Sample Category Title

EUR/USD

Current level - 1.1412

The pair failed to test 1.1470 peak, so there is a risk of a break through 1.1360 support and such will extend the consolidation pattern to 1.1270.

USD/JPY

Current level - 112.80

There is still a downward bias after the reversal at 113.20, for a slide towards 112.30.

GBP/USD

Current level - 1.2869

Yesterday's break through 1.2880 signals a positive outlook above 1.2820, for a rise towards 1.3040 zone.

Markets mixed

Following a decline in shares due to weak corporate earnings and growth worries, European markets are opening in the green, supported by banks and technology sectors. At market opening, the UK FTSE 100 index (-9.15% year-to-date) is trading up 0.36%, Germany’s DAX and Spain’s IBEX 35 have risen 0.47% and 0.40% respectively, with the Euro STOXX 50 ahead by 0.38%. Asian shares are trading in the opposite direction, with Chinese shares declining amid worries of a growth slowdown and pessimism from analysts about improvement in equities and a breakthrough in the trade war at the G20 meeting. Both Hong Kong’s Hang Seng and the blue-chip CSI 300 ended the week at -0.35% and -2.21% respectively. Japan’s Nikkei and Australian ASX 200 closed at +0.65% and +0.44 respectively.

Sterling rebounds to decline

The pound rose by 0.77% following yesterday’s announcement of a Brexit deal, but there is a long road yet ahead to ratification. The 27 European Union member states will vote on Sunday 25 November: a yes is expected, even though Spain is threatening to veto over Gibraltar. Critically, the final word remains in the hand of the UK Parliament, which will take the final decision sometime thereafter. Accordingly, we expect GBP/USD to decline slightly, approaching the 1.2790 range. The Political Declaration, approved yesterday, remains a political, and not a legal-binding document, thus it does not engage either the UK or the EU to any engagement in the future. The document gives some hints towards the areas where both counterparts will have to work on following the divorce.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13870
Open: 1.14404
% chg. over the last day: +0.16
Day's range: 1.13657 – 1.14186
52 wk range: 1.1299 – 1.2557

Yesterday the EUR/USD were in a sidewards trend. The trading activity was lowered due to the Thanksgiving in the US. At the moment the quotes started to descend. The key support and resistance levels are 1.13600 and 1.14100. Positions should be opened from these levels.

Investors expect an array of business indices from the EU and Germany at 10:30 (GMT+2) and 11:00 (GMT+2).

Indicators do not send accurate signals: the price has crossed 50 MA.

The MACD histogram is near the 0 mark.

Stochastic Oscillator is in the neutral zone, the %K line has is below the %D line, which indicates a bearish sentiment.

Trading recommendations

Support levels: 1.13600, 1.13200, 1.13000
Resistance levels: 1.14100, 1.14500, 1.14800

If the price fixes below the 1.13600 support, expect the EUR/USD to fall further. The movement will tend toward 1.13200-1.13000.

Alternatively, the quotes can grow toward 1.14000-1.14200.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.27710
Open: 1.28739
% chg. over the last day: +0.78
Day's range: 1.28303 – 1.28746
52 wk range: 1.2662 – 1.4378

Yesterday, GBP/USD was showing an aggressive buy-out. The quotes grew by 120 points. GBP is supported by the great prospects regarding Brexit. The key range is 1.28300-1.28750. Positions should be opened from these levels.

Today the publication of important economic reports from the UK is not planned.

The price has fixed between 50 MA and 200 MA, which act as the dynamic support and resistance levels.

The MACD histogram is in the positive zone but below the signal line, which give a weak signal towards the purchase of GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 1.28300, 1.27900, 1.27500
Resistance levels: 1.28750, 1.29200, 1.29600

If the price fixes below the support level of 1.28300, the GBP/USD quotes are expected to fall. The movement is tending to 1.27900-1.27500.

An alternative may be the GBP/USD currency pair growth to 1.29200-1.29600.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.32314
Open: 1.31866
% chg. over the last day: -0.30
Day's range: 1.31941 – 1.32205
52 wk range: 1.2248 – 1.3387

USD/CAD currency pair was showing a variety of trends. The financial market participants expect for the important economic stats from Canada. The key support and resistance levels are 1.32000 and 1.32250. Positions should be opened from these levels.

At 15:30 (GMT+2) Canada will publish reports on inflation and retail sales.

