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Fernando Guzmán Cavero
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Nov 19, 2019
FGC Notification: From The Desk of Fernando Guzmán Cavero
Regular Posts will be back next Tuesday the 26th, November 2019.
Please stay tuned,
Fernando Guzmán Cavero
Nov 18, 2019
EU - FX Report: Euro sees sigh of relief as dollar weakens on US-China trade deal hopes
3-4 minutos - Source: CNBC
Hong
Kong one-hundred dollar banknotes and U.S. one-hundred dollar banknotes
are arranged for a photograph in Hong Kong on April 15, 2019.
Paul Yeung | Bloomberg | Getty Images
Paul Yeung | Bloomberg | Getty Images
The
euro enjoyed a small respite on Monday, jumping to an 11-day high
versus the U.S. dollar, on expectations that Washington and Beijing can
soon sign off on a deal to end a trade war that has been a drag on
global economic growth.
Faint optimism for a breakthrough was supported by a report on Sunday from Chinese state news wire Xinhua, which said the two sides had “constructive talks” over the weekend.
The export-oriented European economy has suffered from the 16 month long trade dispute between the world’s two largest economies. The tariff war has taken a toll on the world’s manufacturing.
Investors injected $3 billion of inflows into European equities over the past two weeks, ending a record run of 85 weeks of persistent outflows, EPFR data showed last week.
“Market participants remain optimistic that a partial U.S.-China trade deal will be signed soon and have welcomed tentative signs of economic improvement outside of the U.S., especially in the euro zone, both of which are eroding the relative appeal of the U.S. dollar,” said Lee Hardman, currency analyst at MUFG.
The euro was last up 0.1% at $1.1068, its highest since Nov. 7, and the index which tracks the greenback against six major currencies was down 0.1% at 97.90.
The offshore Chinese yuan, however, remained below 7 per dollar, last falling 0.1% to 7.0142. The yuan is the most sensitive currency to the trade dispute.
“USD/CNY above 7.0 suggests that the market is not yet convinced a solution is near,” said Marshall Gittler, chief strategist at FX analysis firm ACLS Global.
The liveliest mover, however, was the pound, creeping up 0.3% against the dollar to $1.2945 and against the euro to 85.41 pence. It has surged to a 17-day high versus the dollar and a six-month high versus the common currency.
Sterling was boosted by expectations that the Conservative Party could win a majority in the Dec. 12 election, as well as by British Prime Minister Boris Johnson saying that all Tory candidates in the election have pledged to back his Brexit deal. This could open the door to getting the Brexit deal agreement passed through parliament.
Johnson’s Conservatives have a 14 point lead over the opposition Labour Party, a poll published by Good Morning Britain showed on Monday.
“Anyone firmly believing in a Tory victory can expect further potential in sterling,” said Commerzbank analysts in a note to clients, though they added that “the FX market is still quite skeptical” towards a Tory win.
Faint optimism for a breakthrough was supported by a report on Sunday from Chinese state news wire Xinhua, which said the two sides had “constructive talks” over the weekend.
The export-oriented European economy has suffered from the 16 month long trade dispute between the world’s two largest economies. The tariff war has taken a toll on the world’s manufacturing.
Investors injected $3 billion of inflows into European equities over the past two weeks, ending a record run of 85 weeks of persistent outflows, EPFR data showed last week.
“Market participants remain optimistic that a partial U.S.-China trade deal will be signed soon and have welcomed tentative signs of economic improvement outside of the U.S., especially in the euro zone, both of which are eroding the relative appeal of the U.S. dollar,” said Lee Hardman, currency analyst at MUFG.
The euro was last up 0.1% at $1.1068, its highest since Nov. 7, and the index which tracks the greenback against six major currencies was down 0.1% at 97.90.
The offshore Chinese yuan, however, remained below 7 per dollar, last falling 0.1% to 7.0142. The yuan is the most sensitive currency to the trade dispute.
“USD/CNY above 7.0 suggests that the market is not yet convinced a solution is near,” said Marshall Gittler, chief strategist at FX analysis firm ACLS Global.
The liveliest mover, however, was the pound, creeping up 0.3% against the dollar to $1.2945 and against the euro to 85.41 pence. It has surged to a 17-day high versus the dollar and a six-month high versus the common currency.
Sterling was boosted by expectations that the Conservative Party could win a majority in the Dec. 12 election, as well as by British Prime Minister Boris Johnson saying that all Tory candidates in the election have pledged to back his Brexit deal. This could open the door to getting the Brexit deal agreement passed through parliament.
Johnson’s Conservatives have a 14 point lead over the opposition Labour Party, a poll published by Good Morning Britain showed on Monday.
