EUR showed correctional growth on Monday, recovering slightly after a steady decline of last week. The uptrend appeared due to technical factors, since no interesting macroeconomic statistics from the US or Europe were released yesterday. American markets were also closed due to Veterans Day. One way or another, investors are still focusing on trade negotiations between the United States and China. Optimism regarding the early conclusion of a preliminary agreement gave way to doubts after Donald Trump announced that he was not going to revise the current policy on increased import duties. Today, the instrument is relatively stable, expecting new drivers to appear on the market. Investors expect the publication of November statistics on ZEW Economic Sentiment, as well as statements by ECB representatives, Coeure and Mersch.
GBP rose significantly against USD yesterday, rising to the local highs of November 5. The pound managed to show growth on Monday, despite the publication of disappointing macroeconomic statistics from the UK. Industrial Production in September fell by 0.3% MoM after a decline of 0.7% MoM in the previous month. Analysts had expected decline of 0.2% MoM. In annual terms, production decreased by 1.4% YoY, slightly improving dynamics from the previous month at –1.8% YoY. UK GDP in Q3 2019 showed an increase of 0.3% QoQ after a decrease of 0.2% QoQ in Q2 2019. Analysts had expected growth rate at 0.4% QoQ. In annual terms, the British economy slowed down from +1.3% YoY to +1% YoY, which also turned out to be slightly worse than forecasts of +1.1% YoY. Today, the pound remains prone to further growth. Traders are awaiting the publication of UK labor market data for September/October.
AUD fell against USD on Monday, continuing to develop a "bearish" momentum, which has been preserved since the end of last week. Pressure on the instrument is exerted by noticeably worsened prospects for concluding a trade deal between the USA and China. At the end of last week, Donald Trump said that he was not currently considering the possibility of canceling part of the previously imposed import duties, which Beijing insists on. In addition, the parties still did not agree on the time and place of the possible signing of the agreement, which reduces the likelihood that the deal may be concluded in November. Today, the Australian dollar, which opened with the usual decline, is recovering some of the lost ground. The instrument is supported by fairly positive macroeconomic statistics from Australia. NAB Business Confidence rose from 0 to 2 points in October with the neutral forecast. NAB Business Survey rose from 2 to 3 points in October, which exceeded the expectations as well.
USD fell against JPY on Monday, as the negative sentiment regarding the prospects for a trade agreement between the US and China outweighed the publication of weak macroeconomic statistics from Japan. Core Machinery Orders in Japan in September decreased by 2.9% MoM after a decrease of 2.4% MoM in the previous month. Analysts had expected growth rate at 0.9% MoM. In annual terms, the indicator increased by 5.1% YoY after the decrease by 14.5% YoY in the previous month. Forecasts suggested an increase of 7.9% YoY. Economy Watchers Current Index in October fell sharply from 46.7 to 36.7 points, while analysts had expected growth to 47.1 points.
Oil prices showed ambiguous trading dynamics on Monday, interrupting the development of weak correctional dynamics. Pressure on quotes is still provided by the uncertain prospect of a trade agreement between the United States and China. Last Saturday, Donald Trump once again emphasized that the deal would be concluded only if it is "useful" for the United States. As for the possible cancellation of some of the introduced import duties, Trump has not yet considered this possibility, which may become another stumbling block for the current negotiations.