3 Dec: Markets to react positively to US/China trade truce. PMIs/ISM in focus on Monday. NFP Friday.

By | December 3, 2018

Stocks ended Friday a little higher (+0.8%) while the US$ was mixed ahead of the G20 meeting and the Trump-Xi summit that took place over the weekend. The major mover was the Euro, which seemed to be undermined by the better than expected Chicago Purchasing Managers Index, which came in better than expected, while Cable also remained heavy ahead of the upcoming UK Parliament vote on whether to accept the Brexit deal (Dec 11). The metals were steady and WTI was down by -1.5% but it did manage to finish the month above 50.00pb.

Over the weekend, with China and the US agreeing to a ceasefire in the trade war after the G20 talks in Argentina, risk markets are likely to open the week higher. There will be no escalated tariffs on Jan 1, with the US leaving tariffs on $200 billion worth of Chinese imports at 10% at the beginning of 2019, while agreeing to not raise them to 25%“at this time”. Really it seems more like a truce than a breakthrough and if there is no progress in the talks, then risk sentiment will again turn negative, as thoughts of a global slowdown begin to rise to the surface. In the meantime, markets seem set to be quite positive, with the Aud$ and the Kiwi both looking very buoyant in early Monday trade..

The coming week will be busy on most days, and the next 24 hours will be spent disseminating the outcome of the G20. but looking further ahead, the key data focus this week will be on Friday’s US employment data (NFP; exp +205K, Headline rate;3.7%, AHE; 0.3%). Ahead of that, the main points of interest will be on the Manufacturing PMIs (Monday), RBA Interest Rate Decision(Tue), Australian Q3 GDP (Wed),  OPEC Meeting (Thur), EU Q3 GDP, US Employment data (Fri). Have a good week.

Economic data highlights will include:          

Mon: NZ Terms of Trade, Australian AIG Performance of Mfg Index, Building Permits, ANZ Job Ads, Company Gross Operating Profits, RBA Coincident Index, China Caixin China Manufacturing PMI, EU Manufacturing PMIs, EU Sentix Investor Confidence Survey, ISM Mfg PMI/Prices Paid, Total Vehicle Sales, Construction Spending

Tue: Australian TD Inflation, Current Account, RBA Interest Rate Decision, EU PPI, US ISM NY Business Conditions, Global Dairy Trade Index

Wed: NZ ANZ Commodity Price Index, Australian Performance of Services Index, Q3 GDP, Caixin China Services PMI, Japan Services PMI, ECB Non-MP Meeting, EU Services/Composite PMIs, EU/US Retail Sales, US ADP Jobs data

Thur: OPEC Meeting, Australian Retail Sales, Trade Balance, German Factory Orders, US Jobless Claims, Factory Orders

Fri: Australian AIG Performance of Construction Index, China Foreign Exchange Reserves, Japan Leading Economic Index, Coincident Index, German Industrial Production, EU Q3 GDP, Employment Change, US Jobs/NFP/Average Hourly Earnings data, Rts/Michigan Consumer Sentiment Index, Wholesale Inventories, Consumer Credit

CURRENCIES
EURUSD: 1.1350
Res  1.1370  1.1385  1.1400
Sup  1.1335  1.1300  1.1280
USDJPY: 113.80
Res  113.90 114.05  114.25
Sup  113.50  113.25  113.00
GBPUSD: 1.2744
Res  1.2770  1.2795  1.2825
Sup  1.2725  1.2695  1.2660
USDCHF: 0.9980
Res  1.0005  1.0030  1.0055
Sup  0.9970  0.9940  0.9910
AUDUSD: 0.7370
Res  0.7380  0.7400  0.7425
Sup  0.7340  0.7320  0.7300
NZDUSD: 0.6910
Res  0.6925  0.6940  0.6960
Sup  0.6880  0.6850  0.6835
INDICES / COMMODITIES
S&P.fs: 2762
Res  2770  2785  2800
Sup  2750  2735  2725
DJ30.fs: 25576
Res  25640  25740  25815
Sup  25480  25370  25255
SPI200.fs: 5695
Res  5710  5730  5750
Sup  5680  5665  5645
GOLD: 1222
Res  1225  1230  1235
Sup  1215  1210  1205
XAGUSD: 14.17
Res  14.40  14.25  14.55
Sup  14.05  13.90  13.75
WTI.fs: 50.58
Res  51.60  52.35  53.00
Sup  50.00  49.35  48.50