Indicators do not provide precise signals, the price is testing 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations

Support levels: 1.32000, 1.31700, 1.31450
Resistance levels: 1.32250, 1.32550, 1.32800

If the price fixes above the mirror resistance level of 1.32250, you should consider purchasing USD/CAD. The movement will tend toward 1.32500-1.32800.

Alternatively, if the price fixes below 1.32000, you should look for the market entry points to open the short positions. The movement will tend toward 1.31700-1.31500.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 113.056
Open: 112.939
% chg. over the last day: -0.06
Day's range: 112.834 – 112.883
52 wk range: 104.56 – 114.74

The technical pattern on the USD/JPY currency pair is ambiguous. At the moment, quotes are consolidating. The key support and resistance levels are 112.750 and 113.000, respectively. We recommend paying attention to the dynamics of the US government bonds. Positions should be opened from the key levels. The trading instrument is tending to decline.

Publication of important economic reports from Japan is not planned. Financial markets are closed due to a national holiday.

Indicators indicate the power of the sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram moved into the negative zone, which creates a signal to sell USD/JPY.

Stochastic Oscillator is in near the oversold zone, the %K line crosses the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 112.750, 112.500, 112.300
Resistance levels: 113.000, 113.250, 113.500

If the price fixes below the support level of 112.750, the USD/JPY quotes are expected to fall. The movement is tending to 112.500-112.300.

An alternative may be the USD/JPY currency pair growth to 113.250-113.500.

Notes/Observations

• Major European manufacturing PMI data disappoint but hold onto expansion territory (France, Germany and Euro Zone all below expectations); data flags growth concerns in region
• German Q3 Final GDP data confirmed 1st quarterly contraction since Q2 2014
• UK PM May faces fresh battles to save Brexit strategy Tory rebels demand rethink while EU states express concerns over fishing and Gibraltar;
• US returns from Thanksgiving holiday; focus turn to shopping season (Black Friday and Cyber Monday) to confirm the US consumer is still supporting the economy
• US ratcheting up a campaign against Huawei Technologies

Asia:

• US government said to ask its foreign allies to stop using Huawei [HUAWEI.CN]
• China Commerce Ministry (MOFCOM) said it is deeply concerned about the US new Section 301 report update. Rejected fresh US accusations of perpetuating "unfair" trade practices and urged Washington to stop making provocations. China was evaluating the potential impact from the US proposal to increase technology export controls

Brexit:

• EU-UK declaration on future relationship draft said to foresee equivalence for UK banks. EU-UK to commit to deep customs cooperation and build on single customs territory. EU-UK State determination to replace backstop in the future. EU to recognize UK independent trade policy and EU-UK sought to ratify fisheries agreement by July 2020 (Note: Next step was for the 27 EU member states to decide if they accept it before leaders' summit on Sunday. No final deal could be agreed without approval of the EU council on Sunday, Nov 25th)
• PM May Statement: To do everything possible in 72 hours ahead to deliver this deal. political deal declaration ended the free movement; protected the union; included reference to independent trade policy. Absolutely clear to Spanish PM that Gibraltar's British sovereignty must be protected
• PM May political spokesperson: PM would be seeking to persuade members of her Tory party and the DUP on merits of the Brexit deal; believed she could win the vote in parliament on Brexit. UK had no further demands in Brexit negotiations ahead of Sunday EU summit. Impossible to determine at the moment the cost of any extension to Brexit transition period
• Spain PM Sanchez: Spain would veto Brexit deal if there were no changes. After conversation with UK PM May, our positions remained far away.

Europe:

• ECB's Praet (Belgium, chief economist): Too soon to decide on a new TLTRO now, or to discuss adjust key interest rates
• BoE's Saunders reiterated monetary policy implications of different Brexit outcomes could go either way; policy stance would need to return to something like Neutral rather earlier than yield curve implied in event of 'smooth' Brexit
• Germany Fin Min Scholz said not threatened with new Euro crisis due to Italy

Americas:

• US President Trump: Very prepared' for talks w China President Xi at G20 Meeting. Reiterated China wanted to make a deal on trade 'very badly' because of tariffs, if we could make a deal we would

Energy:

• Saudi Oil Min Al-Falih: Saudis would respond to market demand for oil and l not flood oil market with supply. Nov oil output now above 10.7Mb/d. Saw demand for oil in Jan being lower and would respond to cool off anxiety

