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Positive U.S.-China trade updates got nothing on the bears! The small recovery in risk-taking dragged the dollar and left the Loonie eating dust. What’s up with that?!

  • Japan’s BSI manufacturing index dips from 6.5 to 5.5 in Q4 2018
  • Australia’s house price index (q/q) dips by 1.5% as expected vs. 0.7% decrease in Q2 2018
  • Australia’s NAB business confidence lower from 5 to 3 in November
  • Japan’s preliminary machine tool orders (y/y) plummets by 16.8% vs. 0.7% dip seen in October
  • PM May to meet Dutch PM Mark Rutte and Germany’s Angela Merkel on Tuesday to discuss Brexit
  • U.S.’ Mnuchin and Lighthizer discussed next stage of trade talks with Chinese Vice Premier Liu He

Major Events/Reports:

U.S.-China backroom negotiations update

In a statement earlier today, China’s Commerce Ministry shared that Vice Premier Liu He had talked trade with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in a pre-arranged phone call in Tuesday morning Beijing time.

The ministry explained:

“Both sides exchanged views on putting into effect the consensus reached by the two countries’ leaders at their meeting, and pushing forward the timetable and roadmap for the next stage of economic and trade consultations work…”

While neither China nor the U.S. offered more details, the prospect of ongoing negotiations between the U.S. and Chinese reps were enough to energize some of the bulls.

Cautious risk-taking

Wall Street might have seen last-minute recovery during the U.S. session, but Asian session traders weren’t as impressed.

See, aside from catching up to the Brexit (or no-Brexit) headlines, traders also remain concerned that recent disappointments in economic data from China, Japan, and other economies point to global economic slowdown in the foreseeable future.

  • Nikkei is down by 0.34% to 21,146.4
  • A SX 200 is down by 0.31% to 5,553.5
  • Shanghai index is up by 0.28% to 2,591.749
  • Hang Seng is down by 0.11% to 25,723.0

Gold prices were a little more bullish thanks to dollar weakness. Ditto for crude oil benchmarks, which were boosted by Libya’s National Oil Company (NOC) declaring force majeure on exports from the El Sharara oilfield, the country’s biggest, which was seized at the weekend by a militia group.

NOC said the shutdown would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield.

  • Gold is up by 0.11% to $1,245.58 per troy ounce
  • Brent crude oil is up by 0.50% to $60.17 per barrel
  • U.S. WTI is up by 0.57% to $51.16 per barrel

Major Market Mover(s):

USD

A bit of recovery in risk sentiment dragged the dollar lower against its major counterparts. If you recall, market players are still concerned that the Fed won’t be as hawkish next year as it is this year as Uncle Sam’s growth slows down.

USD/JPY is down by 26 pips (-0.23%) to 113.06; USD/CHF is down by 12 pips (-0.12%) to .9891; GBP/USD is up by 17 pips (+0.14%) to 1.2576; EUR/USD is up by 11 pips (+0.09%) to 1.1366, and AUD/USD is up by 16 pips (+0.22%) to .7206.

CAD

There were no direct catalysts to support it, but the Loonie ended the session lower across the board.

One possible explanation is that Asian session traders paid more attention to the Aussie and Kiwi’s price recoveries, which means that the Loonie is still near its prices when lower oil and concerns over China’s potential retaliation weighed on the comdoll during the U.S. session.

USD/CAD is up by 5 pips (+0.04%) to 1.3402; CAD/JPY is down by 22 pips (-0.26%) to 84.36; AUD/CAD is up by 24 pips (+0.24%) to .9657; GBP/CAD is up by 25 pips (+0.15%) to 1.6853; CAD/CHF is down by 10 pips (-0.14%) to .7380, and EUR/CAD is up by 19 pips (+0.12%) to 1.5231.

Watch Out For:

  • 6:30 am GMT: France’s final private payrolls (q/q) (0.2% expected and previous)
  • 9:30 am GMT: U.K.’s employment data (unemployment rate, claimant count change, average earnings). Read our mini trading guide if you’re planning on trading the event!
  • 10:00 am GMT: Germany’s ZEW economic sentiment (-25.0 expected, -24.1 previous)
  • 10:00 am GMT: Euro Zone’s ZEW economic sentiment (-23.2 expected, -22.0 previous)