December 05, 2018
Pulse of the Market
· Safe-haven buying emerged after President Trump’s tweet raised fears that trade war was not over
· Falling Treasuries were blamed for the leg lower in the greenback earlier in the session
· The Pound Fell as Prime Minister Theresa May’s government was found in contempt of parliament
· Goldman Sachs said it continued to recommend investors position for a “tactical bounce in USD/CAD
|The U.S Dollar rose from lows against its rivals yesterday after the plunge in U.S Treasury yields stalled. Safe-haven buying emerged after President Donald Trump’s tweets raised fears that the trade war was not over. The U.S dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.11% to 96.86, but was above a session low of 96.31. Trump said in a tweet he was “Tariff Man,” reminding investors that he was not afraid to re-escalate trade tensions with China, scaling back optimism from a day earlier, prompting support for Treasuries and helping the greenback move off lows. Falling Treasuries were blamed for the leg lower in the greenback earlier in the session, as fears of an economic recession grew after short-dated Treasury rates rose above longer-dated rates, referred to as an inversion of the Treasury yield curve, a signal of a potential economic recession. Yields on two maturities at the front of the Treasury curve rose above longer-dated 5-year notes overnight Tuesday for the first time in more than a decade. The pound, meanwhile, reversed its gains from earlier after Prime Minister Theresa May’s government was found in contempt of parliament for refusing to release its full legal advice on Brexit. GBP/USD fell from a session high of $1.2839, which had followed hopes that Brexit could be canceled after a top European Officer said that UK should be able to unilaterally cancel its withdrawal from the EU. USD/CAD rose 0.45% to $1.3256 a day ahead of Bank of Canada’s interest rate decision, widely expected to remain unchanged at 1.75%. Ahead of the rate decision, Goldman Sachs said it continued to recommend investors position for a “tactical bounce in CAD vs. USD going into year-end,” citing expectations the Bank of Canada will continue to keep a January rate hike on the table. The markets were delighted with the results of a weekend meeting between President Trump and Chinese President Xi Jinping at the G-20 summit.|
|00:30||Nikkei Japan PMI Services (NOV)||Medium||52.4|
|00:30||Australia Gross Domestic Product (YoY) (3Q)||High||3.3%||3.4%|
|01:45||Caixin China PMI Services (NOV)||Medium||50.8||50.8|
|08:55||Markit Germany Services PMI (NOV)||Low||53.3||53.3|
|09:00||Markit Eurozone Services PMI (NOV)||Low||53.1||53.1|
|09:30||Markit/CIPS UK Services PMI (NOV)||Medium||52.5||52.2|
|10:00||Euro-Zone Retail Sales (YoY) (OCT)||Medium||2.0%||0.8%|
|12:00||U.S MBA Mortgage Applications (NOV 30)||Medium||5.5%|
|13:15||U.S ADP Employment Change (NOV)||Medium||195k||227k|
|14:45||Markit US Services PMI (NOV)||Low||54.4||54.4|
|15:00||Bank of Canada Rate Decision (DEC 5)||High||1.75%||1.75%|
|15:00||U.S ISM Non-Manufacturing/Services Composite (NOV)||High||59||60.3|
|15:30||DOE U.S Crude Oil Inventories (NOV 30)||Medium||3577k|
|19:00||U.S Federal Reserve Releases Beige Book||Medium|
The single currency traded sharply higher earlier in yesterday’s session but ended the day slightly lower. EU finance ministers agreed yesterday to give the euro zone ESM bailout fund new responsibilities, but delayed decisions on a euro zone budget and a deposit guarantee scheme after failing to reach an agreement. Overall, the EUR/USD traded with a low of 1.1317 and a high of 1.1417 before closing the day around 1.1341 in the New York session.
The Japanese Yen traded higher yesterday. The markets were delighted with the results of meeting between President Trump and Chinese President Xi Jinping at the G-20 summit. Trump had threatened to raise tariffs on all Chinese products from 10 percent to 25 percent on December 1, but the Chinese convinced Trump to hold off on the tariffs until March 1. Overall, the USD/JPY traded with a low of 112.55 and a high of 113.64 before closing the day around 112.76 in the U.S session.
The British Pound traded higher at the start of the session following an unexpected piece of legal advice. The advocate general of the European Court of Justice said earlier today that the British government has the unilateral right to withdraw its notice of intent to leave the European Union. However, GBP ended the day lower against the U.S Dollar. Overall, the GBP/USD traded with a low of 1.2656 and a high of 1.2837 before closing the day at 1.2714 in the New York session.
The Canadian Dollar edged higher in yesterday’s Asian trading hours, after sharp gains at the start of the week. On the release front today, the Bank of Canada is expected to maintain the benchmark rate at 1.75%. The Canadian dollar started the week with sharp gains after the U.S and China agreed to a truce in the tariff war. Overall, USD/CAD traded with a low of 1.3161 and a high of 1.3264 before closing the day at 1.3259 in the New York session.
The Australian Dollar has touched a multi-month peak in a knee jerk reaction to a pause in the Sino-US trade dispute, though there was plenty of caution about the prospects of a lasting peace. The White House said President Donald Trump told Chinese President Xi Jinping that he would not boost tariffs on US$200 billion of Chinese goods on January 1 if Beijing agreed to buy an unspecified amount of US goods. Overall, AUD/USD traded with a low of 0.7324 and a high of 0.7391 before closing the day at 0.7334 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 43 and lies below the neutral zone. In general, the pair has lost 0.86%.
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 38 reading and lies below the neutral zone. On the whole, the pair has lost 0.83%.
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 56 reading and lies above the neutral region. In general, the pair has lost 1.03%.
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 59 and lies above the neutral region. On the whole, the pair has lost 0.05%.
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 37 and lies below the neutral region. In general, the pair has lost 0.09%.
|FOREX Closing Prices for December 04, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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