Macro

• (DE) Germany: Q3 GDP was confirmed at -0.2% q/q impacted by a marked contraction in exports, which were hit not just by global trade tensions, but new global emission tests in the auto sector. The main surprise in the numbers was the weakness in consumption, which also contracted -0.3% q/q.
• (EU) Eurozone: The flash Eurozone manufacturing PMI fell to a 65 month low, services PMI fell back to a 25-month low and the composite reading a 47 month low. The weakness in the flash readings reflects slowing order books growth and a drop in exports. A new index for export orders across manufacturing and services sectors that was released for the first time this month, was actually at lowest level in the four-year history . The backlog of orders picked up only marginally, which means capacity constraints are easing. While the headline numbers are disappointing, the backlog of work suggests that this is still a slowdown in growth, rather than a contraction and that capacity utilization remains elevated. So the data won't likely impact the ECB's decision to phase out of QE in December.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.4% at 353.9, FTSE +0.3% at 6980, DAX +0.5% at 11192, CAC-40 +0.5% at 4963, IBEX-35 +0.4% at 8945, FTSE MIB +0.8% at 18753, SMI 0% at 8787, S&P 500 Futures -0.2%]
• Market Focal Points/Key Themes: European Indices trade higher across the board despite weaker prelim PMI readings out of Europe. After the EU-UK draft agreement yesterday, traders await further developments on Brexit talks as uncertainty continues to exist. On the corporate front Flybe outperforms after talks of bid interest from Virgin Atlantic. On the earnings front Parrot falls almost 50% after a sharp decline in profits and Revenue; Rockwool, Interserve, CFE among other names lower on earnings while GEA Group declines after cutting its outlook. Elsewhere Ibstock trades higher after announcing the divestment of its subsidiary to Brickworks as well as affirming its outlook. Looking ahead earnings on docket include Diana Containerships and StealthGas on a shortened trading day in the US.

Equities

• Consumer discretionary: Flybe Group [FLYB.UK] +25% (Virgin Atlantic said to be interested in acquiring Flybe), Starbreeze [STAR.SE] -16% (launches business review), Rockwool International [ROCKA.DK] -9% (earnings)
• Materials: Eramet [ERA.FR] +17% (analyst action), Ibstock [IBST.UK] +11% (trading update; divestment)
• Healthcare: Novartis [NOVN.CH] -0.5% (European Commission Approves LUXTURNA), Curetis [CURE.NL] +14% (earnings; accelerates 510(k) Submission Preparation)
• Industrials: Volkswagen [VOW3.DE] +0.5% (Reportedly company has to refund each Volkswagen Golf with the full purchase price of €30K as higher court in south Germany rules; minor acquisition), Renault [RNO.FR] +3% (Nissan reportedly seeking to review Renault shareholding structure), GEA Group [G1A.DE] -14% (profit warning)
• Technology: Parrot [PARRO.FR] -48% (earnings; adjusts guidance)
• Telecom: Nokia [NOKIA.FI] +1.5%, Ericsson [ERICB.SE] +2% (US government said to ask its foreign allies to stop using Huawei), Vodafone [VOD.UK] -0.5% (Reportedly studying jobs cuts in Spain)

Speakers

• Brexit Gibraltar chief Picardo: reached an agreement with Spanish colleagues. Had very positive meeting in Madrid and delivered on Gibraltar
• Italy Deputy PM Di Maio reiterated stance of no cuts to key reforms and urged dialogue with EU, not 'war'. Reiterates stance that was important to repeat that this govt did not want to leave Europe or the Euro
• Italy official Siri (adviser to Dep PM Salvini): some budget measures can be improved
• Italy's EU Affairs Minister Savona said to consider resigning from Govt as a sign of dissent with Govt strategy to challenge EU budget rules (**Note: story later refuted)
• Former UK Brexit Min Raab: UK Parliament will vote down PM May's Brexit deal
• Northern Ireland DUP party official Donaldson (part of May coalition): Withdrawal agreement will be voted down; need guarantees within the agreement
• Austria EU Min Bluemel: Convinced that EU27 Brexit concerns to be resolved
• Sweden Speaker Norlen stated that to propose Lofven as PM to Parliament on Monday, Nov 26th
• France Ecology Min De Rugy: Govt to fine-tune its energy plan and make announcement on nuclear energy on Tues, Nov 27th
• Russian Deputy Foreign Min Ryabkov: Country was not amending its military doctrine

