Archives of “January 13, 2020” day

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The US is about to remove ‘currency manipulator’ tag from China – report

  
Analysis, Forex

US with a gesture ahead of trade deal

China’s delegation arrived in Washington today ahead of Wednesday’s ‘phase one’ trade deal signing.
The US designated China a currency manipulator in August in what was a token gesture.
Fox’s Edward Lawrence reports that the designation will be removed imminently (or is that eminently?)
Sr Administration Official tells me Foreign Exchange report is expected to come out before China signs Phase One trade deal. Source in #China tells me today the Chinese will be removed as a currency manipulator in the report. Chinese trade sources wanted off to sign #trade deal.
USD/CNY fell below 6.9 today for the first time since August.
The report has given a further lift to risk trades.
How about a sell-the-fact on the deal signing?

European shares end the session mixed

  
Analysis, Global Indices

German DAX, -0.3%. UK FTSE, up 0.3%

The major European indices are ending the day with mixed results.  Looking at the provisional closes:

  • German DAX, -0.3%
  • France’s CAC, -0.12%
  • UK’s FTSE 100, +0.31%
  • Spain’s Ibex, -0.32%
  • Italy’s FTSE MIB, -0.6%
  • Portugal’s PSI 20, unchanged
In the debt market, the benchmark 10 year yields are mostly higher with the exception of the UK at -2.1 basis points.
German DAX, -0.3%. UK FTSE, up 0.3%_
In other markets,
  • Spot gold is trading down $10.11 or my 0.65% at $1552.29
  • WTI crude oil futures are trading down at $0.74 or -1.25% at $58.30. The low reached $57.97
In the US stock market, the major indices are trading near high levels. The S&P index and NASDAQ index are also above their highest close levels.
  • The S&P index up 13.77 points or 0.42% at 3279.17. The high close was 3274.70.
  • The NASDAQ index is trading up 54.7 points or 0.60% at 9233.55. The high close for it was at 9203.42. The all-time intraday high is up at 9235.19. The price is close to breaking that level
  • The Dow industrial average is up 58 points or 0.20% at 28883. The high close for its is at 28956.90. The price remains below that level

Chinese trade delegation en route to Washington to sign Phase One trade deal – Global Times

  
  Analysis
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Global Times with a tweet update on the matter

US China

The update reads:

The Chinese trade delegation led by Vice Premier Liu He has left Beijing en route to Washington DC to sign the phase one #tradedeal with US officials, a source told the Global Times on Monday. #tradetalks #tradewar

It looks like all is going according to plan and schedule – at least for now – with the deal expected to be signed off later in the week on 15 January.
As mentioned before, the details of the deal will be of particular importance so look towards that bit of information next as to how market participants will tie all of this to US-China trade sentiment in the bigger picture.
So far, markets are keeping more steady in the run up to the trade deal signing with risk faring rather decently today. USD/JPY is still keeping at fresh seven-month highs around 109.90 while gold is down by 0.7% around $1,550 at the moment.

Saudi energy minister says OPEC+ will only take decision on oil output cuts in March

  
Analysis, Crude

Adds that it is too early to talk about the decision at this point in time

With the oil market “normalising” after recent US-Iran geopolitical tensions, there is a sense that we may have probably seen the peak for oil prices this year already.

The market continues to be well supplied and unless global growth/demand improves significantly over the coming quarters, it is hard to see a natural progression towards anything higher than $70 just off supply and demand alone.
In that sense, OPEC+ will definitely have to keep their current quotas to maintain any form of a floor in oil prices for the rest of the year at least.

German 2019 budget surplus reportedly in low two-digit billions of euros

  
Analysis, Economy
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Sueddeutsche Zeitung newspaper reports

Germany

The paper says that Germany generated a federal budget surplus in the low two-digit billions of euros with higher-than-expected tax revenues offset by lower-than-expected interest payment, without identifying the source of its information.

For some context, that should see the figure come just below the 2018 figure of €11.2 billion. The actual figure will be published later today.
This is a bit of a setback for those hoping for Germany to loosen the purse strings a little as such a low surplus will give more reason for lawmakers to not do so. That said, it’s not like those hopes were that high to begin with anyway.

Yen crosses making the most of the good feels over the phase 1 trade deal

  
Analysis, Forex
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Positive sentiment is likely to persist into the signing of the US-China phase one trade deal on Wednesday January 15

USD/JPY is having an OK sort of session, on approach to its Friday high above 109.65. Yen crosses are generally higher also, AUD/USD is putting in some consolidation above 0.6900, kiwi also is near its recent highs and EUR is about to test its Friday high also. All these were helped along by some USD weakness on Friday on that disappointing NFP result.
Meanwhile the offshore Chinese yuan is pushing higher agisnt the USD also, benefitting also from phase1-itis.
Having said all this, the ranges here are not large for the majors, it is Asian after all. Its also a holiday in Japan today (markets closed).

Bundesbank official says euro zone GDP growth expected at 1.1% in 2020

  
Analysis, Economy

An official of the German central bank speaking in Hong Kong

  • pace of economic expansion in euro area expected to stabilise in 2020

Reuters with the headlines. Nothing further at this stage.

EZ growth has been lacklustre, 1.1% is not much better. It was 1.2% last year!
Comments from BUBA executive board member Burkhard Balz.(responsible for payments & settlements systems).

Forecasts for China GDP due this week (spoiler, full year 2019 at 6.1%)

  
Analysis, Economy

Bank of Communications economist (via Global Times):

2019 6.1%
Q4 6 % (compares with the same in Q3(
Slowdown in 2019 due to (the usual suspects follow …)
  • uncertainties in the world market
  • domestic factors, such as “the declining growth of manufacturing, labor-intensive and high-energy consumption industries as well as the country’s economic structural adjustment.”
China Q4 GDP is due on the 17th
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