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Global market watch - 19th November 2019

The Buck is trading a bit firmer this morning as domestic stock indices hit new record highs on increased optimism of a US trade deal with China whilst the 10-year Treasury bond yield dipped to its fresh 15-day low and USDCNY touched a 15-day peak on broad Dollar strength. The Buck improved in very tight market ranges with the Euro, CAD, and Sterling, but is close to its one-week peak with the Yen from yesterday, along with its new one-week high versus the Swiss Franc as the safe-havens sold off, while USDMXN is at its five-day high close to its one-month peak from one week ago. While the Greenback did improve a bit this morning, there is still no concrete US-China trade deal while the impeachment of President Donald Trump continues to be a matter of concern for the moment.  Domestic Building Permits and Housing Starts were also better than expected ahead of the key Fed Meeting Minutes Wednesday afternoon as it’s otherwise a generally light week for domestic economic data while politics remains front and center for now.

The Canadian Dollar sold off from its 11-day high versus the Greenback to a four-day low on USD strength in general coupled with the WTI Crude Oil price falling to its 19-day low this morning. CAD hit a fresh 2-week low versus the Euro along with its 5-day worst against the Yen largely on sliding oil prices.  Manufacturing Sales MoM was better than anticipated this morning at -0.2% actual on its -0.5% consensus forecast ahead of the key CPI MoM release tomorrow and Retail Sales MoM figure due this Friday morning.    In between is another speech from BoC Governor Stephen Poloz along with the newer ADP Non-Farm Employment Change on Thursday morning.  Mr. Poloz was CAD supportive last week as he pointed out that wage inflation is some +4.00% for now.

The Euro ticked a bit lower versus the broadly firmer Dollar today, rallied to its fresh 2-week high with the Loonie overnight, while it ticked up in very tight ranges with the British pound as well.  Eurozone Current Account was better than expected at 28.2B compared to its 22.4B consensus forecast today with the previous number revised up +28.3B from 26.6B also.  Market participants are looking at the key ECB Monetary Policy Meeting Accounts scheduled for Thursday morning along with the speech from new European Central Bank (ECB) President Christine Lagarde on Friday morning as well for insight into future central bank actions now in light of consistently soft inflation and growth data for the Eurozone.

The British Pound has managed to stay close enough to its fresh 27-day high versus the Greenback from yesterday despite Cable falling a bit lower in general.  CBI Industrial Order Expectations was slightly better than expected at -26 compared to its -30 consensus forecast which definitely was an improvement from its -37 reading last month.  Sterling has continued to be supported by the news last week the UK economy avoided recession combined with the decreased potential for an no deal or disorderly Brexit for now despite the election concerns now.

The broadly greenback stayed relatively firm with the safe-haven Yen and Swiss Franc as US stock indices rose to new record highs this morning while it fell to its five-day low with the Aussie and two-week low against the Kiwi on the new optimism of a US trade deal with China in the foreseeable term.  Meanwhile, the USDCNY rate actually rose to its own two-week high on USD strength coupled with the unrest in Hong Kong of late. 

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