Currencies/Fixed Income

• GBP/USD was lower by 0.3% to test below 1.2840 as doubts lingered that the UK Parliament would secure passage of the EU withdrawal bill at its first attempt . On Thursday, the GBP currency soared over 100 pips after EU-UK declaration on future relationship draft said to foresee equivalence for UK banks and have the EU recognize UK independent trade policy
• Weaker Euro Zone PMI data weighed upon the EUR/USD as the pair remained below the 1.14 level. Dealers noted that the EU data flagged growth concerns in the region. Money Market Futures dated to ECB's December 2019 meeting now price in approx. 88% chance of 10 Bps rate h (down from 95% earlier in the week)

Economic Data

• (DE) Germany Q3 Final GDP Q/Q: -0.2% v -0.2%e; Y/Y: 1.1% v 1.1%e; GDP NSA Y/Y: % v 1.1%e
• (DE) Germany Q3 Private Consumption Q/Q: -0.3% v -0.1%e; Government Spending Q/Q: 0.2% v 0.2%e; Capital Investment Q/Q: 0.8% v 0.4%e; Construction Investment Q/Q: 0.9% v 0.4%e; Domestic Demand Q/Q: 0.8% v 0.3%e; Exports Q/Q: -0.9% v -0.3%e; Imports Q/Q: 1.3% v 0.7%e
• (CN) Weekly Shanghai copper inventories (SHFE): 133.2K v 134.7K prior
• (RU) Russia Narrow Money Supply w/e Nov 16th: 10.33T 10.30T prior
• (TW) Taiwan Oct Industrial Production Y/Y: 8.3% v 3.6%e
• (ES) Spain Oct PPI M/M: 0.0% v 0.7% prior; Y/Y: 4.5% v 5.2% prior
• (AT) Austria Sept Industrial Production M/M: +0.2% v -1.2% prior; Y/Y: 2.6% v 2.8% prior
• (FR) France Nov Preliminary Manufacturing PMI: 50.7 v 51.2e (26th month of expansion but lowest since Sept 2016); Services PMI: # v 55.0e; Composite PMI # v 53.9e
• (TW) Taiwan Oct M2 Money Supply Y/Y: 3.4% v 3.3% prior; M1 Money Supply Y/Y: 5.3% v 5.2% prior
• (DE) Germany Nov Preliminary Manufacturing PMI: 51.6 v 52.2e (47th month of expansion but lowest since Mar 2016); Services PMI: 53.3 v 54.5e prior; Composite PMI 52.2 v 53.1e
• (EU) Euro Zone Nov Preliminary Manufacturing PMI: 51.5 v 52.0e (64th month of expansion and lowest since Mar 2016); Services PMI: 53.1 v 53.6e; Composite PMI 52.4 v 53.0e

Fixed Income Issuance

• (ZA) South Africa sold total ZAR650M vs. ZAR650M indicated in 2025, 2038 and 2050 I/L bonds

