Forex-novosti i prognoze od 24-11-2020

FXStreet reports that economists at Charles Schwab expect a near-term economic double-dip for the global economy gives way to a vaccine-led broad recovery in 2021. The new cycle comes with new leadership as international economic and earnings growth are likely to exceed the US for the first time in years, supporting relative outperformance by international stocks.

“The global economy has the potential to make a full recovery in 2021, rebounding from the -4.4% decline in 2020 with the growth of +5.2% in 2021, according to current estimates from the International Monetary Fund (IMF). Next year, we expect a very easy monetary and fiscal policy combined with a vaccine rollout beginning in the first half of 2021 to lead to a strong rise in economic and earnings growth. This 2021 backdrop may see the US pass the baton of global growth leadership to Europe, favoring international stocks and a broader overall market advance compared to 2020.”

“The strong vaccine-led recovery in global growth aided by accommodative policy expected for 2021 should favor stocks in general, especially economically sensitive stocks. While improving in November, cyclical stocks have generally moved sideways since early June, leading us to believe that markets have not yet priced a broad recovery. This disconnect within the stock market is hiding what we believe could be a long-term shift favoring international stocks.”

“Emerging market stocks usually outperform developed market stocks in the first year of an economic recovery. Now we know that emerging markets were ground zero for the COVID-19 crisis, which started in China. However, most major emerging market economies came into this recession with fewer fiscal and monetary imbalances compared to the prior two recessions, having more manageable debt and deficits and even trade surpluses in some cases. Additionally, central banks acted swiftly to alleviate financial stress in global markets, allowing for emerging market policymakers to quickly enact stimulus without concern of a weakening currency. This healthier backdrop for emerging markets, combined with the global economic rebound and weaker dollar may propel the performance of emerging market stocks during the new cycle.”

The latest survey from the Federal Reserve Bank of Richmond revealed on Tuesday that the U.S. fifth district's manufacturing activity continued to grow in November, albeit at a slower pace than in October.

According to the report, the composite manufacturing index dropped from 29 in October to 15 in November, the lowest since July, but remained firmly in expansionary territory, as all three component indexes – shipments (at 20 in November, down from 30 in October), new orders (at 12 in November, down from 32 in October), and employment (at 13 in November, down from 23 in October) - had positive readings. Manufacturers reported improvement in local business conditions, but the spending indexes softened somewhat, the Richmond Fed noted. Survey participants were also optimistic about the future, expecting growth to continue in the coming months

The Conference Board announced on Tuesday its U.S. consumer confidence fell 5.3 points to 96.1 in November from 101.4 in October.

Economists had expected consumer confidence to come in at 98.0.

October’s consumer confidence reading was revised up from originally estimated 100.9.

The survey showed that the expectations index dropped from 98.2 last month to 89.5 this month. Meanwhile, the present situation index edged down from 106.2 in October to 105.9.

“Consumer confidence declined in November, after remaining virtually flat in October,” noted Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in Q4. Heading into 2021, consumers do not foresee the economy, nor the labor market, gaining strength. In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”

FXStreet reports that analysts at Credit Suisse apprise that AUD/USD maintains a bull “wedge” as the pair is finally breaking above the key 0.7340/45 highs which suggests further upside, with key resistance at 0.7414.

“AUD/USD is finally breaking above the mid-September and current November highs at 0.7340/45, which should reinforce the core bullish uptrend, in line with the bull ‘wedge’ that is still in place, as well as the bullish daily MACD momentum setup.” 

“Next resistance is seen at 0.7382, beyond which could see a move back to the September high at 0.7414. Removal of here would reinforce the medium-term uptrend and see a further acceleration of upside momentum, with resistance seen at 0.7450 next, ith our medium-term objective eventually seen at a cluster of long-term Fibonacci retracements at 0.7574/7638.” 

“Support moves to 0.7340, ahead of the 13-day exponential average at 0.7273/65, which ideally holds should the market reverse back lower."

S&P reported on Tuesday its Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan areas, rose 6.6 percent y-o-y in September, following a revised 5.3 percent y-o-y jump in August. (originally a 5.2 percent y-o-y surge). This was the biggest annual gain in house prices since April 2018.

Economists had expected a climb of 5.1 percent y-o-y.

