News

USA

The US currency is weakening today against the euro and the pound, but is strengthening against the Japanese yen.

Investors are following trade relations of the United States and China. Recently China began the purchase of American agricultural products, as was agreed at the meeting of Xi Jinping and Donald Trump at the G20 summit. The total volume of purchases of soybeans was about 2 million tons, and their supplies should begin in the first quarter of next year. Thus, pressure on the American agricultural sector is decreasing, and general trade tensions are alleviated, which supports the hope of an early conclusion of the US-China trade deal.

Published on Tuesday, US inflation data coincided with market expectations. The consumer price index in November fell from 2.5% to 2.2%, while the base consumer price index rose from 2.1% to 2.2%. Tomorrow statistics on US retail sales will be published, it is expected that in November, the sales volume will decline from 0.8% to 0.1%, which could put pressure on the dollar.

Eurozone

The European currency today is strengthening against the yen and the US dollar and weakening against the pound.

European currency strengthened thanks to the positive news from Italy. Prime Minister Giuseppe Conte presented to the European Commission a new draft budget for the following year, where the national debt was significantly reduced from 2.4% to 2.04%. At the same time, Conte noted that the reduction of public debt will not affect the pension reform and the increase in social benefits. Representatives of the European Commission appreciated the efforts of the Italian government and promised to evaluate the new budget in the near future.

At today's meeting, the ECB expectedly left rates at previous levels. The key one – at the level of 0.00%, deposit one – at the level of -0.40%, and the marginal lending rate – at the level of 0.25%. Later today Mario Draghi will hold a press-conference and may confirm plans for completing the quantitative easing program at the end of this year and raising the rate no earlier than the end of next summer.

Great Britain

The British currency today is strengthening against its main competitors – US dollar, yen and euro.

The pound gets support after Teresa May managed to retain the post of leader of the Conservative Party and the Prime Minister of Great Britain – most of the party members did not support her dismissal. Now, May has set off on a tour of European capitals to receive new concessions on Brexit from the EU. The main issue is the Irish border – British deputies who are ready to vote against the deal are not satisfied that Northern Ireland will have to obey the rules of the customs union until a new comprehensive trade agreement is signed between the UK and the EU, and this may take years. However, May is unlikely to expect a change in the terms of the deal, because the EU leaders Jean-Claude Juncker and Donald Tusk have already said that this will not happen. The only thing that the UK can count on is further clarification of the provisions of the Brexit treaty.

Japan

Today, the Japanese currency is weakening towards its main competitors – the euro, the US dollar and the pound.

In the absence of significant economic releases, the movement of the Japanese currency is technical in nature. It is worth noting the statement of the Japanese government commission that the current growth of the Japanese economy is the second in duration since the end of the Second World War. The growth phase began in December 2012 and was related to the work of Shinzo Abe as prime minister.

On Friday, data on the index of business activity of the largest manufacturers of Tankan will be published. It is expected that in the fourth quarter the figure will drop from 19 to 17 points, and Tankan for the non-production sphere can drop from 22 to 21 points. The implementation of forecasts can put pressure on the yen.

Australia

The Australian dollar is strengthening against the yen and the US dollar and has mixed dynamics in pairs with the euro and the pound.

In the absence of significant economic releases, the movement of the Australian currency is technical in nature. It is worth noting only the release of the quarterly statement of the Australian Council of Financial Regulators at the end of its meeting. In particular, officials discussed the lending and housing market, it was noted that the tightening of conditions for lending to households and small businesses led to a slowdown in the housing sector. On the housing market itself, prices are falling, primarily in the major cities – Sydney, Melbourne and Perth.

Oil

During the day, oil quotes were going down.

Oil prices are under pressure of the latest report of the International Energy Agency. The report shows doubt that the current cuts in production, adopted under the OPEC+ agreement (1.2 million barrels per day), will eliminate the glut in the market. In addition, the EIA report published yesterday recorded a smaller reduction in oil reserves in the US. The volume of oil fell by 1.208 million barrels, instead of the expected 2.99 million barrels