“Anyone firmly believing in a Tory victory can expect further potential in sterling,” said Commerzbank analysts in a note to clients, though they added that “the FX market is still quite skeptical” towards a Tory win.
Bonds | Treasury Yields Report: Treasury yields fall as investors remain on edge about US-China trade
Yun Li, Spriha Srivastava
Chinese
officials were troubled by Trump’s comment that there was no agreement
on phasing out tariffs, a government source told CNBC. China has pushed
for a removal of the additional duties imposed on each other’s products in different phases, as part of the deal.
However, Trump said a week ago he has not agreed to scrap tariffs on Chinese goods, conflicting the signal from China and dampening hopes about a coming resolution to a jarring trade conflict.
Chinese state media said the two sides had “constructive” trade talks on Saturday, noting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin talked with Chinese Vice Premier Liu He about the core issues for a phase one trade agreement.
Meanwhile, Chinese officials have surprised markets with the announcement of a cut to a key interest rate for the first time since 2015. The move has sparked speculation of further stimulus measures in China.
Trump and Federal Reserve Chairman Jerome Powell, who have been at odds over the direction of monetary policy, met Monday to discuss a variety of economic issues, according to a statement from the central bank.
On the auction front, the Treasury is set to auction a three-month and a six-month bill on Monday.
—CNBC’s Silvia Amaro contributed to this report.
However, Trump said a week ago he has not agreed to scrap tariffs on Chinese goods, conflicting the signal from China and dampening hopes about a coming resolution to a jarring trade conflict.
Chinese state media said the two sides had “constructive” trade talks on Saturday, noting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin talked with Chinese Vice Premier Liu He about the core issues for a phase one trade agreement.
Meanwhile, Chinese officials have surprised markets with the announcement of a cut to a key interest rate for the first time since 2015. The move has sparked speculation of further stimulus measures in China.
Trump and Federal Reserve Chairman Jerome Powell, who have been at odds over the direction of monetary policy, met Monday to discuss a variety of economic issues, according to a statement from the central bank.
On the auction front, the Treasury is set to auction a three-month and a six-month bill on Monday.
—CNBC’s Silvia Amaro contributed to this report.
Energy | Oil | Oil Price Report: Oil falls more than 1% as trade uncertainty, oversupply concerns weigh
3minutos - Source: CNBC
An employee holds a control panel as barrels are filled with lubricant oil in Torzhok, Russia, on March 21, 2014.
Andrey Rudakov | Bloomberg | Getty Images
Andrey Rudakov | Bloomberg | Getty Images
Oil
prices fell more than 1% on Monday, erasing last week’s gains and
tumbling alongside U.S. stocks on uncertainty over a trade deal between
the United States and China.
Brent crude futures fell 95 cents, or 1.5%, to settle at $62.35. West Texas Intermediate (WTI) crude fell 67 cents, or 1.2%, to settle at $57.05.
Wall Street’s three main stock indexes also fell from last week’s record highs following a report that stoked concerns a U.S.-China trade deal might not get through, which pushed oil prices lower, analysts said.
“Crude has become highly reactive to whichever way the wind is blowing in the (U.S.-China) trade talks. When it falters, prices get punished,” said John Kilduff, a partner at Again Capital LLC in New York. “This headwind of slack demand growth keeps holding us back.”
The 16-month trade war between the world’s two biggest economies has slowed global growth, prompting analysts to lower forecasts for oil demand growth and raising concerns that a supply glut could develop in 2020.
China and the United States had “constructive talks” on trade in a high-level call on Saturday, state media Xinhua reported on Sunday, but it gave few other details.
On Monday, CNBC quoted a Chinese government source saying the mood in Beijing about a trade deal was pessimistic due to U.S. President Donald Trumps reluctance to roll back on tariffs.
“The souring trade situation has put a halt to the rally,” said Robert Yawger, director of energy futures at Mizuho in New York, adding crude prices had risen earlier in the session but faded when New York markets opened.
Expectations of lower seasonal demand for gasoline in the United States also weighed on oil prices, said Andy Lipow, president of Lipow Oil Associates in Houston.
Concerns about plentiful crude supplies in 2020 weighed on the market, which expects OPEC to extend production cuts in early December to help avoid a new global glut.
The Organization of the Petroleum Exporting Countries (OPEC) said last week it expected demand for its oil to fall in 2020, supporting a view that there is a case for the group and other producers like Russia - collectively known as OPEC+ - to maintain limits on production.
OPEC+ is due to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.
Brent crude futures fell 95 cents, or 1.5%, to settle at $62.35. West Texas Intermediate (WTI) crude fell 67 cents, or 1.2%, to settle at $57.05.
Wall Street’s three main stock indexes also fell from last week’s record highs following a report that stoked concerns a U.S.-China trade deal might not get through, which pushed oil prices lower, analysts said.
