December 12, 2018
| Pulse of the Market
· The core producer price index in U.S increased more than expected in November
· German Chancellor Angela Merkel said the European Union would not renegotiate its Brexit deal
· Japanese indicators continue to have a bad week as manufacturing data also disappointed
· The Canadian Dollar edged higher against the U.S Dollar as oil prices and stocks rose
|The U.S Dollar inched higher yesterday, as a leading indicator of inflation rose, increasing pressure on the Federal Reserve to raise rates. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.13% to 97.31. The core producer price index increased more than expected in November. The Federal Reserve keeps its eye on this data because, when producers pay more for goods, they are more likely to pass price increases on to the consumer. The Dollar has been under pressure recently amid expectations that the Fed will pause its rate of interest rate hikes and trade tensions between the U.S and China. Meanwhile, the pound pared back earlier gains after German Chancellor Angela Merkel said the European Union would not renegotiate its Brexit deal. UK Prime Minister Theresa May pushed back a planned Parliament vote on the draft of the Brexit deal in the hopes of striking a better deal with Brussels. The Dollar was slightly lower against the safe-haven Japanese yen. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. Japanese indicators continue to have a bad week. The BSI Manufacturing Index slipped to 5.5 in the third quarter, down from 6.5 in the second quarter. Preliminary Machine Tool Orders nosedived, with a reading of -16.5 percent. This was the sharpest decline since July 2016. Earlier this week, Final GDP in the third quarter declined 0.6%. This was the second decline this year. On an annualized basis, the economy declined by 2.5% in Q3, after a gain of 2.8% in the second quarter. This was the worst downturn since 2014. The Euro declined yesterday, with EUR/USD dipping 0.24% to 1.132. The Euro could strengthen should European Central Bank President Mario Draghi stick this week to indications that monetary policy could be tightened next year, just as the Federal Reserve’s interest-rate path is thrown into doubt.|
|04:30||Japan Tertiary Industry Index (MoM) (OCT)||Medium||0.8%||-1.1%|
|10:00||Euro-Zone Industrial Production w.d.a. (YoY) (OCT)||Medium||0.8%||0.9%|
|12:00||U.S MBA Mortgage Applications (DEC 7)||Medium||2.0%|
|13:30||Canada Teranet/National Bank HPI (YoY) (NOV)||Low||2.8%|
|13:30||U.S Consumer Price Index (YoY) (NOV)||High||2.2%||2.5%|
|13:30||U.S Consumer Price Index Ex Food and Energy (YoY) (NOV)||High||2.2%||2.1%|
|13:30||U.S Real Avg. Weekly Earnings (YoY) (NOV)||Medium||0.9%|
|13:30||U.S Real Avg. Hourly Earnings (YoY) (NOV)||Medium||0.7%|
|15:30||DOE U.S. Crude Oil Inventories (DEC 7)||Medium||-7323k|
|15:30||U.S DOE Cushing OK Crude Inventory (DEC 7)||Low||1729k|
|15:30||DOE U.S. Gasoline Inventories (DEC 7)||Low||1699k|
|19:00||U.S Monthly Budget Statement (NOV)||Medium||-$197.0b||-$100.5b|
|23:50||Japan Buying Foreign Bonds (Yen) (DEC 7)||Low||¥1053.5b|
|23:50||Japan Buying Foreign Stocks (Yen) (DEC 7)||Low||-¥75.0b|
The single currency fell in yesterday’s trading session. Euro zone authorities are scrutinizing proposals for a synthetic common bond aimed at strengthening banks’ immunity to financial shocks but the process will take time given the asset’s complexity, ECB governing council member Philip Lane said yesterday. Overall, the EUR/USD traded with a low of 1.1304 and a high of 1.1398 before closing the day around 1.1315 in the New York session.
The Japanese Yen ended almost unchanged yesterday, after posting considerable gains earlier in the session. On the release front, Japanese manufacturing data disappointed. In the U.S, PPI came in at 0.1%, above the estimate of 0.0%. Core PPI dropped to 0.3%, but beat the estimate of 0.1%. Later in the day, the U.S releases CPI reports. Overall, the USD/JPY traded with a low of 112.98 and a high of 113.44 before closing the day around 113.35 in the U.S session.
The British Pound rebound came to an abrupt halt yesterday after a report that colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership. The British pound fell to a new 20-month low, down more than half a percent on the day, after earlier trading above $1.26. Overall, the GBP/USD traded with a low of 1.2478 and a high of 1.2637 before closing the day at 1.2486 in the New York session.
The Canadian Dollar edged higher against its U.S counterpart yesterday as oil prices and stocks rose amid hopes of an easing in the China-U.S. trade war. Canada is a major exporter of commodities, including oil, and runs a current account deficit so its economy could benefit from an improved outlook for the global flow of trade or capital. Overall, USD/CAD traded with a low of 1.3375 and a high of 1.3421 before closing the day at 1.3388 in the New York session.
The Australian Dollar gained yesterday. While risk-sentiment has been weaker since last week due to fears that US-China trade tensions are worsening rather than lessening, the risk correlated Aussie strengthened yesterday. Rather than this being caused by any positive data, the Australian Dollar’s gains were mainly caused by weakness in rivals Overall, AUD/USD traded with a low of 0.7182 and a high of 0.7223 before closing the day at 0.7202 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 46 and lies below the neutral zone. In general, the pair has lost 0.32%.
Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 33 reading and lies below the neutral zone. On the whole, the pair has lost 0.56%.
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 47 reading and lies below the neutral region. In general, the pair has gained 0.25%.
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 bullish signal. The Relative Strength Index is above 71 and lies above the neutral region. On the whole, the pair has gained 0.25%.
This cross is trading below 14, 50 and 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 25 and lies below the neutral region. In general, the pair has lost 0.31%.
|FOREX Closing Prices for December 11, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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