible thaw in Sino-US trade relations prompted a bout of short-covering, though it remained within recent well-worn ranges. Figures on Australian wage growth showed some pick-up. Overall, AUD/USD traded with a low of 0.7227 and a high of 0.7296 before closing the day at 0.7281 in the New York session.
EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 47 and lies below the neutral zone. In general, the pair has gained 0.18%.
Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 42 reading and lies below the neutral zone. On the whole, the pair has lost 1.66%.
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 63 reading and lies above the neutral region. In general, the pair has gained 0.61%.
This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 59 and lies above the neutral region. On the whole, the pair has gained 1.87%.
This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 42 and lies above the neutral region. In general, the pair has lost 1.60%.
|FOREX Closing Prices for November 15, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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