“Crude has become highly reactive to whichever way the wind is blowing in the (U.S.-China) trade talks. When it falters, prices get punished,” said John Kilduff, a partner at Again Capital LLC in New York. “This headwind of slack demand growth keeps holding us back.”
The 16-month trade war between the world’s two biggest economies has slowed global growth, prompting analysts to lower forecasts for oil demand growth and raising concerns that a supply glut could develop in 2020.
China and the United States had “constructive talks” on trade in a high-level call on Saturday, state media Xinhua reported on Sunday, but it gave few other details.
On Monday, CNBC quoted a Chinese government source saying the mood in Beijing about a trade deal was pessimistic due to U.S. President Donald Trumps reluctance to roll back on tariffs.
“The souring trade situation has put a halt to the rally,” said Robert Yawger, director of energy futures at Mizuho in New York, adding crude prices had risen earlier in the session but faded when New York markets opened.
Expectations of lower seasonal demand for gasoline in the United States also weighed on oil prices, said Andy Lipow, president of Lipow Oil Associates in Houston.
Concerns about plentiful crude supplies in 2020 weighed on the market, which expects OPEC to extend production cuts in early December to help avoid a new global glut.
The Organization of the Petroleum Exporting Countries (OPEC) said last week it expected demand for its oil to fall in 2020, supporting a view that there is a case for the group and other producers like Russia - collectively known as OPEC+ - to maintain limits on production.
OPEC+ is due to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.
Commodities | Gold | Gold Price Report: Gold erases losses as US-China trade hopes ebb
2-3 minutos - Source: CNBC
Canadian maple leafs sit on the faces of one ounce gold coins in London, the United Kingdom, on July 15, 2014.
Chris Ratcliffe | Bloomberg | Getty Images
Chris Ratcliffe | Bloomberg | Getty Images
Gold
firmed on Monday, erasing losses from earlier in the session as fresh
doubts over a U.S.-China trade deal pushed Wall Street into the red.
Spot gold was up 0.29% at $1,471.4 per ounce as of, reversing course from earlier when prices fell to as low as $1,455.82 on optimism that constructive trade talks had taken place between the world’s two largest economies over the weekend. U.S. gold futures settled up 0.22% to $1471.9 per ounce.
However, a report that Beijing was not as optimistic, owing to U.S. President Donald Trump’s reluctance to roll back tariffs, threw cold water over market cheer and on world shares that were near record levels.
“I am surprised how robustly the market reacts (to news on the trade talks). This isn’t the first time we have had this news, but the market keeps responding,” said Bart Melek, head of commodity strategies at TD Securities, adding that the report on pessimism from Beijing has triggered a rebound in gold prices. “It looks like gold is seeking a move towards $1,480, which is the 100-day moving average.”
The 16-month long Sino-U.S. tariff war has fanned recessionary fears, but recent optimism over a phase one deal has driven a rally in equity markets.
Gold is generally considered to be an attractive investment during times of political or economic uncertainty. Market participants now await minutes of the U.S. Federal Reserve’s last policy meeting, due on Wednesday, for clues about the future interest rate trajectory.
Gold is highly sensitive to interest rates, as lower interest rates reduce the opportunity cost of holding the non-yielding bullion. Investors also kept a close eye on developments in Hong Kong, with police on Monday trapping hundreds of protesters inside a major university and demonstrators rampaging through a tourist district, after almost two straight days of standoffs.
Among other metals, silver gained 0.3% to $17 an ounce and palladium rose 1.4% to $1,728.02 an ounce. Platinum rose 0.4% to $892.55, extending gains for a fourth straight session.
Spot gold was up 0.29% at $1,471.4 per ounce as of, reversing course from earlier when prices fell to as low as $1,455.82 on optimism that constructive trade talks had taken place between the world’s two largest economies over the weekend. U.S. gold futures settled up 0.22% to $1471.9 per ounce.
However, a report that Beijing was not as optimistic, owing to U.S. President Donald Trump’s reluctance to roll back tariffs, threw cold water over market cheer and on world shares that were near record levels.
“I am surprised how robustly the market reacts (to news on the trade talks). This isn’t the first time we have had this news, but the market keeps responding,” said Bart Melek, head of commodity strategies at TD Securities, adding that the report on pessimism from Beijing has triggered a rebound in gold prices. “It looks like gold is seeking a move towards $1,480, which is the 100-day moving average.”
The 16-month long Sino-U.S. tariff war has fanned recessionary fears, but recent optimism over a phase one deal has driven a rally in equity markets.
