Forex-novosti i prognoze od 06-12-2019

ANZ's analysts suggest that after a very busy week in terms of data and the RBA statement, the week ahead is quieter for Australia, but still important, with key data on business conditions released and the RBA Governor speaking on 10 December.

• “It will be interesting to see whether he gets asked any questions about how quantitative easing (QE) might work. One issue we have just looked at is how the cash rate target operates in such a world.
• Consumer confidence data in the coming week will be important. Among the many disappointments in the Q3 GDP report was the softness of household spending. This wasn’t because the tax cuts were worth less than we thought. Household income jumped sharply in the quarter. But households choose to save rather than spend.
• The shift higher in the household saving rate suggests we may see greater spending at some point, possibly into the end of the year. But the weakness of October retail sales and the continued decline in consumer sentiment argue otherwise.
• We also note that the lift in December spending has weakened in recent years. ‘Black Friday’ may provide a positive surprise for November sales. Even if it does, the pressure on our domestic spending forecast is downward, especially when we add the softer outlook for non-mining business investment.”

• Economy outperforming expectations, policies working
• President  Trump basically "likes what he sees" in China trade talks
• China talks moving nicely, Trump will make final deal
• U.S. and China need to adjudicate most delicate matters in trade talks
• Trump is not ready to sign any trade deal with China
• We have not papered any lengthy documents in China trade deal
• We are waiting for paperwork and translations
• He knows of no plans for top U.S. negotiators to travel for U.S.-China talks
• Deal could be made at ministerial level or presidential level, no decision made yet

The Commerce Department announced on Friday the U.S. wholesale inventories edged up 0.1 percent m-o-m in October after a revised 0.7 percent m-o-m drop in September (originally, a 0.4 percent m-o-m decline).

Economists had forecast wholesale inventories growing 0.2 percent m-o-m in October.

On a y-o-y basis, wholesale inventories surged 3.8 percent.

According to the report, wholesale auto stocks fell 0.4 percent m-o-m in October, following a 1.3 percent m-o-m drop in the previous month. Apparel inventories decreased 1.4 percent m-o-m, the largest drop since September 2016, after edging up 0.1 percent m-o-m in September. In addition, decreases were also recorded in furniture and professional equipment inventories. Petroleum inventories dropped 3.7 percent m-o-m.

Meanwhile, sales at wholesalers dropped 0.7 percent m-o-m in October, the biggest decline since December 2018, after falling 0.1 percent m-o-m in September.

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment surged to 99.2 in early December. That was the highest reading since May.

Economists had expected the index would increase to 97.0 this month from November’s final reading of 96.8.

According to the report, the index of current U.S. economic conditions increased to 115.2 in December from 111.6 in the previous month. Meanwhile, the index of consumer expectations grew to 88.9 this month from 87.3 in November.

Nearly all of the early December gain was among upper-income households, who also reported near-record gains in household wealth, largely due to increased stock prices, the report noted.

Analysts at Danske Bank say that at Wednesday's FOMC meeting, they are expecting the U.S. Fed to stay on hold, particularly in light of the recent upward revision of payrolls data.

• “Lagarde's first ECB meeting is not expected to bring policy changes, but the ECB is likely to launch formally its long-awaited strategy review - though we may not get a deadline for its completion.
• German politics, and the survival of the Grand Coalition, is still in flux, and investors should not get too excited about a big German fiscal policy boost in the near term.
• The UK election is coming up on Thursday. If Boris Johnson gets a solid majority, he should be able to get his Brexit deal through Parliament before Christmas and the UK will leave the EU by 31 January.
• We may get a phase one deal in the US-China trade talks next week, as Trump is otherwise set to put a 15% tariff on another USD160bn of goods from China.”

U.S. stock-index futures rose on Friday, helped by stronger-than-forecast November jobs data.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Statistics Canada reported on Friday that the number of employed people reduced by 71,200 m-o-m in November, while economists had forecast a gain of 10,000 and after an unrevised drop of 1.800 in the previous month.

Meanwhile, Canada's unemployment remained rose to 5.9 percent in November from 5.5 percent in October, above economists’ forecast for 5.5 percent. That was the highest jobless rate since September 2018.

According to the report, full-time employment decreased by 38,400 (or -0.2 percent m-o-m) in November, while part-time jobs declined by 32,800 (or -0.9 percent m-o-m).

