FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1728
BTC/USD
42 567.79
GBP/USD
1.3640
USD/JPY
109.4710
USD/CHF
0.9230
USD/CAD
1.2802
EUR/JPY
128.3820

Markets keep dancing on trade headlines


5 December 2019

After a steep fall in global equity markets over the first two trading days of December, sentiment turned around once more and risk-on trade returned with the latest trade headlines indicating signs of progress on the ‘phase one’ deal.

A day after President Trump declared he was prepared to wait until after the US election to reach a trade deal with China, a Bloomberg report released yesterday said  Washington and Beijing are moving closer to agreeing the amount of tariffs that would be removed in the deal.

Looking at how the world’s two largest economies are performing, it seems logical to believe that a deal needs to be struck. However, given recent history, nothing is guaranteed. Policy uncertainty has become the new normal in the US administration, and with that uncertainty expect to see increased volatility in financial markets.

Of course, December 15 is when the US is supposed to impose further tariffs on another $160 billion worth of Chinese goods. If President Trump lets these tariffs take effect, expect to see trillions of Dollars wiped off the value of stock markets. A decision to delay or cancel these tariffs will be the first real sign of progress in trade talks. Until we have a decision on that, expect investors to remain nervous.

In currency markets, the Dollar came under increased pressure due to a handful of poor economic data releases. The US manufacturing sector continued to contract further in November with the latest ISM monthly survey indicating that domestic factory activity fell to 48.1 from 48.3 in the previous month. Yesterday, the services sector slowed more than anticipated in November with the ISM non-manufacturing index falling to 53.9 from a previous reading of 54.7. ADP also revealed that private-sector job growth fell sharply in November, with only 67,000 jobs added last month versus expectations of 156,000. If tomorrow's non-farm payrolls report confirms further slowing in employment growth, expect to see rising calls for more interest rate cuts from the Federal Reserve.

Sterling was an outlier in yesterday’s trading session as GBPUSD finally broke above the recent 1.28 – 1.30 trading range. The currency pair climbed above 1.31 for the first time in seven months as traders began to bet that the Conservative Party will win a solid majority in the upcoming election. Technical factors also contributed to Sterling’s rally as stops above 1.30 were triggered, leading to a squeeze in short positions.

Trading the Pound is likely to be very tricky in the days ahead. Traders are obviously pricing in an orderly Brexit from the EU by January 31 based on the assumption of a Conservative majority. However, if polls prove to be misleading and we end up with a hung parliament, expect to see a steep correction in the Pound.


Related

Stock Futures Trade Sharply Lower
Stock Futures Trade Sharply Lower

Futures in the United States and in Europe are trading sharply lower as investors worry about the domino effect of Evergrande’s massive plunge on the Chinese property market..

21 Sep 2021

Oil market: the unbalanced demand and supply
Oil market: the unbalanced demand and supply

Oil prices climbed to higher grounds in the most recent daily sessions adding further to its upward momentum formed so far in September. The Oil market is running...

21 Sep 2021

US Markets lost major support, Asian Indices are melting
US Markets lost major support, Asian Indices are melting

Global markets closed last week on the back foot, and no significant positive factors emerged in Asian trading, increasing the flight to safety. The Hang Seng lost...

20 Sep 2021

US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.