An Inside Look on Market Expectations for the Upcoming Week

The week will undoubtedly be memorable for all trades. Let’s take a quick look at the expectations for the week.

Politics and Others
Making news will be the ongoing accusation saga in the White House that will be made public. Its impact has not yet been felt in the market, but it can be felt in the coming weeks.

On Friday, the U.S. announced its unwillingness to eliminate certain tariffs. With the uncertainty of a tariff reversal before the preliminary agreement, it seems that China is still unsure and, therefore, needs guarantees before signing the agreement.

Powell’s defense at Congress during the week, the long-awaited speech by the President of the United States at the Economic Club in New York will be in the news this week.

UK politics may also come into play given the upcoming elections, also the recent monetary stance of the Bank of England due to Brexit.

RBNZ can keep its rates stable as expected, while conversations for rate cuts can continue, the positivity hovers around the Kiwi dollar as there is a 50 percent chance of a 25 basis point rate cut.

Main Currencies
U.S. Dollar, the Canadian Dollar
The previous week had been positive for the dollar, as it closed at $98,353 with a market gain of 1.15%. Investors may need to relax until Wednesday to obtain statistics that influence the U.S. market since it is assumed that by then the inflation figures for October will be out.

While the impact on the USD is uncertain, it can remain stable to inflation and unemployment claims figures, but retail sales figures can deal a blow to the USD. Canadian dollar can also be affected by the expected speech of the BoC governor.

The dollar can recover, but events can take a turn.

The Canadian dollar closed at C $1.3228 at 0.65% per USD.

Euro, the Japanese Yen
The economic sentiment figures for Germany and the Eurozone will be published on Tuesday, which could face a negative blow to the EUR given the rise in unemployment in Germany and a drop in the ZEW economic sentiment index.

Industrial production figures and GDP figures on Wednesday and Thursday respectively can cause a change of trend for the EUR. The GDP figures that will be published as first and second estimates, while the final figures will come out on Friday can be shocking for the Japanese yen. Besides, the recent monetary stance of the BoJ comes into play.

The EUR and the Japanese yen can recover if the economy according to published figures improves and if inflation figures are low.

The previous week, the EURUSD closed at $1.1018 at 1.33% and the Japanese Yen at 0.99% at ¥109.26/USD.

The Cable, the Australian Dollar
Manufacturing figures for the third quarter of GDP and for September will impact, while commercial inventories and industrial production may have less impact on the cable.

Employment figures, October inflation, and retail sales figures to be published on Tuesday, Wednesday and Thursday will affect the cable, also the Australian dollar. GBPUSD closed at $1.2774 for 1.33%. The Australian dollar ended the week with a 0.59% drop to $0.6863.

U.S.-China Trade Deal: European Markets Get a Wild Run Four Years in a Row

After reports of a preliminary agreement been reached by the two largest economies, China and U.S broke out; the bulls tested European markets in which it reached the 2015 peak.

Recall in the last 16 months, the U.S. and China had been in a trade war in which both countries slapped tariffs on their respective goods. Following an announcement by China that both countries were nearing a preliminary agreement in which the extra tariffs imposed will be removed, European markets had a climb in which it reached a four year high.

The preliminary agreement talks had been ongoing for two weeks spurred both countries agreeing to remove tariffs on goods worth billion dollars and this led to the pan-European Stoxx 600 peaking by 0.4% in early trade to reach a four year high.

Basic resources, autos and travel, and leisure stocks peaked more than 1% as most sectors and major bourses recorded a bullish trend. Utilities and telecoms had a backdrop of 0.6%.

However, inside sources reveal that the preliminary agreement may not come sooner as speculated as China is still scouting for a location where the preliminary agreement would be signed. Most speculations reveal that December is the most likely date as the location search seems to be a hurdle to it coming fast, while London is believed to be a possible location.

Investors who had been optimistic about the awaited preliminary deal in that it may be a boost for the global economy had speculated its signing early November.

However, on the Asia side, events took another turn as MSCI’s broadest index of Asia-Pacific shares, excluding Japan, slid by 0.3%, while most indexes held steady.

In Europe, the apex bank, the Bank of England is holding decisive meetings on slashing its interest rate however speculations indicate it might hold steady its interest rates given the on-coming elections in December.

Giant telecom outfit, Siemens and others like Commerzbank and Unicredit reported their quarterly corporate earnings which were the week’s market highlight.

Corporate Earnings
This was the week’s highlight as Siemens made known its 4th quarter earnings of 24.5 billion euros with an 8% yearly increase. Commerzbank recorded a 35% net profit increment in the 3rd quarter.

Early trades report shows that Siemens and Lufthansa rose above 3% and 6% respectively while Commerzbank slid by 2% with Arcelormittal, largest steelmaker topping the chart with 8%. On the other end, ProSiebenSat.1 shares dropped by 7% following negative media speculations.

Unicredit rose by 4% with a net profit of 1.1 billion Euros for the 3rd quarter, Lufthansa followed the positive trend by rising by 4% capturing a net profit of 1.15 billion Euros. Vestas Wind topped the 3rd quarter earnings chart with a 7.7% increase while Tate&Lyle had a 7.4% increment.