Archives of “November 22, 2019” day

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European indices mostly higher to end the week

  
Analysis, Global Indices

Italy’s FTSE MIB ends marginally lower

The major European indices are ending the week mostly higher. The exception is the Italy’s FTSE MIB which fell marginally.
The provisional closes are showing:
  • German DAX, +0.2%
  • France’s CAC, +0.1%
  • UK’s FTSE 100, +1.2%. The gain was the best in nearly 4 months
  • Spain’s Ibex, +0.4%
  • Italy’s FTSE MIB, -0.1%
  • Portugal’s PSI 20, +0.15%
For the week, apart from the UK FTSE 100 which turn positive as a result of today’s sharp move higher, the other indices had declines for the week.
  • German DAX, -0.59%
  • France’s CAC, -0.8%
  • UK’s FTSE 100, +0.35%
  • Spain’s Ibex, -0.12%
  • Italy’s FTSE MIB, -1.3%

Trump says deal with China ‘potentially very close’

  
Analysis, Politics

Trump on Fox News

  • Says he told Xi ‘this can’t be an even deal’
  • ‘We have to stand wit Hong Kong but I’m also standing with President Xi’
  • Says he warned Xi not to send soldiers to Hong Kong
  • Deal with China is very close
  • Says he will stick with Pence as running mate in 2020
The comment is boosting stock futures.
Here’s the verbatim:
“We have a deal potentially, very close, he wants to make it much more than I want to make it, I’m not anxious to make it,” he said.

A couple of option expiry levels to watch out for EUR/USD next week

  
Analysis, Forex

Alongside key near-term technical levels, it could make for yet another narrow week of trading for EUR/USD

Here is what’s on the options board for the time being:

Monday, 25 November
  • 1.1000 (€311m)
  • 1.1025-35 (€606m)
  • 1.1055-65 (€417m)
  • 1.1085-90 (€963m)
  • 1.1145-55 (€1.2bn)
Tuesday, 26 November
  • 1.1100 (€347m)
Wednesday, 27 November
  • 1.0995-00 (€1.5bn)
  • 1.1035-40 (€864m)
  • 1.1050 (€556m)
  • 1.1100-10 (€733m)
  • 1.1115-20 (€1.1bn)
  • 1.1125-35 (€2.6bn)
  • 1.1150-60 (€1.6bn)
Thursday, 28 November
  • 1.1025-35 (€886m)
Friday, 29 November
  • 1.1000 (€442m)
  • 1.1050-60 (€913m)
  • 1.1065-70 (€1.1bn)
  • 1.1100 (€1.7bn)
Just take note that the expiries and their respective size will continue to change in the run up to their rolling off time but we will update this on a day-to-day basis.
In terms of key economic releases next week, there is the German Ifo and GfK surveys but arguably the more important one will be the euro area inflation data on Friday, 29 November. As such, potential data-driven sentiment looks unexciting.
Some key technical levels to pair the above expiry levels:
a) Swing region resistance @ 1.0990-00
b) 100-day MA @ 1.1087
c) 100-hour MA @ 1.1071
d) 200-hour MA @ 1.1047
e) 14 November low @ 1.0989

 

China premier Li says will not resort to competitive devaluation of the yuan

  
Analysis, Forex

Comments by China premier Li Keqiang, via state television

  • Will push forward with yuan market-based reform
  • Will keep yuan basically stable within a reasonable, balanced range
The usual commentary coming out of China on the matter. Even with USD/CNY rising from 6.35 to 7.00 this year, the rhetoric remains more or less the same. In the case of the yuan, actions always speak louder than words.

Eurozone November flash manufacturing PMI 46.6 vs 46.4 expected

  
Analysis, Economy
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Latest data released by Markit – 22 November 2019

  • Prior 45.9
  • Services PMI 51.5 vs 52.4 expected
  • Prior 52.2
  • Composite PMI 50.3 vs 50.9 expected
  • Prior 50.6
The report here sort of summarises the overall sentiment from the French and German releases earlier. While there are green shoots starting to be observed in the manufacturing sector, domestic demand is beginning to weaken further as pointed out by the services print.
And when you weigh that as a whole, the composite reading still points to continued weakness in the euro area. As such, even if there are signs of hope, it is too soon to say that the European economy is on its way to a sustained recovery.

Heads up: ECB president Lagarde to speak soon

  
  Analysis
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Lagarde will be speaking at the European Banking Conference in Frankfurt

Lagarde

She will be delivering the keynote address to begin the event, right after the welcome/opening addresses which are scheduled for around 0800 GMT.

It has already been three weeks into her tenure as ECB president but Lagarde has yet to share any firm views on monetary policy and her strategic plans for the central bank.
Given the context of the occasion above, perhaps she may not delve too deep into monetary policy remarks but I wouldn’t be surprised if she does bring up a mention or two just to appease the crowd – and markets for that matter.
If she still keeps mum today, the next time we’ll see her speak will be during the press conference after the 12 December monetary policy meeting.

Nikkei 225 closes higher by 0.32% at 23,112.88

  
Analysis, Global Indices

The Nikkei closes higher amid mixed mood in Asian trading

Nikkei 22-11

Japanese stocks managed to find a reprieve to end the week but the overall mood remains more mixed as traders and investors are still caught in the middle of trying to figure out how US-China trade talks are developing at the moment.

The Hang Seng is also seeing mild gains of 0.2% but the Shanghai Composite is down by 0.7% on the day currently.
The overall risk mood remains more flat/modest as we look towards European trading with US futures up 0.1% but Treasury yields are flat across the curve. USD/JPY is also seeing little change at 108.61, trapped in a 14 pips range so far today.

China president Xi: We are not afraid of a trade war

  
Analysis, Economy

Further comments by China president Xi Jinping

Xi Trump
  • China did not start trade dispute with the US
  • Will not flinch from such a fight
  • Wants to work out agreement on trade on the basis of mutual respect, equality
  • When necessary, we will fight back
  • But we have been working actively to try and avoid a trade war
He is continuing with the usual rhetoric from the Chinese camp from the past few months. It’s pretty much a copy and paste of what they have been reiterating all along.
I reckon that gives you a sense of where the current standing is in terms of getting towards a “Phase One” trade deal.

Japan headline inflation data for October misses, core-core beats

  
Analysis, Economy
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The headlines National CPI comes in at 0.2% y/y, a “miss” on estimates.

  • expected 0.3%, prior was 0.2%
National CPI y/y excluding Fresh Food is 04% y/y
  • expected 0.4%, prior was 0.3%
National CPI excluding Food, Energy is 0.7% y/y a “beat” on estimates
  • expected 0.6 %, prior was 0.5%
I generally do not like describing CPI data in terms of misses and beats but made an ex[pcetion today.
The ‘core-core’ referred to is CPI excluding Food & Energy, this is the closest measure to what is termed ‘core’ CPI in the US. As you can see, slightly above the median consensus. While well short of the 2% BOJ target, a tiny bit of good news for the Bank.
Yen doing pretty much nothing on the data release. As is usual.
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