In November, the number of public sector employees decreased by 2,300 (-0.1 percent m-o-m), while the number of private sector employees declined by 50,200 (-0.4 percent m-o-m). At the same time, the number of self-employed dropped by 18,700 (-0.6 percent m-o-m) last month.

Sector-wise, employment declined in both in the goods-producing sector, specifically in manufacturing (-28,000) and natural resources (-6,500), as well as in the services-producing sector, notably in public administration (-25,000).

On a year-over-year basis, employment grew by 293,000 (+1.6 percent) in November, with the increase largely accounted for by full-time work.

The U.S. Labor Department announced on Friday that nonfarm payrolls increased by 266,000 in November after an upwardly revised 156,000 gain in the prior month (originally an increase of 128,000).

According to the report, significant job gains occurred in health care (+45,000 jobs) and in professional and technical services (+31,000). In addition, manufacturing employment rose by 54,000, reflecting the return of workers from a strike.

The unemployment rate fell to 3.5 percent in November from 3.6 percent in October.

Economists had forecast 180,000 new jobs and the jobless rate to stay at 3.6 percent.

The labor force participation rate edged down to 63.2 percent in November from 63.3 percent in October, while hourly earnings for private-sector workers rose 0.2 percent m-o-m (+7 cents) to $28.29, following a revised 0.4 percent m-o-m gain in October (originally an increase of 0.2 percent m-o-m). Economists had forecast a 0.3 percent m-o-m advance in the average hourly earnings. Over the year, average hourly earnings have increased by 3.1 percent, following a revised 3.2 percent rise in October (originally a 3.0 percent advance).

The average workweek remained unchanged at 34.4 hours in November, matching economists’ forecast.

Analysts at ING note that, at the same time as U.S. payrolls, the Canadian jobs report will be published. 

• "The markets are already expecting a rebound in the headline number after the negative reading in October. Unemployment should remain around its all-time lows and continue to suggest that the Labour market is in a good place (wage growth to remain very strong too) and is no concern for the Bank of Canada. 
• For now, this should contribute to keep USD/CAD below the 1.32 level. 
• We still expect the BoC will cut early next year, but the reason behind such a move would mostly relate to external woes, in our view."

Analysts at TD Securities note that the German industrial production (IP) was much weaker than had been anticipated, and then was suggested by yesterday's factory orders report, with IP at -1.7% MoM in October (market +0.1%).

• "Details show that the biggest source of decline was in capital goods production. With a 0.6% decline in September, this sets us up for a very weak start to Q4 activity for Germany."
  

After the ISM non-manufacturing disappointed this week, analysts at ING expect that today’s jobs report in the U.S. to come in stronger than market consensus. 

• "Our economics team is expecting a 210k increase in hiring (consensus 183k) which should mark a strong rebound from the October reading. The headline gauge should largely benefit from the ending of the General Motors strike. This should give some respite to the dollar which has been under pressure in the past few days, mostly on the back of increased trade optimism. 
• An improvement in the labour outlook should endorse the notion that the Federal Reserve will stay on hold as it announces monetary policy next week (the market is already fully pricing in this eventuality). 
• Nonetheless, we continue to see a non-negligible risk of the Fed restarting its easing cycle early next year as the economic outlook keeps softening."

Analysts at Danske Bank suggest that the December ECB meeting, which will be Lagarde's first meeting as chair, is set to focus on the strategic review.

• “With forward guidance and new QE purchases already set for the coming months, no change in monetary policy is expected for the near future.
• Markets are likely to trade sideways through the press conference. We doubt specific details of the strategic review will be announced but we hope for at least some scope. We do not expect a deadline to be announced.
• We recommend Bund ASW wideners and periphery spread tightening as main ECB QE trades next year. We do not expect next week's meeting to 'rock the boat'.”

Analysts at TD Securities are expecting the Canadian labour market to give back 10k jobs in November (market: +10k) on an unwind of election-related hiring that bolstered the October print.

• “This would represent the second instance of consecutive declines in 2019, following job losses in June/July, which could feed speculation about a broader erosion in labour market conditions. A 10k decline in total employment should push the unemployment rate higher to 5.6% (market: 5.5%) although favourable base-effects should see wage growth hold at 4.4% y/y.”

Analysts at Danske Bank note the markets are in wait-and-see mode ahead of the U.S. payroll report today and the informal deadline of a U.S.-China phase one trade deal only nine days away.

