Daily Market Update

China trying to make a deal happen, Buck rises

November 25, 2019

The U.S. Dollar once again has the pendulum moving in its favor as news that could lead to a trade deal hit the wire over the weekend.

Overview

China is ready to tighten intellectual property rules, a move that indicates a willingness to address one of the biggest concerns in negotiations, which is technology and protection.

Stocks rising to add to the renewed sense of risk-taking as TD Ameritrade is set to merge with Charles Schwab, a multi-billion-dollar union sure to shake the investment business. Although the buck is earning on the U.S.-China deal chances, traders are eager to see mention of a rollback of tariffs, a development that could add volatility to an end-of-year market that seems to have priced a lot in already.

We shall see if prior to the Thanksgiving holiday we see an impact from key Durable Goods Orders numbers as well as the first reading of Q3 Gross Domestic Product. We believe there is still room to gauge guidance, but with not much left for the year, we shall see if the weakness we forecast can materialize.

 

What to Watch Today…

  • No major events scheduled for today.

Complete Economic Calendar can be found here.

 

EUR

The Euro swings continue in the half percent range it has been stuck in for two weeks as the last month of the year comes with a few events and important data. Purchasing Managers Index out of Germany and inflationary figures for the bloc will be out this week, but there will be a focus on statements from EU economists as well as Christine Lagarde dealing with what approach is to be expected from the central bank. On December 12th, she will lead her first meeting and decision press conference. We see Euro improving, but it will be a matter of data shining and momentum towards higher spending for next year.

JPY

Trade-talk optimism dented Yen slightly this morning, but the currency is down by close to 1.0% for the year. Overall for 2019, the safe-haven is looking to strengthen as fears over an economic slowdown dissipated especially in the second half of the year.

Despite no details on a trade agreement, markets try to look upward, and it is possible the Yen closes 2019 very much near the exact same levels it started the year with. We see a little bit of weakening from current ranges that can materialize the even year with swings, but no change at the end.

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