Gold is generally considered to be an attractive investment during times of political or economic uncertainty. Market participants now await minutes of the U.S. Federal Reserve’s last policy meeting, due on Wednesday, for clues about the future interest rate trajectory.
Gold is highly sensitive to interest rates, as lower interest rates reduce the opportunity cost of holding the non-yielding bullion. Investors also kept a close eye on developments in Hong Kong, with police on Monday trapping hundreds of protesters inside a major university and demonstrators rampaging through a tourist district, after almost two straight days of standoffs.
Among other metals, silver gained 0.3% to $17 an ounce and palladium rose 1.4% to $1,728.02 an ounce. Platinum rose 0.4% to $892.55, extending gains for a fourth straight session.
Market Insider | Biggest Moves Premarket: Stocks making the biggest moves premarket: Fitbit, Xerox, Ford, Five Below, TripAdvisor & more
Fred Imbert
Check out the companies making headlines in the premarket Monday:
Ford Motor — The carmaker unveiled the Mustang Mach-E, Ford’s first all-electric SUV that starts at about $44,000. The Mach-E’s pricing, performance, and range are expected to be comparable with the Model Y, an upcoming SUV from Tesla.
Splunk — Shares of the data software company rose about 3% before the bell on the back of a Morgan Stanley upgrade to “overweight” from “equal weight.” The analyst said Splunk’s shift to a recurring sales model potentially reveals a “durable” annual recurring revenue of at least 25%.
Five Below — An analyst at J.P. Morgan added the discount store company to his “focus list,” citing potential upside to Wall Street’s consensus estimate around Five Below’s same-store sales.
Fitbit — Several Fitbit users told CNBC they were searching for an alternative to the company’s fitness trackers after Alphabet’s Google announced its purchase of the company earlier this month. The users said they’re getting rid of their Fitbit trackers because they don’t trust the search giant.
Workday — An analyst at Morgan Stanley downgraded Workday’s stock to “equal weight” from “overweight,” noting that slowing momentum in the human capital management segment and “a more difficult spending environment lead us to trim our near-term forecasts.” Shares fell nearly 2%.
HP Inc., Xerox — HP Inc.’s board unanimously rejected an acquisition bid from Xerox, saying the offer would undervalue the company. The board also said it considered the “highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock.” Xerox shares dipped 2.4% in the premarket, while HP Inc. slid 0.9%.
TripAdvisor — TripAdvisor shares gained 1.1% in the premarket after an analyst at Cowen upgraded the stock to “market perform” from “outperform.” The analyst pointed to a potential recovery in TripAdvisor’s online search metrics moving forward after a “major SEO shortfall.”
Dunkin’ Brands — Dunkin’ Brands banned the use of its “double cup” in New England in an effort to move away from foam to paper coffee cups. The company added its foam cups will be eliminated globally in 2020.
—CNBC’s Michael Bloom contributed to this report.
Ford Motor — The carmaker unveiled the Mustang Mach-E, Ford’s first all-electric SUV that starts at about $44,000. The Mach-E’s pricing, performance, and range are expected to be comparable with the Model Y, an upcoming SUV from Tesla.
Splunk — Shares of the data software company rose about 3% before the bell on the back of a Morgan Stanley upgrade to “overweight” from “equal weight.” The analyst said Splunk’s shift to a recurring sales model potentially reveals a “durable” annual recurring revenue of at least 25%.
Five Below — An analyst at J.P. Morgan added the discount store company to his “focus list,” citing potential upside to Wall Street’s consensus estimate around Five Below’s same-store sales.
Fitbit — Several Fitbit users told CNBC they were searching for an alternative to the company’s fitness trackers after Alphabet’s Google announced its purchase of the company earlier this month. The users said they’re getting rid of their Fitbit trackers because they don’t trust the search giant.
Workday — An analyst at Morgan Stanley downgraded Workday’s stock to “equal weight” from “overweight,” noting that slowing momentum in the human capital management segment and “a more difficult spending environment lead us to trim our near-term forecasts.” Shares fell nearly 2%.
HP Inc., Xerox — HP Inc.’s board unanimously rejected an acquisition bid from Xerox, saying the offer would undervalue the company. The board also said it considered the “highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock.” Xerox shares dipped 2.4% in the premarket, while HP Inc. slid 0.9%.
TripAdvisor — TripAdvisor shares gained 1.1% in the premarket after an analyst at Cowen upgraded the stock to “market perform” from “outperform.” The analyst pointed to a potential recovery in TripAdvisor’s online search metrics moving forward after a “major SEO shortfall.”
Dunkin’ Brands — Dunkin’ Brands banned the use of its “double cup” in New England in an effort to move away from foam to paper coffee cups. The company added its foam cups will be eliminated globally in 2020.
—CNBC’s Michael Bloom contributed to this report.
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