Phoenix (+11.4 percent y-o-y), Seattle (+10.1 percent y-o-y) and San Diego (+9.5 percent y-o-y) recorded the highest y-o-y advances among the 19 cities (excluding Detroit) in September. All 19 cities reported greater price gains in the year ending September versus the year ending August.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, jumped 7.0 percent y-o-y in September, following a 5.8 percent y-o-y increase in the previous month. This was the largest annual advance since September 2014.

“Housing prices were notably - I am tempted to say ‘very’ - strong in September,” noted Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “This month’s increase may reflect a catch-up of COVID-depressed demand from earlier this year; it might also presage future strength, as COVID encourages potential buyers to move from urban apartments to suburban homes. The next several months’ reports should help to shed light on this question.”

U.S. stock-index futures rose on Tuesday, as the U.S. president Donald Trump's acceptance of Joe Biden's White House transition ended weeks of political uncertainty and added to hopes of an economic recovery in 2021, which were initially bolstered by encouraging news about COVID-19 vaccines.

Global Stocks:

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

General Electric (GE) upgraded to Outperform from Perform at Oppenheimer; target $12

Yandex N.V. (YNDX) upgraded to Buy from Neutral at BofA Securities; target $80

• Although recent news on effectiveness of vaccines provides light at the end of the tunnel, significant uncertainty about future income prospects can be expected to prevail for some time, also because the pace of the rollout of vaccines and their acceptance among the public remain uncertain
• Fiscal expansion is then indispensable in order to sustain demand and mitigate the long-term costs of the crisis
• More elastic use of the “medium-term” notion might be all the more conducive in an environment in which high degree of prevailing uncertainty is likely to considerably increase the lags with which policy is transmitted to the real economy

• ECB should be open to making its own "below but close to 2%" inflation target genuinely symmetric
• ECB already has a dual mandate, needs also to aim for full employment, balanced growth, sustainable development

FXStreet reports that  Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes that ICE Brent Crude Oil continues its ascent and the rise above the 55-week moving average at 45.49 targets the 47.31 August peak and above.

“ICE January Brent Crude Oil’s strong rally has taken it to a two-month high at 46.72, to not far below the 47.18/31 August highs, which are expected to soon be overcome. The next resistance level can be seen at the 49.93 December 2018 low and at the psychological 50.00 mark.” 

“Minor support comes in between the mid-September and October highs at 44.67/43.99 and more important support between the mid-November low and the 200- and 55-day moving averages at 42.63/12. Further support comes in at the 40.42 September low. Below it lie the early October and the November 6 lows at 39.34/32.”

• Vaccine news provides some light at the end of the tunnel
• If the economy comes back because of the vaccine, effects of Brexit may be longer-term problem for the economy
• We still have plenty that we can do in terms of policy firepower

• Central bank measures have helped with global pickup
• Swift, abundant liquidity provision from central banks prevented negative feedback loop between economic and financial activities
• Deferral of full implementation of the Basel III standards, encouragement for banks to use capital, liquidity buffers have contributed to securing smooth functioning of financial intermediation
  
• Due attention must be paid to the possible shift in challenges facing firms, households from liquidity to solvency could affect future financial system
• It will be necessary to examine carefully structural changes in financial system, given growing importance of non-banks in financial intermediation

EUR traded mixed against its major rivals in the European session on Tuesday with gains versus USD, JPY and CHF, declines versus AUD and NZD, and flat versus GBP and CAD.

Investors' appetite for risk was bolstered by encouraging recent news about COVID-19 vaccines, the U.S. president Donald Trump's decision to accept Joe Biden's White House transition as well as media reports about the potential appointment of former Fed Chair Janet Yellen as the U.S. Treasury Secretary.

Markets also digested better-than-expected data out of Germany, the region's largest economy. The Federal Statistical Office (Destatis) reported that Germany's gross domestic product (GDP) expanded by a record 8.5 percent q-o-q in the third quarter, compared to a preliminary estimate of an 8.2 percent q-o-q growth, reversing a 9.8 percent q-o-q plunge in the second quarter. In y-o-y terms, the German economy shrank by 4 percent in the third quarter compared to a preliminary estimate of a 4.3 percent tumble and after a record contraction of 11.3 percent in the previous quarter. 

Meanwhile, the survey released by ifo Institute showed that German business sentiment deteriorated less than forecast in November. The Ifo Business Climate indicator for Germany fell to 90.7 in November 2020, from a downwardly revised 92.5 in the previous month (originally 92.7). Economists had forecast the index to drop to 90.1. The November decline was largely driven by a more pessimistic view about the future (the expectations index fell to 91.5 in November from a revised 94.7 in October). At the same time, the assessment of the current situation was little changed in November (the current conditions index came in at 90.0, down marginally from 90.4 in October).