Looking Ahead

• 06:00 (BR) Brazil mid-Nov IBGE Inflation IPCA-15 M/M: 0.3%e v 0.6% prior; Y/Y: 4.5%e v 4.5% prior
• 06:00 (UK) DMO to sell €3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively)
• 06:30 (IN) India Weekly Forex Reserves w/e Nov 16th: No est v $393.0B prior
• 06:30 (IS) Iceland to sell 1.5% Feb 2026 RIKB Bonds - 06:45 (US) Daily Libor Fixing
• 07:00 (CL) Chile Oct PPI M/M: No est v 2.4% prior
• 07:00(BR) Brazil Nov CNI Consumer Confidence: No est v 110.6 prior
• 07:00 (ES) ECB's De Guindos (Spain)
• 08:00 (PL) Poland Oct M3 Money Supply M/M: 0.9%e v 0.8% prior; Y/Y: 7.8%e v 7.9% prior
• 08:10 (UK) Baltic Dry Bulk Index
• 08:30 (CA) Canada Sept Retail Sales M/M: 0.0%e v -0.1% prior; Retail Sales (Ex-auto) M/M: +0.3%e v -0.4% prior
• 08:30 (CA) Canada Oct CPI M/M: +0.1%e v -0.4% prior; Y/Y: 2.2%e v 2.2% prior; CPI Core- Common Y/Y: 1.9%e v 1.9% prior; Core- Median Y/Y: 2.0%e v 2.0% prior; CPI Core- Trim Y/Y: 2.1%e v 2.1% prior; Consumer Price Index: 134.0e v 133.7 prior
• 08:30 (US) Weekly USDA Net Export Sales data
• 09:00 (BE) Belgium Nov Business Confidence: -2.0e v -1.1 prior
• 09:00 (MX) Mexico Q3 Final GDP Q/Q: 0.9%e v 0.9% prelim; Y/Y: 2.6%e v 2.6% prior; GDP Nominal Y/Y: 7.8%e v 8.3% prior
• 09:00 (MX) Mexico Sept Economic Activity Index (Monthly GDP) Y/Y: 2.8%e v 1.7% prior
• 09:45 (US) Nov Preliminary Markit Manufacturing PMI: 55.7e v 55.7 prior; Services PMI: 55.0e v 54.8 prior; Composite PMI: No est v 54.9 prior
• 10:00 (MX) Mexico Q3 Current Account Balance: -$4.4Be v -$3.9B prior
• 11:00 (EU) Potential sovereign ratings after European close (South Africa Sovereign Debt to be rated by S&P; Hungary Sovereign Debt to Be Rated by Moody's
• 14:00 (AR) Argentina Oct Trade Balance: $0.4Be v $0.3B prior
• 14:00 (AR) Argentina Sept Economic Activity Index (Monthly GDP) M/M: No est v 1.3% prior; Y/Y: -4.6%e v -1.6% prior

The USD didn't change much relative to the basket of other currencies. Yesterday the US celebrated Thanksgiving, which made the trading a lot more calm. The USD kept the current levels. Today the attention of the financial market participants is focused on the Canadian economic reports. We recommend you keep an eye on the relevant data regarding the US/China trade conflict. Japanese financial markets will be closed due to a government holiday.

GBP and EUR strengthened due to the good prospects regarding the Brexit conundrum. The countries finally agreed on a project that will allow tight partnership even after UK leaves the EU. On November 25, the EU summit will be held, where both sides will sign this project.

The prices on oil keep falling. The WTI futures are testing the 53.30 USD/barrel mark.

Market Indicators

• Yesterday the US stock market was closed due to a holiday. Currently, the major indices are testing the monthly minimums.
• The 10-year US government bonds yield has stabilized at 3,06-3,07%.

The News Feed for 23.11.2018:

• an array of Business indices (EU and GER) – 10:30 (GMT+2:00) and 11:00 (GMT+2:00);
• reports on inflation and retail sales in Canada – 15:30 (GMT+2:00).

The GBP strengthened yesterday as the UK and EU reached a draft deal regarding their future relationships. The draft deal sounded more generic and underscored the intention of the two parties to have an “as close as possible” trade relationship. Analysts also point out, that a lot of details will need to be addressed and that the document may fail to convince the markets that it will pass through parliament. The fact that the two sides were able to reach a draft deal strengthens possibilities for a positive outcome of Sunday’s EU summit. The main question remains though if Theresa May will have the necessary majority to pass the Brexit deal through parliament which may constraint the market’s reaction. Volatility could continue to exist for the pound as details of the draft deal could leak, as well as any possible reaction.

Cable rallied on the news yesterday, breaking consecutively the 1.2850 (S1) resistance line (now turned to support) and the 1.2920 (R1) resistance level, however corrected below the latter, later on. The pair had stabilised above the 1.2850 (S1) support line during the American session yesterday and the Asian session today, however its direction could be influenced by any further Brexit headlines during the day. Should the bulls dictate the pair’s direction, we could see it breaking the 1.2920 (R1) resistance line and aim for the 1.3015 (R2) resistance barrier. On the other hand should the bears take over, we could see the pair breaking the 1.2850 (S1) support line and aim for the 1.2780 (S2) support hurdle.

Oil hits 2018 lows once again

Oil prices dropped yesterday as concerns about a possible global glut emerged, combined with worries for a weaker economic outlook. Analysts point out that at the moment, even OPEC’s intentions of curbing production to prevent a possible glut, provided little support yesterday. The US shale oil producers seem to intent to increase production, while the demand outlook seems to be weaker due to a possible economic slowdown. On the other hand OPEC members, may adjust production accordingly, in case of a lower demand. We could see volatility rising for black gold as its price is nearing the lowest level for 2018.

