US Markets

Geopolitics, FOMC Meeting Minutes and Canadian Inflation in Focus

Earlier in the Day:

It was a busier day on the economic calendar through the Asian session this morning.

Key stats included October trade data out of Japan early in the session.

Later in the morning, the PBoC also delivered its November loan prime rates decision.

On the geopolitical risk front, a unanimous Senate vote on Tuesday in support of HK led to a warning of retaliation from China.

With the chances of a phase 1 trade agreement hanging in the balance, the latest U.S move may add further pressure on Beijing to hold back.

For the Japanese Yen

The trade deficit jumped from a ¥124.8bn deficit to a $17.3bn surplus in October. Economists had forecast a surplus of ¥301bn, however…

According to figures released by the  Ministry of Finance,

  • Year-on-year, exports fell by 9.2% in October, following a 5.2% decline in September.
    • Within the Asian region, exports to China fell by 10.3%, by 9.4% to HK and by 23.1% to R. Korea.
    • To the U.S, exports slid by 11.4%, with exports to Germany tumbling by 19.4%.
  • Imports fell by 14.8%, year-on-year, following a 1.5% decline in September.
    • From the Asian region, imports fell by 14.0% and by 15.6% from North America.
    • Imports from Western Europe saw a more modest 10.7% decline

The Japanese Yen moved from $108.478 to $108.457 upon the release of the figures. At the time of writing, the Japanese Yen was up by 0.10% to ¥108.43 against the U.S Dollar.

Out of China

The PBoC cut prime loan rates this morning.

  • The 5-year loan prime rate was cut from 4.85% to 4.80%, with the 1-year prime rate cut from 4.20% to 4.15%.

The Aussie Dollar moved from $0.68109 to $0.68169 on the decision. At the time of writing, the Aussie Dollar was down by 0.18% to $0.6816.


At the time of writing, the Kiwi Dollar was down by 0.19% to $0.6419.

The Day Ahead:

For the EUR

It’s yet another quiet day ahead on the economic calendar. German wholesale inflation figures for October are due out in the early part of the day.

After a quiet start to the week, the EUR will be more sensitive to the numbers. Any moves, however, will likely be short-lived at best.

Outside of the numbers, expect chatter from Beijing and the U.S and from the UK politics to also influence.

While the EUR may prefer Britain to remain within the EU, an orderly departure is the next best thing…

At the time of writing, the EUR was down by 0.05% to $1.1072.

For the Pound

It’s another quiet day ahead on the data front. Key stats are limited to 3rd quarter labor productivity figures.

Following disappointing claimant count and wage growth figures last week, today’s stats are unlikely to move the dial.

UK politics is going to remain the key driver all the way through to 12th December. A pullback on Tuesday and early this morning came in response to Corbyn’s better than expected performance in the 1st leadership debate.

At the time of writing, the Pound was down by 0.15% to $1.2907

Across the Pond

It’s a quiet day on the economic calendar. There are no material stats due out of the U.S to provide the Greenback with direction.

As the week progresses, updates from the U.S – China trade talks will have a greater influence on the Greenback.

On the monetary policy front, the FOMC meeting minutes due out late in the day shouldn’t have a material impact on the Dollar.

Powell’s testimony last week will have been considered more current, with economic indicators largely in line with the FED’s plan to hold.

The Dollar Spot Index was up by 0.05% to 97.901 at the time of writing.

For the Loonie

It’s a busier day on the economic calendar. October inflation figures are due out of Canada later today.

With stats having been on the lighter side at the start of the week, expect Loonie sensitivity to the numbers.

A softening in inflationary pressure would raise the prospects of a BoC rate cut.

The Loonie was down by 0.11% to C$1.3282, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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