Overnight, China posted the trade data for November, and imports grew by 17.7%%, up from 17.2% in October.
Exports also saw an acceleration in growth as they grew by 12.3%, and that compared with the previous months reading of 6.9%. This suggests the Chinese economy is not cooling, so we could see a rally in mining stocks today.
European equity markets experienced low volatility yesterday due to a lack of any major economic indicators being released, or any developments on the political front. The FTSE 100 finished firmly in the red while the DAX and CAC 40 eked out small gains. The US markets finished higher too.
Donald Tusk, President of the European Council, is expected to make an announcement at 6.50am (UK time) in relation to the Brexit talks. The negotiations between the UK and the EU were thrown off kilter during the week over the issue of the Irish border. There is speculation that Mr Tusk’s statement will be of significant importance, so we could see some volatility in sterling.
Traders are looking ahead to the US non-farm payrolls report at 1.30pm (UK time). The consensus is for 200,000 jobs to have been added in November, and that compares with 261,000 jobs that were added in October. The unemployment rate is expected to remain at 4.1%.
When it comes to the US jobs report, the devil is always in the detail so keep an eye out for revisions to previous reports. The average earnings figures will be closely watched too. On a monthly basis, average earnings are expected to jump to 0.3% from 0.0%, and on year-on-year basis it is anticipated to rise to 2.5% from 2.4%. Wage growth has been lagging behind that of job creation growth, and we will need to see a steady rise in earnings if the US economy wants to have a sustainable recovery.
Yesterday, gold fell to a four month low as the US dollar rallied and the next Federal Reserve meeting drew nearer. The US central bank is widely tipped to hike interest rates next week, and an all-round respectable US jobs report could put additional pressure on the metal.
Bitcoin had yet another erratic session where it reached a new record high, north of $16,500, and dipped below $15,000 not too long after that. Overnight it rallied beyond $17,000, and has since dropped below $15,000. The cryptocurrency is seeing tremendous volatility, but the upward is still in place for now.
EUR/USD – is still in its upward trend from early November, and if its holds above the 50-day moving average at 1.1756, it could retest the November high of 1.1961. Beyond that mark, traders will look to 1.2000. A break below 1.1756 could see it fall back to 1.1670.
GBP/USD – is still in its upward trend and while it is above the 100-day moving average at 1.3180 the outlook may remain bullish. Rallies could encounter resistance at 1.3548 or 1.3659. A move below 1.3180 may send the market to 1.3000.
EUR/GBP – has been edging lower since mid-November and it has broken below the 200-day moving average at 0.8800. If the negative move continues it could target 0.8600. A push higher might retest the 200-day moving average at 0.8800.
USD/JPY – has pushed above the 50-day moving average at 112.83 and if the positive run continues it could target 114.00, or 114.73. Pullbacks may find support at 112.83 or at 112.00.
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