Oil prices dropped yesterday breaking the 54.15 (S1) support line. As the downward trendline, incepted since the 10th of October, seems to be in control of oil prices, we maintain our bearish outlook for the commodity’s prices. It should be noted though, that the RSI indicator in the 4 hour chart for WTI remains below the reading of 30, implying a possibly overcrowded short position. Should black gold continue to be under the selling interest of the market, we could see its price action breaking into even lower levels (the lowest for 2018), breaking the 52.10 (S1) support line and aiming for the 49.40 (S2) support barrier. Should on the other hand, the market favor the pair’s long positions, we could see WTI prices breaking the 54.15 (R1) resistance line, the prementioned downward trendline and aim for the 56.15 (R2) resistance level.

In today’s other economic highlights:

In the European session, we get the final release of Germany’s GDP growth rate for Q3 and a number of preliminary PMI’s for November relating to the EUR (Eurozone, Germany, France). In the American session, we get from Canada the inflation rates for October and the retail sales growth rate for September. From the US we get the preliminary reading of the Markit PMIs for November and the baker Hughes active oil rig count.

WTI H4

Support: 52.10 (S1), 49.40 (S2), 47.35 (S3)

Resistance: 54.15 (R1), 56.15 (R2), 58.30 (R3)

GBP/USD H4

Support: 1.2850 (S1), 1.2780 (S2), 1.2700 (S3)

Resistance: 1.2920 (R1), 1.3015 (R2), 1.3085 (R3)

Euro and Pound had risen after the draft declaration between the UK and the European Commission. Market reaction seems very moderate, as it is not the end of the negotiations on Brexit. However, there is a good chance for the currencies to turn towards growth in the long run.

The outgoing year can be called “a year of trade conflicts” that have eroded the demand for risky assets and, what is more important, noticeably cooled down the global growth rate. Europe is affected by too many of them: trade disputes with Britain, the decline in demand from China due to trade wars with the United State and direct US tariffs on European products. All these factors are hindering the economic growth and make pressure on the common currency and the British pound.

Market participants are mostly skeptical about further negotiations. Change of the investors’ attitude would become a driver for Sterling. British currency had received such support several times on dips to the 1.2700 region since August – and now there is a similar case. Previously GBPUSD had been managed to grow into the 1.31-1.32 area. Now investors are waiting the voting in British Parliament, which will take place the second week of December.

The single currency has bounced from the 17-month lows in recent weeks but now is developing the downward trend by the EURUSD. Sustainable breaking above 1.14 can be a signal of players’ confidence in future prospects. In addition, there are several fundamental factors on the euro side: winding down ECB’s QE by the end of the year and move to the next stage in the form of rate hikes. The Fed takes a more cautious stance, which undermines the dollar’s position.

Technical picture attracts attention too. The impulses of the euro weakening since May had sent quotes to the new local lows. However, the RSI is displaying powerful impulse to decrease. Such divergence may be the pivot point for rolling back into 1.17 area and may lay ground for a more substantial rally in the 1.23 area next year.

Are stocks the real bargain on Black Friday this year?

US equity markets are expected to open slightly lower following the Thanksgiving bank holiday, with trading likely to be fairly light heading into the weekend.

Whether it's a case of recovering from the previous days celebrations or taking advantage of the deep discounts in store and online, activity in the US is likely to be more muted on the final trading day of the week. And who knows, maybe after a day of grabbing bargains, some of that Black Friday mentality may rub off investors with many stocks now trading at a deep discount themselves compared to a couple of months ago.

We're not quite seeing that rub off on the markets just yet though with US futures trading in the red but we're heading into a very interesting time of year and they may well now be primed for a so-called Santa rally as all the festive good will finds its way onto Wall Street.

Two Brexit steps forward, one Italian step back

Europe has found itself at the centre of much of the recent news flow, with Brexit making positive strides ahead of this weekend's EU summit – at which leaders are expected to sign off on the exit agreement – and Rome continuing on a collision course with Brussels over its budget.

Eurozone PMIs disappoint, weighing on euro

This morning though it's the PMI readings that have provided the disappointment, with numbers from Germany, France and the eurozone as a whole disappointing across the board and weighing on the euro. While the slowdown in the region isn't new and is unlikely to deter the ECB from ending QE in December, it is increasingly worrying that the numbers continue to deteriorate and could threaten next year's rate hike.

Bargains to be found in oil and crypto?