• “Most equity markets are trading with a slight positive tone, though, based on cautious optimism that the US and China will find common ground and strike a deal ahead of 15 December when the US is set to put a 15% on another USD160bn goods coming from China. Yesterday Trump stated that the talks were 'moving right along'.
• While the two rivals seem to be getting closer to a phase one deal, the confrontation continues in all other areas. Yesterday, yet another front of tension opened up, as the White House administration is objecting to a USD1bn World Bank loan to China. The rift has another angle to it as the World Bank is now headed by David Malpass, who is American and was appointed by Washington earlier this year.
• US tensions with North Korea have resurfaced and in the past days turned into an exchange of insults. Yesterday North Korea named Trump a 'dotard' in response to Trump calling Kim Jong-Un 'rocket man' again three days ago. North Korea has threatened to end the diplomatic route by the end of December unless Washington makes concessions.”

• Market will have to trust us
• OPEC is trying to show analysts that we're doing our job
• World economy will continue to be well supplied
• But further commitment will allow us all to benefit

Aline Schuiling, senior economist at ABN AMRO, notes that Eurozone’s Q3 GDP growth remained unchanged from the flash estimate, at 0.2% QoQ.

“Looking at the main components, net exports reduced growth by 0.1pp qoq. Fixed investment and government consumption were slightly positive and each added 0.1pp, while inventory building reduced growth by 0.1 pp. The main surprise was a jump in private consumption growth, which accelerated in Q3, adding 0.3 pps to qoq growth, up from 0.1 in Q2. Looking forward, we expect the positive contribution of final domestic demand to growth to decline. Employment growth eased to 0.1% qoq in Q3, down from 0.2% in Q2 and 0.3% in Q1. The deterioration in labour market conditions is also reflected in the fact that the unemployment rate has stopped falling (it has been roughly stable since April) and that consumers have become less optimistic about labour market prospects. All in all, we expect GDP growth to edge lower to around 0.0.-0.1% qoq in the final quarter of this year and to remain subdued in the first half of 2020.”

China is likely to lower its economic growth target for 2020 to “around 6%” which would give policy makers leeway to respond to slower growth while still keeping the goal of doubling income this decade within reach, according to Goldman Sachs Group Inc.

Communist Party officials are expected to convene the annual Central Economic Working Conference this month and trim the growth target from 6%-6.5% this year, economists including Yu Song wrote in a note.

The vague “around” term would allow a growth rate below 6% to still be viewed as compatible with the target, the economists said. The goals set at the conference are usually kept undisclosed until formally endorsed by the legislature in March.

China’s economy expanded at the slowest rate in almost three decades at 6% last quarter. Economists expect the economy to slow below 6% in the fourth quarter on weak domestic demand and external headwinds.

Beijing will likely be tolerant of higher inflation in the coming year, raising the ceiling to 4% from the current 3%, Goldman Sachs said.

The Chinese government is also expected to allow an uptick in fiscal deficit to 3% from 2.8% this year, according to Goldman Sachs. Amid a slowing economy, Beijing has already rolled out a string of targeted measures including tax cuts which makes the sub-3% target difficult to achieve for this year, the economists wrote.

Analysts at National Bank Financial suggest that in the US, the most important piece of news will be November’s non-farm payrolls and with jobless claims continued to hover near 50-year lows in the month which is hinting at a very subdued rate of layoffs.

“Hiring in the private sector, meanwhile, may have improved somewhat judging from Markit’s flash composite PMI report which showed employment advancing for the first time in three months. The end of the strike at GM should also prop up payrolls. Accordingly, we’re calling for a slight acceleration in employment creation to 160K, a level still significantly above what the Atlanta Fed considers sufficient to absorb new entrants to the labour market and keep the unemployment rate steady over the long term (+110K/month). The unemployment rate, for its part, may stay unchanged at 3.6% if, as we believe, the household survey shows only a small decline in employment following outsized gains in previous months.”

France rejects a U.S. proposal this week that would let companies opt out of a proposed international tax reform, Finance Minister Bruno Le Maire said on Friday, urging Washington to negotiate in good faith.

U.S. Treasury Secretary Steven Mnuchin raised serious questions about OECD international tax reform proposals in a letter made public on Wednesday, jarring international officials by floating the idea of a “safe harbor regime”.

Le Maire said that would mean U.S. companies could opt in or out as they pleased, which he said would be unacceptable to France and other OECD countries.