FXStreet reports that Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, informs that copper (LME) has risen until 7331.00 in November as continues its advance to the 2018 high at 7348.00 above which lies the 7460.00 2014 peak.

“LME Copper has so far risen to its current November high at 7331.00, to above the 2017 high at 7312.50, with the 2018 peak at 7348.00 about to be hit. Further up the January 2014 peak can be seen at 7460.00 and the November 2012 low at 7506.00. There the current advance may pause. If not, attention would be on the 7796.00 January 2010 high and on the 8043.75 April 2010 peak.” 

“We will retain our medium-term bullish forecast while copper remains above the 6672.00 current November low.”

FXStreet reports that analysts at MUFG Bank note that the New Zealand dollar has been one of the best performing G10 currencies resulting in NZD/USD rising back to within touching distance of the 0.7000-level for the first time since the middle of 2018 after the news suggesting New Zealand (NZ) Finance Minister Grant Robertson’s search for advice on whether to include stability in house prices as a factor in the RBNZ remit.

“Finance Minister Grant Robertson has written to RBNZ Governor Adrian Orr asking him to consider amending the bank’s remit to include stability in house prices as a factor for monetary policy. He is concerned that an extended period of low-interest rates combined with a shortfall in housing supply could put upward pressure on prices and threaten financial stability. However, he stressed that he was not proposing any changes to the RBNZ’s policy mandate or independence which would have put more pressure on the RBNZ to place more weight on house price stability when setting monetary policy going forward.”

“The RBNZ will continue to have more discretion when setting policy and it remains to be seen whether the housing market will take on greater weight. Governor Orr has already added that they already take house prices into consideration.” 

“The developments will market participants to speculate that the housing market could overheat and prompt the RBNZ to scale back easing sooner than major central banks thereby boosting demand for the kiwi. A more likely first step though would be to use macroprudential policy tools to address housing market concerns.”

The Confederation of British Industry (CBI) reported on Tuesday its latest survey of retailers showed retail sales volume balance stood at -25 in the year to November, down slightly from -23 in October. That was the lowest reading since June.

Economist had forecast the reading to decrease to -35.

Retail sales volumes are expected to be broadly flat in the year to December.

The report also revealed that orders placed on suppliers dropped but at the slowest pace since December 2019 (balance of -10 from -39 in November) and are seen to fall at a similar pace next month (-13). Meanwhile, stock levels remained below the long-run average (balance of +14 from +6; average +18) and are expected to remain so next month (+12).

In other survey results, employment in the retail sector continued to decrease compared to a year ago, but at a slower pace than in August (balance of -32 from -45). Investment intentions for the year ahead fell in November, but at a slower pace than in August (balance of -12 from -32).

Retailers also reported that average selling prices rose compared to last November (balance of +40 from +17) and at the fastest pace since February, although price inflation is expected to ease next quarter (+33).

“This month’s survey gives hope that the economic impact of the Autumn lockdowns should not be as severe as in the Spring. Both consumers and firms are adapting as best they can, borne out in this month’s strong online sales,” noted Ben Jones, CBI Principal Economist. “With encouraging progress on mass, rapid testing and vaccine solutions coming down the track, there is reason for growing consumer and business confidence going into 2021.”

Bloomberg reports that according to a ECB report, governments and central banks face a tricky balance between shocking the economy if they end pandemic support too soon, and undermining it if they keep measures in place too long.

Noting the sheer scale of the fiscal, monetary and regulatory support, it said the effort has been “vital” in helping companies and households withstand the crisis. It said the three prongs of support are intertwined, making their withdrawal a complex task.

“Ending measures abruptly could lead to cliff effects on households’ and corporates’ income, with knock-on effects for economic activity in 2021,” the researchers wrote in the pre-released article from the ECB’s Financial Stability Review. “The simultaneous termination of policy measures could trigger a protracted downward shift in the recovery path.”

FXStreet reports that FX Strategists at UOB Group said that USD/JPY is likely to navigate within the 103.70-105.30 range in the next weeks.