Black Friday deals are not just confined to retail or stock markets it seems, with oil and cryptocurrencies – two things not often found in the same sentence – both experiencing considerable sell-offs in recent weeks and very much trading at a discount to early October levels.

Oil remains under pressure despite noises from some OPEC countries, most notably Saudi Arabia, about another possible coordinated production cut at the next meeting in two weeks. I do wonder how much lower traders will push it given how likely it is that members will follow through on these threats. I wonder whether we may be trading at the lower end and the price drop may be a little overdone.

The same can't be said for crypto though which in its nature is very volatile and prone to wild swings. This time last year we were closing in on a high of close to $20,000 in bitcoin, something many said was a bubble waiting to burst – how right they were with it now trading almost 80% off those highs. I still see plenty of scope for more downside here given how much this has proven to be a sentiment driven market, not to mention the fact that even now it's up almost 350% since January last year. In any other market, that would be considered frothy at the very least.

Here are the latest developments in global markets:

FOREX: The dollar is nearly 0.3% lower against a basket of six major currencies on Friday, looking set to post a third day of declines in a row, without any fresh catalyst behind these moves. Meanwhile, the British pound soared on Thursday, buoyed by news that EU and UK negotiators reached an accord on the draft political declaration, setting the stage for the deal to be approved by EU leaders over the weekend.

STOCKS: US markets remained closed on Thursday for Thanksgiving, though futures tracking the S&P 500, Dow Jones, and Nasdaq 100 are pointing to a lower open today. In Asia, Chinese indices closed significantly lower on Friday amid jitters around whether a ‘trade ceasefire” will ultimately be agreed next week. Meanwhile in Europe, all major benchmarks were expected to open higher today, according to futures.

COMMODITIES: Oil prices remained in the doldrums, with both WTI and Brent erasing their recent rebound to test once again the one-year lows they recorded earlier in the week. Both benchmarks appear ready to post their seventh consecutive week of declines, as oversupply concerns continue to weigh. The only bright spot on the horizon that could help prices stabilize at least, would be clear signals from OPEC that it intends to cut its production as we approach its next gathering on December 6. In precious metals, gold prices are lower by 0.27% at $1,222 today, even despite the US dollar being in the red as well.

Major movers: Sterling crawls higher on Brexit news; risk sentiment still fragile

The British pound was the best performer on Thursday, bolstered by news that EU and UK negotiators finalized the draft political declaration outlining how EU-UK trade, security, and other issues would function. This lays the groundwork for the deal to be approved by EU leaders over the weekend, before it is brought to the UK Parliament. While the EU appears practically certain to accept it, the same cannot be said for UK lawmakers, as nearly every faction of Parliament – including Labour, Tory Brexiteers, pro-EU moderates, and the DUP – has threatened to vote it down.

Hence, the picture remains highly uncertain, particularly since nobody can confidently predict how things will play out if UK lawmakers reject it. Accordingly, the pound will likely stay headline-driven and choppy for a while longer. As for the actual vote though, the risks surrounding sterling from it may be asymmetric and tilted to the upside, with a potential approval likely to generate a bigger positive reaction than the corresponding negative one in case of a rejection. Given the broad opposition to the deal, an approval would come as a surprise. Coupled with the fact speculative positioning in sterling is still heavily net-short, these imply the currency could explode higher if Parliament votes in favor of the accord, as numerous investors rush to unwind or cover their prior short bets.

In Europe, the single currency barely reacted to the ECB minutes yesterday, which contained nothing new. Elsewhere, there was little else in terms of news flow, with US traders having taken the day off to celebrate Thanksgiving. Risk sentiment remains in “risk-off” territory, with US equity futures pointing to a lower open today, albeit not significantly so. Consequently, the aussie and the kiwi are on the back foot, while the defensive yen is trading on a slightly stronger note.

Day ahead: Eurozone flash PMIs, Canadian inflation & retail sales, Markit’s US manufacturing PMI due; Brexit developments eyed

Eurozone PMIs and key data out of Canada are on the agenda on Friday, while the US will be on the receiving end of Markit’s manufacturing PMI. Meanwhile, any Brexit headlines will be eyed after Britain and the EU agreed on a text setting out their future relationship.

Flash eurozone PMI estimates for November will be made public at 0900 GMT. The readings are not expected to reflect a pickup in euro area economic activity during Q4. Indicatively, the composite PMI, which is viewed as a good overall growth indicator for euro area economies, is anticipated at its lowest in more than two years. Still, all three measures are projected to remain in expansion territory above 50.