He urged Washington therefore to negotiate on the basis that the new tax rules be binding, and said if the efforts at the OECD fell through EU countries should revive talks for a European digital tax.

In view of Deutsche Bank analysts, today’s US NFP is unlikely to be a blockbuster though as the Fed have made it quite clear that they are on hold until further notice and although we have an FOMC next week its very very unlikely that today’s jobs report will change anything.

“In terms of a preview, the consensus for November nonfarm payrolls is pegged at 185k (vs. 128k in October) but after Wednesday’s disappointing ADP (67k vs. 135k expected) print it’s likely that the whisper number is lower. Our economists forecast 145k, with around 46,000 of that attributable to the resolution of the GM strike. They also expect average hourly earnings to have risen +0.3% mom, the unemployment rate to hold steady at 3.6%, and hours work hold steady at 34.4 hours – all of which is in line with the wider consensus. All eyes on the data at 1.30pm GMT then.”

British employers' demand for staff rose in November at the slowest rate in more than a decade, adding to signs of a waning jobs market ahead of Brexit and next week's general election, a survey of recruiters showed.

The index of demand for staff from the Recruitment and Employment Confederation (REC) and accountants KPMG fell to 51.4 in November, its lowest since September 2009, from 51.6 in October.

REC report showed permanent job placements fell for an ninth month running, chiming with official data which has shown job creation waning.

"The uncertainty around the upcoming election and Brexit outcomes are playing havoc with the UK jobs market, as clearly employers and job-seekers are taking a wait-and-see approach before committing to growth or movement," James Stewart, vice chair at KPMG, said.

The survey showed starting salaries for permanent staff rose in November at the slowest rate since December 2016. For temporary staff, it was the weakest reading since November 2016.

Global growth will recover in the second half of 2020 as the trade war between Washington and Beijing eases and central banks’ monetary policies come into effect, said Adrian Zuercher, APAC head of asset allocation at UBS Global Wealth Management’s.

“There is a lot of fog around trade, influencing our forecast for economic growth,” Zuercher told CNBC. Tariffs the U.S. and China have imposed on each other are among the firm’s “key risks,” said Zuercher.

But while the environment is currently slow, he said global growth will see a “significant recovery going into the second half of 2020, particularly in the fourth quarter.”

“We see that the U.S. economy has actually slowed down and we see a relatively good chance that there may be a first phase deal and maybe the December tariffs get pushed out or actually even removed. That should be good enough for the economy to slowly recover,” said Zuercher.

Since the world’s two largest economies started their trade war in early 2018, Asia has seen a downward trend, said Zuercher, but trade was not the only contributing factor to a global slowdown.

It was also during that time when central banks “started to remove some of the stimulus and started (to) actively to shrink balance sheet globally,” he said. 

As 2019 comes to an end, Zuercher said central banks around the world have moved back “to printing money, expanding their balance sheets and lowering interest rates,” which will all have a positive influence on the world economy.

According to the report from Halifax Bank of Scotland, UK house prices in November were 2.1% higher than in the same month a year earlier. Economists had expected a 1.0% increase.

On a monthly basis, house prices rose by 1.0%. Economists had expected a 0.7% decrease.

In the latest quarter (September to November) house prices were 0.2% higher than in the preceding three months (June to August)

Russell Galley, Managing Director, Halifax, said: “Average house prices rebounded somewhat in November, with annual growth of 2.1% being driven by the biggest monthly rise since February, following two months of modest falls. Prices are now up by £3,904 since the start of the year. While a degree of uncertainty remains evident, it’s also clear that buyers and sellers are responding to factors such as improved mortgage affordability and the limited supply of available properties. It is these issues which we believe will continue to underpin the resilience evident in the market for most of 2019. Over the medium term we expect the emerging trend of modest gains to continue into next year.”

Karen Jones, analyst at Commerzbank, points out that GBP/USD has reached its 5 year downtrend at 1.3156 and is likely to be guided by the techincals.

“Also found in this vicinity is the 50% retracement of the move down from 2018 at 1.3167 and the 1.3187 May high and this is tough resistance and we look for the market to fail here. Minor support is offered by 1.3013 October high and the 20 day ma at 1.2938 and this guards the 1.2768 8th November low. Failure at 1.2768 would probably see a slide to the 200 day ma at 1.2696. This guards the 1.2582 September high. Below 1.2582 lies the 1.2548 uptrend line. It guards 1.2196/94. A close above 1.3187 will open the way to the 1.3382 the 2019 high and potentially the 61.8% retracement at 1.3450.”

