Commodities, Indices, Forex, General

Markets Resilient, Oil Slips...

George Walker, Friday, 30 November 2018

Last week, markets were showing signs of resilience in the face of multiple perceived risks including a weakening oil price, continuing trade wars between the US, China and Germany, tensions sparking up once again between Russia and Ukraine and the ongoing Brexit scenario. The Bank of England’s view is that Britain risks suffering an even bigger hit to its economy than during the global financial crisis 10 years ago if it leaves the European Union in a worst-case Brexit scenario in four months’ time. Taking all this into account, the UK and German signature Indices were little changed with the stand out weekly performance coming from Wall Street.

Wall Street
Wall Street rose over 1000 points by midweek last week, reversing the previous losses following Jerome Powell’s statement relating to financial stability and many investors read this as a signal the Fed’s three-year tightening cycle is drawing to a close. Volatility could still be on the horizon at 13:30 on Friday afternoon when the final Nonfarm Payroll figures and employment data are released in the US.

Brent Crude
Oil slipped to trade near 2018 lows due to pressure from rising U.S. inventories and doubts over whether an OPEC-led output cut will be agreed in the coming week. The price of Brent Crude has slumped by more than 30% from a 4 year high in early October, as concerns that supply will exceed demand in 2019 as economic growth slows. EIA Crude Oil Stocks Change will be important data to watch on Wednesday at 15:30 to see if the downturn will continue.

The AUD has seen a strong recovery in the final quarter of 2018 against CAD. In the early hours of Tuesday morning we get the latest announcement on the interest rates from the Reserve Bank of Australia accompanied by a statement from the Reserve Bank board about forward guidance. Overnight they also release Gross Domestic Product figures which evaluates the total value of all goods and services produced. At 15:00 on Wednesday we get an interest rate decision and statement from the Bank of Canada (BoC). If the BoC is hawkish and leans towards a rise in the interest rate it could be viewed as positive, or bullish, for the CAD. Likewise, if they have a dovish view, this could be seen as negative, or bearish.

On the last trading day of the week EURUSD could be the main focus. GDP data from the Euro Zone will be released at 10:00 followed shortly after by the final Nonfarm Payroll figures from the US at 13:30. Despite the comments from Fed chair Jerome Powell last week suggesting they may be nearing an end to its three-year rate tightening cycle, the greenback kept the Euro pinned near 2018 lows as eyes move towards the employment data from the world’s largest economy. Could a strong number cement the Feds plan to raise rates multiple times next year, or will weaker employment figures reduce the expectations on the number of hikes in 2019 providing the EUR with a chance of recovery?


Monday, 3rd December
00:30 JPY Nikkei Manufacturing PMI
00:30 AUD Building Permits
00:30 AUD Imports/Exports
01:45 CNY Caixin Manufacturing PMI
09:00 EUR Markit Manufacturing PMI
09:30 GBP Markit Manufacturing PMI
14:30 CAD Markit Manufacturing PMI
15:00 USD ISM Manufacturing PMI

Tuesday, 4th December
03:30 AUD RBA Interest Rate Decision
03:30 AUD RBA Rate Statement
08:15 CHF Consumer Price Index
09:30 GBP PMI Construction
10:00 EUR Producer Price Index
13:55 USD Rebook Index
21:30 USD API Weekly Crude Oil Stock

Wednesday, 5th December
00:30 AUD Gross Domestic Product
00:30 JPY Markit Services PMI
01:45 CNY Caixin Services PMI
08:00 EUR Non-monetary Policy Statement
09:00 EUR Markit Services PMI
09:00 EUR Markit Services Composite
09:30 GBP Markit Services PMI
10:00 EUR Retail Sales
14:45 USD Markit Services PMI
15:00 USD ISM Non-Manufacturing PMI
15:00 CAD BoC Interest Rate Decision
15:00 CAD Rate Statement
15:30 USD EIA Crude Oil Stocks Change
19:00 USD Fed’s Beige Book

Thursday, 6th December
00:30 AUD Retail Sales
00:30 AUD Trade Balance
07:00 GER Factory Orders
13:15 USD ADP Employment Change
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
13:30 CAD Imports/Exports
15:00 CAD Ivey Purchasing Managers Index
15:30 EIA Natural Gas Storage Change

Friday, 7th December
05:00 JPY Leading Economic Index
07:00 GER Industrial Production
08:30 GBP Halifax House Prices
09:30 GBP Consumer Inflation Expectations
10:00 EUR Gross Domestic Product
13:30 USD Average Hourly Earnings
13:30 USD Unemployment Rate
13:30 USD Nonfarm Payrolls
13:30 CAD Unemployment Rate
13:30 CAD Net Change in Employment
15:00 USD Michigan Consumer Sentiment Index
18:00 USD Baker Hughes Oil Rig Count
20:00 USD Consumer Credit Change


Thursday, 6th December
Ted Baker PLC – Trading Statement

Sources: Bloomberg/Companies

Share article