Analysis

AUD is weakening against its main competitors – EUR, JPY, GBP, and USD

United States of America, USD is weakening today against EUR and GBP but is strengthening against JPY.

Investors monitor US-China trade relations and are awaiting the implementation of the concluded agreements. Today, the Chinese Ministry of Commerce announced that it started to implement the agreements, and US began to prepare for the resumption of soybeans and liquefied gas imports to the PRC. China promised to increase purchases of American products, mainly agricultural; in return, the US would postpone the introduction of new tariffs for 90 days. However, the main negotiations on the protection of American intellectual property in China are still ahead. The day before, President Trump reiterated his intention to continue raising tariffs if the deal with China could not be concluded within three months.

Today, the US declared mourning for the funeral of former President George W. Bush, so the stock exchanges are closed and trading volumes reduced. However, US November Service PMI will be published. The value is expected to stay at the level of 54.3 points.

Eurozone

EUR is weakening against GBP but is strengthening against USD and JPY.

EUR is supported by strong Retail Sales data and a positive Service PMI. In November, the German index remained at the same level of 53.3 points, while EU one grew from 53.1 to 53.4 points. EU October Retail Sales rose by 0.3% after a significant decline in September by 0.5%. Also, investors continue to monitor the situation around the Italian budget. Earlier, Italian Prime Minister Giuseppe Conte had already softened his position, allowing the possibility to lower the national debt below 2.4%, and Finance Minister Giovanni Tria promised that the three percent deficit rule would not be violated. Now the market is waiting for the publication of specific figures of the new budget of Italy.

United Kingdom

GBP is strengthening against its main competitors – EUR, USD, and JPY.

GBP is growing after the publication of the full text of legal advice on a deal with EU. Thus, Theresa May made concessions to the deputies, seeking their support. Today, the debate on the treaty in the House of Commons will continue. Due to the Brexit issues, the market practically did not react to the publication of poor Service PMI data, which reflects a great share of the British economy. In November, the indicator dropped significantly from 52.2 to 50.4 points, being in the immediate vicinity of the level of 50.0 points, below which the sector slows down. Undoubtedly, the service industry is affected negatively by uncertainty with the UK leaving the EU, and the situation may worsen. According to the Lobby group Frankfurt Main Finance (FMF), by March 2019, London as a financial center could lose up to 800 billion euros of assets, since large financial institutions would prefer to transfer their representative offices to the EU. About 30 large financial companies have already submitted applications for moving headquarters from London to Frankfurt.

Japan

JPY is weakening today against its main competitors – EUR, GBP, and USD.

Due to a lack of significant economic releases, JPY movement is of a technical nature. Japanese investors and politicians continue to analyze the agreement of Chairman Xi Jinping and President Trump. Officials adhere to the cautious tone of statements. On the eve, Japan's Minister of Economy, Trade, and Industry Hiroshige Seko noted that the threat of the introduction of new tariffs still persisted. Today, Prime Minister Shinzo Abe, at a meeting with economists in Tokyo, said that the trade war declared a 90-day truce but next year it would continue, and the task of the Japanese government is to make the national economy strong and independent from foreign economic conditions.

Australia

AUD is weakening against its main competitors – EUR, JPY, GBP, and USD.

The currency is under pressure of poor Q3 GDP data. The indicator dropped from 0.9% QoQ to 0.3% QoQ and from 3.4% YoY to 2.8% YoY. The decline in the growth rate of the Australian economy was influenced by the trade war between China and the United States and the fear of a recession in two of the world's largest economies. As for internal reasons, experts note a reduction in consumer spending by Australian households. The publication of the latest Australian GDP data has also raised investors' concerns that the Reserve Bank of Australia could significantly delay the interest rate increase.

Oil

During the day, oil quotes move horizontally. The morning decline was replaced by the growth of the prices.

Initially, prices were under pressure from the API report, which reflected the growth of US oil reserves by 5.360 million barrels. At the same time, gasoline inventories rose by 3.610 million barrels, and distillate stocks increased by 4.320 million barrels. But then the optimism of investors, associated with the expectation of cuts in OPEC countries, prevailed, and prices regained its lost positions.

In the evening, investors are waiting for a report on US oil reserves from the EIA. It is predicted that the figure may be reduced by 0.942 million barrels, which will support the "black gold".

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