Next 1-3 weeks: “One week ago (17 Nov), we held the view that there is a ‘slight downward bias in USD but any weakness is viewed as part of a lower trading range of 103.75/105.20’. After USD dropped to 103.63, we indicated last Thursday (19 Nov) that ‘while the underlying tone still appears soft, the prospect for USD to move to 103.18 from here is not high’. That said, the sudden surge in USD that sent it soaring to an overnight high of 104.63 came a surprise. The mild downward pressure has dissipated and the current movement is viewed as the early stages of a consolidation phase and USD could trade between 103.70 and 105.30 for now.”

FXStreet reports that FX Strategists at UOB Group noted USD/CNH is now seen between 6.5400 and 6.6200 in the next weeks.

Next 1-3 weeks: “We have held a negative view in USD for about 2 weeks now. In our latest narrative from last Friday, we highlighted that ‘unless USD moves and stays below 6.5500 within these 1 to 2 days, prospect for a move to 6.5200 would diminish quickly’. USD dropped to 6.5455 yesterday (23 Nov) before rebounding strongly to end the day on a firm note at 6.5835 (+0.49%). While our ‘strong resistance’ level at 6.6000 is still intact, the rapid loss in momentum suggests that the weak phase in USD has run its course. From here, USD is deemed to have moved into a consolidation phase and is expected to trade between 6.5400 and 6.6200 for a period of time.”

Reuters reports that Germany's foreign minister said that the German EU presidency is optimistic about finding a solution to the European Union budget row within days.

"We are in the last phase of negotiations, it is not easy as we all know," Heiko Maas said.

"But I am absolutely certain that we will be able to take decisions in the next couple of days for the EU budget as well as for the recovery fund, so we are able to release the money."

Marketwatch reports that according to the report from Ifo Institute, German business sentiment fell in November for the second consecutive month.

The Ifo business-climate index came in at 90.7 points, compared with a downwardly revised 92.5 points in October. Economists had forecast it at 90.6 points.

The expectations component declined to 91.5 points from a revised 94.7 points in October, Ifo said.

The drop came due mainly to companies being considerably more skeptical regarding developments over the coming months, as a second wave of coronavirus has interrupted Germany's economic recovery, Ifo said.

Companies' assessment of their current situation also deteriorated, falling to 90.0 points in November from 90.4 points in October.

FXStreet reports that economists at Rabobank note that NZD/USD has jumped after the Reserve Bank of New Zealand (RBNZ) considered adding house prices to its mandate.

“New Finance Minister Robertson has proposed adding house prices to the central bank’s remit. In other words, not only would the RBNZ have to keep CPI around 2%, but it would also have to keep house price inflation stable.”

“Lower rates are needed to try to keep inflation up but lower rates push house prices through the roof, and so the opposite is needed. What’s a central bank to do? Of course, there are always macro-prudential measures to limit mortgage lending. Yet then one ends up flattening the property market and/or reducing first-time buyers’ ability to get a home loan, and a lot of the time the property market IS the economy, meaning that rates then need to go even lower, and macroprudential measures become even tighter. 

“In the short-term, expectations of negative RBNZ rates have withered and NZD is up, as it logically should be – which is just what exporters don’t want to see, of course, and leads to even more reliance on domestic demand and the housing ‘wealth effect’.”

Reuters reports that industry officials said that a trade deal between Britain and the European Union would help open the door to cross-border financial services from January and avoid years of acrimony. Financial services are not part of talks that continue this week in a bid to conclude a free trade agreement (FTA) before Britain's access to the bloc under transition arrangements ends next month.

"It's very important for the financial services industry that there is a deal, it will completely change the atmosphere," Nicolas Mackel, CEO of Luxembourg for Finance, told.

"If there were to be no deal, relations would be acrimonious for at least one or two years, and it would be very difficult to envisage any bridges to be built across the Channel," he said.

TD Research expects a USD short squeeze into the year-end.

"Vaccine-related headlines remain a key source of optimism. The positive news of AstraZeneca and Oxford University's results completed the trifecta recently. The result has helped nudge risk assets forward. Yet we caution on extrapolating the upbeat tone into year end," TD notes. 

"We continue to forecast a deeper USD pullback in the quarters ahead. Still, it's a choppy path. We expect a reflation squeeze over the next six weeks, reflecting the COVID winter, and associated mobility trends, positioning, valuation, and annual seasonal trends that benefit the USD," TD adds.

During today's Asian trading, the US dollar declined amid increased risk appetite in global markets due to news about the possibility of an early start of vaccination against COVID-19 in the US, as well as the beginning of formal procedures for the transfer of power to US President-elect Joe Biden.