Another disappointment in eurozone data will likely spur speculation for a relatively dovish ECB during its December meeting. Evidently, investors are starting to increasingly challenge that the central bank will be able to deliver a 10bps rate hike during the latter part of 2019, with that outcome being priced out by markets, albeit only on the margin.

Elsewhere, Germany and France, the two largest economies in the eurozone, saw the release of their respective flash PMI prints earlier in the day, with the euro experiencing losses in the aftermath of worse-than-expected German numbers.

Remaining in Europe and turning to Brexit, despite Britain and the EU agreeing on a draft text, hurdles remain, and sterling – as well as the euro to an extent – will remain sensitive to developments. More specifically, PM May will be back in Brussels to talk with the EU’s Juncker on Saturday and address the EU heads of state on Sunday. EU leaders will need to sign off the agreement, but before that Spain needs to get on board, overcoming issues that have to do with Gibraltar. Given that the EU 27 endorse the deal, May would still need the support of the UK parliament and so far things don’t look that rosy for her on this front.

Out of Canada, important monthly data on inflation and retail sales will be made public at 1330 GMT. Better-than-expected numbers may fuel speculation for a rate increase by the Bank of Canada during its January meeting, something which would help the loonie; at the moment, swap markets assign a 75% probability for a January move by the BoC. It bears mention that the Canadian currency will also be turning its sights on oil prices for direction.

The US will be on the receiving end of Markit’s flash manufacturing PMI for November at 1445 GMT.

In terms of policymakers’ appearances, RBA Governor Lowe will be giving a speech at 2215 GMT.

In energy markets, Baker Hughes data on active oil rigs in the US are due at 1800 GMT.

In the meantime, today’s Black Friday, the day that marks the start of the US holiday shopping season. Retailers such as Amazon hope to cash in after running big discounts.

Technical Analysis: USDCAD bullish bias may be easing

USDCAD lost ground after touching a near four-month high of 1.3317 on Tuesday. Despite the fall, the Tenkan- and Kijun-sen lines remain positively aligned in support of a bullish bias in the short term. Notice though that the two have stalled their advance, the implication being that bullish momentum may be easing.

Upbeat data out of Canada can exert selling pressure on the pair. Support to losses may come around the current level of the Kijun-sen at 1.3143. Lower, the zone around the 100- and 50 day moving average lines at 1.3068 and 1.3059 respectively would be eyed for additional support.

On the upside and in the event of disappointing Canadian figures, resistance could occur around the Tenkan-sen at 1.3222. Higher still, Tuesday’s peak of 1.3317 would increasingly come within scope; the area around this includes the 1.33 handle, as well as another top from previous months at 1.3289.

The movement in oil prices can also affect the loonie, as Canada is one of the largest oil exporters in the world.

The DAX index has gained ground in the Friday session. Currently, the DAX is trading at 11,191, up 0.47% on the day. On the release front, German Final GDP declined 0.2%, matching the forecast. German and eurozone manufacturing PMIs softened in October.

It was a tumultuous week for global stock markets, as investors were greeted with a sharp correction early in the week, triggered by a downturn in technology stocks. The DAX continues to head south – the index declined 2.16% last week and has dropped 1.63% this week. On Tuesday, the DAX dropped to a low of 11,009, its lowest level since December 2016. Investor risk appetite has waned, as the ongoing global tariff war between the U.S. and its major trading partners has dampened global growth. The markets are hoping for a breakthrough at the G20 summit in Argentina next week, when President Trump meets with Chinese leader Xi Jinping. If there is any progress, traders can expect the DAX to respond with gains.

German economic data disappointed on Friday, but the DAX has nonetheless managed to post gains. Final GDP declined 0.2% in the third quarter, in line with expectations. This marked the first decline since 2014 and was identical to Preliminary GDP, which was released last week. Manufacturing PMI fell to 51.6, pointing to a stagnant manufacturing sector. This marked a fourth straight drop in manufacturing activity. Services PMI dropped lower, with a reading of 53.3 points. Both indicators missed their forecasts. The contraction in growth has weak PMIs is bound to raise concerns – is the long German expansion over? German officials attributed the weak GDP releases to new emission standards for German cars, but it’s likely that the drop can also be attributed to the ongoing trade war between the U.S. and China, which has dampened global economic growth.