Danske Bank analysts point out that today brings some very important data releases with the main event being the US jobs report for November.

“Employment in October was quite strong, both when looking at the upward revisions of the previous months and the fact that the strike at General Motors pulled the headline down by nearly 50,000 workers. Soft indicators are showing a weakening in employment growth, but the headline is likely to be strong, as the striking workers have returned to work. We estimate non-farm payrolls rose 200,000 in November, suggesting underlying growth of around 150,000. Markets will also keep an eye on headlines from the SPD party convention that kicks off today. With the surprise win of Norbert Walter-Borjans and Saskia Esken as party leaders last week, hopes in the market about fiscal easing have rekindled.”

Chidu Narayanan, economist at Standard Chartered, points out that Australia’s GDP growth slowed further in Q3 to 0.4% QoQ on slowing consumption and declining investment.

“In y/y terms, growth picked up marginally to 1.7% from 1.6% but remains well below trend growth of c.3%. Government spending was the only source of strength in Q3; other components of growth (barring inventories) slowed from Q2. We expect full-year 2019 growth to slow to a multi-decade low of 1.7%, picking up (due to a low-base) to a still-weak 2.2% in 2020. We expect labour-market conditions to deteriorate sharply over the next few months as declining construction activity leads to significant job losses. The unemployment rate is likely to rise above 5.5%, weighing further on household consumption. Meanwhile, we see net exports subtracting from growth in the 2020 as they decline from a high base. We expect two more 25bps rate cuts from the Reserve Bank of Australia (RBA), in February and Q2-2020, as growth slows further. We expect the central bank to embark on quantitative easing (QE) after hitting the cash rate floor of 0.25%; we expect this to come only at end-2020 or later.”

According to Karen Jones, analyst at Commerzbank, EUR/USD is poised to challenge the 5 month downtrend at 1.1115 as the attention is on the topside.

“The downtrend guards the 1.1180 October high and the 1.1249 channel resistance and eventually the 1.1359 200 week ma. This latter level remains the critical break point on the topside from a medium term perspective. Intraday dips should hold over 1.1050/45. This guards the recent low at 1.0981. Failure at 1.0980 targets the 1.0943 78.6% retracement. This is seen as the last defence for the 1.0879 October low and the 1.0814 Fibo retracement, and if seen, we will look for signs of reversal from here.”

China will waive imports tariffs for some soybeans and pork originating from the United States, China’s finance ministry said on Friday citing a decision by the country’s cabinet.

The ministry said the tariff waivers being implemented are based on applications by individual firms for U.S. soybeans and pork. The statement did not specify the exact quantities of the imported products on which the relevant waivers will be applied.

According to provisional data of the Federal Statistical Office (Destatis), in October 2019, production in industry was down by 1.7% on the previous month on a price, seasonally and calendar adjusted basis. Economists had expected a 0.1% increase. In September 2019, the corrected figure shows a decrease of 0.6% from August 2019, thus confirming the provisional result published in the previous month.

In October 2019, production in industry excluding energy and construction was down by 1.7%. Within industry, the production of intermediate goods increased by 1.0% and the production of consumer goods by 0.3%. The production of capital goods showed a decrease by 4.4%. Outside industry, energy production was up by 2.3% in October 2019 and the production in construction decreased by 2.8%.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1250 (5140)

$1.1200 (5871)

$1.1152 (3428)

Price at time of writing this review: $1.1102

Support levels (open interest**, contracts):

$1.1048 (2930)

$1.1000 (3608)

$1.0950 (3371)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date December, 6 is 110479 contracts (according to data from December, 5) with the maximum number of contracts with strike price $1,1200 (5871);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3251 (1787)

$1.3209 (1474)

$1.3181 (205)

Price at time of writing this review: $1.3158

Support levels (open interest**, contracts):

$1.3096 (212)

$1.3000 (238)

$1.2950 (391)

Comments:

- Overall open interest on the CALL options with the expiration date December, 6 is 31746 contracts, with the maximum number of contracts with strike price $1,3000 (5887);

- Overall open interest on the PUT options with the expiration date December, 6 is 36699 contracts, with the maximum number of contracts with strike price $1,2200 (2280);

- The ratio of PUT/CALL was 1.16 versus 1.12 from the previous trading day according to data from December, 5

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.