Yesterday, the British company AstraZeneca Plc reported that its vaccine showed an average effectiveness of 70% based on the results of interim tests in the UK and Brazil. At the same time, one of the tested dosage options gave a significantly higher efficiency: about 90%.

American Pfizer Inc. and German BioNTech on Friday filed a request for emergency use in the United States of their coronavirus vaccine. Moncef Slaoui, head of the US government's pre-vaccination program, said that vaccination in the US could begin as early as December 11-12.

Meanwhile, the US General services Administration (GSA) has informed Joe Biden that it is ready to begin the process of transferring power. The current US President, Donald Trump, said that he recommended that the head of the GSA, Emily Murphy, do "everything necessary" according to the" initial protocols " of the transfer of power to Biden. Trump noted that the struggle of his team for the results of the US elections continues.

Meanwhile, the Wall Street Journal reported that Biden plans to nominate former Fed chief Janet Yellen as US Treasury Secretary.

The ICE index, which tracks the dollar's performance against six currencies (the euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.1%

CNBC reports that according to a former foreign policy advisor the Biden administration will likely have to reimagine the future of U.S. economic leadership in Asia-Pacific following two massive free trade agreements signed by countries in the region.

The first of the two trade agreements is the Trans-Pacific Partnership (TPP): It was negotiated by the Obama administration but never approved by Congress. President Donald Trump subsequently pulled the U.S. out of the TPP in 2017.

More recently, 15 countries including China, Australia, Japan, South Korea as well as Southeast Asian nations, signed the Regional Comprehensive Economic Partnership (RCEP).

“So far, the incoming administration has not committed one way or the other to the future of the TPP,” Richard Fontaine, CEO of the Center for a New American Security, told. 

He explained that President-elect Joe Biden and his administration will enter an era where the U.S. is party to neither the TPP nor the RCEP. “They are going to have to at least consider what the future of U.S. economic leadership in Asia looks like,” he said.

According to the report from the Federal Statistical Office (Destatis), the gross domestic product (GDP) rose by 8.5% in the third quarter of 2020 compared with the second quarter of 2020 after adjustment for price, seasonal and calendar variations. Thus, the German economy could offset a large part of the massive decline in the gross domestic product recorded in the second quarter of 2020 due to the coronavirus pandemic. However, the price-, seasonally and calendar-adjusted GDP was still 4.0% lower in the third quarter of 2020 thanin the fourth quarter of 2019, that is the quarter before the global coronavirus crisis. Destatis reports that the increase of the gross domestic product in the third quarter of 2020 was slightly stronger than reported in the first release of 30 October 2020 (+8.2%).

Due to the massive decline observed in almost all use areas in the second quarter of 2020, two-digit growth rates were recorded in the price-, seasonally and calendar-adjusted results of the third quarter of 2020 in some areas. Increasing by 10.8% on the previous quarter, final consumption expenditure of households contributed especially to growth in the third quarter of 2020. General government final consumption expenditure again rose by 0.8% on the preceding quarter, after a 2.2% increase in the second quarter. General government consumption thus stabilised economic growth during the first three quarters of the year. Gross fixed capital formation in machinery and equipment was up 16.0%. However, gross fixed capital formation in construction did not contribute to growth; it rather declined by 2.0% on the previous quarter.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1928 (4220)

$1.1898 (2025)

$1.1877 (2693)

Price at time of writing this review: $1.1853

Support levels (open interest**, contracts):

$1.1799 (1081)

$1.1771 (2418)

$1.1734 (3966)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date December, 4 is 104808 contracts (according to data from November, 23) with the maximum number of contracts with strike price $1,1200 (6550);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3461 (1464)

$1.3409 (1491)

$1.3374 (2185)

Price at time of writing this review: $1.3341

Support levels (open interest**, contracts):

$1.3244 (1020)

$1.3187 (722)

$1.3114 (1269)

Comments:

- Overall open interest on the CALL options with the expiration date December, 4 is 23910 contracts, with the maximum number of contracts with strike price $1,3500 (2750);

- Overall open interest on the PUT options with the expiration date December, 4 is 40777 contracts, with the maximum number of contracts with strike price $1,2700 (11992);

- The ratio of PUT/CALL was 1.71 versus 1.64 from the previous trading day according to data from November, 23

* - 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.